Law: Sales Tax Act, 1990

Section: 36(1)

(a) Sales Tax Act (VII of 1990)--- ----S. 36(1)---Interpretation of S.36(1), Sales Tax Act, 1990---Recovery of tax not levied or short-levied or erroneously refunded---Issuing of show-cause notice to taxpayer under S. 36(1) of the Sales Tax Act, 1990---Essentials---Phrase "where by reason of" used in S. 36(1) of the Sales Tax Act, 1990 mandated that the tax department could not begin to assume jurisdiction under S. 36 of the Sales Tax Act, 1990 and issue show case notice to taxpayer until and unless the department was seized of sufficient evidence "by reason of" which collusion, deliberate act, inadvertence, error, or misconstruction was established---Taxpayer must have had a pre-mediated or pre-arranged plan to evade tax and the evidence must show and establish a calculated stratagem or a game plan behind the transaction tailored for the specific purpose of evading tax---"Collusion" required that there must be a more than one person scheming to defraud or there must be a conspiracy of a fraudulent act resulting in evasion of tax and on the whole unless there was a deliberate design or an agreement between the persons to defraud the tax department and the same was clearly and preciously laid out in the show cause notice---Mere mentioning of S. 36(1) or mentioning the words "deliberate act" or "collusion" in the show cause notice would not vest the tax department with the jurisdiction to invoke S. 36(1) of the Sales Tax Act, 1990---Legal enforceability and jurisdictional validity of a show cause notice vested from its content, that was, the facts supported by tangible evidence referred to in the show cause notice and not from the cosmetic showcausing of statutory provisions or from the use of statutory key words like "collusion" or deliberate act in the show cause notice. D.G. Khan Cement Company Ltd., Lahore v. Collector of Customs, Sales Tax and Central Excise, Multan and 2 others 2003 PTD 1797 ref. Assistant Collector Customs, Dry Port, Peshawar and others v. Messrs Khyber Electric Lamps MFG Co. Ltd., Peshawar 2001 SCMR 838; Caltex Oil (Pakistan) Ltd. v. Collector, Central Excise and Sales Tax and others 2005 PTD 480; Collector of Sales Tax and Central…

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