Law: Sales Tax Act, 1990

Section: 2(29A),2(34),11,33,33(25),37,45B,46(1)(a )

Law: Constitution of Pakistan, 1973

Section: 4,10A

SALES TAX ACT, 1990 (VII OF 1990) Section 2(29A) The word 'sales tax' as defined in Section 2(29A) means and includes the tax, additional tax, default surcharge, a fine, penalty or any other sum payable under the provisions of the Sales Tax Act or rules made thereunder. Sections 2(29A), 2(34), 11, 37 45B A combined reading of Section 2(34) and 2(29A) makes it clear that penalty, default surcharge, fine or any other sum payable under the Act of 1990 and or the rule made thereunder are "species of sales tax" and assessment or recovery can only be made under Section 11 which is appealable under Section 45B. Sections 2(43A), 11 33 The department failed to establish mens rea and mala fide on the part of appellant, which is a necessary ingredient for imposing penalty under Section 33(25), for failing to integrate its point of sales (POS) with the F.B.R. Online System, the appellant was neither required to get install the point of sales (POS) software nor was liable to be integrated with the computerized system of F.B.R. as the appellant has not made any "taxable supply" since its inception, penalty is illegal and not sustainable under law.- The appellant is registered under the Sales Tax Act, 1990 as a retailer and filing its monthly sales tax returns regularly. It has been alleged in the show cause notice that the appellant has failed to integrate its point of sale (POS) with the Federal Board of Revenue Online System in terms of sections 2(43A), 3(9A), and 40C of the Act read with Notification No. S.R.O. 1203(I)/2019 dated 10-10-2019. The appellant was required to install point of sales (POS) software duly integrated for monitoring, tracking, recording or reporting of sales with the Federal Board of Revenue and has allegedly failed to do so therefore, a show cause notice dated 08-10-2020 was issued under section 11(5) of the Act as to why penalty of Rs. 1,000,000/- under section 33(25) of the Act may not be imposed. The appellant was neither required to get install the point of sales (POS) software nor was liable to be integrated with the computerized system of the Federal Board of Revenue because the appellant has not made any "taxable supply" since its inception.…

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