Sales Tax Rules, 2004

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Preamble and Section 1

CHAPTER I REGISTRATION, VOLUNTARY REGISTRATION

CHAPTER II FILING OF MONTHLY RETURNS

CHAPTER III CREDIT AND DEBIT NOTE AND

CHAPTER IV APPORTIONMENT OF INPUT TAX

CHAPTER V REFUND

CHAPTER VI SPECIAL AUDIT

CHAPTER VII ZERO-RATING OF SUPPLIES AGAINST

CHAPTER VIII SUPPLY OF ZERO-RATED GOODS TO DIPLOMATS, DIPLOMATIC MISSIONS, PRIVILEGED PERSONS AND PRIVILEGED ORGANISATIONS

CHAPTER IX TAX-PAYER’S AUTHORIZED REPRESENTATIVES

CHAPTER X ALTERNATE DISPUTE RESOLUTION

CHAPTER XI RECOVERY

CHAPTER X REPEAL

SALES TAX RULES, 2004

12^th June, 2004

In exercise of the powers conferred by clause (xxi) of sub-section (2) of section 37 of the Central Excises Act, 1944 (I of 1944), section 219 of the Customs Act, 1969 (IV of 1969), section 50 of the Sales Tax Act, 1990, read with sub-section (2) of section 8, section 9, 14, 21 and 28, clause (c) of sub-section (1) of section 22, section 26, sub-section (6) of section 47A, and sections 48 and 52 thereof, the Central Board of Revenue is pleased to make the following rules namely:-

1. Short title, application and commencement :–(1) These Rules may be called the Sales Tax Rules, 2004.

(2) They shall be applicable to the persons prescribed in the respective chapters.

(3) They shall come into force on the first day of July, 2004, except chapter V, which shall come into force on such date as is notified by the Central Board of Revenue by notification in the official Gazette.

CHAPTER I REGISTRATION, VOLUNTARY REGISTRATION

1. Application :–The provisions of this chapter shall apply to the following persons, namely:—

(a) a person required to be registered under the Act;

(b) a person required, under any other Federal or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were sales tax under the Act;

(d) a person who is subject to compulsory registration;

(e) a person who is already registered and requires a change in the name, address or other particulars of registration;

(f) a person who is blacklisted or whose registration is suspended; and

(g) a person who is required to be de-registered.

2. Definitions :–(1) Unless there is anything repugnant in the subject or context, for the purposes of this chapter,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “Annex” means an annex appended to this chapter;

(d) “Collector” means the Collector of Sales Tax having jurisdiction;

(e) “Local Registration Office“ means the Collectorate of Sales Tax having jurisdiction;

(f) “prescribed form” means the S.T. series of forms prescribed under this chapter;

(g) “registration certificate” means a certificate of registration in the form set out at Annex B;

(h) “STARR system” means the Sales Tax Automated Refund Repository computer system; and

(i) “transmit” means the transmission of data between Central Registration Office and Local Registration Office, through electronic or any other means.

(2) Any terms or expressions used but not defined here shall have the same meaning as are assigned to them under the Act.

3. Requirement of registration :–The following persons engaged in making of taxable supplies in Pakistan (including zero-rated supplies) in the course or furtherance of any taxable activity carried on by them, if not already registered, are required to be registered under the Act and this chapter, namely:—

(a) a manufacturer whose annual turnover from taxable supplies, made in any period during the last twelve months ending any period, exceeds five million rupees;

(b) a retailer whose value of supplies, in any period during the last twelve months ending any period, exceeds five million rupees;

(d) a wholesaler (including dealer) and distributor; and

(e) a person required, under any other Federal or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act;

4. Application for registration :–(1) A person required to be registered under the Act or this chapter shall, before making any taxable supplies, apply for registration in the prescribed form S.T.-1, which shall be submitted, duly filled in as per instructions printed thereon, through registered mail (acknowledgment due), or through courier service, to the Local Registration Office having jurisdiction–

(a) in case of a corporate person, that is, a listed public limited company or an unlisted public limited company or a private limited company, the place where the registered office is located; and

(b) in case of a non-corporate person, the place where the business is actually carried on:

Provided that a non-corporate person, having a single manufacturing unit, whose business premises and manufacturing unit are located in different areas, shall apply to the Collector of the area in whose jurisdiction his manufacturing unit is located:

Provided further that a corporate person shall have the option to apply for transfer of registration to the Local Registration Office having jurisdiction where the place of business is located:

Provided further that, from such date as may be specified by the Board, the application for registration may be submitted electronically.

(2) Where an applicant has unsold or un-used stocks of tax-paid inputs on which he desires to claim the benefit of section 59 of the Act, he shall declare such stocks to the Collector in a statement in the form set out at Annex A, to be appended with his application for registration.

(3) Where the application for registration is complete in all respects, the Local Registration Office shall transmit the same to the Central Registration Office.

(4) The Central Registration Office, after conducting such verification, inquiry or investigation as is deemed necessary, may register the applicant and issue a certificate of registration containing the registration number to the applicant in the form as set out in Annex B.

5. Voluntary registration :–(1) A person who makes or intends to make taxable supplies but is not required to be registered under this Act, may make an application for registration to the Local Registration Office in the prescribed form S.T.-1, in the manner prescribed by rule 5.

(2) The Central Registration Office may register the applicant after such verification, inquiry or investigation as is deemed necessary and a certificate of registration containing his registration number shall be issued to the applicant in the form as set out in Annex B.

(3) A person who applies for voluntary registration shall observe and be bound by all the provisions of the Act and rules made thereunder.

6. Compulsory registration :–(1) If a person, who is required to be registered under this Act, does not apply for registration and the Local Registration Office or any other office as may be authorised by the Central Board of Revenue or the Collector in this behalf, after such inquiry as deemed appropriate, is satisfied that such person is required to be registered, it shall submit a written report to the Local Registration Office.

(2) On receipt of such report, the Local Registration Office shall issue notice to such person in the form set out in Annex C.

(3) In case the Local Registration Office receives a written reply from the said person within the time specified in notice, contesting his liability to be registered, the Local Registration Office shall grant such person opportunity of personal hearing, if so desired by the person, and shall thereafter pass an order whether or not such person is liable to compulsory registration. A copy of the said order shall invariably be given to the said person.

(4) Where the person to whom a notice is given under sub-rule (2), does not respond within the time specified in notice, the Local Registration Office shall transmit the particulars of the person to the Central Registration Office, which shall compulsorily register the said person and allot him a registration number which shall be delivered to the said person either in person through Local Registration Office or through registered mail (acknowledgement due) or through courier service.

