Law: Sales Tax Act, 1990

Section: 8B,8B(1),11(3),33(5),46

Per Ch. Shahid Iqbal Dhillon, Judicial Member, Muhammad Waseem Chaudhry, Judicial Member agreeing [Majority view] Imposition of penalty and default surcharges Adjustment of excess input tax. Adjudicating officer imposed penalty and default surcharge based on said omission/irregularities of registered person. Order of Adjudicating Officer, was challenged before appellate authority, who vacated whole principal amount of sales tax, and upheld liability on account of penalty and default surcharges. Impugned order of appellate authority upholding penalty / default surcharges was illegal and unjustified as the appellate authority itself had held that there was no dispute regarding the genuineness of input tax and vacated the demand of principal amount of sales tax and adjudged recovery of penalty of five percent of the amount of tax involved under S.33(5) of Sales Tax Act, 1990. Assessee would become liable to pay penalty under S.33(5) of the Sales Tax Act, 1990, when he would fail to deposit the amount of due tax or any part thereof, but in the present case appellate authority below had vacated whole amount of sales tax and nothing left payable by the assesse Imposition of penalty was utter violation of provisions of S. 33(5) of the Sales Tax Act, 1990. Where the assessee did not act mala fidely with the intention to evade the tax, the imposition of penalty and default surcharge was not justified No justification existed for levy of default surcharge and imposition of penalty, impugned order was declared to be illegal, ab initio void and was set aside, in circumstances. Case Law referred: 2014 PTD 498 Per Muhammad Raza Baqir, Accountant Member disagreeing with Ch. Shahid Iqbal Dhillon, Judicial Member. [Minority view] Imposition of penalty and default surcharges Adjustment of excess input tax Registered person had defaulted the provisions contained in S.8-B of the Sales Tax Act, 1990 Claim of 100%, input tax adjustment instead of 90% of output tax being a procedural lapse, recovery of principal amount from the registered person, was not justified Such registered persons were liable to penalty /additional tax as they defaulted the provisions of S.8-B of the Sales Tax…

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