Law: Sales Tax Act, 1990

Section: 2(37),7,8,8(1),8A,11(13),21,21(2)(3),26, 73

Law: Qanun-e-Shahadat (10 of 1984)

Section: 17,18

Law: Constitution of Pakistan, 1973

Section: 18,23,24

(a) Sales Tax Act (VII of 1990)--- ----Ss.21, 8A, 7 & 73---Purchase from blacklisted/suspended supplier---Joint liability of registered persons in supply chain where tax unpaid---Scope---Determination of sales tax liability---Transactions to be made through Banking channel---Scope---Appellant was alleged to have purchased goods from blacklisted person---Validity---Taxpayer had made payment of input tax to his supplier and had no way to confirm that the alleged supplier had made the payment in government treasury or not---Taxpayer receiving taxable supplies was legally obliged to check 'validity and veracity' of the supplying person through electronic verification/E-portal verification which was done at the time of transactions---Tax functionaries were duty bound to check as to whether the supplier had made payment of tax due to them especially when he was filing his monthly sales tax returns and summaries of sales and purchases with the department---No concrete evidence was produced to prove that taxpayer was in the knowledge or had reasonable grounds to suspect that some or all of the tax payable in respect of supplies would go unpaid---Liability to pay tax jointly and severally under S. 8A, Sales Tax Act, 1990 came into play only when it was established with corroborating material evidence that registered person receiving taxable supplies from another registered person was in the knowledge or had reasonable grounds to suspect that some or all of the tax payable in respect of the supplies would go unpaid---Supplier of appellant was active when the transaction took place and it was subsequently blacklisted---Payments were made by appellant after adhering to the provisions of S. 73, Sales Tax Act, 1990---Requisite conditions under Ss. 7 & 73, Sales Tax Act, 1990, for claiming input tax were fulfilled by appellant---Department failed to produce any order regarding the blacklisting of supplier---Non-production of such order led to the presumption that supplier was not blacklisted at the time of issuance of invoices---Order of blacklisting passed by Commissioner Inland Revenue was vacated and active status of taxpayer as sales tax registered company was restored…

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