On the basis of credible information that a supplier of close circuit cameras, vigilance/I.T equipment and related accessories, located in Lahore, is involved in evasion by way of suppression of sales/income and making taxable supplies without getting sales tax registration, the Directorate of I&I-IR Lahore initiated the proceedings in the case. The supply of above said taxable goods is subjected to normal regime of sales tax under section 3 of the Sales Tax Act, 1990.
The investigations revealed that the supplier was registered with Income Tax Department in 2014 as a retailer/supplier and filed tax returns for tax years 2012 to 2015 wherein turnover/sales of greater than Rs 5 million for each tax year was declared. A person having a turnover/sales of Rs 5 million or above during a year, is required to get sales tax registration as per Sales Tax Act, 1990.
It transpired that seemingly in order to avoid payment of due sales tax on its taxable supplies, the business concern remained un-registered with sales tax during the above referred tax years. In the circumstances above, an inquiry/investigation against the said business concern, in terms of section 38 read with section 25(2) of the Sales Tax Act, 1990 was initiated. In order to proceed in the matter, search warrant for recovery of private record/documents pertaining to actual sales/ purchase was, therefore, obtained from the Judicial Magistrate under section 40 of Sales Tax Act, 1990. Search of the above said premises led to recovery of private record/things which confirmed that taxpayer is involved in making taxable supplies without getting registration. It is established that the business concern in connivance with its suppliers, buyers and connivers etc has committed tax fraud by way of suppression of its actual sales and making of taxable supplies without getting sales tax registration. The business concern concealed its taxable supplies valuing Rs 229,520,682/- and wilfully & fraudulently evaded sales tax amounting to Rs 38,277,911/- by committing tax fraud.
The said amount is recoverable along with default surcharge amounting to Rs 19,592,007/- beside penalty of Rs 38,277,911/- ie, 100% of the principal. The total recoverable tax amount is Rs 96,147,829/-. Moreover the Lahore Directorate approached the Local Registration Office, RTO-II, Lahore and ensures the compulsory registration of the business concern.
During the course of investigations, one of the partners of business concern, attended the Lahore Directorate and voluntarily agreed to deposit the total sales tax liability to avoid the criminal proceedings. In this regard, they deposited Rs 7,526,768/- and submitted the post dated cheques for the remaining amount. DG I&I IR Khawaja Tanveer Ahmed highly appreciated the efforts of Lahore Directorate.
Copyright Business Recorder, 2017