Law: Sales Tax Act, 1990

Section: 7,33(3)

(a) Sales Tax Act (VII of 1990)---S.7---Determination of tax liability---Input tax adjustment---Consumption of electricity in administrative office---Consumption of electricity in the administrative office located within the four walls of the factory premises was admissible to input tax adjustment---Central Board of Revenue had also clarified and declared to the field formations that input tax adjustment may not be objected to---Objection was dropped by the Appellate Court. (b) Sales Tax Act (VII of 1990)--- ----S.33(3)---Offences and penalties---Non-maintenance of record---Penalty prescribed under S.33(3) of the Sales Tax Act, 1990 was Rs.10,000 and not Rs.50,000 for non-maintenance of record; being so, the penalty was reduced to Rs.10,000---Order-in-original was modified accordingly by the Appellate Tribunal. JUDGMENT HAFIZ MUHAMMAD ANEES, MEMBER (TECHNICAL).---This appeal is directed against the Order-in-Original No.55 of 2002, dated 5-11-2002 (dispatched on 14-11-2002) passed by the Additional Collector (Adjudication), Faisalabad. 2. Briefly stated, the relevant facts of the case are that the during the course of audit of the appellant's units for the period January, 1999 to December, 2000 following observations resulting into evasion of sale tax were communicated to the appellant through show-cause notice, dated 30-7-2002 proposing recovery of Rs.3656727 (including penalty amounting to Rs.2148847) along with additional tax and penal action under sections 36, 34 and 33(2)(c) of the Sales Tax Act, 1990. All the observations raised through the show-cause notice were settled except that penalty although reduced from Rs.2148847 to Rs.50000 by the Adjudicating Officer vide order-in-original, dated 14-11-2002 referred to above for non-maintenance of record and secondly input tax adjustment was disallowed on the electricity consumed in the administrative block located within the factory premises. 3. The appellant has assailed the vires and legality of the aforesaid orders mainly on the grounds that huge penalty of Rs.21.48 million was proposed by the special auditor and reflected in the show-cause notice for…

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