Law: Sales Tax Act, 1990

Section: 66

Sales Tax Act (VII of 1990)---S.66---Claim for refund of sales tax regarding purchases made in year, 2004---Rejection of claim on basis of a report showing non-existent status of supplier in year, 2006---Validity---Refund claim pertained to purchases made in year, 2004 and not in year, 2006---Department had rejected claim without making necessary inquiries regarding status of supplier at the time when assessee made purchases there form---Tribunal set aside impugned order and remanded case to Adjudicating Officer for its fresh decision. JUDGMENT ZAFAR UL MAJEED, MEMBER (TECHNICAL).---The facts giving rise to this appeal are that the appellant filed refund claim amounting to Rs.7,05,233 for the month of March, 2004 with the Collectorate of Sales Tax and Federal Excise Lahore. After scrutiny of the refund claim, an amount of Rs.4,84,200 was rejected on the ground that according to the report of Collectorate of Sales Tax and Federal Excise, Karachi, two of the suppliers namely Messrs Bismillah Leather Industries and Messrs City Trade International, Karachi were non-existent at their declared business addresses while computerized Cross-matching of data revealed the status of one supplier Messrs Waseem Trading, Karachi as "registration suspended" and one supplier Messrs Kamal Industries as having "abnormal tax profile". The invoices issued by these suppliers were, as such, considered unverifiable and improper. The appellant filed appeal against the rejection order passed by the Deputy Collector vide Order-in-Original No.163 of 2006, dated 24-4-2006, which was rejected by Collector (Appeals), Lahore vide order in appeal No.216/ST/2006, dated 14-11-2006. Hence this second appeal. 2. Through the instant appeal, the appellant has challenged the order rejection of its refund claim mainly on the following grounds:-- (1) That the impugned order was passed ex parte without giving the appellant proper opportunity of hearing. (2) That the appellant made purchases from Messrs Bismillah Leather Industries and Messrs City Trade International wayback in March, 2004 whereas the claim has been rejected on the basis of a report showing their non-existent status in 2006 which is not…

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