The titled appeal preferred at the instance of registered person is directed against the order bearing C.No,323 dated 14-10-2011 passed by the learned Commissioner inland Revenue, Zone-II, Faisalabad.
2. Briefly stated, the facts of the case are that it was reported by the Deputy Director Directorate of Intelligence and Investigation FBR Faisalabad that an inquiry is under process against certain units/appellant who are involved in tax fraud under section 2(37) of the Sales Tax Act, 1990. On the basis of said report, criminal proceedings have been initiated and F.I.R. No,02/2011 dated 23-2-2011 was lodged. Further that most of units were got registered through PRAL by using CNICs of innocent persons, user IDs. Pin Codes and passwords of some units are also misused by gang of fraudsters.
On the basis of this allegation, in exercise of powers conferred upon him under section 21(2) of the Sale Tax Act, 1990 read with Rule 12(5) of the Sales Tax Rules, 2000 notified vide S.R.O. 555(1)2006 dated 5-6-2006 and Clause 'N' of STGO No,3 of 2004 dated 12-6-2004 as amended vide STGO No,35/2012 dated 30-6-2012 the registration of the appellant was suspended vide order I dated 14- 10-2011 Hence, this appeal.
3. The learned A.R has vehemently assailed the impugned order as unjustified and arbitrary. He contended that the registration of the appellant was suspended by the learned Commissioner on the basis of presumptions without bringing any material evidence on record. He pointed out that the FBR vide STGO No,.35 dated 30-6-2012 has issued a uniform policy for suspension and blacklisting of the registered person under section 21(2) of the Sales Tax Act, 1990. As per the said STGO, if the Commissioner is satisfied that a registered person has issued flack invoices, evaded tax or committed tax fraud. suspension of action shall be made through a written order. Thereafter, the Commissioner ii shall issue a show-cause notice within seven days of the issuance of such order. It was contended that after passing order of suspension show-cause notice was to be issued within 7 days and order of blacklisting has to be passed within 90 days according to clauses 37 and 38 of the STGO No,35 of 2012 dated 12 6-2004. The learned A.R. pointed out that despite lapse of almost three years neither an show-cause notice was issued nor any order of blacklisting was passed. Hence, the impugned order is liable to be set aside on this legal ground alone.
Reliance in this regard was placed on the judgment of the Tribunal reported as 2013 PTD 1705.
4. The learned D.R. appearing on behalf of the department though opposed the contentions yet could not rebut the legal position advanced by the learned A.R.
5. After having heard the rival arguments and perusing the available record we are in consonance with the contentions of the learned A.R. We have observed that order of suspension of registration was passed on the basis of presumptions without bringing any material evidence on record. Even the legal requirements as envisages in STGO No,35 of 2012 have not been fulfilled. Further despite lapse of almost three years any show-cause notice was issued nor any order of blacklisting was passed. Therefore, action of the learned Commissioner merits nothing but annulment. Accordingly, the impugned order is annulled and the appeal preferred by the appellant is accepted.