' This appeal has been filed by the Registered Person against the Order-in-Appeal No, 355 of 2012 dated 15-11-2012 passed by the learned CIR(A-II) for the assessment year July-09 to December-10 on the following grounds:--
(1) That the learned CIR(A-II) was not, at all, justified in confirming the conducting of audit twice in a year contrary to provision of section 25(2) of the Sales Tax Act, 1990.
(2) That the learned CIT(A-II) was not at all justified in confirming the action of DCIR for conducting audit of the same period i,e, July 2009 to June 2010 twice; first vide Order-in-Original No,20/113 dated January 11, 2012 and second the vide Order-in-Original No, 35/115 dated June 1, 2012.
(3) That the learned CIR(A-II) was not at all justified to confirm the action of DCIR in treating appellant as registered person in default and recovering the tax of Rs,71,732 which in view of the facts and circumstances of the case is illegal, unjustified and unwarranted.
(4) That the learned CIR(A-II) was not at all justified in confirming the action of DCIR in levying sales tax on alleged concealed purchases which in view of the facts and circumstances of the case is illegal, unjustified and unwarranted.
(5) That the learned CIR(A-II) was not at all justified in setting aside the action of DCIR in levying sales tax on alleged difference between the sales declared as per income tax return and sales declared as per sales tax returns.
(6) That the learned CIR(A-II) was not at all justified in confirming the default surcharge of Rs,5,604 which in view of the facts and circumstances of the case is illegal and unjustified.
2. Brief facts of the case are that taxpayer is running a business in the name and style of Toyota Rawal Motors. The DCIR concerned during the course of audit under section 25 of the Sales Tax Act, 1990 for the period July, 2009 to December-2010 observed following discrepancies which were confronted to the appellant through show cause notice dated 13-3-2012:--
(1) Short payment of sales tax amounting to Rs, 71,732
(2) Concealed purchases/suppression of sales amounting to Rs,2,082,046.
(3) Difference in sale in income tax returns and sales tax returns.
(4) Recovery of default surcharge Rs,5,604.
' The DCIR after considering the reply of the Registered Person passed order in original, which is the subject matter of this appeal. Being dissatisfied with the treatment given by the DCIR the Registered Person preferred appeal before learned CIR(A-II) who after considering the facts, partially maintained the order passed by DCIR.
3. Feeling aggrieved with the treatment given by the learned CIR (A-II) the Registered Person has come up in 2nd appeal before this Tribunal on the grounds mentioned above.
4. We have heard the arguments and scrutinized the record. Our findings on different issues are as under:--
(A) Treating the Registered Person in Default: The DCIR observed that the Registered person was also a withholding agent as per FBR S.R.O. No, 660(I)/2007 dated 30-6-2007, whereas the registered person did not deduct withholding tax @ 1 percent of the value of taxable supplies, therefore the officer passed order for the recovery of Rs,71,732 under section 36(1) of the Sales Tax Act, 1990 along with default surcharge and penalty under sections 34 and 33 of the Sales Tax Act, 1990 respectively. Learned CIR(A-II) has incorporated in his order that learned AR verbally admitted this default.] ' However he insists that no loss of revenue has occurred as the tax has been paid by the respective suppliers by filing their sales 'tax returns. Learned AR states that there is no provision in the law for passing order against a person who failed to deduct withholding tax. He has admitted that no withholding tax was deducted. Needless to mention here that onus was upon the Registered person to prove specifically that tax has been paid by the supplier by identifying the said transaction showing no adjustability of the charge in hand @ 1 %. Neither such evidence was furnished before the learned CIR(A) nor before us. Learned AR states that supplier has filed sales tax return if he has not deposited sales tax on the said transaction, his case could be reopened by the department. We are of the view that if the department has already raised the demand against Registered Person in default, then definitely by reopening the case of supplier would amount to taxing twice, Hence his action is confirmed.
(B) Sales Tax on Alleged Concealed Income: ' During the scrutiny of sales tax records it was observed by DCIR that purchases from some of suppliers were not reported as purchases from the unregistered person in the sales tax return. The officer held this non declaration of purchases as concealment of purchases which resulted in suppression of sales and non-payment of sales tax there from, hence he passed order in original for the recovery of principal amount of Rs,2,082,046 along with default surcharge and penalty under sections 34 and 33 of the Sales Tax, 1990. The AR contended before learned First Appellate Authority that the officer detected this figure from their records and there was no element of concealment. However only purchases from registered person were shown in the return in respect of which input tax was claimed. The contention of the AR found favour with learned CIR(A) and he observed that there was no element of any concealment as all purchases were mentioned in the records produced before him. However, he differed with the contention of learned AR regarding declaring of purchases from only registered persons in the return and found it as incorrect. Learned CIR(A) points out that the sales tax return has prescribed two columns to declare purchases from registered persons and from unregistered persons which were to be filled accordingly but this was not done, hence the action of the DCIR was held to be correct but there was no concealment on the part of the registered person hence any penal in this regard was held to be not sustainable, other action of the officer was confirmed. Learned AR states that purchases in controversy are found in our books of accounts and these purchases have already been converted into sales and sale tax has been paid. He has produced Sales Tax Invoices Nos.102559, 99990, 93986, 98475, 95770, 91636, 91730, 104197, 91779, 91952, 91748, 91736, 91045 and 97056. These purchases have been mainly made by Mehran Autos and are shown in receiving reports and receipts of Mehran Autos. In this scenario we deem it appropriate to set aside the order passed by forums below and remand the case to OOIR to verify and then proceed as per law after providing an opportunity of being heard to the Registered Person.
(C) Alleged Difference in Sales: DCIR & Commissioner's findings:-- ' The DCIR observes a difference in sales declared in sales tax and income Sales in income tax turn. Rs,115,548,196 Sales in sales tax returns. Rs,107,336,930 Sales suppressed. Rs,8,211,266 Sales Tax evaded. Rs,1,313,803 ' As per DCIR, the registered person did not furnish any reply to this discrepancy, therefore he passed order in original for the recovery of this amount along with default surcharge and penalty under sections 34 and 33 of the Sales Tax Act, 1990. In first appeal, learned AR contended that the difference was only due to non reporting of non taxable sales in the sales tax returns and no loss of revenue was involved. Learned CIR(A) agreed but needed verification on the part of the DCIR.
Hence, case was remanded back to the DCIR for re-examination the issues/documents available with the AR and ordered to proceed as per law.
' The finding recorded by learned CIR(A) is not open to any exception. It does not suffer from any infirmity or irregularity. It is upheld and maintained. Appeal stands disposed off accordingly.