Law: Sales Tax Act, 1990

Section: 2(5AB),2(25),2(14),2(37),3,6,7,11,14,22, 23,26,33(13),46

Sales Tax Act (VII of 1990)--Ss.3 11-Sales tax-Assessment of tax and recovery of tax not levied or short levied or erroneously refunded-Sales tax levied on the basis of income tax returns-Scope-Appellant was engaged in manufacturing and supply of greige cloth on job basis against conversion/weaving charges-During scrutiny of electricity bills and income tax returns, it was observed that the appellant was not only liable to be registered but was also liable to pay sales tax on the basis of sales declared in the income tax returns for the financial years 2014, 2015, 2016 and 2017-Resultantly, a show cause notice was issued and the impugned orders were passed against the appellant-Validity- Income tax record could be looked into for the purposes of conducting investigations and if any difference was detected by the detecting agency then it should be substantiated with solid and convincing material evidences as records relating to income tax could not be made basis for creating sales tax liability against any registered person without any other corroborating material evidence-Documents relating to the income tax could not be taken as a valid evidence for the purposes of sales tax and the reason for this was obvious as the income tax was always levied and collected on the basis of income but the sales tax is levied on the goods manufactured and sold by the manufacturer-Department had not produced any material to show that the amount reflected in the income tax returns was in anyway linked with the taxable supplies or with any taxable activities or represented an amount on account of any business activity-Impugned show-cause notice and consequent orders passed by the authorities below were set aside-Appeal was accepted. ; <1987 SCMR 1840>; ; <2005 PTD 72>; <2007 PTD 47> and <2019 PTD (Trib.) 144> ref. Messrs Siddique Enterprises, Faisalabad v. The CIR(A), Faisalabad and others 2013 PTD (Trib.) 2130 rel. ORDER: SHAHID MASOOD MANZAR, CHAIRMAN:---.--- Titled appeal has been filed under section 46 of the Act at the instance of the taxpayer, assailing Order-in-Appeal No. 444 of 2019 dated 22-10-2019, passed by the learned CIR(A), Faisalabad whereby…

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