CH. SHAHID IQBAL DHILLON (JUDICIAL MEMBER). The instant appeal has been filed against Order- in-Appeal No. 195/2015 dated 16-04-2015 passed by the learned CIR(A), Faisalabad whereby, he while maintaining the Order-in-Original No. 10/2014 dated 30-10-2014, dismissed the appeal.
2. Succinctly stated, the facts of the case are that during scrutiny of sales tax returns, it has been transpired that appellant has purportedly adjusted input tax worth Rs. 883,681/- pertaining to the tax periods of June-2009 to February-2011 on the strength of invoices issued by M/s. R.Z.
International whose registration was suspended subsequently. Based on the said omission/irregularities, adjudication proceedings were initiated by the taxation officer by way of issuance of show-cause notice dated 15-04-2014 for recovery of already adjusted amount of sales tax asking him to pay back the amount of tax under section 11(3) of the Act A against which explanation tendered by registered person was treated unsatisfactory. Resultantly, adjudication proceedings were culminated in passing of an order dated 30-10-2014 which was challenged before the learned CIR(A) who also upheld the liability against the appellant despite submission of relevant records and documents. The appellant being discontented with treatment met out by both the authorities below, has filed the second appeal before this Tribunal assailing the treatment accorded by both the lower fora. Learned counsel for the appellant contented that the appellant has procured the alleged goods under the coverage of proper sales tax invoices issued in terms of section 23 of the Sales Tax Act, 1990 duly incorporated in supplier's sales registers and summary statements and his supplier has duly discharged his sales tax liabilities under section 7 of the Act in his monthly sales tax returns for periods in question, hence, instant set of transactions are not hit by clause (ca) of subsection (1) of section 8 ibid therefore, the appellant was legally entitled for adjustment of input tax under section 7 of the Act and too the alleged supplier at the time of making transactions was operative/active. On the other hand, when departmental representative confronted with the tax situation cited supra, in counter arguments, he has assailed the case on similar grounds and charges as leveled earlier in impugned show-cause notice as well as adjudged in consequent orders and nothing newel, except to reiterate earlier set of contentions, has been put forth by him and fully supported the orders passed by both the authorities below simply re-endorsing the basis evolved therein.
3. After having heard the arguments of the rival parties and carefully examining the relevant orders as well as relevant record annexed with the memo. of appeal filed before this Tribunal, we are of the opinion that the appellant has duly produced all the relevant record vide acknowledgment receipt dated 22-09-2014, inter alia including, purchase invoices, inward gate passes, sales tax returns and summary statements of the supplier unit M/s. R.Z. International showing genuineness of the alleged transactions but the same were not considered by both the authorities below. The learned counsel for the appellant has also invited our attention towards copies of sales tax returns and summary statements of the supplier unit for the periods in question enclosed with the appeal memo. not only showing sales made to appellant but also showing payment of due tax in the national exchequer. We have also observed that all the transactions made with the alleged supplier are below fifty thousand rupees therefore, provisions of section 73 of the Act cannot be applied in the instant case and the appellant cannot be charged for any violation in this regard.
4. Learned AR, in support of his stance, has placed on record the computer profile dated 21-03-2017 in case of M/s. R.Z. International whereby registration of the said supplier was suspended w.e.f. 3rd July, 2013. The learned DR was asked to confirm the latest status of the alleged supplier who on 17- 04-2017, has admitted that the alleged supplier is still a suspended unit and no blacklisting order was passed within 90 days of basic hearing notice as per Rule 38E of the STGO No. 35/2012. We are therefore of the firm opinion that suspension order of M/s. R.Z. International not converted into blacklisting order within 90 days have become illegal and ab initio void due to afflux of time having no effect of enforcement under Clause 38E of the STGO No. 35/2012 dated 30th June, 2012 therefore, recovery of sales tax against his invoices also become illegal and unlawful and all the subsequent proceedings carried out on its basis are also void ab initio, and unlawful.
5. In view of the forgoing facts, the instant appeal is accepted and impugned show-cause notice as well as consequent orders of both the authorities below are set aside.