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S.T.A. No.390/LB of 2005, decided on 6th June, 2006.

----Ss. 33(2)(cc), 3, 6, 11(2) & 26---Constitution of Pakistan (1973), Art.13---S.R.O. 1349(I)/1999, dated 17-12-1999-Offences and penalties---Levy of penalty for late payment of sales tax along with additional tax---Appellant contended that imposition of fine/penalty amounts to double jeopardy which was prohibited under the provisions of law as enshrined in Article 13 of the Constitution as the principal amount liability along with additional tax had already been cleared---Validity---Appellant failed in its legal obligation to deposit the self-assessed sales tax along with monthly sales tax return and contravened the provisions of Ss.3, 6 and 26 of the Sales Tax Act, 1990---However, sales tax liability was discharged after the due date along with additional tax under S.34 of the Sales Tax Act, 1990--Penalty was imposed under S.33 of the Sales Tax Act, 1990---No question of double jeopardy thus arose as the additional tax was imposed under S.34 of the Sales Tax Act, 1990 for non-payment of sales tax already recovered from the buyers as an agent of the Government and putting the tax to its own use by the registered person which attracted the provisions of S.34 of the Sales Tax Act, 1990---Additional tax was leviable and it was correctly deposited by the registered person on the delayed payment of principal amount of sales tax---Penalty under S.33 of the Sales Tax Act, 1990 was imposed on violation of provisions of Sales Tax Act, 1990---Amnesty Notification S.R.O.1349(I)/1999, dated 17-12-1999 covered cases where principal amount had already been deposited and the registered person had been allowed exemption of 75 per cent of additional tax and penalty on payment of 25 per cent of the principal amount and penalty---Full amount of additional tax having already been deposited, Appellate Tribunal allowed remission of penalty in circumstances---Order-in-original was set aside by the Appellate Tribunal and appeal against imposition of penalty was accepted. Sarfraz Hussain for Appellant. Ms. Zeba Hayee, D.R. for Respondent. Date of hearing: 27-2-2006.

This appeal is directed against Order-in-Original No. 131 of 1999 passed by the learned Additional Collector, Collector, of Sales Tax, Lahore issued vide C. No. ADC/Adj/Gulshan/155/1999, dated 29-12-1999 whereunder the appellant was directed to deposit penalty of Rs.29,697 under section 33 of the Sales Tax Act, 1990 for the contravention of sections 3, 6 and 26 of the Sales Tax Act ibid. 2. Brief facts of the case are that it was reported to the learned Adjudicating Officer by the concerned officials of Collectorate of Sales Tax, Lahore after scrutiny of relevant sales tax record that the registered person Messrs Gulshan Carpet Industries has failed to deposit self-assessed sales tax amounting to Rs.5,93,928 pertaining to the tax period August, 1999 and contravened the provisions of section 3, 6 and 26 of the Sales Tax Act, 1990. Consequently, the registered person was issued a Show-Cause Notice C. No.ADC/Adj/Gulshan/155/1999, dated 19-12-1999 directing to explain as why the principal amount of sales tax along with additional tax and penalty should not be recovered from him under the provisions of sections 11(2), 34 and 33 of the Sales Tax Act, 1990. At the time of hearing, the registered person/respondent informed the learned Adjudicating Officer that the liability of principal amount of sales tax amounting to Rs.5,93,928 has already been cleared along with additional tax amounting to Rs.60,878 under section 34 of the Sales Tax Act, 1990. The learned Adjudicating Officer after hearing the parties and considering the information on record adjudged penalty of Rs.29,697 under section 33 of Sales Tax Act, 1990 against which the appellant has filed appeal before this Tribunal under section 46 of the Sales Tax Act, 1990. 3. The main contentions of learned counsel for the appellant at the time of hearing before this Tribunal were as under:--

(1) That a show-cause notice was issued to the appellant (then respondent) alleging that the self-assessed sales tax amounting to Rs.5,93,928 pertaining to the tax period August, 1999 was not deposited and violations of section 3, 6 and 26 of the Sales Tax Act, 1990 were committed by the registered person.

(2) That the registered person at the time of hearing before the learned Adjudicating Officer informed that sales tax liability amounting to Rs.5,93,928 along with additional tax amounting to Rs.60,878 has already been deposited in instalments during the period 6-11-1999 to 15-11-1999 and requested for vacation of show-cause notice on the plea that the -principal amount liability along with additional tax has already been cleared by the registered person.

(3) That the learned Adjudicating Officer imposed penalty of Rs.29,697 on the appellant under section 33 of the Sales Tax Act, 1990.

(4) That without prejudice to the above, it is submitted that imposition of fine/penalty allegedly under section 33(2)(cc) also amounts to double jeopardy which is prohibited under the provisions of law as enshrined in Article 13 of the Constitution of the Islamic Republic of Pakistan. It was contended that as additional tax under section 34 has been deposited by the appellant, therefore, there is no justification for imposition of penalty under section 33 ibid and demand of penalty is double jeopardy which is not permitted under the Constitution of Islamic Republic of Pakistan.

