SHC upholds sales tax default surcharge
KARACHI: The Sindh High Court has ruled that the liability to pay default surcharge under the Sindh sales tax on services law was a strict statutory obligation of a compensatory character. The SHC also noted that proof of wilfulness or mens rea was not a condition for its imposition, and neither officers of the Sindh Revenue Board (SRB), nor the commissioner or appellate tribunal, were vested…
The Sindh High Court has ruled that paying a default surcharge under the Sindh sales tax on services law is a strict statutory obligation. The court emphasized that proof of intentional wrongdoing is not required for its imposition. Neither officers of the Sindh Revenue Board, the commissioner, nor the appellate tribunal have the power to waive, reduce, or defer such liability based on hardship, equity, or lack of intention.
The two-judge bench, comprising Justice Agha Faisal and Justice Shah Nawaz Memon, acknowledged the disruption caused by Covid-19 to commercial life in Sindh but noted that sympathy does not grant jurisdiction and there is no equity in the matter. The court disposed of 12 identical special sales tax reference applications filed by the Sindh Revenue Board against orders from the appellate tribunal, which had waived the default surcharge on a dozen industries, banks, and private firms.
The tribunal had set aside the surcharge on the grounds that the default was not proven to be wilful and there was no mens rea. The High Court stated that the Sindh Sales Tax on Services Act provides a mechanism for pandemic relief, but the respondents chose not to utilize Sections 17(3) and 45, which empower the Sindh Revenue Board to set a different payment time and exempt the surcharge.
Written by urgent.news from Dawn - Pakistan's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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