(5) A compulsory registered person is required to comply with all the provisions of the Act and rules made thereunder from the date of compulsory registration, and in case of failure to do so, the Local Registration Office may issue notice under section 25 of the Act for production of records or documents and appearance in person to assess the amount of sales tax payable under the provisions of section 11 of the Act, and take any other action as required under the law against such person.

Provided that if it is subsequently established that a person was not liable to be registered but was wrongly registered under this rule due to inadvertence, error or misconstruction, the Central Registration Office, on the recommendation of the Local Registration Office, shall cancel such registration and such person shall, subject to the provisions of section 3B of the Act, not be liable to pay any tax, additional tax or penalty under any of the provisions of the Act or rules made thereunder.

7. Change in the particulars of registration :–(1) In case there is a change in the name, address or other particulars as stated in the registration application or certificate, the registered person shall notify the change in the prescribed form S.T.-2 to the Local Registration Office within fourteen days of such change.

8. Transfer of Registration :–(1) The Central Registration Office may, subject to such conditions, limitations or restrictions as it may deem fit to impose, by an order, transfer the registration of a registered person from the jurisdiction of one Collector to another Collector or, as the case may be, to the Director General of Large Taxpayers Unit.

(2) On transfer of registration,—

(a) all the records and responsibilities relating to such registered person shall be transferred to the Collector or, as the case may be, to the Director General of Large Taxpayers Unit in whose jurisdiction the registration has been so transferred; and

(b) notwithstanding the actions already taken, being taken or otherwise pending immediately before the transfer in respect of such registered person under any of the provisions of the Act or the rules made thereunder in the Collectorate from where his registration has been transferred, the Collector, or as the case may be, the Director General of Large Tax Payers Unit, in whose jurisdiction the registration is so transferred shall exercise the jurisdiction over such person in the manner as if he always had such jurisdiction.

(3) In case of transfer of registration, the Central Registration Office shall issue a new certificate of registration to the taxpayer in lieu of the previous certificate, and such new certificate shall contain a reference to the previous certificate of registration.

(4) In case a registered person intends to shift his business activity from the jurisdiction of one Collector to another, or he has any other valid reason for such transfer, he shall apply to the Central Registration Office for transfer of his registration and the provisions of this rule shall, mutatis mutandis, apply to such cases.

9. De-registration :–(1) Every registered person who ceases to carry on his business or whose supplies become exempt from tax, shall apply to the Local Registration Office for cancellation of his registration in form S.T.-3, and the Local Registration Office, may recommend to the Central Registration Office to cancel the registration of that person from such date as may be specified, but not later than three months from the date of such application or the date all the dues outstanding against such person are deposited by him, whichever is the later:

(2) A registered person whose total taxable turnover during the last twelve months remains below the limit specified in sub-rule (2), may apply to the Local Registration Office for de-registration in form as set out at S.T.-3.

(3) The Local Registration Office, upon completion of any audit or inquiry which may have been initiated consequent upon the application of the registered person for deregistration shall direct the applicant to discharge any outstanding liability which may have been raised therein by filing a final return under the provision of section 28.

(4) If a registered person fails to file tax return under section 26 for six consecutive months, the Local Registration Office may, without prejudice to any action that may be taken under any other provision of the Act, after issuing a notice in writing and after giving an opportunity of being heard to such person, recommend to the Central Registration Office for cancellation of the registration after satisfying itself that no tax liability is outstanding against such person.

(5) The obligations and liabilities of the person whose registration is cancelled under sub-section (1) relating to the period when he conducted business as a registered person shall not be affected by the fact that his registration has been cancelled or that he has ceased to be a registered person.

10. Blacklisting and suspension of registration :–(1) Where a Collector has reasons to believe that a registered person is found to have issued fake invoices, or evaded tax or has committed tax fraud, he may, after confirming the facts and the veracity of the information and giving opportunity to such person to clarify his position, blacklist such person or suspend his registration.

(2) The order for blacklisting or suspending the registration of a registered person shall be in writing and a copy thereof shall be communicated to the registered person, the Central Registration Office and to the STARR system.

(3) The inquiry in such cases shall be completed within ninety days, and show cause notice for recovery of any evaded amount of tax and for contravention of the provisions of the Act may be issued within ninety days of completion of inquiry:

Provided that where the records required for completion of the inquiry are not produced by the registered person or his suppliers, the period of ninety days for completion of the inquiry shall be deemed to have been extended.

(4) In case a registered person, who has been blacklisted or whose registration has been suspended under sub-section (1) without getting an opportunity of being heard, approaches the Collector for withdrawing the order for blacklisting or suspension of registration, the Collector may, after conducting such inquiry as he may deem fit, including consultation with the concerned trade association or body, withdraw such order subject to his satisfaction that such person is not engaged in the activities specified in sub-rule (1).

CHAPTER II FILING OF MONTHLY RETURNS

1. Application :–The provisions of this chapter shall apply to all registered persons required to file a return under section 26 of the Sales Tax Act, 1990.

2. Definitions :–In this chapter, unless there is anything repugnant in the subject or context,-

(a) “Act” means the Sales Tax Act, 1990;

(b) “Agreement” means the agreement executed between the Board and the Bank for the purposes of payment of tax and submission of tax returns;

(c) “Bank” means the National Bank of Pakistan or any of its branches designated, by notification in the official Gazette, for the purpose of filing of returns and payment of sales tax;

(d) “Collectorate” means the Collectorate of Sales Tax having jurisdiction;

(e) “nil return” means a return indicating that no sales tax is payable by the registered person in respect of the tax period to which the tax return relates;

(f) “return” means the sales tax return-cum-payment challan in the form as annexed to this chapter; and

(g) “transmit” means to transmit data through a computer network or connection or otherwise.

(2) All other terms and expressions used but not defined in this chapter shall have the same meanings as are assigned to them under the Act.

3. Filing of Returns :–(1) Every registered person shall file the return in triplicate, in accordance with the instructions printed on its reverse, in a Bank located in the jurisdiction of the Collectorate where he is registered:

Provided that a person registered in the jurisdiction of a Large Taxpayer Unit, shall at the time of filing his return, legibly and conspicuously indicate the expression “LTU” on the top right corner of the return.

Provided further that registered persons working under a special procedure notified under section 71 of the Act by the Federal Government wherein a separate return form is prescribed, shall file returns in such form and in such manner as may be prescribed therein.

(2) The registered person shall deposit the amount of sales tax due for the tax period at the time of filing of return in the Bank.

