COLLECTOR OF SALES TAX, FAISALABAD VS Messrs FAROOQ TRADERS, JHAWARIAN, DISTRICT SARGODHA
2005 P T D 1953
[Lahore High Court]
Before Nasim Sikandar and Jawwad S. Khawaja, JJ
COLLECTOR OF SALES TAX, FAISALABAD
Versus
Messrs FAROOQ TRADERS, JHAWARIAN, DISTRICT SARGODHA
C.A. No.546 of 2002, decided on /01/.
th
May, 2005. (a) Sales Tax Act (VII of 1990)---
---Ss. 33, 34 & 46---Power of Appellate Tribunal to remit, reduce or delete amount of penalty and additional tax---Scope---Tribunal had jurisdiction to waive or remit additional tax or penalty in view of provisions of S.34 of Sales Tax Act, 1990 even after amendment and insertion of word "shall" in subsection (1) thereof---Provisions of S.46 of Act, 1990 were neither governed nor controlled by provisions of Ss.33 and 34 thereof---Imposition of penalty and additional tax with reference to such provisions would not at all be sacrosanct for appellate forums including Tribunal---Principles.
Messrs Millat Tractors Ltd., Lahore v. Collector of Sales Tax and Central Excise, Lahore 2000 PTD 1445 fol.
(b) Sales Tax Act (VII of 1990)---
---Ss. 33 & 34--Penalty or additional tax should not invariably be imposed for simple reason that it is legal to do so.
(c) Sales Tax Act (VII of 1990)---
----S. 47(1)---Appeal to High Court---Exercise of discretion by Tribunal for valid reasons to remit additional tax and penalty---Validity---No question of law could be said to have arisen out of impugned order.
A. Karim Malik for Appellant.
Nemo for Respondent.
Date of hearing: 30th March, 2005.
JUDGMENT
NASIM SIKANDAR, J.---This appeal under section 47 of the Sales Tax Act, 1990 by the Revenue seeks to challenge an order of the Customs, Excise and Sales Tax Appellate Tribunal, dated 8-6-2002.
2. On the report of the Audit Wing of the Collectorate of Sales Tax, Faisalabad the respondent, Messrs Farooq Traders, Jhawarian, Sargodha, was served with a show-cause notice alleging short payment of Sales Tax of Rs.36,949 for the period from July, 1998 to May, 2001. The Deputy Collector (Adjudication), Faisalabad finally found against the registered person. "Although he agreed that the demanded amount of Rs.36,949 had already been paid yet directed that the registered person should also pay additional tax due thereupon as well as penalty of Rs.5,000 under section 33(2)(cc) of the Act ibid.
3. On appeal a Division Bench of the Tribunal however set aside the order-in-original passed by the said Adjudication Authority both with regard to payment of additional tax as well as penalty. The operative part contained in para. No. 5 of the their order reads as under:--
"(5) Having heard the parties and on perusal of record of the case, we find that the tax on wholesalers/distributors, mandated through the 1998 budget, was accepted and complied with by the appellant by getting registered in July, 1998. Moreover, they paid the demanded principle amount of sales tax of Rs.36,949 on 14-7-2001 i.e. even before the issue of show-cause notice, dated 28-8-2001 and the impugned order, dated 29-9-2001. All the above facts show the bona fide of the appellant and also that the appellant is a law-abiding registered person. We attach due respect and recognition to the tax compliance of the appellant and direct that the demand of amount of additional tax and penalty in this case stands remitted as a special case. The impugned order is modified to the above extent only and the appeal stands disposed of accordingly"
4. After hearing the learned counsel for the appellant we are not persuaded to interfere with the impugned order. We are not in agreement with the learned counsel for the Revenue that in view of the provisions of sections 33 and 34 of the Act the Tribunal cannot remit, reduce or delete additional tax or penalty. This issue recently came up for consideration before this Court in S.T.A. No. 3 of 2002 decided on 27-1-2005. In that case the argument that under the provisions of section 34 of the Act or happening of anyone of the commissions and omissions mentioned therein on the part of the taxpayer, the levy of additional tax and prescribed penalties would be a consequence mandated by law and its waiver by the Tribunal would be an apparent illegality was rejected. On consideration of various judgments of the Hon'ble Supreme Court as well as of this Court we found that the Tribunal had the jurisdiction to waive or remit additional tax or penalty in the face of provisions of section 34 of the Act even after amendment and insertion of the word "shall" in subsection (1) of section 34 of the A Act. By making a reference to an earlier judgment of this Court in Re: Messrs Millat Tractors Ltd., Lahore v. Collector of Sales Tax and Central Excise, Lahore (2000 PTD 1445) it was opined that provisions of section 46 (Appeals to Appellate Tribunal) were neither governed nor controlled by the provisions of sections 33 and 34 of the Act. It was further observed that in a number of cases on Income Tax and Wealth Tax side in identical situation this Court expressed the view that the fixed amounts of penalties or those imposed with reference to a certain amount leviable for default per day were relevant only in the assessment proceedings. Further that imposition of penalties or additional tax with reference to such provisions was not at all sacrosanct for the appellate forums including the Tribunal. It was further noted that in case the departmental interpretation was accepted then the appeal provisions and the powers of the Tribunal to allow relief with regard to the penalties and additional tax will become redundant and that the same could never be the intention of the legislature. Also we were of the view that the additional tax or penalty should not invariably be imposed for the only reason that it is legal to do so.
5. The learned Members of the Tribunal having exercised their discretion to remit additional tax as well as penalty for the reasons, which are apparently valid and sustainable, no question of law can be said to have arisen out of their order. The learned Members of the Tribunal having supported their view for valid reasons this appeal by the Revenue should not have been filed in the first instance.
6. Dismissed.
S.A.K./C-81/LAppeal dismissed.