Appeal No. 1474/LB of 2000, decided on 14th February, 2002. Versus Appeal No. 1474/LB of 2000, decided on 14th February, 2002.
1. MIAN ABDUL QAYYUM (MEMBER JUDICIAL).--- This appeal has been filed by Messrs Sargodha Textile Mills Sargodha against Sales Tax Order-in-Original No.9 of 2000, dated 29-8-2000 passed by the Additional Collector (Adjudication), Faisalabad. By this order the learned Adjudicating Officer has directed the appellant to pay sales tax, additional tax alongwith penalty equal to 5 % of the tax involved in respect of the charges detailed below:--
(1) the unit purchased raw materials in one tax period and made adjustment in the other tax period, whereas, as per Sales Tax Act, 1990 the both should be in the same tax period. Therefore, additional tax is recoverable from the unit.
2. Inv No.
3. Date
4. Sales Tax
5. Adjusted in the month of
6. 60
7. 13-2-1997
8. 415550
9. January-97
10. 35
11. 20-3-1997
12. 403373
13. February-97
14. 36
15. 20-3-1997
16. 426808
17. February-97
18. 12,45,731
19. Total
(2) During the course of audit it was identified by the audit team that the unit made short payment of Rs.484384 payable against the supply of cloth and yarn in the month of September, 1998 which caused the violation of section 36 of the Sales Tax Act, 1990. The same is recoverable alongwith additional tax.
(3) During the audit it was found that unit purchased some items during the period from 12 of 1997 to June of 1998 and adjusted input tax against such items which was not admissible under S.R.O. 1307(I)/97, dated 20-12-1997 which reads that:--
20. "A registered person shall not be entitled to reclaim or deduct the input tax paid on goods which are not the direct constituent and integral part of the taxable goods produced, manufactured or supplied, during the course, or in the furtherance, of any taxable activity.
2. It has been argued that on behalf of the appellant, that while deciding the case, the learned Adjudicating Officer has passed the orders in a mechanical way without discussing the arguments advanced by the appellants before him. `In the impugned order he has simply reproduced the written reply to the show-cause notice, a re-joinder submitted by the sales, tax department, a further report made by the department and recorded his decision that the afore-mentioned charges stand established. He has not even verified the payment of sales tax relating to charge at (2) above and left it to the Sales Tax Department to verify the appellant's claim in this regard. While pleading the case on merit, the learned counsel for the appellant has argued that the input tax adjustment made beyond the tax period was before amendment of section 7(1) on 1-7-1997, and therefore, for the period before this date, there was no bar to make input tax adjustment beyond the tax period. Similarly, the input tax adjustment claimed against tax paid on spare part, accessories and lubricants was also lawful as S.R.O. 1307(I)/97, dated 20-12-1997 relied upon by the department was unlawful being against the provisions of section 8 of the Sales Tax Act, 1990. Regarding 3rd charge, it has been submitted that the appellant made payment of entire liability under the amnesty allowed by the Government vide S.R.O.461(I)/99.
4. Learned Departmental Representative opposed the appeal.
5. We have given due consideration to the submissions made by the appellant's counsel and find that there is a considerable force in the contentions raised by him. Learned Adjudicating Officer while, concluding his order has not determined the amount of sales tax to be paid by the appellant nor he has discussed the issues involved while establishing the charges. About the charge listed at para 1(2) of this judgment, learned Adjudicating Officer has observe that "the sales tax Department may verify the claim of respondent that the principal amount of sales tax demanded in said sub-para 5 has been deposited and adjusted recovery accordingly" Instead of determining the amount payable by the appellant, as required under section 36 of the Sales Tax Act, 1990, he has left this exercise to be done by the detecting agency. The impugned order passed by the Adjudicating Officer, therefore, does not meet the requirement of a speaking Order-in-Original to be passed by him in terms of section 36 referred to above. We therefore, without going into the merits of the case, set aside the impugned order and remand the case to the Adjudicating Officer for a fresh decision according to law giving his judgment on each of the issues after giving due consideration to the contentions raised by the appellant and determine the amount of tax to be payable by it.
21. C.M.A./731/Tax(Trib.) Case Remanded.