Sales Tax Instructions

Sales Tax Instructions, 2009
25. Learned counsel for the respondent-manufacturer argued that the said provisions
of the Act have been consistently constructed that additional tax is payable only where nonpayment
of the tax was either willful or was evaded suffer malafidely. He has referred to the
following reported judgments:-
1. PTCL 1992 CL 23 (Supreme Court)
2. PTCL 1992 CL 415 (Supreme Court)
3. PTCL 1992 CL 495 (Lahore High Court)
4. PTCL 1992 CL 315 (Tribunal)
5. PTCL 1992 CL 627 (Tribunal)
6. PTCL 1992 CL 280 (Tribunal)
7. PTCL 1992 CL 195 (Maple Leaf Cement) High Court
26. In the case reported as PTCL 1992 CL 23, this court held that imposition of
penalty was illegal where the evasion of duty was not willful. The Lahore High Court in the case
reported as PTCL, 1995 CL 415 liked that where the petition did not act malafidely with the
intention to evade the tax the imposition of penalty of additional tax and surcharge was not
justified. It was held by the Sales Tax Tribunal in the case of PTCL 2001 CL 627 that where the
controversy between the department and the appellants related to interpretation of different legal
provisions, the imposition of additional tax and penalty and no justification in other case, the
appellant‘s own Tribunal held that additional tax was punitive in nature as such unless default was
willful of malafide the recovery of the same was unwarranted.
27. In view of these decisions, it could not be argued by the appellants that
imposition of penalty or additional tax under section 34 was mandatory and there was no
discretion left with the authorities to allow any concession.
28. Each and every case has to be decided on its own merits as to whether the
evasion or payment of tax was willful or malafide, decision on which would depend upon the
question of recovery of additional tax. In the facts and circumstances of this case, we find that
non-payment of the sale tax within tax period was neither willful nor it could be construed to be
malafide evasion or payment of duty, therefore, the recovery of additional tax as penalty or
otherwise was not justified in law.
29. For the foregoing reasons, Civil Appeals Nos. 1293, 1294, 1296 and 1306 of
2001 are partly accepted and it is hereby declared that the payment of sales tax was due within the
tax period under the Act from the date of receipt of the amount of consideration in advance and
not from the date of delivery of goods and declaration made by the High Court to the contrary is
hereby set aside. The appeals as regards acceptance of the constitutional petitions of the
respondents against the recovery of additional tax for the foregoing reasons are hereby dismissed.
The connected Civil Appeals Nos.1866/1996 and 1288/2000 stand disposed of in the above terms.
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C.NO. 3(56)STP/96 DATED 13TH NOVEMBER, 2004
SUBJECT:-
RELAXATION OF TIME PERIOD FOR DEPOSIT OF SALES
TAX & SUBMISSION OF RETURN UNDER THE SALES TAX
ACT, 1990 AND RULES MADE THEREUNDER