Law: Sales Tax Act, 1990

Section: 2(37),8,11(2),21,21(2),33,34,46(1)(b)

SALES TAX ACT, 1990 (VII OF 1990)---Sections: 2(37), 8, 11(2), 21, 21(2), 33, 34 & 46(1)(b) - SRO 555(I)/2006, dated 05.06.2006 - Sales Tax Rules, 2006, Rule: 12, 12(a), 12(b)(i) & 12(i)(g) - Definitions - Assessment of tax and recovery of tax not levied or short levied or erroneously refunded - Tax credit not allowed - De-registration, blacklisting and suspension of registration - Manufacture of textiles - Making purchases - Order-in-original passed and appellant charged with tax fraud - Show Cause Notice suspension of sales tax registration -Another Show Cause Notice for black-listing of appellant’s status from FBR e-portal - Challenge to - Appeal before Appellate Tribunal - FACTS Succinct history for disposal of the instant case is that the appellant is sales tax registered person being manufacturer of textiles who has made purchases from M/s Usman Corporation, Faisalabad (STRN 3277876152117) was charged with tax fraud. Resultantly, a show cause notice for suspension of sales tax registration was issued by the learned CIR (Chenab Zone), RTO. Faisalabad. Subsequently learned CIR exercising powers conferred upon him under section 21(2) of the Act read with sub-clause (g) of clause (i) of Rule 12(a) of the Sales Tax Rules, 2006 suspended the appellant’s registration and finally the learned CIR (Chenab Zone), RTO. Faisalabad also issued a show cause notice for blacklisting of appellant’s status from FBR e-portal. ARGUMENTS At the very outset of his arguments, learned counsel for the appellant vehemently contended that provisions of section 21(2) of the Act do not empower the CIR to suspend or blacklist a registered person on the ground that he made purchases from buyers against whom proceedings of tax fraud had been initiated. The learned counsel assailed that in case, a registered person is found involved in non-payment or short payment of sales tax through claiming input tax vide inadmissible purchases, then a separate procedure is available under the Sales Tax Act, 1990 for recovery of the same in terms of section 11(2) of the Act instead of proceedings initiated under section 21(2) of the Act. It was stated by the learned counsel that mandate of…

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