Law: Sales Tax Act, 1990

Section: 2(37),3,48,33(5),34(1)

Sales Tax Act (VII of 1990)--- ----Ss. 2(37), 3, 48, 33(5) & 34(1)---Sales Tax Rules, 2006, R. 12(a)(i)(C)---Tax fraud---Abnormal tax profile---Scope of tax---Recovery of arrears of tax---Failure to deposit the amount of sales tax---Default surcharge---Scope---Department observed that registered person claimed credit of sales tax withheld without having invoice wise detail; that discrepancy existed between sales tax returns and income tax returns declared by registered person and that registered person had not charged and paid further tax at the rate of one percent on supplies made to unregistered persons---Validity---Show-cause notice and order-in-original proceedings were based on presumption which tantamount to fishing enquiry---Proceedings suffered from grave legal infirmities and substantive illegalities---Commissioner Inland Revenue failed to appreciate facts in a judicious manner---Appellate Tribunal accepted the appeal and declared the order passed by Commissioner Inland Revenue to be void ab initio, illegal and without jurisdiction. 2008 PTD (Trib.) 541 and S.T.A. No.166/LB of 2009 ref. THIS ORDER PASSED BY: SHAHID MASOOD MANZAR, (CHAIRMAN):---.--- Through the titled appeal pertaining to tax period July, 2013 to March 2017, has been filed against impugned Order-in-Original No.05/2017-18 dated 20.10.2017, passed by the learned CIR, Multan. 2. Briefly stated, essential facts of the case are that the appellant is registered under the Sales Tax Act, 1990 (hereinafter, "the Act") in the capacity of manufacturer and general order supplier engaged in making of taxable supplies of furniture etc., adjusting input tax credit under section 7 of the Act and has also paying sales tax in his monthly sales tax returns regularly and carrying out his mandated business within framework of law. That pivotal facts of the instant appeal case are that on e-scrutiny of abnormal tax profile having continuous carry forwards and evaded sales tax by the appellant for the tax periods from July 13 to March-2017 under section 2(37) of the Sales Tax Act, 1990 read with rule 12(a)(i)(c) of Sales Tax Rules, 2006 and observed that the appellant claimed credit of sales tax withheld…

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