COLLECTOR OF CUSTOMS, SALES TAX (WEST), KARACHI vs Messrs K&A INDUSTRIES, KARACHI
This petition arises from an order passed by the High Court of Sindh, Karachi, which allowed the respondent's appeal and struck down the demand for Additional Tax on the ground that the show-cause notice dated 12-8-1999 was issued beyond the prescribed limitation period. The core legal question before the Supreme Court was whether the show-cause notice issued in respect of the tax year 1994-95 on 12th August 1999 fell within the three-year limitation period prescribed by law. The Supreme Court held that the show-cause notice was indeed served beyond the limitation period prescribed under subsection (2) of section 36 of the Sales Tax Act, thereby affirming the decision of the High Court to non-suit the petitioner. The key principle laid down is that a show-cause notice issued beyond the statutory limitation period is time-barred and invalid, rendering any consequential tax demands unsustainable.
- Whether a show-cause notice issued beyond the period of limitation prescribed under the Sales Tax Act is sustainable?
- Is a demand for Additional Tax lawful if the underlying show-cause notice is time-barred?
- Does the issuance of a show-cause notice after the expiry of three years violate the limitation provisions of the Sales Tax Act?
- Section 36(2), Sales Tax Act
ORDER
1. ' IFTIKHAR MUHAMMAD CHAUDHRY, C.J.--- This petition calls in question the following order passed by the High Court of Sindh Karachi:-- "By the impugned order the appeal filed by the respondent was allowed and the demand of Additional Tax was struck down for the reason that the show-cause notice, dated 12-8-1999 was beyond the prescribed limitation in terms of subsection (2) of section 36 of the Sales Tax Act. Mr. Abdul Sattar Silat was not able to dislodge the finding which is based on facts. Consequently, the appeal has no merits and the same is dismissed, with no order as to costs."
2. 2, Learned counsel when confronted with the provisions of subsection (2) of section 36 of the Sales Tax Act, and was called upon to explain as to whether in respect of the year of 1994-95, show- cause notice, dated 12th August, 1999, was within the prescribed limitation i.e, three years. He could not answer satisfactorily. Thus it is held that show-cause notice was served beyond the period of limitation as prescribed in subsection (2) of section 36 of the Sales Tax Act and as such learned High Court had rightly non-suited the petitioner.
3. Petition is dismissed and leave declined. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.
Cited by 3 cases
- Messrs MAYFAIR IMPEX, KARACHI vs COLLECTOR OF CUSTOMS, CENTRAL 2018 PTD (Trib.) 1131
- Messrs AL-QUTAB ENTERPRISES vs ADDITIONAL COLLECTOR CUSTOMS and another 2013 PTD (Trib.) 1913
- Messrs INNO VATIVE IMPEX, KARACHI vs COLLECTOR CUSTOMS, SALES TAX AND 2011 PTD (Trib.) 1010