ZAHID SIKANDAR, JUDICIAL MEMBER.----The titled appeal is directed against order No.551 dated 19.12.2022 passed by Commissioner Inland Revenue (Appeals), Faisalabad whereby the impugned penalty order passed by the assessing officer was upheld by the CIR(A).
2. Brief facts of the case are that the appellant M/s. City Cash and Carry was duly integrated at POS Software for monitoring/recording or reporting of sales and similar business transactions with FBR's Computerized System. Being an integrated retailer, the appellant is required to declare its entire sales through point of sales (POS) system correctly and in case of violation penalty under section 33(24) of the Sales Tax Act, 1990 is liable to by imposed. It was observed that the appellant issued invoices outside the POS system integrated with FBR. Invoice No.373797 dated 07.01.2022 issued from the outlet of the appellant was taken into custody and it was observed that the registered person was involved in issuing invoices/bills outside the POS system. Accordingly, the appellant was issued a show-cause notice to the effect as to why penalty of Rs.500,000/- might not be imposed. As per order--in-original, no one attended the proceedings on behalf of the present appellant. Consequently, the OIR finalized the show-cause proceedings and imposed penalty of Rs.500,000/- under section 33(24) of the Sales Tax Act, 1990 to the appellant registered person.
3. Felt aggrieved by the aforesaid penalty order, the appellant filed appeal before the CIR(A) which was regretted, hence, this second appeal.
4. Arguments heard. Order perused.
5. It is the case of the appellant that due to some connectivity issue of the software with the internet in the computerized system at the time, invoices could not be issued in the prescribed manner, however, the appellant taxpayer has duly shown the same in monthly sales tax return, hence, committed no violation of law and tax evasion. Submission is misconceived. Record evidenced that the taxpayer had been penalized for similar default on issuing invoices on different dates against which connecting appeals STAs Nos. 315, 316 and 320/LB/2023 are pending and have been decided by this bench vide separate orders of similar date. It shows that the appellant is regularly involved in issuing invoices outside the POS system. Law is very clear on the subject that every person integrated with the FBR system is required to conduct transactions in the prescribed manner and is liable for penal consequence in case the person commits default. Issuance of invoices outside the POS system has not been denied rather the appellant has contested the default on the ground that invoices could not be issued in the prescribed manner due to internet connectivity issue. For the sake of ready reference, it is expedient to reproduce section 33(24) which reads as under:- '33(24) Any person, who is integrated for monitoring, tracking, reporting or rupees or two hundred recording of sales, production and similar business transactions with the He shall, further be Board or its liable, upon computerized system, conducts such transactions in a manner so as to avoid monitoring, tracking, reporting or recording of such transactions, or issues an invoice which does not carry the prescribed invoice number or counterfeit barcode or any person who abets commissioning of such offence.Such person shall pay a penalty of five hundred thousand per cent of the amount of tax involved, whichever is higher.
He Shall, further be liable, upon conviction by a Special Judge, to simple imprisonment for a term which may extend to two years, or with additional fine which may extend to two million rupees, or with both.
Any person, who abets commissioning of such offence shall be liable; upon conviction by a Special Judge to simple imprisonment for a term which may the extend to one year or with additional fine which may extend to two hundred thousand rupees or with both. Subsection (9A) of section 3 and section 40C
6. Perusal of the above section leaves no ambiguity that if any person duly integrated with the POS computerized system does not issue invoice in the prescribed manner as given, he shall be liable to pay penalty of Rs.500,000/- or two hundred percent of the amount of tax involved whichever is higher besides criminal proceedings. In the instant case, issuance of invoice other than prescribed manner as given in the provisions of Income Tax Ordinance is an admitted position and the appellant appears to be habitual in committing such default as penalty was also imposed to the registered person against other invoices of different dates. It is the responsibility of the taxpayer to ensure compliance of the legal provisions which has not been done in the instant case.
7. Even otherwise, record reflects that despite issuance of notices the taxpayer did not join the proceedings before the adjudication officer. First appeal was filed and as per impugned order appeal was fixed. by CIR(A) on different dates i.e. 06.10.2022, 19.10.2022, 31.10.2022 and 19.12.2022 but the taxpayer neither himself nor any of his representative attended the first appellate proceedings.
Hence, first appeal was decided by CIR(A) against the present appellant. It is evident that the taxpayer has not pursued the matter with due diligence rather apparently avoided the proceedings before the learned authorities below. Further, in this appeal and all the connected appeals similar reason of internet connectivity issue has been given for non-issuance of POS invoices on different dates. The argument appears to be an afterthought by the appellant as he chose not to appear before the officers below. Argument is neither convincing nor substantiated hence, rejected. The learned counsel also pleaded that section 11 relates to short payment of tax and can only be invoked for assessment purposes and not for penalty. This tribunal in STA No.1021/LB/2021 in an appeal titled as M/s Fiza Noor Creations (Pvt.) Ltd. v. CIR, RTO, Faisalabad held that 'sales tax' includes the tax, additional tax, default surcharge, a fine, penalty of any other sum payable under the provisions of STA or the rules made thereunder. Sales tax (including penalty) can only be assessed and recovered under section 11 of STA. Hence, contention is turned down.
8. The CIR(A) rightly confirmed the penalty order of Rs.500,000/- Impugned order is neither arbitrary nor fanciful rather was passed in accordance with law, hence the same is upheld.
9. The titled appeal of the taxpayer is dismissed.