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Federal Board of Revenue (FBR) Wednesday said the status of cases involving Sales Tax evasion that are pending for adjudication, had not been affected by the omission of section 45 of the Sales Tax Act, 1990, following the promulgation of Finance (Amendment) Ordinance, 2009, as claimed in the reports appearing in a section of the press in recent days.
In an official statement, the FBR spokesman has dispelled the wrong impression regarding the matters pertaining to section 45 of the Sales Tax Act, 1990, to the effect that section 45 provides no legal sanction for the process of adjudication. This section which is neither charging nor adjudicating in scope, only prescribes pecuniary limits for adjudication by various authorities. Orders of adjudication/assessment are not made under section 45 but under section 11 or section 36 of the Sales Tax Act, 1990.
The spokesman recalled that the Finance (Amendment) Ordinance, 2009, in an attempt to harmonize the domestic tax laws, abolished the separate tier of adjudicating authorities. Through insertion of sub-section 4(A) in section 25, the officer conducting audit, has been authorized to determine the tax liability by passing an order under section 11 or 36 of the Sales Tax Act, 1990.
Press reports had pointed out about pending adjudication proceedings, which had not been saved whereas the fact is that saving of pending adjudication proceedings was not required in view of section 6 of the General Clauses Act, 1897. Section 6 relates to consequences of repeal of Central Acts or Regulations and is equally applicable to amendments in Acts and Regulations.
Similarly, the process of adjudication by a separate authority was consciously discontinued for future cases. At present, final orders determining the tax liability in cases of registered persons are to be made by the same authority in harmony with the procedure under the Income Tax Ordinance, 2001. In the pending cases, adjudication will be continued and finalized under the un-amended provisions.
Moreover, reference to Additional Collector, Deputy Collector or Assistant Collector in the omitted Section 45 would mean reference to Additional Commissioner, Deputy Commissioner and Assistant Commissioner Inland Revenue, etc, as given in Section 72A of the Sales Tax Act, 1990, inserted through Finance (Amendment) Ordinance, 2009.
The spokesman further maintained that issuance of fresh show cause notices is not required and pending proceedings can be continued and finalized. Even otherwise, fresh show cause notices, if required, can be issued within the periphery of limitation of five years prescribed under section 11 and five and three years respectively under sub-section (1) and (2) of section 36. In case, where there is time limit for adjudication, the same can be extended by FBR as provided under section 74 of the Sales Act, 1990.