Messrs BISMA TEXTILE MILLS LTD. VS FEDERATION OF PAKISTAN
2002 P T D 2780
[Lahore High Court]
Before Jawwad S. Khawaja, J
Messrs BISMA TEXTILE MILLS LTD.
Versus
FEDERATION OF PAKISTAN and others
Constitutional Petition No. 12355 of 2001, decided on /01/.
th
July, 2001. Sales Tax Act (VII of 1990)---
----Ss. 3 & 6---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Liability to pay sales tax---Petitioners in their Constitutional petition had challenged the demand of sales tax by Authority created on the basis. of audit report---Petitioner had not been furnished a copy of audit report nor he was granted any opportunity to point out flaws in such report and to show cause as to why amount demanded ought not be paid by petitioner---Audit report, even otherwise could not constitute a determination of petitioner's liability for payment of sales tax-- Petitioner could not be burdened with liability of payment of sales tax merely on the basis of audit report with which petitioner had not been confronted.
Syed Amir Ali Shah for Petitioner.
Khan Muhammad Virk for the Department.
ORDER
Learned counsel for the petitioner contends that an amount of Rs.3,789,778 has been demanded from the petitioner on the basis of an audit report. The petitioner, however, has not been furnished a copy of A the audit report nor has any opportunity been granted to the petitioner to point out flaws in such report and to show cause why the amount demanded might .not be payable by the petitioner.
2. Learned counsel for the petitioner contends that even though the petitioner has deposited an amount of Rs.1,500,000 with the respondent--Department on 12-6-2001 this was done under protest and on the express conditions that the audit report, which forms the basis of the demand against the petitioner, will be supplied to the petitioner. Admittedly, this has not been done despite the lapse of almost one month from the date on which the deposit of the aforesaid sum was made with the Sales Tax Department by the petitioner.
3. Learned counsel for the petitioner further contends that the audit report itself cannot constitute a determination of the petitioner's liability for payment of sales tax. According to him the petitioner has to be) afforded a reasonable and adequate opportunity of going through the audit report and to point out flaws, if any, in such report with the object of rebutting the basis or authenticity of such report.
4. The aforesaid contentions of learned counsel have obvious merit. The petitioner cannot be-burdened with liability merely on the basis of an audit report with which the petitioner has not been confronted. In these circumstances, the present petition is allowed.
5. This order, however, shall not prevent the Sales Tax Department from preparing a contravention case in accordance with law on the basis of the audit report and other material, if any. The matter should thereafter be adjudicated in accordance with the provisions of the Sales Tax Act after a show-cause notice has been issued to the petitioner and the petitioner has been afforded a reasonable and adequate opportunity of responding such show-cause notice. This petition is disposed of it the above terms.
H.B.T./B-103/L
Petition allowed.