' CH. MUHAMMAD ASGHAR PASWAL,. JUDICAL MEMBER.---The titled sales tax appeal has been filed against Order-in-Appeal No,1216 of 2008 dated 27-2-2008 passed by the learned Collector (Appeals), Faisalabad.
2. Brief facts giving rise to the present appeal are that during the processing of the refund claim an amount of Rs,152,863 was deferred for various reasons such as violation of section 8(1)A and exceeds declared output etc. Due to these irregularities/omissions, the registered person was charged with the violation of sections 4, 7, 8(1), 10 and 26 of the Sales Tax Act, 1990. Show-cause notice was issued as to why input tax refund amounting to Rs,152,863 may not be rejected under the law. The adjudication proceedings culminated in passing of an Order-in-Original No,37 of 2007 dated 9-6-2007. The registered person being aggrieved went in appeal before the Collector who upheld the treatment given by the Assistant Collector (Refund Streams). The registered person still feeling dissatisfied has conic up in further before this Tribunal.
3. As regards the violation of section 8(1)A the learned AR submitted that since input tax paid on building materials pertaining to July, 2005 is not hit by S.R.O. 490(1)/2004 dated 12th June, 2004 as no such item is given in the negative list of goods given thereunder therefore, the same is being admissible and bona fide may be ordered to be allowed. As regards the charge of exceeds declared output tax, the learned AR stated that the claim of appellant did not exceed output tax declared by the alleged suppliers, the refund sanctioning authority as well as the learned Collector(Appeals) did not consider the facts and passed the impugned orders. Payments against the alleged goods have also been transacted through banking channel as provided under section 73 of the Act and since, refund of sales tax claimed against invoices of the alleged suppliers did not exceed output tax declared by them in their monthly sales tax returns, supply registers and summary statements for period in question therefore, its rejection is illegal and unlawful. At the time of hearing the learned AR also produced the copies of sales tax returns, supply registers and summary statements for perusal. The learned AR produced a copy of the unreported judgment passed by the Customs, Excise and Sales Tax Appellate Tribunal (Bench II), Lahore in the case of Messrs Eastern Spinning Mills Ltd, Lahore (STA No,718/LB/1999) whereby it was held that the M.S. Bars and cement were entitled to input tax adjustment and the amount of adjustment claimed by the appellant in this regard was lawful. The learned AR also relied on another unreported judgment of the Customs. Federal Excise and Sales Tax Appellate Tribunal, Lahore passed in S.T.A. No,695/LB of 1999 dated 3-4-2007 whereby it was held that the appellant was entitled to claim adjustment of input tax against cement and tiles during period in question and there was no restriction in this regard under section 8 of the Act. None was present on behalf of the Revenue to controvert the submissions made by the learned AR.
4. I have heard the learned AR and perused the available records. I find that the submissions made by the learned AR carry force. The unreported judgments cited (supra) relied upon by the learned AR are on all four with the case of the present assessee. After examination of sales tax returns, supply registers and summary statements it also revealed that refund of sales tax claimed against invoices of alleged suppliers does not exceed output tax. In this view of the matter the orders passed by the authorities below are set aside and the Revenue is directed to allow the refund in accordance with the relevant provisions of law.
5. The appeal filed by the assessee is allowed to the extent and in the manner indicated above.