1. ' We intend to dispose of above captioned appeal instituted against the impugned order recorded vide O.N.O No,44 of 2000 on the grounds that demand relating to tax period 1989-90 to 1994-95 is barred by limitation m as under the law period of limitation under section 36(3) is five years, while the O.N.O has been passed after lapse of such period. That annual sale of Rs,3,830,661 as allegedly shown in the balance sheet for 1996-97 is not included in the sale presumed at Rs,30,357,9000, computed against the alleged amount of withholding tax deducted under section 50(4) of the Income Tax Ordinance, 1979, while the tax deduction of withholding tax as per balance sheet amounting to Rs,9,10,737 is accumulative amount of tax for the years 1984-85 to 1996-97 and has been shown as receivable.
2. ' Precisely the facts of the case as per record are that appellant is manufacturer of furniture, it was found by the audit team that for tax period 1990-91 to 1994-95 the taxpayer failed to absolve the liability of tax amounting to Rs,2,56,000. That for tax year 1996-97 the registered person supplied taxable furniture worth Rs,3,830,661 to various customers, but failed to deposit the leviable sales tax at standard rate resulting the non- payment of said levy to the tune of Rs,6,74,871. That from annual accounts of the same year 1996-97 submitted to the income tax department, showing the deduction of withholding tax under section 50(4) of Income Tax Ordinance, 1979 at Rs,9,10,737 which were without payments of sales tax for making taxable supplies to the Govt. Are hidden and undeclared supplies. In this way computing the sale against the withholding tax these were taken at Rs,30,357,9000 and on its base sales tax at standard rate was levied accordingly. Feeling aggrieved from the above treatment of the order-in-original, the instant appeal has been filed by the unit.
3. ' The L/AR of appellant argued his case as per the grounds of appeal while L/DR supported the impugned order, also produced the relevant income tax record.
4. We have heard the arguments of the parties and have perused the relevant orders and examined the sales tax as well income tax record of the unit, the copy of balance sheet and the income tax return for assessm ent year 1997-1998 (financial year 1996-1997). For 1990-1991 to 1994-1995 as per provision of 36(2) of Sales Tax Act, 1990, per the Finance Act, 1996 period of limitation is five years whereas prior to amendment of Finance Act, 1996 it was 10 years. The show cause in the case has been issued on 2-2-2002 O.N.O has been passed on 1-6-2006, which is beyond the prescribed period of limitation of five years, thus on this score the SCN and order-in-original being barred by limitation are nullity, thus vacated.
5. ' As regard the other objections of withholding tax under section 50(4) of the Income Tax Ordinance 1979, amounting to Rs,9,10,737, it was contended by L/AR that it is accumulative tax deduction from the years 1984-1985 to 1995-1996. The same have been shown receivable as per the accounting procedure. The entire proceeding have been carried out on account of income tax proceedings, whereas on examination of the income tax record of the unit the contention of appellant has been found correct, because the aforementioned amount of withholding tax as per balance sheet has been shown receivable. As per income tax return for assessment years 1997-98 (Financial Year 1996-97) and sales tax is leviable as per the financial year i,e, 1996-1997. For this year under appeal appellant has neither declared any supply nor any statement under section 143(b) assessable under section 80C of the repealed Ordinance has been filed, relevant column of income tax return had been left vacant, in this way no such declaration of supplies have been made in the income tax return. The photo-copy of the return is placed on record. In the above situation of the case, the sales tax levied for the year 1996-97 is unwarranted, and being so the O.N.O. And SCN B liable to vacation and are vacated accordingly.