COLLECTOR OF SALES TAX, FAISALABAD VS NATIONAL SUGAR MILLS LTD., LAHORE, 2005 PTD-LAHORE-HIGH-COURT-LAHORE 1995 (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 the Sales Tax Act, 1990 were neither governed nor controlled by provisions of Ss. 33 and 34 ,thereof---Imposition of penalty and additional tax with reference of 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.

Muzamil Akhtar Shabbir for Respondent.

Date of hearing: 30th March, 2005.

JUDGMENT

NASIM SIKANDAR, J.---This appeal by the Revenue under section 47 of the Sales Tax Act, 1990 seeks to assail an order of the Customs, Excise and Sales Tax Appellate Tribunal, dated 25-7-2002.

2. The respondents, a public limited company engaged in manufacturing of sugar was found to have short paid sales tax for the month of August, 2001. In the adjudication proceedings which followed issuance of show-cause notice the assessee took up the plea that they had made good the difference not only of the short paid sales tax but had also paid additional tax thereon. The Adjudicating Authority, however, found the respondent to be still liable to pay further sales tax as well as penalty equal to 3% of the defaulted amount of sales tax.

3. On appeal, by way of the impugned order the learned Members of the Tribunal allowed part relief both in case of additional tax as well as amount of penalty. The relevant part of para. 4 of the orders reads as under:---

"(4) We have heard contentions of both the sides and perused the appeal file available before us, The principal short paid amount of Rs.50,28,454 has already been paid along with additional tax amounting to Rs.2,00,515. The appellants having already been sufficiently burdened to the extent of Rs.2,00,515 as additional tax on the principal amount of Rs. 50,28,454, the balance amount of Rs.623 adjudged as additional tax vide the impugned order is remitted. The amount of penalty is reduced from 3% to one and a half percent of the defaulted principal amount of sales tax."

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. That issued 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 any one of the commissions and omissions mentioned therein on the part of the tax payer, 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, A of the word "shall" in subsection (1) of section 34 of the 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 appellant 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. This order will also govern C.A. No.475 of 2002, S.T.A. No. 467 of 2002 and S.T.A. No. 468 of 2002.

S.A.K./C-80/LAppeal dismissed.