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Sales Tax Instructions

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<strong>Sales</strong> <strong>Tax</strong> <strong>Instructions</strong>, 2009<br />

2. Board referred the matter to the Law and Justice Division for<br />

clarification as to whether or not in the circumstances explained above, provisions of<br />

clause (d) of section 33(2) are attracted. The following observation of the Board was<br />

added in the reference sent to the Law and Justice Division;<br />

―The CBR, however, feels that there does not exist any provision in the<br />

<strong>Sales</strong> <strong>Tax</strong> Act, 1990, for correction amendment in monthly sales tax returns by<br />

the registered person. Any mis-statement whether inadvertent or otherwise in the<br />

return is an offence under section 33 of the <strong>Sales</strong> <strong>Tax</strong> Act, 1990 and should be<br />

dealt with accordingly. In the above explained situation the Collector should<br />

issue a show cause notice under section 11(2) and pass a suitable order in terms<br />

of section 33 and section 34 of the <strong>Sales</strong> <strong>Tax</strong> Act, 1990.‖<br />

3. The Law & Justice Division after considering the issue has clarified as<br />

follows:-<br />

i) ―Under Section 33(2) clause (d) of the <strong>Sales</strong> <strong>Tax</strong> Act, 1990, a person<br />

who repeats erroneous calculation in the return during a year,<br />

whereby amount of tax less than the actual tax due is paid is liable to<br />

pay a penalty of Rs.5000 - or three percent of the amount of the<br />

tax involved whichever is higher provided that no penalty shall be<br />

imposed when any miscalculation is made for the first time during a<br />

year.<br />

ii) In order to attract the above penal provisions three ingredients must coexist<br />

i.e. (i) repeating erroneous calculations in the return during a year<br />

(ii) the amount of tax paid should be less than the actual tax due (iii) the<br />

miscalculation is not made for the first time. In the instant reference,<br />

these ingredients do not co-exist because due to miscalculation the<br />

amount of tax paid is not less than the actual tax due. These were rather<br />

returns containing the refund of input tax and the amount of refund<br />

claimed in the revised returns is less than that claimed in the original<br />

returns. So there is no loss of revenue to the Government and the penal<br />

provisions of section 33 are not attracted at all in the present case.<br />

Although there is no provision to file the revised returns but the mistakes<br />

in the calculation which is pointed out by the concerned person in good<br />

faith can be corrected and there is no specific bar in the <strong>Sales</strong> <strong>Tax</strong> Act in<br />

this respect. This Division concurs the viewpoint of the Collector of<br />

<strong>Sales</strong> <strong>Tax</strong> & Central Excise (West), Karachi‖.<br />

4. The above opinion of the Law and Justice Division is circulated only for<br />

guidance. This opinion will however, not in any manner whatsoever, confer any right on<br />

or be used as permission to any registered enrolled person to file revised return on his<br />

own to conceal deliberate or willful attempt or act to underpay the tax liability or claim<br />

refund of the tax amount in excess of what is due under the law or to reduce the amount<br />

of refund willfully claimed in excess. In such cases, the law will follow its own course as<br />

prescribed under the <strong>Sales</strong> <strong>Tax</strong> Act, 1990.<br />

[New provision for revised return added in Budget 2003-2004]

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