DERA TONIGHT, MAKKI RESIDENCY, OLPER ROAD, ROHRI, DISTRICT SUKKUR vs COMMISSIONER (APPEALS-II), SINDH REVENUE

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DERA TONIGHT, MAKKI RESIDENCY, OLPER ROAD, ROHRI, DISTRICT SUKKUR VS COMMISSIONER (APPEALS-II), SINDH REVENUE BOARD, KARACHI Ss. 24, 24B & 43---Provisions relating to registration, contravention of---Penalty, imposition of---Scope---Plea of the appellant was that two penalties were provided in terms of serial No.1 under S.43 of Sindh Sales Tax on Services Act, 2011 ('the Act 2011') and appellant was entitled to the lesser penalty amongst the two provided in terms of serial No.1 under S.43 of the Act, 2011---Section 43 of the Sindh Sales Tax on Services Act, 2011, shows that penalty in terms of serial No.1 of the Table under S.43 deals with "not-getting registered voluntarily" and "being registered compulsorily" provided under Ss. 24 and 24B, respectively---It was very much clear from the wordings of statute that penalties provided in the first part (in column (2)) are applicable to single situation i.e. "not-getting registered voluntarily" and the assessing officer has discretion to impose penalty either of Rs.100,000/- or five per cent of the amount of sales tax---However, the penalty provided in second part is applicable to twin situations i.e. "non-compliance of the notice (requiring taxpayer to get registered voluntarily) or when an order has been passed making the taxpayer registered "compulsorily", wherein the law prescribes minimum penalty of Rs.100,000/=---Situations mentioned at serial No.1 (in column (2)) are interconnected---In case a person, liable to be registered, does not get himself registered, the assessing officer issues a notice requiring such person to get himself registered voluntarily---In case such person responds to such notice positively and gets himself registered, the assessing officer, after considering the existence of mens rea behind non-registration prior to providing taxable services, may impose either of the penalties i.e. Rs.100,000/- or five per cent of the amount of sales tax---However, in case of non-compliance of the notice, the assessing officer is liable to register the said person compulsorily and also impose a penalty of Rs.100,000/----Word "shall" used with the penalty (in column (2)) makes it directory in nature, therefore, no discretion can be exercised by the assessing officer in case the taxpayer does not comply with the notice---Thus, in the present case the imposition of penalty amounting to Rs.100,000/- in terms of serial No.1 of the Table under S.43 of the Act, 2011, was justified---Appellate Tribunal, Sindh Revenue Board, maintained the impugned order / findings of Commissioner (Appeals)---Appeal was dismissed, in circumstances. R.42 (1)(a)---Sindh Sales Tax on Services Act (XII of 2011), S.24---Exemption, entitlement to---Scope---There is no denial to exemption provided under the R. 42(1)(a) but the entitlement of such exemption is subject to registration and also filing of returns---Without filing a return no person can avail any exemption---Appellate Tribunal, Sindh Revenue Board, maintained the impugned order / findings of Commissioner (Appeals)---Appeal was dismissed, in circumstances. Ss. 24, 24B & Second Sched.---Sindh Sales Tax on Services Rules, 2011, R. 42 (1) (a)---"Restaurant services"---Registration, requirement of---Scope--- Being registered compulsorily---Scope and effect---Tax profile, changing of---Scope---It is the matter of record that appellant was registered compulsorily in compliance of the Original Order by the department in respect of economic activity, being carried out by a specific name/style (in the name of M/s. Dera Tonight) and that vide relevant letter the details of appellant's tax profile (i.e. Activation Code and Passcode) were duly communicated to the appellant---Admittedly, such profile had an option of modification, which allowed the taxpayer to modify the details available in his tax profile, in case the same were incorrect---There is no legal justification in creating a fresh tax profile, just for the reason that the details available in the tax profile created by the department (compulsorily) were incorrect---Thus, the Assistant Commissioner was justified in registering appellant compulsorily under Tariff Heading 9801.2000 in compliance of S.24B of the Act, 2011, therefore, appellant's tax profile registered by the department was a valid registration and appellant's Tax Profile registered on 13.03.2024 had no legal effect---Appellate Tribunal, Sindh Revenue Board, maintained the impugned order / findings of Commissioner (Appeals)---Appeal was dismissed, in circumstances. S. 24 & Second Sched.---Sindh Sales Tax on Services Rules, 2011, R. 42(1)(a)---Constitution of Pakistan, Arts. 5 & 18---"Restaurant services"---Registration, requirement of---Fundamental rights of taxpayer---Scope---Article 18 of the Constitution provides a right to freedom of trade, business or profession but such right is not absolute as the same is subject to law which governs such trade, business or profession, therefore, the Art. 18 of Constitution has to be read in juxtaposition with Art. 5 of the Constitution which envisages the obedience to law as an inviolable obligation of every citizen---The appellant has carried out economic activity which is governed under the provisions of Sindh Sales Tax on Services Act, 2011 ('the Act, 2011') and Sindh Sales Tax on Services Rules, 2011, therefore, he was liable to abide by all the provisions of said statute---Section 24 of the Act, 2011 requires every person to get itself registered who is resident and provides any of the services listed in the Second Schedule from their registered office or place of business in Sindh, however, S. 24B of the Act, 2011, empowers the department to register such person compulsorily in case he fails to get himself registered voluntarily and S.43 provides penalties for non-compliance of any of the provisions of the Act, 2011---In order to secure fundamental rights, every citizen has to adhere to the relevant law and policies issued by the Government, having binding effect under the doctrine of sovereignty---The rights and duties are two sides of the same coin and they both go side by side---Article 5 of the Constitution categorically envisages the obedience to law and the Constitution---Word "inviolable" used in Art. 5 means that it is never to be broken and infringed, meaning thereby it is the sole responsibility of every citizen to obey law, rather than taking it (the law) for granted---To be loyal to the State is the basic duty of all citizens and they have to be obedient to the Constitution and the law, wherever they may be---Admittedly, the appellant was carrying on economic activity listed in the Second Schedule as "Restaurant Services" vide Tariff Heading 9801.2000, therefore, he was liable to be registered irrespective of the fact that services provided were exempt or otherwise.

DERA TONIGHT, MAKKI RESIDENCY, OLPER ROAD, ROHRI, DISTRICT SUKKUR vs COMMISSIONER (APPEALS-II), SINDH REVENUE BOARD, KARACHI Ss — 2025 PTD 1880 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

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