(5) That without prejudice to the above, it is submitted that the appellant is entitled to the benefit of S. R.O. 1349(1)/99 whereby it is laid down that if a person is short filler with reference to his return-cum-payment challan, the said person if makes payment of 75% of the additional tax and penalty, he shall be deemed having discharged the full liability. Moreover, if the amount paid by the appellant is calculated in view of additional tax already paid, the appellant shall be found having completely discharged his liability if the benefit is extended to him. In view of above, there is no justification for the demand of penalty on the non-payment of self-assessed sales tax pertaining to the tax period August, 1999. 4. The respondents were represented by Ms. Zeba Hayee learned D.R. who contended that the appellant has failed to fulfil his legal obligation to deposit the self-assessed sales tax already recovered from the buyers along with monthly sales tax return pertaining to the tax period August, 1999 and therefore violated sections 3, 6 and 26 of the Sales Tax Act, 1990. The sales tax liability, however, was discharged according to his own convenience in instalments during the period 6-11-1999 to 15-11-1999 along with additional tax under section 34 of the Sales Tax Act, 1990. The learned D.R. contended That the new system of sales tax is based on self-assessment procedures where the registered persons are allowed to calculate their tax liability pertaining to a tax period and deposit the same along with monthly sales tax return after availing the benefit of deferment of tax without any interference from the sales tax officials of the department. The learned D.R. contended that the appellant during the tax period August, 1999 levied and charged sales tax on its supplies but failed to deposit the amount of Sales Tax collected from its buyers along with sales tax return for the said period and violated the relevant provisions of Sales Tax Act, 1990. The sales tax liability was, however, discharged after the due date during the period 6-11-1999 to 15-11-1999 along with additional tax chargeable under section 34 of the Sales Tax Act, 1990. The violation of committed by the registered person warranted imposition of penalty under section 33 of the Sales Tax Act, 1990 and the learned Adjudicating Officer imposed penalty amounting to Rs.29,697 for the contravention committed by the registered person. The learned D.R. contended that there is no infirmity in the impugned order so far as levy of penalty on the violations committed by the appellant are concerned. Regarding applicability of amnesty Notification S.R.O. 1349(I)/1999, dated 17-12-1999, the learned D.R. contended that this notification allowed amnesty from payment of certain amount of additional tax and penalties on the deposit of principal amount of sales tax during the currency of amnesty notification i.e. from 17-12-1999 to 30 12-1999. The learned D.R. further contended that liability of principal amount of sales tax along with additional tax was discharged by the registered person before the issuance of amnesty notification but penalty was not deposited at all. The learned D.R. contended that there is no infirmity in the impugned order and the same may be upheld dismissing the appeal. 5. We have heard the contentions of both the parties and perused the appeal file available before us. It is an established fact that the appellant failed in its legal obligation to deposit the sales tax liability pertaining to the period August, 1999 and filed sales tax return without depositing the due amount of sales tax as collected from the buyers during the relevant tax period August, 1999. The appellant, therefore, failed to deposit sales tax already collected as an agent of the Government. The sales tax liability was however, cleared after the due date in instalments according to his convenience during the period 6i-11-1999 to 15-11-1999 along with additional tax under section 34 of the Sales Tax Act, 1990. The violations as contained in the show-cause notice were, therefore, established against the appellant beyond any doubt. The learned D.R. has correctly pointed out that the principal amount of sales tax along with additional tax was deposited by the appellant before the issuance of amnesty Notification S.R.O. 1349(I)/1999, dated 17-12-1999. 6. We have observed that the sales tax registered persons under the self-assessment scheme envisaged in the Sales Tax Act, 1990, are required to make assessment of their sales tax liability on the supplies made by them and recover the amount of tax from the buyers and deposit the same along with sales tax return pertaining to the tax period. In the instant case the appellant failed in its legal obligation to deposit the self-assessed sales tax along with monthly sales tax return and contravened the provisions of sections 3, 6 and 26 of the Sales Tax Act, 1990. However, the self-assessed sales tax liability was discharged after the due date along with additional tax under section 34 of the Sales Tax Act, 1990. The learned Adjudicating Officer imposed penalty of Rs.29,697 on the appellant under section 33 of the Sales Tax Act, 1990 in the impugned Order-in-Original No.131 of 1999. It is pertinent to observe that there is no question of double jeopardy in the instant case as pointed out by the learned counsel as the additional tax was imposed under section 34 of the Sales Tax Act, 1990 for non-payment of sales tax already recovered from the buyers as an agent of the Government and putting the tax to its own use by the registered person which attracted the provisions of section 34 of the Sales Tax Act, 1990. The additional tax was therefore leviable under the provisions of section 34 of the Sales Tax Act, 1990 and it was correctly deposited by the registered person on the delayed payment of principal amount of sales tax. So far as penalty under section 33 is concerned it was imposed on the violation of provisions of Sales Tax Act, 1990. It has been observed that the amnesty Notification S.R.O. 1349(I)/99, dated 17-12-1999 also covered cases where principal amount has already been deposited and the registered person has been allowed exemption of 75 per cent of additional tax and penalty on payment of 25 per cent of the principal amount and penalty. Since in the instant case, full amount of additional tax has already been deposited, therefore, we find it appropriate to allow remission of penalty of Rs.29,697 in view of circumstances of the case. The impugned order in view of above discussion is set aside and appeal against imposition of penalty of Rs.29,697 is accepted. 7. The appeal stands disposed of as above. C.M.A./59/Tax (Trib.) Appeal accepted.

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