(3) In case no amount of sales tax is payable by the registered person, he may file a nil return without depositing any amount in the Bank, or in accordance with chapter I of the Sales Tax Special Procedures, 2004.

4. Receipt of return by the Bank :–(1) The Bank official shall ensure that the particulars entered in all the three copies of the return are identical and that the amount deposited by the registered person tallies with the amount indicated as “TOTAL SALES TAX PAYABLE” in the return, and shall thereafter sign and stamp the return indicating the date of payment of tax and submission of tax return.

(2) The Bank shall forward the original copy of the return to the concerned Collectorate of Sales Tax or the Large Taxpayers Unit, as the case may be, and the duplicate shall be delivered to the registered person as a token of receipt of payment of sales tax and filing of return and the third copy shall be retained by the Bank for its record.

(3) In case of payment through cheque, pay order or bank draft, the Bank will receive the return in triplicate along with the instrument of payment for the amount of tax payable indicated in the return and issue a provisional acknowledgement receipt to the registered person.

(4) On clearance of the instrument, the Bank official shall sign and stamp the return indicating the date on which payment is received by the Bank. In cases where the payments are received through pay order or bank draft, the bank shall affix two stamps on the return indicating the date on which the pay order or bank draft was received for clearing and the date on which the pay order or bank draft was cleared for payment by transfer.

(5) The date of payment, in case of payment through cash or cheque, shall be treated as the date on which the payment is received by the bank. In case of payment through pay order or Bank draft, the date on which the pay order or Bank draft is tendered at the Bank counter shall be treated as the date of payment and where the pay order or Bank draft, so tendered at the Bank counter, is not cleared on its first presentation for Bank clearing, the registered person shall, without prejudice to any other action, be liable to pay additional tax and penalties prescribed under the Act for late payment of sales tax.

5. Payment of service charges to the Bank :–(1) The Bank shall charge ten rupees per return (including nil returns) as service charges from the Collectorates having jurisdiction in the area where the bank branches are located.

(2) For the purpose of claiming service charges referred to in sub-rule (1), the Manager of the main branch of the Bank shall submit the claim to the Assistant Collector, Assessment and Processing Division of the concerned Collectorate in the first week of the following month supported by a statement indicating date, number of returns received, number of returns submitted to the Collectorate, amount of sales tax collected and amount of sales tax deposited in the State Bank of Pakistan.

(3) The Assistant Collector, Assessment and Processing Division shall verify the statement submitted under sub-rule (2) from the Accounts Section of the Collectorate and from his own record. If the claim is found to be in order and the Assistant Collector is satisfied that the Bank has fulfilled its responsibility under clauses (iv), (vi) a and b of the Agreement, he shall sanction the claim and issue a cheque within a week from the date of submission of the claim, provided that in case of delay by the Collectorate, it shall pay a penalty @ 15% per annum for the amount late sanctioned.

(4) If the Bank fails to fulfill the conditions specified in clause (iv), clause (vi), a, or b of the Agreement, the Assistant Collector shall deduct the amount of penalty leviable thereunder on the Bank at the rate of 15% per annum against the amount late deposited in the State Bank of Pakistan from the service charges admissible to the Bank.

(5) If the returns are not submitted to the Collectorate within forty-eight hours of the receipt thereof returns in the designated branches of the Bank, the service charges in respect of the returns submitted late shall also be deducted and the remaining amount, if any, shall be sanctioned by the Assistant Collector and cheque therefore will be issued to the Bank.

(6) For deduction of any amount under sub-rule (4), the Assistant Collector shall intimate the Bank the reasons thereof within seven days of deduction.

(7) Where it is not clear as to whether deduction should be made, the Assistant Collector shall require the Bank for clarification before taking a decision.

(8) All public holidays and the number of days the Collectorate is prevented from functioning due to the factors beyond its control, shall be excluded while calculating delay in sanctioning the claim for service charges.

(9) Where the Assistant Collector requires any clarification from the Bank, the time taken by the Bank for this purpose shall be excluded from the time specified for sanctioning the service charges claim.

6. Electronic filing of return and transmission of data from bank :–Notwithstanding anything contained in this chapter, the Board may, by an order, specify the manner and procedure for filing of return by electronic means, and may also specify the manner and particulars of the data relating to sales tax returns received by the Bank which shall be transmitted to the Collectorate or to the LTU, as the case may be.

CHAPTER III CREDIT AND DEBIT NOTE AND

1. Application.–The provisions of this chapter apply where a registered person has issued a tax invoice in respect of a supply made by him and as a result of any of the events specified in section 9 of the Sales Tax Act, 1990, the amount shown in the tax invoice or the return needs to be modified.

2. Issuance of Credit and Debit Note.–(1) Where a registered person has made a supply, and such supply or part thereof is cancelled or returned or its value is changed within one hundred and eighty days of such supply, the seller shall issue a Credit Note (in duplicate) in respect of such supply or part thereof, indicating its value determined on the basis of the value of such supply as shown in the tax invoice issued by the supplier, the amount of sales tax paid thereon, and number and date of the original tax invoice.

Provided that the Collector may, at the request of the supplier, in specific cases, by giving reasons in writing, extend the period of one hundred and eighty days by a further one hundred and eighty days.

(2) The original copy of the Credit Note shall be sent to the buyer and the duplicate copy shall be retained for record.

(3) In case of return of goods by the buyer, the buyer shall issue a Debit Note (in duplicate) in respect of such goods, indicating their value, amount of sales tax charged thereon at the time of their supply and the number and date of the tax invoice which was issued by the supplier in respect of these goods, and shall send the original copy to the supplier and retain the duplicate copy for his own record.

(4) In the case of supply of goods to an unregistered person, sub-rule (2) shall not apply.

3. Adjustment of input and output tax.–(1) The buyer shall not be entitled to claim input tax in respect of the supply which has been cancelled or returned to the supplier or in respect of the amount of tax reduced.

(2) Where the buyer has already claimed input credit in respect of these goods, he shall reduce the amount of input tax to that extent in his return for the tax period in which the supply was cancelled, returned or modified.

(3) The supplier shall on the basis of the Credit Note issued by him, correspondingly reduce the amount of output tax in his return for the tax period in which the supply or payment thereof was received by him.

(4) Where the goods relating to such supply are subsequently supplied to the original buyer or some other person with or without carrying out any repairs, the supplier shall charge sales tax thereon in the normal manner and account for it in his return for the period in which these goods were supplied.

