Law: Sales Tax Act, 1990

Section: 2(20),2(33),2(35),2(37),2(40),2(41),3,3( 1A),6,7,11,11(2),22,23,26,30,30(3),33,33 (13),34,34(1),Sixth Schedule

THIS ORDER PASSED BY: SHAHID MASOOD MANZAR (CHAIRMAN):---.--- This appeal has been filed against Sales Tax order-in-appeal No. 116 of 2017 dated 19.09.2017. Facts of the case are that during scrutiny of Financial Audited Accounts for the period 2011-12 to 2016-17 (upto December, 2016), it was observed that M/s Fauji Foods Ltd. (Formerly M/s Noon Pakistan Ltd), Sargodha Road, Bhalwal bearing NTN: 0786271-7, STRN: 040040600155 was involved in manufacturing and supply of Tea Whiteners namely "Chai Mix, Dairy Rozana and Dostea" but did not deposit the sales tax on these supplies. The zero rating/exemption facility was available only to the extent of dairy products i.e. Milk (04.01), Milk and cream, concentrated or containing added sugar or other sweetening matter, excluding that sold in retail packing under a brand name (04.01 and 04.02), Flavored milk, excluding that sold in retail packing under a brand name (0402.9900), Yogurt, excluding that sold in retail packing under a brand name (04.04), Butter, excluding that sold in retail packing under a brand name (0405.1000), Desi Ghee, excluding that sold in retail packing under a brand name (0405.9000), Cheese, excluding that sold in retail packing under a brand name (0406.1010), Processed cheese not grated or powdered, excluding, that sold in retail packing under a brand name (0406.3000). But as a matter of fact "Tea Whiteners" are not milk and Registered Person deliberately treated Tea Whitener as a milk by claiming either zero rating are exempt supplies. The Registered Person according to assessing officer therefore, committed tax fraud as defined u/s 2(37) of the Sales Tax Act, 1990 by evading Sales Tax amounting to Rs.974,360,140/- on local supplies valued at Rs.5,363,097,170/- and M/s Fauji Foods Ltd were charged with contravention of section 3, 3(1A), 6, 7, 22. 23 & 26 read with section 2 (20), 2 (33), 2(35), 2(37), 2(39), 2(40), 2(41) of Sales Tax Act, 1990 hence was called upon through show cause dated 18.04.2017 as to why evaded Sales Tax amounting to Rs.974,360,140/- alongwith default surcharge u/s 34(1) of the Sales Tax Act 1990 and 100% penalty under section 33(13) of the Sales Tax Act, 1990 may not…

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