THE COMMISSIONER OF SALES TAX, RAWALPINDI ZONE, RAWALPINDI (Now
These appeals were directed against a judgment of the Lahore High Court concerning income-tax references. The core legal question was whether the High Court could interfere with concurrent findings of fact made by the Appellate Assistant Commissioner and the Income-Tax Appellate Tribunal regarding the genuineness of sales and the status of purchasers as licensees under the Sales Tax Act. The Department argued that the Sales Tax Officer had conducted an inquiry and made findings against the respondent, which the appellate forums had overturned. The Supreme Court held that the Department failed to demonstrate any legal infirmity in the findings of the appellate forums. The Court emphasized that the findings subject to review before the High Court were those of the appellate forums, not the initial Sales Tax Officer. Since the Department could not show that the appellate findings suffered from any legal error, the High Court correctly declined to interfere with the concurrent findings of fact. Consequently, the Supreme Court dismissed the appeals.
- Can the High Court interfere with concurrent findings of fact made by the Appellate Assistant Commissioner and the Income-Tax Appellate Tribunal in a tax reference?
- Does the failure of the Department to show legal infirmity in appellate findings justify the dismissal of an appeal against a High Court judgment?
- Are findings of fact made by appellate forums in tax matters subject to interference by the High Court if they do not suffer from legal infirmity?
- Section 4, Sales Tax Act 1951
- Section 12(4), Sales Tax Act 1951
1. MUHAMMAD AFZAL ZULLAH, J.--These appeals through leave of this Court are directed against judgment, dated 30th September, 1971 of the Lahore High Court, whereby to income-tax references were decided in favour of the respondent assessee. Tire question sought to be raised before the High Court were: "(1) Whether on facts and in the circumstances of the case, the Tribunal rightly maintained the orders of the Appellate Assistant Commissioner when the sales claimed to be exempt under section 4 were made to bogus parties and there was actually no evidence of actual delivery of the goods to those parties?
(2) Whether the order of the Appellate Assistant Commissioner modifying penalties under section 12(4) for the years 1955-56 and 1956-57 was rightly maintained by the Tribunal?
2. The respondent Company were admittedly licensee as is required under the Sales Tax Act (No.III of 1951). They claimed exemption on certain sales made to three parties who also it was asserted by the assessee were themselves licensees with licences Nos 16159, 13605 and 13056. The Sales Tax Officer was of the view that neither there were any sales made by the asses5ee Company nor the so-called purchasers were licensees rather all this was treated as fake. However, the respondent's appeal was allowed by the Appellate Assistant Commissioner with findings of fact against the Department on both the issues relating to the sales and the genuineness of the purchasers being licensees. The Department approached the Income-Tax Appellate Tribunal which also upheld the appellate order.
3. We asked the learned counsel as to how the High Court could have interfered with concurrent findings of fact oil the question of the sales being genuine or not and the purchasers being genuine licensees or not? He failed to render any satisfactory reply except that it was necessary for the Sales Tax Officer to hold an inquiry on both the issues and he having held the inquiry gave findings of fact on both the issues against the respondent assessee. But this again amounts to begging the question, namely, that the to appellate forums having disagreed (on findings regarding questions of fact) with the Sales 'E.x Officer, the findings which had to be assailed before the High Court by the Department, were of the appellate forums and they undoubtedly did not suffer from any legal infirmity, at least none has been shown during the hearing of these appeals. We accordingly finding no force in these appeals dismiss the same. As the respondent assessee is not represented, therefore, there shall be no order as to costs.