Law: Sales Tax Act, 1990

Section: 11(2),7,8(1)(ca),21,33(5),36(1)

Law: Sales Tax Rules, 2006

Section: 12(5)

(a) Sales Tax Act (VII of 1990)--- ----Ss.11(2), 7, 8(1)(ca), 21, 33(5) & 36(1)---Sales Tax Rules, 2006, R.12(5)---Assessment of tax---Input adjustment---Claimed input tax adjustment was disallowed on the strength of purchase invoices issued by suspended/black listed/blocked units and ordered to deposit inadmissible tax along with default surcharge---Tax payer contended that Assessing Officer rejected the input tax adjustment without conducting any inquiry about the black listed/suspended/blocked registered persons; and at the time of claiming input tax from units in question were functional/active; and subsequent suspension/blocking of the same could not in any way affect the statutory right of the taxpayer to claim valid lawful admissible input tax---Validity---Assessment was made ex parte, as the taxpayer did not attend the proceedings, due to non service of notices---Raising of demand under such circumstances of non-hearing, and when the issues were of such mysterious nature i.e. casting doubt and suspicions over transactions, issues of black listing and blocking, could not be decided in isolation, same had to be established on the basis of evidence, audit of record and books of accounts that the invoices were fake concluding in declaring input tax as inadmissible---In order to let due process of law unfold, it was necessary that before raising any demand interface with affected party had to be conducted, also in the present case, outreached to supplier's record had to be made so as to prove and establish the fact of fraud---Orders of the authorities below were set aside and case was remanded for re-adjudication by ensuring attendance of the taxpayer and inquiry of the suppliers and after invoking necessary provisions of the law. 2010 PTD (Trib.) 1631 and 2011 PTD (Trib.) 162 ref. (b) Sales Tax Act (VII of 1990)--- ----S. 21--- De-registration, blacklisting and suspension of registration---Effect---Mere black listing or blocking of person could not be allowed to impinge on previous transactions prior to black listing, if the same were found to be correct and verified. ORDER I. This order shall dispose of the titled appeal filed by taxpayer against the…

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