Law: Sales Tax Act, 1990

Section: 11,11(2)

Law: Income Tax Act, 1922

Section: 15(2)(3),34

Law: Income Tax Ordinance, 1979

Section: 65

SALES TAX ACT, 1990 (VII OF 1990)---Section: 11 & 11(2) - Indian Income Tax Act, 1922 Sections: 15(2)(3) & 34 - Income Tax Ordinance, 1979, Section 65 - Income Tax Ordinance 2001, Sections 122(5) & 148(1) - Assessment of tax and recovery of tax not levied or short levied or erroneously refunded - Show Cause Notice - Raising of jurisdictional power by the taxpayer - Creation of demand by OIR - Appeal allowed by the CIR(A) - Challenge to - FACTS Brief facts of the case are that the Respondent is an AOP, a wine merchant of wholesale & retail and registered voluntarily on 04-09-2013 with Sales Tax department vide STR No.1700322525513. The Officer Inland Revenue (OIR) E&C Unit-06, Zone I, RTO II, Karachi issued show notice under section 11(2) dated 21-06-2014 and created sales tax demand Rs.63,659,330 for the period July, 2009 to June 2013, when the taxpayer was not registered and demand was created on the basis of income tax return filed. In response to the show cause notice, the taxpayer informed that our business activity is not in your jurisdiction, legal jurisdiction rests with CIR, Zone II, RTO II, which jurisdiction is covered under “FOOD AND BEVERAGES”. The learned CIR, Zone II, RTO II, Karachi vide its letter No.3413 dated 13-02-2015 had also clarified that: “Wine & Beer, which fall in the category of Beverages as per Pakistan Custom Tariff Code 22.04 therefore, jurisdiction over these cases rests with this zone under sector of Food & Beverages assigned vide FBR Jurisdiction order C.No.57(2)jurisdiction/2011/10376 dated 30-06-2012. The OIR, E&C Unit-06, Zone I, RTO-II, Karachi passed the order No.1/98 dated 13-04-2014 without considering the jurisdiction and created sales tax demand Rs.63,659,330. The Taxpayer filed appeal before the Commissioner Appeals -IV, Karachi who vide order mentioned supra allowed the appeal of the taxpayer on the ground of wrong assumption of jurisdiction by DCIR. Hence the instant appeal before this Tribunal. ARGUMENTS Before us, the learned D.R. vehemently assailed the order of the learned CIR (A). He vehemently contended that the learned CIR (A) has merely allowed the appeal on technical ground of jurisdiction which does not…

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