Recovery from M/s FLS Pakistan (PVT) Ltd, Hattar

GOVERNMENT OF PAKISTAN (REVENUE DIVISION) CENTRAL BOARD OF REVENUE *** Islamabad, the 16th May, 2003 NOTIFICATION (SALES TAX) S.R.O. 416 (I)/2003.- WHEREAS, the Additional Collector, Sales Tax, Peshawar vide order in-original No.04/2000 dated the 17th January, 2000 adjudged the following amounts to be recovered from M/s FLS Pakistan (Pvt) Ltd, Industrial Estate, Hattar, namely:- (a) principal amount of sales tax (thirty two lac twelve thousand five hundred and sixty-eight rupees only) along with additional tax and penalty on account of incorrect adjustment of input tax in respect of machinery imported during the exempted period; (b) additional tax and penalty to be calculated at the time of payment on account of non-payment of sales tax in time on advances received by them; and (c) nine thousand five hundred and nineteen rupees only along with additional tax and penalty on account of non payment of further tax; AND WHEREAS M/s. FLS Pakistan (Pvt) Ltd, Industrial Estate, Hattar paid the principal amounts of sales tax (rupees thirty-two lac twelve thousand five hundred and sixty eight only) and (nine thousand five hundred and nineteen rupees only) and have requested for exemption of additional tax and penalty leviable thereon and the additional tax and penalty leviable on advances received by them on the following grounds, namely:- (a) incorrect adjustment of input tax happened due to the misconstruction of the then language of section 7 of the Sales Tax Act, 1990; as the words “during the tax period” were inserted in the section after the words “input tax paid” by the Finance Act, 1998 (III of 1998); and (b) the concept of charging tax on advances was incorporated in the definition of “Time of Supply” in the Finance Act, 1996 (IX of 1996). The exemption available to them was also withdrawn on The 1st July, 1996. It was beyond their professional reach to know, understand and apply both the legal amendments simultaneously. Moreover, they have paid sales tax due on the component of advances at the time of supply of the machinery during taxable period and it was invoiced on the total value. Hence, charging additional tax for the period intermediately between the receipt of advances and the date of actual supply and imposition of penalty would be an undue additional burden on their financial resources; NOW, THEREFORE, in exercise of the powers conferred by section 34A of the Sales Tax Act, 1990, the Central Board of Revenue is pleased to exempt, as a special case, the amount of additional tax and penalty leviable on the principal amount of rupees thirty two lac twelve thousand five hundred and sixty-eight only and rupees nine thousand five hundred and nineteen only and the additional tax and penalty payable on account of non payment of sales tax on advances on time adjudged vide order in original No.4/2000 dated the 17th January, 2000, by the Additional Collector, Sales Tax, Peshawar on the aforesaid grounds. [C.No.1(82)-STT/96-Pt] (MANZOOR HUSSAIN MEMON) Secretary (STT)