Appeal No. S.T.A. 983/LB of 2000, decided on 30th December, 2004. Versus Appeal No. S.T.A. 983/LB of 2000, decided on 30th December, 2004.
SAEED AKHTAR, (MEMBER (TECHNICAL)).-- -This appeal is directed against Order-in-Original No.30/02 of 2000 passed by the Deputy Collector, Sales Tax and Central Excise (Adjudication), Lahore issued vide C. No.610-DC-II/ST/198/2000/2176, dated 30-9-2000 whereunder the appellant was directed to pay penalty of Rs.9,372'under section 33(2)(cc) of the Sales Tax Act, 1990 for failure to deposit sales tax pertaining to the tax period June, 2000 by the due date.
2. The brief facts of the case as reported to the Adjudicating Officer by the Collectorate of Sales Tax and CE, Lahore are that the registered person Messrs ADK Enterprises (Pvt.) Ltd., Abid Market, Lahore filed sales tax return for the tax period 6 of 2000 but failed to pay sales tax amounting to Rs.10,000 in relation thereto at the time of filing of return. The appellant (then respondent), however, discharged his sales tax liability on 10-8-2000 and also paid additional tax amounting to Rs.150 as a consequent of belated payment of tax. The Assessment and Processing Division of Collectorate of-Sales Tax during scrutiny of sales tax return took cognizance of the matter and made out a contravention case against the respondent (now appellant) for violation of sections 3(1)(a) and 3(a), 6(2) and 3(1), 7(1) and 26(1) read with section 2(9) of the Sales Tax Act, 1990. A show-cause notice was issued to the registered person directing to explain as to why penalty should not be imposed on him under section 33(2)(cc) of the Sales Tax Act, 1990 for belated payment of sales tax due for the tax period 6 of 2000 and consequent violation of sections 3(1)(a) and 3(a), 6(2) and 3(1), 7(1) and 26(1) read with section 2(9) ibid. The Adjudicating Officer after considering the written as well as oral comments of the respondent (now appellant) and detecting agency held the respondent (now appellant) guilty of breach of relevant provisions of the Sales Tax Act, 1990 and imposed penalty of Rs.9,372 under section 3(2)(cc) ibid for failure to deposit the self-assessed sales tax by the due date. The appellant feeling aggrieved with the decision of the. Adjudicating Officer filed appeal before this Tribunal under section 46 of the Sales Tax Act, 1990.
3. The main contentions of the learned counsel at the. time of hearing were as under:--
(1) That the appellant is a registered person manufacturing cooling towers. The appellant has been paying sales tax for the last 10 years and never before any penalty has been imposed upon him for any default.
(2) The appellant filed sales tax return for the tax period 6 of 2000 on 7-7-2000, i.e. much before the due date and deposited sales tax of Rs.68,334 instead of Rs.78,334., The deposit of less tax was due to miscalculation. However, on receipt of notice of short recovery under section 4 of the Sales Tax Act, 1990, the appellant made payment of short-paid amount of Rs.10,000 along with additional tax under section 34 of the said Act and wrote a Letter No.ADK/ST/010/01, dated 10-8-2000 to the Assistant Collector regretting mathematical error made by the appellant in the preparation of sales tax return for the tax period June, 2000 whereby the appellant short deposited sales tax by a sum of Rs.10,000. The short paid amount was deposited along with additional tax and Collectorate of Sales Tax was informed accordingly.
(3) That the Adjudicating Officer was again informed that the short payment was due to mathematical error/miscalculation. It was further informed that the return along with sales tax was submitted on 7-7-2000, much before the due date fixed under the law.
(4) That having settled the matter to the satisfaction of the Assistant Collector on receipt of recovery notice by depositing the shortfall of Rs. 10,000 plus Rs. 150, the show-cause notice was unnecessary especially in view of the provisions of sections 3(1)(2)(a), (b), (c), (cc) and (d) reading. Provided that no penalty shall be imposed when any miscalculation is made for the first time during the year.
(5) That the appellant's mistake being that of miscalculation could only be dealt under section 33(2)(d) and not under section 33(2)(cc) as has been illegally done by the learned Adjudicating Officer.
(6) That a question for consideration of the learned Tribunal is "whether a case of miscalculation could at all be penalized under clause (cc) of subsection (2) of section 33?"
(7) It is prayed that the impugned Order-in-Original may be set aside and the penalty of Rs.9372 may be declared as illegal.
4. The learned DR opposed the contentions of learned counsel for the appellant and supported the impugned Order-in-Original.
5. I have heard the contentions of both the sides and perused the appeal file available before me. The appellant filed sales tax return for the tax period June, 2000 much before the due date i.e. on 7-7-2000 with the following particulars:--
Supplies ?????????????????????????????????? Rs.733,389
Sales Tax @ 15% ??????????????????? Rs.110,008
Less credit for input sales tax ??? Rs.31,674
Sales tax payable ????????????????????? Rs.68,334
However, on pointation by the respondent Collectorate, the appellant immediately deposited the short paid amount of Rs.10,000 along with additional tax of Rs.150. The learned consultant for the appellant has contended that short payment was a result of miscalculation made by the appellant and amount of Rs.68,334 instead of correct amount of Rs.78,334 was deposited. He further contended that short payment was not intention and it happened due to miscalculation on the part of the appellant for which he is not liable to penal provision under the Sales Tax Act, 1990. The learned consultant further pointed out that according to proviso to clause (d) of subsection (2) of section 33 of the Sales Tax Act, 1990 penalty for miscalculation made for the first time is not in accordance with the law.
6. I have examined the contentions of the learned consultant and A considered the arguments of the learned DR very carefully. The short payment made by the appellant in this case appears to be a genuine mistake, which was a result of miscalculation made by the appellant and accordingly correct amount of sales tax was not deposited. However, later on the appellant deposited the short payment along with additional tax. In view of above, I do not find any justification for imposition of penalty for the miscalculation of tax made first time in a year by the appellant as pointed out by the learned consultant. In view of what has been discussed above, the penalty imposed in the impugned order is remitted.
7. The appeal stands disposed of as above.
C.M.A./490/Tax(T) ????????????????????????????????????????????????????????????????????????????? Appeal accepted.