Law: Sales Tax Act, 1990

Section: 2(46),11(2),3,34

(a) Sales Tax Act (VII of 1990)---S. 2(46)---S.R.O. 1361(I)/98, dated 9-12-1998---Value of supply--­Valuation of cotton seed---Short payment of tax on account of under valuation of cotton seed ---Assessees were required to pay sales tax on supply of cotton seed at its value fixed by the Central Board of Revenue vide S.R.O. 1361(1)/98, dated 9-12-1998 in terms of S.2(46) of the Sales Tax Act, 1990. (b) Sales Tax Act (VII of 1990)--- ----S. 11(2)---Assessment of tax---Suppression of sales---Detection of audit staff---Assessment of tax payable---Validity---Department was competent to assess the correct amount of tax payable by the assessee where audit staff detected suppression of sales by observing that the quantity of cotton seed produced did not-commensurate with the quantity of cotton received---Objection that the Department had gone beyond the record to determine the amount of tax had no force in circumstances. Appeal No. 1539 of 2001 irrelevant. (c) Sales tax--- ---- Cotton seed---Recovery ratio----Recovery ratio of cotton seed in different areas of Multan Collectorate was accepted by the local Sales Tax Authorities ranged from 55 % to 64.92 %. (d) Sales Tax Act (VII of 1990)--- ----Ss. 3, 11(2) & 34---Scope of tax---Cotton ginning factory--­Determination of correct quantity of cotton seed recovered during the ginning of cotton ---Assessee's recovery ratio of cotton seed during the year 1997-98 was 57 % whereas during the year 1998-99 it reduced to 46.8 %---Department determined sales by ,applying average recovery ratio of 58% prevalent in the industry ---Validity---Assessee had not provided any, convincing reason for fall of recovery ratio from 57 % to 46.8 % in the succeeding year---Appellate Tribunal directed that the same recovery ratio of 57% be applied for the year 1998-99 to determine the amount of tax payable by the assessee---Order was set aside for a fresh decision. JUDGMENT ZAFAR-UL-MAJEED, MEMBER (TECHNICAL).------This appeal is directed against Sales Tax Order-in-Original No.982 of 2000, dated 2-11-2000 passed by the Deputy Collector. (Adjudication), Multan. By this order the learned Adjudicating Officer has directed Messrs Madina Cotton…

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