ORDER: MR. ZAHID SIKANDAR (JUDICIAL MEMBER). (1). This is the second appeal preferred by the taxpayer u/s 46 of the Sales Tax Act, 1990 (hereinafter referred as the 'Act') against Sales Tax Order-in- Appeal No. 263/2021 dated 15.09.2021 passed by the learned Commissioner (Appeals-II), Faisalabad.
2. Brief facts of the case are that the taxpayer u/s 3(9A) read with section 40C of the Act and SRO 1203(1)/2019 dated 10.10.2019 was required to install point of sale software duly integrated for monitoring/recording or reporting of sales and business transactions with the FBR. However, despite the letter issued by the department to appellant for integration as Tiler-I retailer, the taxpayer did not install Point of Sale Software (POS). Consequently, the adjudication officer invoked penalty provisions given in section 33(25) of the Sales Tax Act and issued a show cause notice to appellant taxpayer as to why penalty of Rs. 1,000,000/- (one million) may not be imposed on the taxpayer u/s 33(25) of the Sales Tax Act. In response, the taxpayer neither furnished any reply nor explanation, hence, the adjudication officer imposed penalty amounting to Rs. 1,000,000/- (one million) u/s 33(25) of the Sales Tax Act to the taxpayer.
3. Feeling aggrieved by the said order, of the OIR, the appellant registered person filed appeal u/s 45B of the Sales Tax Act before the CIR(A). The learned CIR(A) dismissed the appeal of the registered person and confirmed the penalty order. Hence, the registered person has filed this second appeal against the order passed by the CIR(A).
4. Arguments heard. Record perused.
5. The learned counsel agitated against the impugned orders on certain ground but also informed this bench that the taxpayer has integrated his point of sale with online computer system of FBR in terms of section 3(9A) and section 40C of the Act read with SRO 1203(1)/2019. The learned counsel has also submitted that the penalty order has been passed violating all the principles settled by the apex courts.
6. Perusal of the record suggests that the appellant alongwith other business individuals of the locality were in touch with the department and numbers of meeting were also held to settle the issue of integration to the taxpayer with FBR. Now, the learned counsel has apprised the Court about integration and in order to prove the assertion, the learned AR has placed sales receipts showing FBR POS Ids issued under POS invoicing system and copy of point of sale registration.
7. There is no denying the fact that the provisions contain in section 33 of the Act are not charging provisions and are not provided for the purpose of generating revenue rather the purpose is to ensure compliance of different provisions given in the Statute. Initially the taxpayer failed to comply with the provisions regarding integration of the system with FBR, however, now, the appellant has duly integrated and has installed Point of Sales Software with online computer system of FBR. The penalty provisions are meant to ensure compliance and to prevent violation. The Apex Court has held in a innumerable times that the court should take judicious view while imposing the penalty to the taxpayer as the penalty provisions provided in the Statutes are to ensure compliance certain procedure and not to generate revenue.
Since the taxpayer has made compliance by integrating with the online computer system of FBR.
Therefore, by taking a lenient and judicious view, the penalty imposed by the authorities below is hereby deleted.
8. The appeal of the taxpayer is allowed.