Law: Sales Tax Act, 1990

Section: 3(1)(a),6,7,11,11(2),11(3),22,23,25,26,3 3,33(1),33(9)(c),34,46,73

(a) Sales Tax Act (VII of 1990)--- ----Ss. 7, 11, 33, 34 & 73---Adjustment of input tax---Certain discrepancies allegedly were found in the sales tax record of the taxpayer---Adjudication proceedings culminated on ex parte basis and taxpayer was proceeded in absentia without affording any opportunity of hearing, which was challenged before appellate authority and was partially vacated---Validity---Taxpayer did hold valid sales tax invoices duly incorporated in supplier's sales tax returns and summary statement for relevant tax period, and taxpayer had transacted all payments to his supplier through Banking Channel by complying with the mandatory provisions of S.73 of the Sales Tax Act, 1990---Taxpayer, could not be deprived of legitimate right of input tax adjustment, as no violation in that regard was found to have been committed by him---Alleged late filing of sales tax returns for the tax periods in question was not intentional and wilful, but was due to certain financial problems which were beyond human control---Taxpayer, being under liquidity hardships, could not file sales tax returns within time which could not be termed as "deliberate and intentional failure"---No mala fide and wilful default was attributed to the taxpayer---Delay in filing of sales tax returns, would not attract imposition of penalty without establishing mala fide and wilful default on the part of taxpayer---Imposition of penalty for late filing of sales tax returns under S.33(1) of the Sales Tax Act, 1990 was not only illegal, but also unjustified---Taxpayer was alleged of suppression of sales, presumptively and arbitrarily, on the basis of consumption of electricity units---Consumption of electricity units might have any nexus with that of production of goods and any correlation in between could have been made out, but no direct relationship could be established in electricity with that of sales and supply of taxable goods---Demand of sales tax created on the basis of electricity bills, was illegal and without lawful authority, as neither the Sales Tax Act, 1990, nor Rules made thereunder, prescribed any procedure or formulae to calculate liability of sales tax merely on…

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