Appeal No. S.T.A. 1495/LB of 2000, decided on 15th December, 2004. VS Appeal No. S.T.A. 1495/LB of 2000, decided on 15th December, 2004., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 626 (2004)

Sales Tax Act (VII of 1990)---

----Ss.3, 6, 23, 33, 34, 37(a)(b) & 2(9)---Scope of tax---Supply of cotton lint without issuance of sales tax invoices and payment of sales tax---Show-cause notice was issued for evasion of sales tax on account of cotton lint and cotton seed---Appellant failed to submit written reply to show-cause notice and no one appeared at the time of hearing to defend the charges---Demand of sales tax along with additional tax and penalty was enforced by the Adjudicating Officer---Validity---Nothing was available on record to prove that show-cause notice was served upon the appellant---Decision was an ex parte one where huge liability against the appellant had been adjudged on the basis of information available with the department---Case was remanded to the Adjudicating Officer for de novo consideration on merit after affording opportunity of hearing to the parties concerned so that a just and fair decision could be made.

Rana Muhammad Afzal for Appellant.

Ahmad Raza, D.R. assisted by M. Amin, Auditor for Respondent.

Date of hearing: 14th December, 2004.

JUDGMENT

SAEED AKHTAR, MEMBER (TECHNICAL).---The appeal is directed against Order-in-Original No.450/1999/2000, dated 19-1-2000 passed by the Assistant Collector, Collectorate of Customs, Sales Tax and Central Excise, Multan issued vide C. No. 289/89/AC/6348, dated 19-1-2000 whereunder the appellant Messrs Mehr Ahmed Brothers Ginners, Mailsi Road, Kehror Pacca was directed to deposit sales tax amounting to Rs.451,247 along with additional tax under the relevant provisions of Sales Tax Act, 1990.

2. Brief facts of the case are that the .sales tax record of the appellant Messrs Mehr Ahmed Brother Kahror Pacca was examined by the sales tax auditors of Collectorate of Customs, Sales Tax and Central Excise, Multan. The auditors after scrutiny of record observed that the registered person supplied cotton lint to different Textile Mills without issuance of sales tax invoices and payment of sales tax during the period January, 1998 to May, 1998. The appellant (then respondent) evaded an amount of Rs.451,247 (sales tax amounting to Rs. 426,429 on account of cotton lint and sales tax amounting to Rs.24,818 on account of cotton seed). The registered person, therefore, contravened the provisions of sections 2(9), 3, 6, 23, 33, 34, 37(a)(b) of the Sales Tax Act, 1990. A show-cause notice was accordingly issued directing the registered person (then respondent) to explain as to why sales tax amounting to Rs.451,247 be not recovered from him along with additional tax and penalty under sections 36, 34 and 33 of the Sales Tax Act, 1990. The appellant, however, failed to submit written reply to the show-cause notice and no one appeared at the time of hearing to defend the charges. The demand was enforced by the Adjudicating Officer. The appellant feeling aggrieved with the decision of the Adjudicating Officer filed appeal before this Tribunal under section 46 of the Sales Tax Act, 1990.

3. The main contentions of the learned counsel for the appellant were as under:---

(1) That the order passed by the Adjudicating Officer is bad in law and against facts of the case. The impugned order has been passed ex parte without affording opportunity of hearing the appellant.

(2) That show-cause notice was not served upon the appellant and the Adjudicating Officer has committed illegality in adjudicating the charges regarding evasion of sales tax on cotton lint and cotton seed.

(3) That there was no deliberation on the part of appellant therefore, the imposition of additional tax- and penalty is illegal.

(4) That in the light of above grounds the impugned order may be annulled.

4. The learned D.R. who was assisted by Mr. Muhammad Amin, Auditor opposed the appeal and contended that there is no infirmity in the impugned order and the same may be upheld dismissing the appeal as sufficient opportunity of hearing was provided to the appellant by the Adjudicating Officer.

5. We have heard the contentions of both the sides and perused the appeal filed before us. It has been observed that neither reply to the show-cause notice was furnished by the appellant nor anyone appeared to defend the case before the Adjudicating Officer in spite of opportunity of hearing provided by the Adjudicating Officer on different dates of hearing. We have further observed that there is nothing on record to prove that the show-cause notice was served upon the appellant. It is, therefore, an ex parte decision where huge liability against the appellant has been adjudged on the basis of information available with the respondent-Collectorate. After scrutiny of the relevant record and hearing both the parties we find it appropriate to remand the case to the Adjudicating Officer for de novo consideration so that a just and fair decision could be made after hearing both the parties. The impugned order is, therefore, set aside and case is remanded to the learned Adjudicating Officer for de novo consideration on merit after affording opportunity of hearing to the parties concerned.

6. The appeal stands disposed of as above.

Remand the case to the Adjudicating Officer for a just and fair decision.

C. M. A. /497/Tax(Trib.)Case remanded.