Law: Sales Tax Act, 1990

Section: 7,7(1),33(2),46,73

Sales Tax Act (VII of 1990)---Ss. 7(1), 33(2), 46 & 73---Appeal---Appellate Tribunal---Determination of tax liability---Imposition of penalty---Entitlement of a registered person to deduct input tax from output tax, was subject to the provisions of S.73 of Sales Tax Act, 1990, which had made it binding on the registered person that payment of the amount of transaction exceeding value of Rs.50,000 would be made by a crossed bank draft; or crossed pay order or any other crossed banking instrument in favour of the supplies from the business account of the buyer-Payments in the present case were made through travellers cheques, which were bearer in nature and did not qualify for Banking instruments referred to in S.73 of Sales Tax Act, 1990---Provisions of Ss. 7 and 73 being mandatory in nature must be followed by a registered person---Mere non-mention of S.36 of the Sales Tax Act, 1990 in the show-cause notice, would not vitiate entire proceedings---Assessee having not actually made input tax adjustment, its sales tax liability was reduced---Additional tax and penalty of 3% imposed under S.33(2) of Sales Tax Act, 1990 was remitted. JUDGMENT ZAFAR UL MAJEED, MEMBER (TECHNICAL).---This appeal has been filed by Messrs Bilal Old Tyre Centre, Sadiq Abad, against sales tax Order-in-Original No. 255-256 of 2005, dated 18-11-2005 passed by the Collector (Appeals), Customs, Sales Tax and FE, Multan. By this order, learned Collector (Appeals) has upheld sales tax Order-in-Original No.933/05, dated 2-3-2005 passed by the Deputy Collector (Adjudication), Multan whereby a demand of Rs.4,28,888 along with additional tax and penalty equal to 3% of the amount of tax involved under section 33(2) of the Sales Tax Act, 1990 (hereinafter referred to as "the Act") has been adjudged against the appellant. The demand has been adjudged on the ground that during the period March-June, 2002, the appellant made payments against its purchases through traveller's cheques instead of transactions through business account in violation of the provisions of section 73 of the Act. 2. The appellant's case is that traveller's cheques are also banking instrument as envisaged under section 73 of…

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