Law: Sales Tax Act, 1990

Section: 3(3)(a),3(6),3(7),7(4),8(1)(b),11,11(1), 11(2),11(3),11(4),11(5),33,34,71

ORDER The titled further appeal filed at the instance of the registered person has been directed against the order-in-appeal No. 18-A-II dated 25.06.2014 recorded by CIR(Appeals-II) Lahore. 2. The facts in brief leading to the instant appeal are that it was observed by the taxation officer that the registered person/appellant had failed to withhold sales tax during the period February 2013 to January 2014 on the taxable purchases as required under the Sales Tax Special Procedure (Withholding) Rules, 2007, resulting in short payment of sales tax amounting to Rs.4,558,308/-. The said discrepancy was confronted to the registered person/appellant by way of issuance of show cause notice, but despite fixation of the case on three occasions, the registered person/appellant opted to be absent and no explanation was tendered in this regard. Resultantly, the proceedings culminated in passing of assessment order dated 30.04.2014, wherein an amount of Rs.4,558,308/- on account of sales tax alongwith default surcharge (to be calculated at the time of deposit) and penalty amounting to Rs.227,915/- was ordered to be recovered from the registered person/appellant. Feeling aggrieved, the registered person preferred appeal before CIR(Appeals-II) Lahore, which was rejected. Still discontented, the registered person has come up in further appeal before this Tribunal. 3. At the very outset of hearing, learned counsel appearing on behalf of the registered person/appellant has opted to assail the assessment order dated 30.04.2014 on the legal plane of jurisdiction, by vehemently arguing that section 11(2) of the Sales Tax Act, 1990 only covers the eventualities regarding non-payment or short payment of sales tax in respect of taxable purchases and the DCIR is not empowered to make assessment on account of non-withholding of tax or short withheld sales tax while making payment to his suppliers for purchases by the registered person by invoking the said provisions. In order to lend credence to his stance, reliance has been placed on a judgment of this Tribunal dated 09.04.2013 recorded in STA 130/LB/2013 in the case of M/s. United Industries Limited, Faisalabad. On the strength of…