Destruction of goods.–Where any goods are returned by the buyer on the ground that the same are unfit for consumption and are required to be destroyed by the supplier, the goods shall be destroyed after obtaining permission from the Collector of Sales Tax having jurisdiction, and under the supervision of an officer of Sales Tax not below the rank of an Assistant Collector as may be deputed by the Collector for the purpose.

CHAPTER IV APPORTIONMENT OF INPUT TAX

1. Application :–The provisions of this chapter shall apply to the registered persons who make taxable and exempt supplies simultaneously.

2. Definitions :–For the purpose of this chapter,—

(a) “Act” means the Sales Tax Act, 1990; and

(b) “residual input tax” means the amount of tax paid on raw materials, components and capital goods being used for making taxable as well as exempt supplies but does not include the input tax paid on raw materials used wholly for making taxable or exempt supplies.

3. Determination of input tax :–(1) Input tax paid on raw materials relating wholly to the taxable supplies shall be admissible under the law.

(2) Input tax paid on raw materials relating wholly to exempt supplies shall not be admissible.

(3) The amount of input tax incurred for making both exempt and taxable supplies shall be apportioned according to the following formula, namely:—

Value of taxable supplies

Residual input tax credit on taxable supplies = _________________ x Residual input tax

Value of taxable + exempt supplies

(4) Monthly adjustment of input tax claimed by a registered person under this chapter shall be treated as provisional adjustment and at the end of each financial year, the registered person shall make final adjustment on the basis of taxable and exempt supplies made during the course of that year.

(5) Any input tax adjustment claimed wrongfully on account of incorrect application of formula spelled out in sub-rule (3) shall be punishable under the respective provisions of law irrespective of the fact that the claim was provisional.

CHAPTER V REFUND

1. Application and commencement :–The provisions of this chapter shall apply to all refund claims made under the Act.

(2) The provisions of this chapter shall come into force on such date as may be specified by the Board by notification in the official Gazette.

2. Definitions :–(1) In this chapter, unless the subject or context otherwise requires,—

(a) “Act” means the Sales Tax Act 1990;

(b) “claimant” means any registered person who files a claim for refund of sales tax under this chapter;

(d) “commercial exporter” means a registered person who has no manufacturing facility of his own and exclusively makes zero-rated supplies of processed goods or same-state goods;

(e) “green channel” means the channel for immediate payment of a refund claim as specified in rule 32;

(f) “manufacturer-cum-exporter” means a registered person who has a manufacturing facility, whether owned or leased, and makes zero-rated supplies therefrom;

(g) “processed goods” means goods which have been got processed or manufactured, by a commercial exporter or a manufacturer-cum-exporter, from one or more registered vendors against tax invoice for processing, manufacturing or conversion charges;

(h) “red channel” means the channel for detailed scrutiny and verification of a refund claim as specified in rule 32;

(i) “same-state goods” means goods purchased by a commercial exporter or a manufacturer-cum-exporter against tax invoice for export as such;

(j) “sanctioning officer” means any officer of sales tax, not below the rank of an Assistant Collector, authorized by the Collector to sanction refund of sales tax under these rules;

(k) “supportive documents” means the documents specified in rule 29;

(l) “processing officer” means an officer of sales tax, not below the rank of an auditor or deputy superintendent, authorized by the Collector to process and scrutinize a claim for refund of sales tax under these rules;

(m) ”STARR” means the Sales Tax Automated Refund Repository computer system; and

(n) “yellow channel” means the channel for scrutiny of a refund claim as specified in rule 32.

(2) All other words and expressions used but not defined in this chapter shall have the same meanings as are assigned to them in the Act.

3. Establishment of offices and posting of officers :–(1) There shall be established a Central Refund Office under the Central Board of Revenue for centralized payment of refund claims of such claimants or categories of claimants as may selected through STARR on the basis of automated parameters approved by the Board.

(2) There shall be established a Refund Division in each Collectorate of Sales Tax to process and sanction refund claims under this chapter, and each such Division shall have a Refund Receipt Section to receive such refund claims and their related supportive documents.

(3) There shall be established a Post-Refund Audit Division in each Collectorate of Sales Tax to audit the refund claims processed and sanctioned by the Refund Division under this chapter.

(4) The Collector may distribute the work of the Refund Division and the Post-Refund Audit Division amongst one or more Deputy Collectors or senior Assistant Collectors in such manner as may be prescribed.

4. Filing of refund claim :–(1) In case of a manufacturer-cum-exporter or a commercial exporter, the monthly sales tax return filed by the claimant in the manner prescribed in chapter II of these rules or chapter I of the Sales Tax Special Procedures Rules, 2004 shall be treated as his refund claim once all the supportive documents as prescribed in sub-rules (1) or (2) of rule 29 including the requisite data in electronic format, have been received in the Refund Division.

(2) A registered person claiming refund under section 66 of the Act shall submit the supportive documents specified in sub-rule (3) of rule 29, along with the electronic data if applicable and an application for refund specifying his name, address and registration number, date of application, amount of refund claimed, and reasons for claiming the refund.

5. Supportive documents :–(1) A manufacturer-cum-exporter or a commercial exporter shall submit the requisite data relating to his refund claim on a computer diskette in the prescribed electronic format along with the following documents in support of his refund claim, namely: –

(a) input tax invoices, output tax invoices and zero-rated invoices;

(b) triplicate copy of bills of entry or Pakistan Goods Declaration duly cleared by customs;

(c) quadruplicate copy of bills of export or Pakistan Goods Declaration, bearing the declaration “Under Claim for Sales Tax Refund” and the examination report recorded by Customs, indicating Mate Receipt number with date;

(d) proof of transportation of goods out of Pakistan vide bills of lading, airway bills, railway receipts or postal receipt;

(e) treasury challans in case of auction sales; and

(2) A commercial exporter or a manufacturer-cum-exporter whose exports of same-state goods or processed goods exceeds twenty per cent of his total exports, shall furnish the following documents in addition to the documents prescribed in sub rule (1), namely:-

(a) a statement showing quantity, value and input tax on: stocks carried over from the previous tax period, additions to such stocks, stocks consumed or supplied during such period and stocks in balance, if any;

(b) bank credit advices or payment realization certificates relating to the exports made during the tax period; and

(c) copies of cheques, pay orders, demand drafts or other banking instruments through which payment has been made to the supplier or in lieu of such copies, a statement certified by the bank, showing all the relevant particulars of the banking instruments.

