COLLECTOR, SALES TAX AND CENTRAL EXCISE (ENFORCEMENT), KARACHI VS Messrs SHAIKH MOHAMMAD FAREED, 2005 PTD-KARACHI-HIGH-COURT-SINDH 1962 (2005)

Sales Tax Act (VII of 1990)---

----Ss. 2(46)(e), 33(2)(cc) & 47---Appeal to High Court---Order of the Appellate Tribunal revealed that by the impugned order, order-in original had been set aside, whereby the Deputy Collector had ordered that in the first instance the course provided under S.2(46)(e), Sales Tax Act, 1990 would be followed, whereby the Valuation Committee in terms thereof would determine the value of the goods within six weeks from the date of the order and in case the issue was not resolved in the said terms, then value of the supply shall be deemed to be value in open market as provided under S.2(46) of the Act and accordingly Sales Tax would be recoverable from the assessee along with additional tax due plus penalty equal to 3% of the amount in terms of S.33(2)(cc) of the Sales Tax Act, 1990---Validity---Held, first course adopted by the Deputy Collector in referring the matter for determination of value of supply by the Valuation Committee was appropriate and such course should have been followed by the Department, instead of enforcing the recovery of sales tax as contemplated in the other part of the order-in original---High Court, to meet the ends of justice partly set aside the order of the Tribunal and directed that the Valuation Committee be constituted in terms of S.2(46)(e) of the Act and question of levy of Sales Tax and penalty, if any, or otherwise shall follow such report of the Committee.

Raja Muhammad Iqbal for Appellant.

None for Respondent.

ORDER

By this appeal under section 47 of the Sales Tax Act, 1990, order, dated 12-7-2004, passed by the Custom, Excise and Sales Tax Appellate Tribunal, Karachi, in Sales Tax Appeal No. K-196/2002/ 6978, has been challenged by the Collector of Sales Tax Karachi.

Perusal of the impugned order reveals that by this order. Order- in-Original, dated 11-5-2002 has been set aside, whereby the Deputy Collector has ordered that in the first instance the course provided under clause (e) to section 2(46) of the Sales Tax Act, 1990, will be followed, whereby the Valuation Committee in terms thereof will determine the _A value of the goods within six weeks from the date of the order and in case the ⁱssue is not resolved in the above terms, then value of the supply shall be deemed to be the value in open market as provided under section 2 of subsection (46) of the Sales Tax Act, 1990 and accordingly Sales Tax of Rs.2,225,431 will be recoverable from the respondent along with additional tax due plus penalty equal to 3% of the amount in terms of section 33(2)(cc) of Sales Tax Act, 1990.

Contention raised by Mr. Raja Muhammad Iqbal is that insofar as the second part of the Order-in-Original imposing/Sales Tax on the respondent is concerned, the Tribunal was justified in setting aside such part of the order but order of the Tribunal setting aside the order-in original as a whole is absolutely unwarranted by law, therefore it is liable to be set aside.

In the context of the above submissions made by the learned counsel for the appellant we have perused clause (e) to section 2(46) of the Sales Tax Act, 1990 which reads as under:--

"(e) In case where there is sufficient reasons to believe that the value of a supply has not been correctly declared in the invoice, the value determined by the Valuation Committee comprising representatives of trade and the Sales Tax Department constituted by the Collector."

Looking to the facts and circumstances of the case, we feel that first course adopted by the Assessing Officer/Dy. Collector in referring the matter for determination of value of supply by the Valuation Committee was appropriate order and this source should have been followed by the Department, instead of enforcing the recovery of sales _B tax as contemplated in the other part of the order-in-original.

In view of above and to meet the ends of justice, we partly set aside the order of the Customs. Excise and Sales Tax Tribunal, Karachi and direct that the Valuation Committee be constituted in terms of clause (e) to section 2(46)_. of the Sales Tax Act, 1990. The question of levy of sales tax and penalty, if any, or otherwise shall follow such report of the Committee.

M.B.A./C-28/KOrder accordingly.