Law: Sales Tax Act, 1990

Section: 3,11(2),34

Sales Tax Act (VII of 1990)---Ss. 3, 11(2) & 34---Scope of tax---Cotton ginning factory---Demand of sales tax had been raised on the ground that assessee showed production and supply of cotton seed @ 53.89% of the cotton ginned whereas the normal recovery ratio of other factories of adjoining area was 59%---Assessee contended that 59% recovery ratio of cotton seed applied by the Adjudicating Officer was based on presumption as there was no uniform standard to determine the recovery of cotton seed nor any specific instance was quoted by the Department to prove that the production of cotton seed declared was not correct---Validity---Recovery ratio of cotton seed in different areas of Multan Collectorate which was accepted by the local Sales Tax Authorities ranged from 55 % to 64.92%---In view of this information and in absence of any other evidence with the Department. Appellate Tribunal allowed the minimum recovery percentage of 55 % ---Department was directed to calculate the short paid amount of sales tax by applying recover ratio of 55%- and recover the same from the assessee alongwith additional tax in terms of S.34 of the Sales Tax Act, 1990---Penalty was, however, remitted and order was set aside by the Appellate Tribunal. JUDGMENT ZAFAR-UL-MAJEED, MEMBER (TECHNICAL). ---This appeal has been filed by Messrs Indus Cotton Factory and Oil, Industries, D.G. Khan against Sales Tax Order-in-Original No. 1525 of 2001, dated 13-11-2001 passed by the Deputy Collector (Adjudication), Multan, whereby the appellants have been directed to pay sales tax amounting to Rs.3,25,266 alongwith additional tax in terms of section 34 of the Sales Tax Act, 1990 and a penalty of Rs.9,780 under section ibid. 2. The aforesaid demand of sales tax has been raised on the ground that during the year 1999-2000 the appellants showed production and supply of cotton seed @ 53.89 % of the cotton ginned whereas the normal recovery ratio of other factories of adjoining area was 59%. Therefore, the. appellants allegedly showed less supply of cotton seed valuing Rs.21,68,437 on which sales tax involved was Rs.3,25,266. A contravention case was accordingly made out against the appellants and…

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