(3) In case of refund claimed under section 66 of the Act, the following documents shall be furnished, as applicable to the case, namely:—

(a) input tax invoices, output tax invoices, zero-rated invoices or invoices of intermediary processes;

(b) documents of import or export mentioned in sub-rule (1);

(d) authenticated copies of the relevant order-in-original, order-in-appeal, order of Appellate Tribunal or Federal Tax Ombudsman or judgement of a High Court or the Supreme Court of Pakistan, as the case may be.

6. Method of processing refund claims :–Refund claims filed under section 66 of the Act that do not involve any automated scrutiny may be processed manually, while all other claims shall be processed, sanctioned and paid in the manner prescribed in rules 31 to 35.

7. Profiling of claimants :–Manufacturer-cum-exporters and commercial exporters shall be profiled on the basis of parameters, criteria and methodology to be approved by the Board on the recommendation of a special committee to be constituted for the purpose. These profiles along with the electronic data of the refund claim shall be used by STARR for automated processing of the refund claims.

8. Scrutiny, processing and sanction of refund claims :–(1) On receipt of the refund claim, the Refund Receipt Section shall conduct preliminary scrutiny, within three days of receipt of the claim, to confirm that the refund claim is complete as required under rule 29 and that the data provided on prescribed electronic format cross-matches the supportive documents. In case the claim is found to be complete and in order, the claim shall immediately be uploaded in STARR, which will assign it a unique claim number, process it automatically on the basis of parameters approved by the Board, and assign it either to the green, yellow or red channels. However, if any discrepancies are discovered during cross matching, these shall be removed by the claimant prior to processing through STARR.

(2) Refund claims assigned to the green channel shall be sanctioned by the Central Refund Office, under intimation to the concerned Collectorate and to the claimant.

(3) In case of a refund claim assigned to the yellow channel, the processing officer shall carry out scrutiny to ascertain its admissibility under the law, give his written report thereon and forward it to the sanctioning officer within fifteen working days. The sanctioning officer shall, within three working days, dispose off the claim on merit in the following manner, namely:—

(a) if, on the basis of STARR processing, report of the processing officer and his own scrutiny, the sanctioning officer is satisfied about the admissibility of the claim, he shall, subject to the provisions of sub-section (3) of section 10 of the Act, sanction the admissible amount of refund claim; or

(b) under circumstances of exceptional nature and for reasons to be recorded in writing, and after obtaining permission from the additional collector in charge, transfer the claim to the red channel, under intimation to the claimant.

(4) In case a refund claim is assigned to the red channel, comprehensive pre-refund audit shall be conducted by an officer, not below the rank of a senior auditor or superintendent, before any amount is sanctioned. Such audit may also include cross-matching of invoices, verification of stocks in balance, and deposit of tax on the goods in respect of which refund of input tax has been claimed.

(5) The officer assigned to conduct the audit may, for reasons to be recorded in writing and after taking permission from the sanctioning officer, call for any other document or information not specified in rule 29 for the purpose of ascertaining the admissibility of the claim. The audit officer shall give his comprehensive written report to the sanctioning officer within seven days of the completion of audit and verification.

(6) If, on the basis of the automated processing, report of the processing officer and his own scrutiny, the sanctioning officer is satisfied about the admissibility of the claim, he shall, subject to the provisions of sub-section (3) of section 10 of the Act, sanction the admissible amount of refund claim within three working days.

(7) In case of sanction of claims under sub-rules (3) and (6), the sanctioning officer shall electronically send such intimation to the Central Refund Office as well as forward the original copy of the sanction order. The duplicate copy of the sanction order shall be retained in the Refund Division in the relevant file.

9. Extent of payment of refund claim :–(1) In case of a manufacturer-cum-exporter whose exports of same-state goods do not exceed twenty per cent of his total exports in the preceding twelve tax periods, refund shall be sanctioned to the extent of admissible input tax consumed in the goods actually exported.

(2) In case of a commercial exporter, or in case of a manufacturer-cum-exporter whose exports of same-state goods exceed twenty per cent of his total exports in the preceding twelve tax periods, refund shall be sanctioned to the extent of admissible input tax consumed in the goods actually exported.

(3) In case a manufacturer-cum-exporter makes zero-rated supplies as well as domestic taxable supplies, he may deduct the amount of tax payable on the domestic supplies from the amount of refund due and claim refund only for the balance amount, if any.

10. Payment of refund claim :–(1) On the basis of sanction orders issued under sub-rules (2), (3) or (6) of rule 32, the treasury officer of the Central Refund Office shall prepare a statement of payment advice for the designated branch of the National Bank on daily basis, for the direct transfer of the refunded amount into the declared bank account of the claimant, under intimation to the officer-in-charge of the Central Refund Office, the collectorate having jurisdiction and the claimant at his declared address.

(2) The treasury officer of the Central Refund Office shall maintain all the records, registers or documents prescribed under the treasury or financial laws, along with any special records directed by the Board, for the purpose of keeping account of payment of Federal revenue refunds.

11. Action on inadmissible refunds :–(1) In case any refund claim or part thereof is found not admissible, the sanctioning officer shall, after obtaining approval from the Additional Collector in charge, serve a notice on the claimant requiring him to show cause in writing, as to why the refund claim or, as the case may be, part thereof, should not be rejected and as to why the claimant should not be proceeded against under the relevant provisions of the law. The matter shall be decided after due process of law and grant of opportunity of hearing to the claimant, and an appealable order shall be passed by the sanctioning officer within seven days of the conclusion of the hearing of the case.

12. Responsibility of declarations and post-refund audit :–(1) The automated processing of refund claims shall be conducted on the basis of supportive documents and data on prescribed electronic format provided by the claimant. The claimant shall be responsible for any misdeclaration or provision of incorrect documents or electronic data, and shall be liable for penal action and recovery of the amount refunded along with additional tax and penalty under relevant provisions of the Act.

(2) The refund claims assigned to green channel and paid through the Central Refund Office shall be forwarded by the Refund Division to the concerned Audit Division for scrutiny at the time of annual audit of the claimant.

(3) The supportive documents of the refund claims paid through the yellow channel shall be forwarded by the Refund Division to the Post-Refund Audit Division for selective audit.

(4) If it is found during post-refund audit that any inadmissible amount of refund has been paid to the claimant, such amount shall be recovered along with additional tax and penalty besides any other penal action that may be taken under the Act.

