Law: Sales Tax Act, 1990

Section: 11

Prior to the introduction of Section 11(4A), no proceedings could be initiated for recovery of withholding sales tax under Section 11(4) of the Act                           RESULT:                  Sales Tax Reference dismissed. ORDER:  (1).  Through this reference filed under Section 47 of the Sales Tax Act, 1990 (“the Act”), the applicant-department has impugned order dated 10.07.2017 passed by the learned Appellate Tribunal Inland Revenue, Lahore in S.T.A No. 330/LB/2017, whereby appeal of the present respondent was allowed and the order-in-appeal dated 17.10.2016 passed by the Commissioner Inland Revenue (Appeals), Faisalabad, as well as order-in-original No. 04/2016 dated 09.08.2016, were set aside.    2. Briefly the facts are that the respondent, engaged in manufacturer of paper cones, was issued show-cause notice No. 13 ( CL. 421 ) CL. 422           Vol. XLIV, P.T.C.L., 2026 (Case Laws)   dated 12.07.2016 for alleged non-deduction and non-deposit of withholding sales tax amounting to Rs. 4,815,462/- for the tax periods 01/2015 to 02/2016, under sections 11(2), 11(4) and 26 of the Act read with the Sales Tax Special Procedure (Withholding) Rules, 2007. The proceedings culminated in an order-in-original dated 09.08.2016 creating liability of Rs. 1,334,256/- with surcharge and penalty. The departmental appeal was dismissed; however, the learned Appellate Tribunal accepted the second appeal holding that the proceedings lacked lawful basis. Through order dated 04.04.2018, this Court framed the following question of law for consideration:-- “Whether the learned Appellate Tribunal IR has failed to appreciate the law settled by this Honourable Court in W.P. No. 24795/2016 & 21761/2016, wherein it has been observed that provisions of Section 11(4A) of the Act would apply retrospectively for the recovery of tax?” Learned counsel for the respondent contends that the very issue involved in the instant reference has been…