Law: Sales Tax Act, 1990

Section: 47(1A),47(1B),47(1A)(a),47(2)

JUDGMENT AGHA FAISAL, JUSTICE:---.--- The applicant has impugned the Judgment dated 25.11.2019, rendered by the learned Appellate Tribunal, Sindh Revenue Board, Karachi, in Appeal No.AT-52/2018 (Impugned Judgment). The relevant discussion and the operative findings are reproduced herein below: 19. The other legal pleas raised by the appellant are that (a) section 47(1B) for recovery of non-withholding or non-deposit of sales tax from withholding agent, was introduced vide Sindh Finance Act, 2016 and do not apply to tax periods prior to July, 1, 2016, (b) prior to Finance Act, 2019 (applicable from July, 1, 2019), there was no section under the Sindh Sales Tax Act, 2011 to hold the withholding agent personally liable for not withholding sales tax or depositing the tax withheld as the said provisions were introduced under section 13 of the Act through Finance Act, 2019, (c) mere mentioning of section 47(1A) of the Act does not vest the tax department jurisdiction to proceed on the ground of tax fraud without first establishing collusion on the part of appellant. 20. We will deal with all these legal points jointly as these are interconnected. In the show cause notice sub-section 47(1A)(a) of the Act has been mentioned. Although sub-section 47(1A)(a) of the Act was added to the Act vide the Sindh Sales Tax on Services (Amendment) Ordinance, 2011 dated 01.11.2011 and subsequently enacted as the Sindh Sales Tax on Services (Amendment) Act, 2012 dated 26.01.2012. In the SCN sub-section 47(1B) of the Act was not invoked as contended by the learned representative of the appellant. From the perusal of the contents of SCN it appears that the same does not meet the requirement of clause (a) of sub-section (1A) of section 47 of the Act. The requirement of sub-section (1A) of section 47 of the Act mentions that the SCN can only be issued if it is alleged that where by reason of some collusion, abetment, deliberate attempt, misstatement, fraud, forgery, false or fake documents any ax or charge has not been paid or is short paid, assessed or collected, the person liable to pay such tax shall be served with a notice within five years of such tax period, requiring him to show…

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