Law: Sales Tax Act, 1990

Section: 25,25(2),33,34(1),34,72B,72B(2)

SALES TAX ACT, 1990 (VII OF 1990) Sections: 25(2), 33, 34 72B - Selection for audit by the Board - Access to record, documents etc:- Offences and penalties - Default surcharge - Failure to produce record - Determination of tax liability along with default surcharge and penalty - Dismissal of writ petition - Intra court appeal - Audit to be conducted once in three years - Concept of - FACTS Brief facts giving rise to this appeal are that the Appellant is a private company limited by shares. It is engaged in manufacturing and export of textile products and holds Sales Tax Registration No. 0407520900155. The Federal Board of Revenue (the Board) selected the Appellant under section 72B of the Sales Tax Act. 1990 (the Act), for audit for the tax period July. 2012 to June. 2013 which was done. Thereafter, vide Order No. 3645 dated 14-3-2019. Respondent No.4 (Commissioner Inland Revenue), in purported exercise of powers under section 25 of the Act selected the Appellant for audit for the tax period July. 2015 to June. 2016. He made various representations to him for withdrawal of that order alleging that it was without jurisdiction but he refused. In the meanwhile. Respondent No.6 kept asking the Appellant to produce the sales tax record but it did not cooperate. Eventually Respondent No.6 issued Audit Report No. 385 dated 21-9-2020 determining its liability at Rs. 94,745,818 plus default surcharge (to be calculated in terms of section 34(1) of the Act at the time of deposit) and penalty in the sum of Rs. 65,000. On 10-10-2020 the Appellant filed W.P. No. 13607/2020 in this Court challenging Notice/Order No. 3645 dated 14-3-2019 and Audit Report No.385 dated 21-9-2020. The learned single judge dismissed the said petition vide Order dated 12-10-2020. Hence, this appeal. ARGUMENTS Learned counsel for the Appellant contends that the proviso to section 25(2) of the Act mandates that sales tax audit of a registered person can be conducted only once in three years. The Appellant was last audited for the tax period July, 2012 to June. 2013 so it cannot be selected again for the tax period July. 2015 to June, 2016. He argues that the learned Single Judge has misconstrued…

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