Law: Sales Tax Act, 1990

Section: 11(3),33(5),34,72B

ORDER The above captioned appeal has been filed by the Appellant Company against Order-in-Appeal No. 31/2015 dated 08.10.2015 passed by the Commissioner Inland Revenue (Appeals-I), Islamabad on the following grounds:- i. The appellate order has been passed in haste as grounds and arguments of appellant, though produced in the appellate order however without any rebuttal/explanation and decision is given very briefly without referring to these grounds. AR also referred to the heading of the appellate order which mentions the order as Federal excise order -in-appeal while it is sales tax. Sales Tax Withholding on Purchases: ii. That the learned Commissioner of Income lax (Appeals) Zone-II, Islamabad, has erred in upholding the order of OIR for the alleged default of Sales Tax Withholding without appreciating the following facts of the case. iii. That the learned assessing officer has erred in ordering the appellant to pay Rs. 4,102,313 u/s 11(3) of Sales Tax Act, 1990 along-with default surcharge u/s 34 of Rs. 2,710,024 and penalty u/s 33(1) & 33(5) of Rs. 385,116 for the alleged default in withholding sales tax from payments made during the period from July 2010 to June 2011 without appreciating the fact that, prior to February 14, 2013, sales tax was not required to be deducted by companies assessed in RTOs. Case of the appellant was transferred on 07 January 2013 from RTO to LTU vide FBR order (copy attached). iv. On amendment in sales tax withholding rules through SRO 98(1)/2013 dated 14 February 2013; all companies were ONLY made liable to withhold sales tax effective February 2013 onward. Accordingly, the appellant was not liable to withhold sales tax prior to 14 February 2013. v. The learned officer also ignored the fact that the Sales Tax is only leviable on taxable purchases, whereas, Annexure A and B of Show Cause Notices dated 17 April 2015 and 23 April 2015 also included numerous transactions relating to transporters, service providers and exempt supplies. vi. The learned officer had issued show cause notice on 17 April 2015 without attachment of Annexure B, the Company in its reply dated 23 April 2015 requested the learned office to provide…

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