2008 PTD 1905
SYED KAZIM RAZA SHAMSI, MEMBER (JUDICIAL).--- This Sales Tax Appeal is directed against an Order-in-Original No.645, dated 13-6-2002 passed by Additional Collector (Adjudication), Multan, whereby a liability was adjudged against the appellant on various counts.
2. Facts of the case briefly stated are that during the course of audit of the registered person the Auditors found following discrepancies in the record of the appellants:
(1) Inadmissible input adjustment.
(2) Short payment of Rs.97898 due to difference between the meter reading.
(3) Short payment made by WAPDA to the appellant to the tune of Rs.1622137.
(4) Wrong adjustment of sales tax for the month of December, 1999.
(5) Excess claim of input tax on advances.
(6) Premature adjustment of input tax of Sui gas bills.
(7) Excess claim of input tax of Sui gas bills.
(8) Non-payment of sales tax on self-consumption of electricity in housing colony.
(9) Non-payment of sales tax on sale of vehicles; and
(10) Non-filing of sales tax return for the months of September, 2000.
These discrepancies were confronted to the registered person by issuing a show-cause notice calling upon them as to why sales tax amounting to Rs.2806331 should not be recovered from them along with additional tax and penalties.
3. The appellants contested the show-cause notice on various grounds. The Adjudicating Authority after examining the record and considering the submissions of the appellants did not agree with the same and upheld the charges levelled in the show-cause notice except charge No.4 which was dropped and charge No.10 which was sent back to the Collectorate of Sales Tax for deciding the same afresh.
4. The appellants feeling aggrieved by the findings of the Adjudicating Officer adjudging the liability of Rs.280631 along with penalties and additional tax have assailed the said order-in-original in the present appeal.
5. We have heard both the parties and have examined the record minutely. At the very outset of the opening of the arguments learned A.R. of the appellants filed additional arguments in appeal and stressed on the point that the show-cause notice, dated 1-3-2002 was vague and illegal and without lawful authority for the reason that no section was indicated therein and in this connection has referred to various judgments of the superior Courts. The point raised by the learned A.R. for the appellants has examined in the light of the arguments addressed by the learned A.R. as well as the case-law cited at the bar. It is the principle of general law that the sections of a law are not to be seen rather substance of the matter is to be examined where from the allegations are oozed out. The examination of show-cause notice shows that the Auditors had pointed out the liabilities under different heads after examining the record which clearly show that the charges were levelled against the registered person under section 36 of the Sales Tax Act, 1990. Even otherwise it does not matter whether the evasion of tax was a deliberate act of a person or it was otherwise, the liability of additional tax under section 34 of the Sales Tax Act, 1990 cannot be avoided. The contention thus having no force is repelled.
6. In respect of Charge No.1, the appellants had claimed input adjustment on the item which do not fulfil the requirement of section 8 of the Sales Tax Act, 1990 as those goods do not involve in the furtherance of taxable activity. The goods like hotel bills and air tickets having nothing to do with the production of goods liable to the sales tax nor the appellant was successful in proving the same before the lower forum or even at this stage of appeal.
7. It is the stand of the appellant that there were two meters installed at the premises out of which one was back up meter and there was an agreement with the WAPDA for recording the reading for the purposes of raising bill from back up meter. The appellant did not produce any agreement showing privy between the registered person and the WAPDA for taking the reading from the back up meter. In the absence of such agreement it was justified to take reading from the main meter which reading resulted into the short payment of Rs.97898. The findings of the adjudicating officer being unexceptionable are maintained.
8. In respect of Charge No.3 it is the stand of the appellant that there was a dispute between the WAPDA and the appellant but again no details of such dispute have been produced. Even the appellant failed to obtain debit note from the WAPDA in respect of the amount charged against the appellant which amount could be adjusted. The findings of the adjudicating officer on this point are thus correct and are maintained.
9. Charge No.5, relates to the excess claim of input tax on the advances received from the clearing agent. It would be suffice to say that the learned A.R. has failed to establish as to how the findings of the adjudicating officer that the appellants were entitled to claim amounts for which they were entitled and they were not entitled to claim such amount calculated on estimated basis, is not legal and factually incorrect.
10. In respect of Charge, No.6, learned A.R. has referred to a judgment reported as PLD 1998 SC 64 and has also referred to the judgments of this Tribunal to say that adjustment of input tax out of tax period was allowed by above referred judgments. The judgments so referred have been examined which support the contention of the appellants, therefore, keeping in view the law laid down by the apex Court the findings of the Adjudicating Officer on this issue are set aside and the charge is dropped accordingly.
11. About Charge No.7 i.e., excess claim of input tax of Sui gas bills suffice it would be to say that the appellants had utilized the Government Revenue for a long time, therefore, the liability against the appellant was correctly adjudged against them.
12. In respect of Charge No.8 i.e., the consumption of electricity in the housing colony the arguments of the appellants that those persons were associated persons as defined in section 2(46)(ii)(a) of the Sales Tax Act, 1990 appears to be based upon misconstruction of law. It has now been settled that the utility supplied to the housing colony of a manufacturing unit do not relate to taxable activity as defined by section 2(41) of the Sales Tax Act, 1990, as such the supply was taxable and liable to the sales tax.
13. The last charge has already been settled by the apex Court in the recent judgment wherein their lordships have graciously been held that the sale of fixed assets as well as the scrap are liable to the sales tax as the same fall in the furtherance of taxable activity reducing cost of production or adding to the profit of the registered person. The charge as alleged in the show-cause notice is maintained.
14. No other point was argued by the learned A.R. for the appellants.
15. The upshot of the discussion is that the order passed by the adjudicating officer does not suffer from any legal infirmity and is maintained except on Charge No.6.
16. For the foregoing reasons, the appeal is partly accepted by setting aside finding of lower fora on Charge No.6 while remaining findings on other charges the judgment is maintained. Parties be informed through registered post or by UMS.
17. File be consigned after completion.
C. M.A. /80/Tax(Trib.) Order accordingly.