SYED ARSHAD ALI, J.---This is a Sales Tax Reference filed by the petitionercompany under section 47 of the Sales Tax Act, 1990 ("Act") seeking advice of this Court on the purported questions of law framed in the memo of reference as allegedly arising out of the order dated 09.08.2017 passed by the worthy Appellate Tribunal Inland Revenue, Peshawar Bench, Peshawar ("Tribunal").

1. In order to appreciate the facts of the case, we would like to refer to the judgment dated 27.01.2015 passed by the Deputy Commissioner (E&C-1) Zone, RTO, Peshawar which reads as under:-

"M/s Khyber Tea & Food Company, R.No. 13 Suleman Plaza Kachehry Gate, Ashraf Road Peshawar holding sales tax Registration No. 05-01-0902-08964 have filed sales tax refund claim of Rs. 26,949,268/- under section 10 of the Sales Tax Act, 1990 for the tax period June 2012 against the input tax credit carried forward in terms of Section 3(2)(b) of the Sales Tax Act, 1990 read with SRO 180(I)/2011 dated 05.03.2011 from the tax period April 2011 to June 2012. In order to determine admissibility or otherwise of the claim, the case was sent to Additional Commissioner IR (Audit) Zone-1 vide C No. ST (Refund)/Z-1/Khyber TEA and FOOD/320 12/08 dated 03.01.2013 for pre-refund audit in terms of rule 29(4) read with rule 34 of the Sales Tax Refund Rules, 2006 notified vide SRO 555(I)/2006 dated 05.06.2006. The Deputy Commissioner IR Audit Unit-1 as incorporated at para 5 above reported in admissibility of the claim. On the basis of the pre-refund audit report show cause notice referred to above was issued to the claimant. Meanwhile the Chief Commissioner IR RTO, Peshawar vide C. No. RTO(Hqra) Cre Units/Admn/05 dated 09.07.2014 constituted Special Cell for examination and scrutiny of the record pertaining to the refund claims created as result of reduced rate of sales tax in terms of SRO 180(I)/2011. The claim was sent to the Special Cell for examination and report. The Special Cell also examined the record of the claimant and after providing opportunities to the claimant, submitted detail report as incorporated under para-11 above wherein the refund claim of the claimant has also been recommended for rejection. Both the audit units are of the view that no proper addresses were mentioned on the sales tax output invoices of the claimant. Therefore, the claimant was requested for provision of proper addresses of their buyers. Later on as an after thought the claimant provided addresses of 53 unregistered buyers. As per detail given in the tables incorporated above, 95% of the buyers are located in PATA/FATA. The audit unit issued letter of verification on the given addresses and copies of the letters were given to the claimant for early delivery to their buyers for reply. Replies were received on part of 43 out of 53 unregistered buyers. The audit unit examined the envelops of the letters received and it was reported that 95% of the buyers are located at far-flung areas of PATA/FATA, however, 100% of the verification letters have been dispatched from Peshawar particularly from Afghan Colony Peshawar. Detail of the letters received has been tabulated above. In order to confirm as to whether or not the supplies have been made to the buyers at reduced rate or standard rate and to verify authenticity of the letters dispatched from Peshawar six (06) unregistered buyers out of 43 were summoned under section 37 of the Sales Tax Act, 1990 but none of them made compliance. It was concluded that copies of the verification letters were given to the claimant for early delivery to their buyers but instead of delivering the letters to their buyers the claimant dispatched replies on their behalf from Peshawar. This act on part of the claimant is punishable under section 11(a) and (c) of Sales Tax Act, 1990. Moreover, the claimant has not provided annual audited accounts and complete bank statements of MCB Peshawar City, Bank Al-Habib Limited and NIB Bank Jodia Bazar Karachi, This act on part of the claimant is punishable under section 33(9) of the Sales Tax Act, 1990. The claimant produced three bank statements as well as cash receipts as tabulated above which is more then the declared sales during the period. If the amount received in other banks whose statements have not been provided to the audit units is added with the aforesaid amounts, it will further increase the quantum of amount received v. sales made. On the other hand the claimant declared 95% sales in FATA/PATA and 5% in KP but Rs.320.032.460 received in MCB Karachi. These receipts have not been clarified and reconciled by the claimant with the sales made to and amount received from. The excess amount received in bank statements also established that the sales tax has been charged and collected on supplies at standard rate instead of reduced rate. The department has also issued show cause notice for excess receipts in the bank statements of MCB, Summit Bank and Bank AlHabib and non-payment of sales tax under section 8B of the Sales Tax Act, 1990. It is also added that value addition of the claimant it 0.34% whereas sales and administrative expenses of the claimant are Rs.6.601,498 and Rs.912,139/- respectively. The declared value addition does not justify income v. expenses. The claimant also has no debtors and creditors to justify the refund claim. The claimant also has no enough capital to justify the expenses as well as refund claim. Stock statement of the claimant also not reconciled with the sales and purchases made. Under section 3B (3) of the Sales Tax Act, 1990, the burden of proof that the incidence of tax or charge referred to in subsection (1) has been or has not been passed to the consumer shall be on the person collecting the tax or charge. The claimant failed to justify their refund claim with valid sportive and explanatory documents/ record. Both the audit units have recommended rejection of the refund claim. In view of the aforesaid discussion I fully agree with stance of both audit the units as incorporated above. Therefore, the sales tax refund claim amounting to Rs.26,949,268/- pertaining to the tax period June 2011 is hereby rejected under section 11(2) of the Sales Tax Act and Rule 37 of the Sales Tax Refund Rules, 2006 notified vide SRO 555(I)2006 dated 05.06.2006. The claimant have made an attempt to get sanctioned inadmissible sales tax refund, therefore. I hereby impose 100% penalty equal to the refund claim in terms of section 33(11) of the Sales Tax Act, 1990".

