Sales Tax Instructions

Sales Tax Instructions, 2009
I am directed to refer to Collectorate‘s letter C. No. REF/ST/636/2002/ 2322
dated 16.03.2005 on the subject cited above and to say that M/s M.K. Cotton
Corporation, Karampur Road, Vehari registered as a manufacture of ginned cotton
exported cotton waste during June 2002 to December 2002, on the same registration
number that was used for the purposes of manufacture and supply of ginned cotton. The
Collectorate is not processing his refund claims, as in terms of sub-rule(2) of rule 3 of
SRO 1271(I)/1996 dated 10.11.1996 the registered ginners was required to obtain a
separate registration for activities other than ginning.
2. This issue has been examined and Board is pleased to direct that, in
terms of section 55 of the Sales Tax Act, 1990, in order to remove the difficulties, the
Collectorate may process and dispose off the claims of this ginner-cum-exporter, if
otherwise admissible on merit.
[Issued by the CBR, Islamabad, under the signature of Mr. Aamer Amin Bhatti, Secretary
(ST&CE-L&P), addressed to the Collector, Collectorate of Customs, Sales Tax & Central Excise,
Multan. Copy to M/s MK. Cotton Corporation, Karampur Road, Vehari.]
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C. NO. 1(5) STJ/ 2003 DATED 26 TH MARCH, 2005
SUBJECT:
FILING OF APPEALS AGAINST WAIVER/REMISSION OF
PENALTIES
I am directed to refer to the subject noted above and to say that the Board has
been receiving the requests / references from the Collectorates seeking its approval for
filing of appeals against the cases where the appellate authorities remit/waive statutory
penalties imposed by the adjudicating authorities under the relevant provisions of the
Sales Tax Act, 1990. Similarly the issue relating to imposition of penalty of additional tax
by the adjudicating authorities under the relevant provisions of the Act has also remained
a matter of concern and litigation at different legal fora.
2. The above issues have been considered in the Board. The appellant
authorities‘ right to reduce the penalties is an accepted right of the said authorities. The
Honourable Supreme Court of Pakistan vide its judgment dated 11-11-2003 in C.A. No.
1866/96 & others (M/s D.G. Khan Cement Co. Ltd etc vs Federation of Pakistan &
others) has referred to the judgments / decisions of the Honourable Lahore High Court
(PTCL–1999 CL415) and Appellate Tribunal (PTCL 2001 CL 267) wherein it has been
held that where the petitioner did not act malafide with the intention to evade the tax, the
imposition of penalty of additional tax and surcharge was not justified. In other words,
the penalty and additional tax can be levied where there was a willful default or malafide.
Therefore, where legal controversies or contentious issue were involved, penalties would
not be justified.