Trajectory of the case: This is an appeal filed under section 66 of the Punjab Sales Tax on Services Act, 2012 (hereinafter referred to as The Act) by "Messrs Ghalib City" (hereinafter referred to as the appellant) being aggrieved of the order dated 17.11.2020 of the Commissioner (Appeals), Punjab Revenue Authority, Lahore who upheld the findings of assessing officer i.e. learned Additional Commissioner of Punjab Revenue Authority (hereinafter referred to as the Authority), Faisalabad.
Factual Statement:
2. The synoptical background of the instant case is that M/s. Ghalib City is engaged in providing services of property developer, taxable as per Sr. No. 15 of the Second Schedule of the Punjab Sales Tax on Services Act, 2012 having description "Services provided by property developers, builders and promoters (including their allied services)." On failure to get voluntarily registered in terms of section 25 of The Act, the appellant was registered compulsorily on 03.04.2017 vide C.R.
No.016450250 under section 27 of The Act. Therefore, after gaining the status of property developer, the appellant was required to pay sales tax on services, detail of such services and sales tax payable is as under: Total Approved Area (Kanals)306.15 Kanal Approved Area (Sq.Yards) 185,220.75 Sq.Yards Rate Rs.100 per Square Yard Sales Tax Payable Rs.18,522,075/- It was further alleged in the show-cause notice that the appellant had contravened the provisions of Section 3, 10, 18 and 35 of The Act and were called upon to show-cause vide show-cause notice No. PRA/ENF/43640 dated 30.01.2020 as to why sales tax amounting to Rs. 18,522,075/- may not be assessed against the appellant under section 24 along with default surcharge under section 49 of The Act. The appellant, thereafter, having prior intimation of above said situation remained reluctant and did not contest the same which resulted in to passing of the order dated 24.02.2020 by the assessing officer whereby the appellant was held liable to pay tax amounting to Rs.
18,522,075/-recoverable along with default surcharge (to be calculated at the time of payment).
3. Feeling aggrieved of the said assessment order, the appellant preferred an appeal before Commissioner (Appeals) who upheld the findings of assessment order vide order dated 17.11.2020, hence this appeal.
Submissions by A.R for Appellant:
4. The learned Authorized Representative of the appellant, has contended that the, show cause notice issued by the Authority does not contain any specification of allegation as such by its essence it seems vague and confused as it is depicted through its contents. He further referred Section 2(44) of The Act and also Section 18 read with section 35 of The Act to clarify the proposition in hand while supporting his arguments. He further stated that due to non- determination of nature of services allegedly provided by the appellant he cannot be burdened of payment of the tax, hence it cannot be-levied; that the appellant has been compulsorily registered whereas there is no mention what type of services ever provided by the appellant and whether it comes with the ambit of taxable services or not. He has also relied upon the case laws cited as under:
(i) 2016 PTD (Trib.) 445.
(ii) 2001 SCMR 838
(iii) 2007 PTD 2265
(iv) 2021 PTD (Trib.) 641
(v) 2020 PTD (Trib.) 1911 Submissions by D.R for Respondents:
5. Contrary to it learned Departmental Representative has stated that the appeal in hand is not maintainable in its present form as Punjab Revenue Authority has not been arrayed as a party to the proceedings as required under Rule 11 of the Punjab Revenue Authority (Appellate Tribunal)
Rules, 2016. He has also referred to the paragraph No.04 of the assessment order where it has been clarified by the Additional Commissioner regarding providing sufficient time and opportunities to the appellant to make his defense if any, but despite execution of service as per relevant law and procedure, the appellant himself opted not to appear before that forum hence, therefore, the lis was decided as per its own merits.
6. Arguments heard. Record perused.
7. The sales tax on services on real estate developing, its developers and promoters was originated vide Notification No. SO(Tax)1-1/2013-2014 dated 22-05-2013 which was added through entry No: 15 in the 2nd schedule to the Punjab Sales Tax on Services Act, 2012. The law mentioned above depicts that total area of the land either for development or for construction purposes would be liable to tax. The sales tax on services is enforceable once any development work over the property is being carried on.