1. The said judgment of the Assessing Officer was upheld by the learned Commissioner Inland Revenue (Appeals), Peshawar as well as by the worthy Tribunal vide order-in-appeal dated 28.05.2015 and order dated 09.08.2017 respectively.
2. Although the petitioner/company has framed a good number of questions of law, however, the same does not relate to the core issues for adjudication. The essential issues for adjudication are; (i) whether the refund claim of the petitioner in terms of SRO 180(I)/2011 dated 05.03.2011 was rightly declined by the fora below? (ii) whether the imposition of penalty of 100% in terms of section 33(11) of the Act is legal in the facts and circumstances of the present case?
3. The present matter relates to the refund of the sales tax in terms of SRO 180(I)/2011 dated 05.03.2011 for the tax period from April 2011 to June 2012. The SRO stated above has allowed the registered person to charge sales tax at a reduced rate (8.5%) provided the registered person does not receive the whole of the sales tax from the purchaser of the goods. It has been the case of the petitioner that it had charged sales tax (output) at the reduced rate in view of SRO 180(I)/2011 dated 05.03.2011; therefore, it is entitled to refund the sales tax paid by the petitioner as input. Needless to mention that the petitioner deals in the sale of tea and spices which is enumerated at serial Nos. 14 and 18 respectively of the third schedule to the Act. The claim of the petitioner was rejected by the Assessing Officer on the ground that he could not produce sufficient record for verification of the claim. The perusal of the impugned order, as, stated above, would also in respect show that the recipient in respect of the parties' goods neither could be traced nor the statement of account presented by the petitioner could verify the fact that the petitioner has charged a reduced rate of sales tax at the time of sale. The said question of fact has been determined by all fora against the petitioner, which does not call for interference in view of the limited jurisdiction of this Court. M/s Zarghoon Zarai Corporation v. Collector of Customs and another (2006 PTD 534), Pak Suzuki Motors Co. Ltd., Karachi v. Collector of Customs, Karachi (2006 PTD 2237), Collector of Customs v. M/s. Noman Chugtai (2007 PTD 153), M/s. Ittehad Textile Industries (Pvt.) Ltd. v. Collector of Sales Tax Collectorate of Sales Tax and Central Excise, Faisalabad (2007 PTD 663), Assistant Collector of Customs, Sambrial Dry Port Sialkot v. M/s. Al-Badar Poultry Farms, Wazirabad (2004 PTD 2683), M/s B.P. Industries, Karachi and others v. The Additional Collector of Customs, Sales Tax and Central Excise (Adjudication) and another (2008 PTD (Trib.) 36).
4. Moving on to the second question regarding the imposition of penalty under section 33 (11) of the Act. For ease of reference, the said provision is reproduced as under:-

33. Offences and penalties. Whoever commits any offence described in column (1) of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence in column (2) thereof:-

7. It is by now settled law that imposition of penalty would only be attracted when the person with mala fide intention presents a forged document in support of his claim, however, in the present case, the claim of the petitioner cannot be considered as to be based on mala fide for the obvious reasons that at the relevant time, the SRO 180(I)/2011 dated 05.03.2011 was in vogue allowing the refund of sales tax, as stated above, and mere fact that the petitioner could not establish his claim before the Assessing Officer by producing the relevant record which the Assessing Officer himself has confirmed that the same is/was a cumbersome job; therefore, mala fide cannot be attributed to the petitioner; hence, the imposition of penalty was not legal. In the case of Messrs D.G. Khan Cement Company Ltd. and others v. The Federation of Pakistan and others (2004 SCMR 456 = 2004 PTD 1179) it was held by the Apex Court that:-
"26. In the case reported as PTCL 1992 CL 23, this Court held that imposition of penalty was illegal where the evasion of duty was not willful. The Lahore High Court in the case reported as PTCL 1992 CL 415 held that where the petitioner did not act mala fide with the intention to evade the tax, the imposition of penalty of additional tax and surcharge was not justified. It was held by the Sales Tax Tribunal in the case of PTCL 2001 CL 627 that where the controversy between the department and the appellants related to interpretation of different legal provisions, the imposition of additional tax and penalty had no justification. In other case, the appellant's own Tribunal held that additional tax was punitive in nature as such unless default was willful or mala fide, the recovery of the same was unwarranted.

1. In view of these decision, it could not be argued by the appellants that imposition of penalty or additional tax under section 34 was mandatory and there was no discretion left with the authorities to allow any concessions.
2. Each and every case has to be decided on its own merits as to whether theevasion of payment of tax was willful or mala fide, decision on which would depend upon the question of recovery of additional tax. In the facts and circumstances of his case, we find that non-payment of the sale tax within tax period was neither willful nor it could be construed to be mala fide evasion of payment of duty, therefore, the recovery of additional tax as penalty or otherwise was not justified in law".

Thus, both the aforesaid questions are answered in the above terms.
MQ/8/P Order accordingly.
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