13. Saving :–The admissible refund claims received with supportive documents up to the date this chapter comes into effect shall be sanctioned and paid in accordance with the provisions of the Sales Tax Refund Rules, 2002:

Provided that refund claims filed by commercial exporters for exports made till 30th June, 2003, shall be sanctioned under the Sales Tax Refund Rules, 2000, after production of Bank Credit Advice (BCA) showing receipt of sales proceeds in foreign exchange from the country to which the goods have been exported:

Provided further that refund claims filed by commercial exporters may be sanctioned and paid against a bank guarantee, in the format prescribed by the Board, submitted by the commercial exporters in lieu of Bank Credit Advice (BCA) for refund claims filed till 30th June, 2003.

CHAPTER VI SPECIAL AUDIT

1. Application :–The provisions of this chapter shall apply to the registered persons who are subject to special audit in terms of section 32A of the Act.

2. Definitions :–(1) In this chapter, unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “records” means the records as provided under section 22 of the Act;

(d) “special auditor” means a Chartered Accountant or a Cost and Management Accountant appointed under section 32A of the Act;

(e) “terms of reference” means the terms of reference as specified in the appointment letter issued by the Board to the special auditor regarding his appointment; and

(f) “audit report” means the report submitted by the special auditor under this chapter.

(2) All other words and expressions used, but not defined in this chapter, shall have the same meanings as are assigned to them in the Act.

3. Special Audit :–The Board may cause special audit by a special auditor, of the records, tax invoices and monthly returns required to be maintained, issued or furnished by any registered person, or class or classes of registered persons under sections 22, 23 and 26 of the Act.

4. Scope of special audit :–The scope of the special audit shall be the expression of professional opinion with respect to the following, namely:-

(a) whether the records, tax invoices and monthly returns have been maintained, issued or furnished correctly by the registered person; and

(b) whether the monthly returns furnished by the registered person correctly reflect that—

(i) all taxable supplies in the tax period as revealed by the records and tax invoices; and

(ii) all input tax, output tax and the net amount of sales tax payable or refundable, as the case may be,

are in accordance with the provisions of the Act and are duly substantiated by the records required to be maintained for the purpose.

5. Form of audit report :–The special auditor shall submit his audit report in the form as specified in the terms of reference.

6. Penalty :–(1) In case of violation of this chapter or any clause of the terms of reference, the payment of fee as specified therein shall be withheld forthwith, without prejudice to any action that may be initiated under the provisions of the Chartered Accountant Ordinance, 1961 (X of 1961), the Cost and Management Accountants Act, 1966 (XIV of 1966), bye-laws made thereunder, or the Act.

(2) In case the payment has already been made in full or part thereof, to the special auditor, the same shall be returned within one week of issuance, by the Board, of a demand notice in this regard.

CHAPTER VII ZERO-RATING OF SUPPLIES AGAINST

1. Application :–The provisions of this chapter shall apply to supplies of taxable goods made by registered persons against international tender to UNICEF, UNDP, WHO, WFP, UNHCR, EuronAid and ICRC for Afghan refugees.

2. Definitions :–(1) In this chapter, unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) ”foreign currency” means foreign currency as defined in clause (c) of section 2 of the Foreign Exchange Regulation Act, 1947 (VII of 1947);

(d) “State Bank” means the State Bank of Pakistan;

(e) “UNDP” means United Nations Development Program;

(f) “UNHCR” means United Nations High Commission for Refugees;

(g) “UNICEF” means the United Nations International Children’s Emergency Fund;

(h) “WFP” means World Food Program; and

(i) “WHO” means World Health Organisation.

3. Procedure and conditions for making zero-rated supplies :–In terms of clause (a) of section 4 read with serial No. 4 of the Fifth Schedule to the Act, supplies against international tender for Afghan refugees shall be charged to tax at the rate of zero per cent subject to the following procedure and conditions, namely:—

(i) the supply shall be made against international tender issued by UNICEF, UNDP, WHO, WFP, UNHCR, EuronAid or ICRC. The contract signed with the concerned organisation shall be retained by the supplier in his record along with a copy of the tender notice;

(ii) payment for the supply shall be received in foreign currency which shall be surrendered to the State Bank and the supplier shall receive payment in Pak rupees as per State Bank procedure and foreign exchange regulations. A certificate from the bank or authorised dealer in foreign exchange to this effect shall be retained by the supplier in his record;

(iii) a zero-rated invoice shall be issued for each supply, mentioning the full particulars of the buyer and the contract number, besides the particulars required in section 23 of the Act; and

(iv) the goods shall be duly received by the organisation which signed the contract and a certificate to this effect shall be issued by the organisation which shall be duly attested by the Chief Commissioner or Commissioner of Afghan Refugees or as the case may be, by the ICRC Kabul or Herat, in which case ICRC Pakistan will also furnish relevant copies of Bill-of-Export.

4. Maintenance of records :–(1) The supplier shall maintain separate records of supplies of zero-rated goods and receipt of foreign currency under this chapter, indicating the number and date of the international tender, number and date of the contract, name of the organisation to whom goods were supplied, value of the goods, amount of foreign currency involved, and number and date of the certificates obtained under clauses (ii) and (iv) of rule 46.

(2) The supplier shall retain the documents specified in rule 46 in his record in addition to those prescribed under section 22 of the Act.

5. Refund :–When filing a claim for refund of sales tax against supplies made under this chapter, in addition to the relevant supporting documents specified in chapter V of these rules, the claimant shall furnish the documents specified in rule 46 in original along with one set of legible photocopies. The original documents shall be returned to the claimant after tallying and endorsement of verification on the photocopies by a Deputy Collector or an Assistant Collector of the Refund Division.

6. Penalty :–In case the goods are found not to be supplied to the organisation specified in rule 46, or foreign exchange is not received within one hundred and twenty days of making the supply, the sales tax involved on such goods shall be recoverable from the supplier, besides legal or penal action under appropriate provisions of the Act.

CHAPTER VIII SUPPLY OF ZERO-RATED GOODS TO DIPLOMATS, DIPLOMATIC MISSIONS, PRIVILEGED PERSONS AND PRIVILEGED ORGANISATIONS

1. Application :–The provisions of this chapter shall apply to supplies of zero-rated goods to diplomats, diplomatic missions, privileged persons and privileged organisations.