8. Learned A.R has further argued that the Authority remained unable to point out that from where it got the information about the details of services received by the appellant liable to be payment of tax whereas it visibly manifests from the letter issued by Faisalabad Development Authority, Faisalabad bearing No.945/TP-II/FDA-17 dated 11.04.2017 in response to the query (aiming at the monitoring of the tax collecting- activities) made by the Additional Commissioner, Punjab Revenue Authority, Faisalabad that the appellant being housing society holds an area of immovable property measuring 306.15 Kanals as it is mentioned at Sr. No. 10 of the said letter therefore, the relevant and requisite information has been provided by the government institution on the request of another government institution which can safely be considered as standard proof of receiving taxable services by the appellant.
9. The contention so raised by learned A.R that the appellant has been compulsorily registered with the PRA hence, not liable to pay tax also does not contain force in it as firstly, such query is not pending before this forum nor subject to the instant lis yet in order to clarify, it is mentioned that before its registration (compulsory), number of notices vide dated 03.04.2017 and 21.04.2017 were issued to the appellant for the purposes of the information and intimation that if the appellant had any justification to be presented in written reply, a reasonable time for its submission was given to the appellant and finally when the appellant did not approach the PRA, hence resultantly, on 09- 05-2017 the appellant was registered with PRA therefore, it is established from the record that the appellant has duly been intimated in this regard.
10. The main thrust of the learned A.R is that the appellant has never been given a sufficient time to prove its case learned forum below rather ex-parte proceedings have been occurred in his absence depriving the appellant from its basic right of hearing based upon principle of natural justice. It is crystal clear from the record itself that firstly the appellant was given a show-cause notice on 30.01.2020 contained the formulation of charges that the appellant being society having an area for development purposes 306.15 Kanals receiving taxable services is liable to be taxed for Rs. 18,522,075/- and the date was fixed for hearing on 10.02.2020 however, the appellant opted not to appear before Additional Commissioner, PRA, Faisalabad. Even on next date of hearing i.e. 24.02.2020 an adjournment has been sought by the appellant. It is also notable that due to non- appearance of the appellant, he was intimated through another show cause notice dated 13.02,2020 which comprised the last opportunity to justify its stance by him qua non-payment of tax. Thereafter, feeling it appropriate that sufficient time has already been given to the appellant by the Authority, and also that the appellant seemed not interested in making its defense before the Authority, the proceedings as per law and procedure had taken place, therefore, it could not be said in any manner that the appellant has never been given sufficient time or opportunity to make its defense before the Authority or Authority had passed an ex-parte order, hence this argument has been repelled. This is also mentionable that even at the time of availing the forum of appeal before the learned Commissioner (Appeals), PRA the appellant could have produced sufficient evidence if any in shape of defense yet the appellant opted not to avail the said option for the reason best known to him, therefore, we are satisfied that the appellant intentionally and deliberately did not advance or put any defense to justify the non-payment of the tax as levied by the Authority.
11. As far as the contention regarding the issuance of show-cause notice containing the vague complexion or its contents, is concerned it is very much visible from the contents of the show- cause notice itself that it shows a violation of the provisions of sections 3, 10, 18 and 35 of The Act and the formulation of the charges available under them which sufficient to make liable appellant to pay tax as mentioned above. As such the show cause notice contains;
(i) Taxable entry No. 15.
(ii) Approved area of development land measuring 306.15 Kanals.
The said show-cause notice also clearly speaks that since the appellant is registered even compulsorily yet he is liable to pay the tax as mentioned above also the relevant provision of law applicable and to make aware the appellant for in time payment of the tax. Hence, there is complete observation of the procedure available under the provision regarding the completion of formalities as mentioned in Section 2 of Chapter 2 of Punjab Sales Tax on Services (Adjudication and Appeals) Rules, 2012.
12. It has been vehemently argued that appellant was exempted from the tax levied prior to its compulsorily registration with PRA yet explanation clause of Section 25 of The Act denies the assertion of the appellant in this regard as it cannot be absolved from payment of tax. The said explanation reads as under: "Section 25.- Explanation.-Unless otherwise specified, no person shall be absolved of any tax liability for want of registration under this Act or the rules."
Hence, argument advanced by learned A.R has no force.
13. In view of the above, we do not find any illegality in the impugned order and the same is upheld.
The appeal is dismissed keeping in view the above said observations. Office is directed to communicate this Order to all concerned immediately.
File of appeal be consigned to record.