Law: Sales Tax Act, 1990

Section: 8(1), 7, 8, 6, 7, 8(1)(a), 8(1)(b), 8(1)(g), 8(1)(h), 8(1)(i), 26, 2(41)

O R D E R NASIR MAHMUD (Member): This appeal has been preferred against the order dated 25-04-2024 passed by the learned Commissioner Inland Revenue (Appeals), Lahore, “CIR(A)”, whereby the learned CIR(A) confirmed the order dated 01.02.2024 passed by the learned Deputy Commissioner Inland Revenue, Unit-28, Range-14, Zone-V, LTO, Lahore, “OIR”. 2.The precise facts of the case are that M/s. Haq Bahu Sugar Mills (Pvt) Ltd., “Registered Person”, derives income from the manufacturing and sale of sugar and its byproducts. Upon observing that the registered person had claimed input tax adjustments that were inadmissible under section 8(1) of the Sales Tax Act, 1990 (“the Act”), a show cause notice dated 30.08.2023 was issued, wherein the registered person was confronted with the fact that the claim of input tax adjustment for the period October 2021 to September 2022 was not admissible, as the confronted items/goods, etc., were not used for the purpose of taxable supplies and/or the claim of input tax was barred under various provisions of section 8 and SRO 450(I)/2013 dated 27.05.2013. The items confronted to the registered person included office equipment, vehicles, paints, iron/steel articles, electrical items, etc. The learned assessing officer specifically confronted the details of the items on which the claim of input tax adjustment was not admissible. The registered person contested the show cause notice and filed a reply on 15.01.2024. The adjudication proceedings culminated in an order dated 01.02.2024, and the adjusted sales tax amount of Rs.52,428,255/- was held recoverable along with a penalty of Rs.2,621,413/- (5% of the principal amount or Rs.10,000/-, whichever is higher) and default surcharge (to be calculated at the time of deposit). 3. Being aggrieved, an appeal was preferred before the learned CIR(A). The learned CIR(A), after taking into consideration the arguments, confirmed the order passed by the learned OIR in the following manner:-  “4.   There is no doubt that the ratio settled through various judgments is unambiguous that the input of sales tax incurred on any goods and…