KARACHI AERO CLUB (GUARANTEE) LTD. vs COMMISSIONER (APPEALS-II), SINDH REVENUE BOARD, KARACHI Ss

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KARACHI AERO CLUB (GUARANTEE) LTD. VS COMMISSIONER (APPEALS-II), SINDH REVENUE BOARD, KARACHI Ss. 24, 24B & 43, Table, Serial No.1---Non-registration before providing taxable services---Penalty, imposition of---Scope---Appellant sought waiver of penalty imposed in terms of Serial No.1 of the Table under S. 43 of Sindh Sales Tax on Services Act, 2011 ('the Act, 2011')---Held: Provision of Serial No.1 of the Table under section 43 of the Act 2011 shows that penalty deals with two situations i.e. "not-getting registered voluntarily" and "being registered compulsorily" provided under Ss. 24 and 24B, respectively---It is 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 officer has discretion to impose a penalty either of Rs.10,000/- 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 notice (requiring the taxpayer 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/---In such circumstances it would be appropriate that the appellant must be registered under S. 24 of the Act, 2011---Situations mentioned at serial No.1 (in column (2)) are interconnected---In case a person, liable to be so 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 get 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.10,000/- or five per cent of the amount of sales tax---However, in case of non-compliance of the notice (asking the person to get registered voluntarily), the assessing officer is liable to register 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---In the present case , vide show-cause notice the assessing officer required the appellant to get himself registered, which was not responded positively---Having no other alternative the assessing officer registered the appellant compulsorily---Thus, in such circumstances, imposition of penalty amounting to Rs.100,000/- in terms of serial No.1 of the Table under section 43 of the Act, 2011 was justified---Appellate Tribunal Sindh Revenue Board maintained the findings of the Commissioner (Appeals)---Appeal, filed by flying club, was dismissed, in circumstances.

KARACHI AERO CLUB (GUARANTEE) LTD. vs COMMISSIONER (APPEALS-II), SINDH REVENUE BOARD, KARACHI Ss — 2026 PTD 274 BOARD-OF-REVENUE-SINDH-APPELLATE-TRIBUNAL

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