COMMISSIONER INLAND REVENUE, ZONE-I, LTO, KARACHI vs PAKISTAN STATE OIL COMPANY LIMITED, KARACHI Ss

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COMMISSIONER INLAND REVENUE, ZONE-I, LTO, KARACHI VS PAKISTAN STATE OIL COMPANY LIMITED, KARACHI Ss. 2(37), 11(2), 11(5), 33(13) & 34---Supply of oil products by Oil Marketing Company (Pakistan State Oil Company Limited /PSO)---Price Differential Claim ('PDC') receipts received from the Government of Pakistan to PSO (Registered Person)---Non-payment of sales tax, allegation of---Tax fraud, claim of---Scope---Imposed tax demand, deletion of---Default surcharge and penalty, imposition of---Scope---After elapse of five years from relevant tax periods of the Registered Person/PSO, the Department issued two Show-Cause Notices against Registered person for non-payment of sales tax on Price Differential Claim ('PDC') receipts having been received from the Government of Pakistan---Assessment order was passed against (Registered Person /PSO) raising sales tax demand along with a penalty equal to the principal amount and default surcharge---Department approached the Appellate Tribunal Inland Revenue ('Tribunal') as the Commissioner Inland Revenue (Appeals) ['CIR (Appeals)'] deleted the entire demanded amount (the sales tax as well as penalty and default surcharge) on the ground of limitation prescribed under S. 11(5) of the Sales Tax Act, 1990---Whether the imposition of default surcharge under S. 34 and penalty under S. 33(13) of the Sales Tax Act, 1990, was legally sustainable, in view of the Department's stance that the Respondent committed tax fraud by not charging sales tax on Price Differential Claims (PDCs) on petroleum products?---Held: Since (this) Tribunal, in the light of the findings recorded under relevant issue ( i.e. whether the limitation prescribed under S. 11(5) of the Sales Tax Act, 1990, was inapplicable in view of the Department's claim of tax fraud?) affirmed the order of the Commissioner Inland Revenue (Appeals) deleting the principal demand, thus, as the principal demand did not survive, the consequential penalty and default surcharge also ceased to have any legal basis---No justification was found to interfere with the impugned order passed by the Commissioner Inland Revenue (Appeals) and the same was accordingly upheld---Appeal, filed by the Department, was dismissed, in circumstances.

COMMISSIONER INLAND REVENUE, ZONE-I, LTO, KARACHI vs PAKISTAN STATE OIL COMPANY LIMITED, KARACHI Ss — 2025 PTD 1803 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

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