Law: Khyber Pakhtunkhwa Finance Act, 2013

Section: 64,65, 66,84,84(2)(d)

Law: Sales Tax Act, 1990

Section: 34

REMARKS

In the matters of tax, the apex court held in case of Commissioner Inland Revenue Karachi that while interpreting fiscal statutes, the court looks to what is clearly said and there is no room for any intendment nor is there any equity about a tax. There is no presumption as to tax and nothing was to be read in or implied and one could only look fairly at the language used. In the present situation, the words \'or otherwise\' clearly indicate that default surcharge can be imposed even if the default is not wilful. The addition of the phrase \'or otherwise\' after the word \'wilfully\' removes any ambiguity and makes it clear that whether the default is wilful or due to any other reason, default surcharge can still be imposed.
The petitioner relied upon a judgment of the Sindh High Court in the case of Commissioner Inland Revenue, Karachi. However, the facts of that case are distinguishable from the present case. In that matter, the Sindh High Court addressed the issue of default surcharge under sections 161 and 205 of the Income Tax Ordinance, 2001. The petitioner also relied on a judgment of the Lahore High Court in the case of United Sugar Mills Ltd, but the facts of that case are also distinguishable from the instant case, as the matter under adjudication was not related to default surcharge. The Lahore High Court addressed issues under the Sales Tax Act, 1990, particularly concerning the proof of payment, the demand for additional tax, and penalties on advances received by the petitioner.
On the other hand, the Islamabad High Court in the case of M/S Attock Refinery Limited, held that default surcharge under section 34 of the Sales Tax Act is automatically applicable in cases of non-payment of tax, regardless of whether the non-payment was willful or inadvertent.

 Summary: Tax Surcharge
In Sales Tax Reference No. 25/2024, the petitioner M/s National Logistic Cell (NLC) challenged the imposition of default surcharge and the dismissal of their appeal as time-barred by the Appellate Tribunal. NLC argued that: