Law: Sales Tax Act, 1990

Section: 2,2(37),3(9A),11,11(2),21,21(2),33,33(25 ),34

Law: Sales Tax Rules, 2006

Section: 12(b)(i),150(ZEF)

Law: Constitution of Pakistan, 1973

Section: 4

CONSTITUTION OF THE ISLAMIC REPUBLIC OF PAKISAN, 1973Article 4If the Statute enacts that certain action shall be taken in a certain manner and in no other manner, such requirement is absolute and that negate to attend or non-compliance will invalidate the whole proceedings.SALES TAX ACT, 1990 (VII OF 1990)Section 2(37)Merely invoking of provisions of Section 2(37) of the Act do not make the case of tax fraud.Sections 3(9A) ,  21There are no provisions in Section 21(2) of the Act empowering the tax functionaries to suspend registration or blacklist a registered person merely due to non-compliance of the provisions of Section 3(9A) of the Act read with the Rule 150(ZEF) of Chapter-XIV-AA of the Sales Tax Rules, 2006.--A combined reading of the above provisions of law unambiguously show that the provisions of sub-section (2) of section 21 of the Act empowered the CIR to suspend or to blacklist any person, in case, where the CIR is satisfied that a registered person is found to have issued fake invoices or has otherwise committed tax fraud, he may blacklist such person or suspend his sales tax registration. Under these provisions, action of blacklisting or suspension of registration can be taken against a registered person found to have involved in issuing fake invoices or otherwise in committing tax fraud but this adverse action cannot be extended against a registered person who is found involved in violation of section 3(9A) of the Act instead such person shall be liable to pay penalty of five hundred thousand rupees for the first default under section 33(25) of the Act and in the same vein, under Rule 150(ZEF) of Chapter-XIV-AA of the Sales Tax Rules, 2006, the integrated supplier who is found to have tampered with the system or made sales in the manner otherwise than as prescribed in this Chapter, or who contravenes any of the provisions of this Chapter, an appealable order by an Officer of Inland Revenue for recovery of tax amount due under the Act has been provided and no action for suspension of sales tax registration and blacklisting is warranted under section 21(2) of the Act. We are of the firm view that there are no provisions in section 21(2) of…

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