(a) Sales Tax Act (VII of 1990)‑‑‑

‑‑‑‑Ss. 33, 34 & 46‑‑‑Additional tax‑‑‑Appeal to Appellate Tribunal‑‑ Appellate Tribunal, while setting aside the order of levy of additional tax and imposition of penalties by the Department, after the assessee had failed in convincing the Tribunal of their arguments against such levy etc., ought to have assigned reasons in view of Ss. 23 & 24, Sales Tax Act, 1990.

(b) Sales Tax Act (VII of 1990)‑‑‑

‑‑‑‑Ss. 3, 7, 33 & 34‑‑‑Bagasse consumed as in‑house fuel by the assessee, a sugar manufacturer, was chargeable to sales tax‑‑‑Default in payment of such levy‑‑‑Charge of additional tax, and imposition of penalties‑‑‑Validity‑‑‑High Court restored the order‑in‑original imposing additional tax as well as penalties with the direction that amendments made in S.34, Sales Tax Act, 1990 being the beneficial one and made during pendency of proceedings, Revenue shall charge the additional tax at the rate which was applicable in similar cases.

Maqsood Ahmad for Appellant.

Mian Abdul Ghaffar for Respondent.

Date of hearing: 31st July, 2003.

JUDGMENT

NASIM SIKANDAR, J.‑‑‑By this judgment we intend to dispose of departmental appeals Customs Appeals Nos. 85, 86, 87, 88, 89, 90, 91, 92, 93, 94 and 99 of 2002.

2. The respondents are manufacturers of sugar. They were served with show‑cause notices wherein it was inter alia stated that under 6th Schedule of the Sales Tax Act, 1990 as amended for the financial year, 1996‑97 no exemption from sales tax on supplies as well as in‑house use of bagasse was available and, therefore, by default in payment of the levy they had contravented the provisions of sections 3, 6, 7, 22, 23 and 26 of the Sales Tax Act, 1990 they were also called upon to show cause as to why penal action should not be taken against them under section 33 of the Act.

3. The replies submitted by the respondents did not find favour with the Department which was of the view that the issue of taxability/chargeability of begasse consumed to house by Sugar Mills stood resolved in terms of the judgment of the Hon'ble Supreme Court of Pakistan in re: Sheikhu Sugar Mills Limited v. Government of Pakistan, (2001 PTD 2097). As far the value of the bagasse no consumed for the purpose of levy of sales tax, different rates were adopted by the Department in respect of different respondents. Also they . were burdened with additional tax under section 34 of the Act as also penalties at different rates.

4. The respondent succeeded before the Tribunal only to the extend of remission/deletion of additional tax and penalties. The learned Tribunal rejected their contentions with regard to chargeability of begasse consumed in house and their prayer for proportionate scoring out of production of molasses for allowing input adjustment as well as exclusion of moisture. Having done so, the Tribunal deleted penalties and additional tax, by writing a single line. "The orders with regard to levy of additional tax and penalties etc. are, set aside". This has grieved the Department.

5. After hearing the learned counsel for the parties we will readily agree with the learned counsel for the appellant/Revenue that the learned Tribunal did not assign any reason for deletion of the additional tax as well as penalties. Learned counsel for the Revenue are also correct is pointing out that keeping in view the provisions of section 33 and 34 of the Sales Tax Act they ought to have assigned reason for remission of additional tax and penalties after the issues had failed in convincing the Tribunal of their arguments regarding chargeability of bagasse consumed in‑house.

6. Even before us the respondents have not come up with any strong argument against the levy of additional tax and penalties in the given situation. The submission that they bonafidely contested the chargeability and honestly believed that Bagasse consumed as fuel was not chargeable to tax cannot be accepted as correct in view of the judgment of the Hon'ble Supreme Court of Pakistan in re. Sheikhu Sugar Mills, (supra). Even after the pronouncement of the aforesaid judgment of Hon'ble Supreme Court of Pakistan on 27‑2‑2001 the respondents attempted to interpret in a way which can at best be described as novel.

7. The impugned judgment of the Tribunal being devoid of any reason or rationable is accordingly set aside. The orders‑in‑original imposing additional tax as well as penalties shall, therefore, be restored. However, keeping in vide the beneficial amendments made in section 34 (additional tax) of the Act during pendency of these proceedings, the Revenue shall charge the additional tax at the rate which is applicable in similar cases as of today.

8. Appeals accepted.

M.B.A./C‑233/LOrder accordingly.