2008 PTD 1864

SYED KAZIM RAZA SHAMSI, MEMBER (JUDICIAL).--- This Sales Tax Appeal is directed against an order-in-appeal, dated 13-2-2006 passed by Collector Appeals, Camp Office, Multan whereby the order-in-original, dated 18-9-2004 passed by Deputy Collector (Adjudication), Multan was upheld.

2. Facts of the case briefly stated are that during the audit of registered person for the period of 2002-2003 it was noted that 800 bales of cotton lint was supplied to blacklisted units Messrs Farooq Habib and Messrs Ravi Spinning involving sales tax of Rs.10,77,662. Upon this detection a show-cause notice was served upon the, registered person which was contested on the ground that it was not conveyed to the registered person was declared blacklisted by Department and that Messrs Farooq Habib Mills had deposited the tax amounting to Rs.666,668 and that the registered person cannot be burdened with additional tax and penalty due to the late payment by the supplier. The Deputy Collector (Adjudication) after hearing the parties did not agree with the contentions of the registered person and adjudged the liability against him. In appeal the order was upheld by the Collector Appeals, therefore, present appeal has been filed challenging the vires of the orders of both forums.

3. I have considered the submissions made by the learned counsel for the parties and examined the record. Admittedly the blacklisted unit namely Messrs Farooq Habib Mills had made the payment of Rs.666,668 although it was deposited late therefore, in the circumstances a levy of additional tax and penalty upon the buyer i.e., the appellant was totally unjustified particularly when the C.B.R. itself is some cases had condoned the late payment of sales tax. The finding of the Collector Appeals that the appellant had deliberately and knowingly supplied the cotton lint to black-listed unit is not supported by any type of evidence therefore, is not sustainable. The orders passed by both the forums below suffering from legal infirmity are, therefore, set aside.

4. For the foregoing reasons, the appeal is accepted by setting aside the impugned order and it is held that the appellant is not liable to make payment of additional tax and penalty. Parties be informed through registered post or by UMS.

5. File be consigned after completion.

C.M.A./83/Tax (Trib) Appeal accepted.