2. Definitions :–(1) In this chapter unless there is anything repugnant in the subject or context,-

(a) “Act” means the Sales Tax Act, 1990;

(b) “diplomat” means a person entitled to immunities and privileges under the Diplomatic and Consular Privileges Act, 1972 (IX of 1972);

(c) “diplomatic mission” means a mission recognized as such under the Diplomatic and Consular Privileges Act, 1972 (IX of 1972);

(d) “privileged person” means a person covered by United Nations (Privileges and Immunities) Act, 1948 (XX of 1948), and shall include persons entitled to concessions and exemptions under the Model Rules for customs concessions to privileged personnel arriving under various foreign aid programmes or projects issued by the Central Board of Revenue, under C. No. 10(34)-Cus-III/58, dated the 18th April, 1963;

(e) “privileged organisation” means United Nations and the organisations working under it and shall include organisations recognized as such by the Central Board of Revenue; and

(f) “reciprocity” means extension of the same privileges and facilities to a diplomat or diplomatic mission of a country in Pakistan as are extended by such country to diplomats and diplomatic mission of Pakistan in that country.

(2) All other terms and expressions used but not defined in this chapter shall have the same meaning as assigned to them in the Act.

3. Supplies to diplomats and diplomatic missions :–(1) Any diplomat or diplomatic mission desirous of taking a zero-rated supply from a registered person shall apply to the Assistant Collector or Deputy Collector having jurisdiction for permission to this effect along with the exemption certificate, in original, issued by the Ministry of Foreign Affairs in this behalf.

(2) The Ministry of Foreign Affairs shall issue such exemption certificates on the following basis, namely:-

(a) reciprocity shall be observed; and

(b) minimum value of purchases for a transaction is ten thousand rupees or more.

Provided that in case sales tax has been paid by a diplomat or diplomatic mission, the Ministry of Foreign Affairs shall forward such claims to the Board for refund, which fulfill the aforesaid conditions.

(3) The Assistant Collector or Deputy Collector shall make entry of the goods being purchased by the diplomat or diplomatic mission on the original exemption certificate, keep the same for office record, and issue an “Authorization for Zero-Rated Supplies” in the form annexed to this chapter, in the name of the said registered person.

(4) The registered person shall make the zero-rated supply and shall keep record of the same for presentation to the sales tax department as and when required to do so.

4. Supplies to privileged persons :–(1) A privileged person desirous of taking zero-rated supply from a registered person shall apply to the Assistant Collector or Deputy Collector having jurisdiction for permission to this effect along with the “CBR Booklet” issued in his name.

(2) The Assistant Collector or Deputy Collector shall make entries of the goods intended to be purchased by the privileged person in the CBR booklet, keep a photocopy of the same for office record and issue an “Authorization for Zero-Rated Supply” in the form annexed to this chapter in the name of the said registered person.

(3) The Assistant Collector or Deputy Collector shall ensure that the value of the goods to be purchased does not exceed the limit specified in the Model Rules.

(4) The registered person shall make the zero-rated supply and keep record of the same for presentation to the sales tax department as and when required to do so.

5. Supplies to United Nations and organisations working under it :–(1) The United Nations or organisations working under it, desirous of taking a zero-rated supply from a registered person shall apply to the Assistant Collector or Deputy Collector having jurisdiction for permission to this effect along with an exemption order, in original, duly signed by the competent officer of the United Nations.

(2) The Assistant Collector or Deputy Collector shall make entries of the goods intended to be purchased on the original exemption order, keep the same for official record and issue an “Authorization for Zero-rated Supply” in the form annexed to this chapter in the name of the said registered person.

(3) The registered person shall make the zero-rated supply and keep record of the same for presentation to the sales tax department as and when required to do so.

6. Supplies to Privileged Organisations other than United Nations :–(1) Any privileged organisation desirous of taking a zero-rated supply from a registered person shall apply to the Assistant Collector or Deputy Collector having jurisdiction for permission to take delivery of goods along with an exemption order, in original, duly issued by the Economic Affairs Division of the Government of Pakistan.

(2) The Assistant Collector or Deputy Collector shall make entries of the goods intended to be purchased by the privileged organisation on the original letter of the Economic Affairs Division, keep the same for office record and issue an “Authorization for Zero-Rated Supply” in the form annexed to this chapter in the name of the said registered person.

(3) The registered person shall make the zero-rated supply and keep record of the same for presentation to the sales tax department as and when required to do so.

ANNEX

AUTHORIZATION FOR ZERO-RATED SUPPLY

S.No. _______ Date:___________

Messrs. ___________________________________ have applied for zero-rated

(name of buyer)

supply under chapter VIII of the Sales Tax Rules, 2004, on the basis of the following documents:

1. CBR Booklet No. ________________________________________________

2. M/o Foreign Affairs Exemption Order No. _________________ dated _______

3. Other__________________________________________________________

The claim for zero-rating has been found in order and the formalities specified in the said Rules have been fulfilled by this office.

M/s. ______________________________________ are, therefore, authorised to

(name & registration No. of registered supplier)

deliver the following goods to the said applicant against a zero rated invoice:-

S. No.	Description	Quantity and/or value
1.
2.
3.
4.
5.
6.

Assistant / Deputy Collector

(Signature, name, and official seal)

CHAPTER IX TAX-PAYER’S AUTHORIZED REPRESENTATIVES

1. Application :–The provisions of this chapter shall apply to persons authorized by the tax-payers to represent them or appear on their behalf before the Appellate Tribunal or any other adjudicating authority.

2. Definitions :–In this chapter, unless there is anything repugnant in the subject or context,—

(a) “authorized representative” means a person authorized in writing by a tax-payer on a Letter of Authorization as specified in Annex-A to this chapter;

(b) “adjudicating authority” means any officer appointed to adjudicate and decide cases under section 179 of the Customs Act, 1969 (IV of 1969), section 45 of the Sales Tax Act, 1990, and section 33 of the Central Excises Act, 1944 (I of 1944);

(i) a Chartered Accountant within the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961); or

(ii) a Cost and Management Accountant within the meaning of the Cost and Management Accountants Act, 1966 (XIV of 1966); or

(iii) a member of any association of accountants recognized in this behalf by the Federal Government;

(d) “misconduct” means conduct prejudicial to good order, unbecoming of a gentleman and includes any act on his part to bring or attempt to bring outside or any sort of influence directly or indirectly to bear on the officer of Customs, Central Excise and Sales Tax in respect of any matter relating to discharge of his duties under the relevant Acts or creating hindrance in discharge of such duties or impersonation or submission of fake documents;

(e) “relevant Act” means the Act, the Central Excises Act, 1944 (I of 1944) and the Customs Act, 1969 (IV of 1969);

(f) “rules” means the rules made under the relevant Act; and

(g) “tax-payer” means any person who is required, or liable, to pay, or is paying duty, or tax, or any sum under any or all of the relevant Acts, or the rules and includes any person who is engaged directly or indirectly in any activity falling within the scope of any of the relevant Acts or the rules.

