Sources reveal that the sales tax department's attempt to prove suppression of supplies has faltered, as it failed to issue a new notice with fresh observations distinct from the earlier allegations.
An audit by department officials led to a show cause notice accusing the company of suppressing supplies, based on a comparison of declared production and electricity consumption.
The company contested the notice with the Federal Tax Ombudsman, who advised the Federal Board of Revenue (FBR) to investigate.
Subsequently, the department issued a sales tax order-in-original, contested by the company at the tribunal. The tribunal instructed the department to form a committee for record examination. However, the FBR overturned the original order before the committee's report.
The adjudicating authority then issued a second order-in-original without a new show-cause notice, determining procedural impropriety and a breach of due process. Relevant authorities stress the importance of a clear show-cause notice in ensuring a fair trial, with specific and non-ambiguous allegations to prevent prejudice to the taxpayer's right to a fair trial.
