JANANA DE MALUCHO TEXTILE MILLS LTD. vs DEPUTY COMMISSIONER INLAND REVENUE ZONE-III, LTO, LAHORE Ss

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JANANA DE MALUCHO TEXTILE MILLS LTD. VS DEPUTY COMMISSIONER INLAND REVENUE ZONE-III, LTO, LAHORE Ss. 11E & 33---Principle amount already paid---Show Cause Notice, issuance of---Default surcharge and penalty, imposition of---Scope---Contention of the Appellant / Registered Person (company engaged in the business of manufacturing of un-dyed cotton yarn) was that while calculating the period the Officer Inland Revenue (OIR) failed to appreciate the fact that the return was filed on 18th of the next month and the payment was made till 15th of the next month of the sales tax return; that the tax withheld was paid when the invoice was claimed in that month---Validity---The statute allowed the registered person to pay the principal amount of tax within six months and also claim the input tax within six months ; the tax would be withheld at the time of payment---In the present case, when the show cause notice was issued the principal amount of tax was already paid, therefore, the default surcharge and penalty provisions were not applicable in the case of the taxpayer---Thus, the OIR charged default surcharge and penalty without properly looking into the facts of the case and the legal provisions applicable in the case of the registered person---Moreover, the OIR failed to apply his mind regarding the norms in Spinning Mills Industry that after receiving Cotton Lint it had to pass certain lab tests, resultantly, purchase return often occurred---On the other hand, in a sales tax period, month end liability was calculated as per law and procedures on month end---When all principle amount was admittedly paid, no question of default surcharge and penalty could be called for at all---Appellate Tribunal Inland Revenue annulled the Order-in Original passed by the OIR---Appeal, filed by the registered person/Company, was allowed accordingly.

JANANA DE MALUCHO TEXTILE MILLS LTD. vs DEPUTY COMMISSIONER INLAND REVENUE ZONE-III, LTO, LAHORE Ss — 2026 PTD 356 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

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