Law: Sales Tax Act, 1990

Section: 11, 11(1), 11(2), 11(4), 33(24), 2(43A), 3(9A), 40C

  Penalty under Section 33(24) cannot be imposed via Section 11 without determination of tax liability or revenue loss; hence, penalties were rightly annulled and departmental appeals dismissed. O RDE R MUHAMMAD NAEEM MUNAWAR (MEMBER): These two departmental appeals relate to penalty orders passed by the Inland Revenue Officer (IRO) dated 15062022, for tax periods October &November 2021, and for tax periods December 2021&January 2022. Since the parties are the same, the controversy is common, and the appellate orders of learned CIR(A) (dated 25.08.2022) decide the matter on an identical legal footing, therefore, for the sake of convenience and to avoid repetition, both appeals are decided through this consolidated order. The respondent-registered person is a Tier-I retailer as defined u/s 2(43A) read with Section 3(9A) and Section 40C of the Sales Tax Act, 1990 ("the Act") and was integrated with the Board's computerized system w.e.f 30.09.2021. The IRO alleged in the penalty order for Oct & Nov-21 that, as per the Oracle Business Intelligence Module, the respondent generated 1204 standardized sales tax invoices valuing  whereas total supplies declared were  hence supplies valuing  were treated as not invoiced through the integrated system, involving sales tax  On that basis, a penalty of Rs.49,930,482/- (i.e., 200%) was imposed by invoking section 11(1) read with section 33(24). In penalty order for Dec-21 & Jan-22 (dated  was alleged that no standardized integrated invoices were generated during Dec-21 & Jan-22, and a penalty of Rsu 500/000/- was imposed under section 11 (1) read with section 33(24)u Being aggrieved with the aforesaid penalty orders, the registered person has preferred appeals before the office of the learned CIR(A), Bahawalpur. The learned CIR(A) annulled the penalty order(s) essentially on the legal premise that a standalone penalty under section 33 cannot be sustained without the determination of tax liability under section 11, relying upon ATIR and High Court precedents as discussed in the impugned s/gppellate orders. The department, aggrieved with the deletion of penalties,…