' Through this titled miscellaneous application, the registered person requests for grant of stay against recovery of disputed tax demand created as a consequence of Orderin-Original No. 33/2013 dated 29.11.2013 also passed embargo sealing order vide C. No. 2514, dated 9.6.2014. The learned first appellate authority while deciding the Sales Tax Order-in-Appeal No. 424/2014, dated 30.5.2014 dismissed the appeal in limine.
2. The learned AR stated that department is pressing hard for recovery of outstanding tax demand during pendency of appeal before the Tribunal. In order to lend credence to his submissions, he referred towards Para 3 of the sealing order in which the DCIR remarks as, "under the provision of Section 48(1)(d) of the Sales Tax Act, 1990 read with Rule 72(1) of the Sales Tax Rules, 2006 notified vide S.R.O. No. 555(1)/2006, dated 5.6.2006"; no notice under Section 48(1)(d) has been issued to the registered person. The principles of Natural Justice required that opportunity was given to the registered person to defend against unilateral adverse action intended to be taken against them. It is evident from the facts and circumstances mentioned above no show-cause notice was issued.
By placing reliance on a judgment of Honourable Sindh High Court, Lahore in a case reported as 2000 PTD 1798; their Lordship has held that:-- "The provisions of Section 48 above are penal in nature and consequently under settled law cannot be enforced without a show-cause notice being served on the party concerned. In any case it has to be read in conjunction with. Section 36, which clearly lays down that serving of show-cause notice is mandatory."
3. On the other hand, learned DR prays for rejection of stay application.
4. We have given due consideration to arguments advanced by rival parties and also carefully perused the available record. It is an admitted fact that appeal of the applicant assailing the treatment given by authorities below is pending adjudication before this Tribunal. Copies of the notices issued to the applicant transpire that the issuance of notice under Section 48 of the Act is obviously for the purposes of effecting recovery. Furthermore, the said notice places an embargo on the applicant to seal its business premises. Therefore, we are inclined to grant stay for a period of 30 days or till the decision of main appeal, whichever is earlier. Furthermore, the impugned sealing order C. No. 2514 dated 9.6.2014 is palpably illegal and void, passed without lawful authority and of no legal effect. The department is directed to restrain from taking coercive measures against the registered person.
5. Order accordingly.