Law: Sales Tax Act, 1990

Section: 2(37),7,8,21,21(3)

Law: Sales Tax Rules, 2006

Section: 12(5)

Sales Tax Act (VII of 1990)- -Ss. 21, 7, 8 & 2(37) - De-registration, blacklisting and suspension of registration-Input tax adjustment - Blacklisted suppliers - Blacklisting of suppliers subsequent to transaction(s) - Invoices issued before blacklisting of suppliers - Denial of claim of input tax adjustment by Department - Sales Tax fraud - Scope- While denying adjustment of input tax on ground of tax fraud, initial burden lay on Department to establish that invoices had been issued during a period where a supplier for suspended or blacklisted - In case invoices were not issued during such period of backlisting, then Department had to show that the cause or reason for the backlisting had some nexus with such invoices - Such burden may be shifted upon taxpayer claiming adjustment or refund of tax, in cases of tax fraud, in accordance with provisions of S. 2(37) of the Sales Tax Act, 1990 - Where supplier was blacklisted only subsequently to a transaction, initial burden was to be discharged by the Department. Commissioner Inland Revenue v. Messrs Ali Hassan Metal Works 2018 PTD 108 and Province of East Pakistan v. MD Mehdi Ali Khan PLD 1959 SC 387 rel. THIS JUDGMENT DELIVERED BY: MUHAMMAD SAJID MEHMOOD SETHI, JUSTICE:---.--- Through instant Reference Application under section 47 of the Sales Tax Act, 1990 ("the Act of 1990") following questions of law, asserted to have arisen out of impugned order dated 28-11-2018, passed by learned Appellate Tribunal Inland Revenue, Lahore Bench, Lahore ("Appellate Tribunal"), have been proposed for our opinion:-" (1) Whether on the facts and circumstances of the case the Appellate Tribunal has not erred in law by allowing credit of input tax claimed on the basis of fake invoices without appreciating that non-obstante Section 8(1)(d) of the Sales Tax Act, 1990 specifically bars the claim of input tax against fake invoices? (2) Whether on the facts and circumstances of the case the Appellate Tribunal has not erred in law by ignoring that the registered person and claimed input tax on the basis of fake invoices issued by the dummy/fictitious firms involved in paper transactions only? (3) Whether the Appellate Tribunal has not…

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