3. Persons authorized to represent a tax-payer :–For the purpose of this chapter, only the following persons are authorized to represent a tax-payer before the adjudicating authority and Appellate Tribunal, namely:—

(a) a person in the employment of the tax-payer working on a full-time basis and holding at least a bachelor’s degree in any discipline from a university recognized by the Higher Education Commission provided that such person shall represent only the tax-payer in whose employment he is working on full-time basis;

(b) an advocate entered in any rolls, and practicing as such, under the Legal Practitioners and Bar Councils Act, 1973 (XXXV of 1973);

(d) a person who has retired or resigned after putting in satisfactory service in the Sales Tax Department or Customs Department or Central Excise Department for a period of not less than ten years in a post or posts not inferior to that of an Assistant Collector:

Provided that no such person shall be entitled to represent a tax-payer for a period of one year from the date of his retirement or resignation or in any case in which he had made, or approved, as the case may be, any order under the relevant Acts; and

(e) an accountant.

4. Disqualifications :–The following persons shall not be entitled to represent a tax-payer under this chapter, namely :—

(a) any person who has been convicted as a result of any criminal proceedings under any law for the time being in force in Pakistan;

(b) a person who has been dismissed or compulsorily retired from service;

(d) a person who is guilty of misconduct as defined in sub-rule (e) of rule 2.

5. Procedure to appoint authorized representative :–To appoint his authorized representative, a taxpayer shall issue a Letter of Authorization, in the form specified in Annex-A, duly signed by proprietor, partner or director of the company or business concern, which shall be submitted by the authorized representative before the adjudicating authority or Appellate Tribunal. The authorized representative will use the Letter of Authorization for a single hearing, or till final decision of the case, by the adjudicating authority or the Appellate Tribunal, as the case may be.

6. Power to disqualify :–On receipt of a complaint against any authorized representative for misconduct from the Appellate Tribunal or, as the case may be, an adjudicating authority, the Central Board of Revenue may, after affording such representative an opportunity of being heard, disqualify him from representing the tax-payer.

Annex-A

[See rule 60]

LETTER OF AUTHORIZATION

I, _________________________________________, Proprietor/Partner/Director of M/s_____________________________________________, hereby authorize Mr._____________________ s/o Mr.___________________________________ N.I.C. No.______________________ to represent before the adjudicating authority or the Customs, Excise and Sales Tax Appellate Tribunal, _________ Bench on behalf of M/s. _________________________________________ S.Tax Reg. No./Central Excise License No _____________________________ for single hearing on ____________________ / till the decision of the case

(date) (cross out whichever is inapplicable)

or till withdrawal of this authorization, whichever is earlier.

I also affirm and certify that he fulfills the conditions of an authorized representative as prescribed in Chapter IX of the Sales Tax Rules, 2004.

Dated:__________ Signature: _____________________________

Name: _______________________________

(Proprietor/Partner/Director)

N.I.C. No._____________________________

Company or business Seal/Stamp__________

CHAPTER X ALTERNATE DISPUTE RESOLUTION

1. Application :–The provisions of this chapter shall apply to all cases of disputes brought or specified for resolution under section 47A of the Act.

2. Definitions :–(1) In this chapter, unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) ”applicant” means a person or a class of persons who has brought a dispute for resolution under section 47A of the Act and this chapter;

(d) “dispute” means, a case where, for evidently valid reasons, a registered person is aggrieved in connection with any matter of sales tax specified in sub-section (1) of section 47A of the Act and prima facie deserves relief for the elimination of possible hardship.

(2) All other words and expressions used but not defined in this chapter shall have the same meanings as are assigned to them in the Act.

3. Application for alternate dispute resolution :–Any registered person interested for resolution of any dispute under section 47A may submit a written application for alternate dispute resolution to the Board, stating inter alia, the following, namely:—

(a) the Collectorate of Sales Tax and the office of the Sales Tax with whom a dispute has arisen;

(b) the particulars of the case;

(c) the grounds on the basis of which a resolution of a dispute is being sought by the applicant duly supported with relevant documents;

(d) the extent or the amount of sales tax, additional tax and penalties etc., which the applicant agrees to pay, if any;

(e) details of amounts already paid, if any;

(f) the particulars of any person who will represent the applicant; and

(g) the applicant shall, if required, pay the remuneration of the members other than a public servant, of the committee to the extent and in the manner specified by the Chairman of the committee as laid down in rule 66.

4. Appointment of Alternate Dispute Resolution Committee :–(1) The Board, after examination of the contents of an application by a registered person and facts stated therein and on satisfaction that a dispute deserves consideration for resolution for the removal of hardship under section 47A of the Act, may constitute a committee for examination of the issues involved in the dispute and for taking other actions as provided under sub-section (3) of section 47A of the Act.

(2) The Board may appoint one of the members of the committee, other than a public servant, to be its Chairman.

(3) The Board may specify the time within which the committee shall be required to submit its report to the Board:

Provided that the time so specified may, if requested by the Chairman of the committee for reasons to be recorded in the request, be extended by the Board to such extent and subject to such conditions and limitations as it may deem proper.

5. Remuneration of the members of the committee :–(1) The applicant shall pay members of the committee, other than public servants, remuneration covering travelling allowance and daily allowance.

(2) The extent and amount of remuneration and the manner of payment thereof shall be decided by the Chairman of the committee under intimation to the applicant.

6. Working of the Committee :–The Chairman of the committee shall be responsible for deciding the procedure to be followed by the committee which may inter alia, include the following, namely:—

(a) to decide about the place of sitting of the committee;

(b) to specify date and time for conducting proceedings by the committee;

(d) to issue notices by courier, registered post or electronic mail to the applicant;

(e) to requisition and produce relevant records or witnesses from the Collectorate or other concerned quarters;

(f) to ensure attendance for hearings either in person or through an advocate, representative or a tax consultant;

(g) to co-opt any other technical, professional, or legal expert or specialist or tax consultant;

(h) to consolidate recommendations of the committee and submission of the conclusive report to the Board; and

(i) for any other matter covered under this chapter.

7. Recommendations of the committee :–(1) The committee may determine the issue and may thereafter seek further information or data or expert opinion or make or cause to be made such inquires or audit as it may deem fit. The committee shall formulate its recommendations in respect of any matter mentioned in sub-section (1) of section 47A of the Act.

(2) The Chairman of the committee shall send a copy of the recommendations of the committee to the Board, applicant and the concerned collector simultaneously.

8. Reconsideration by the committee :–(1) The Board of its own motion, or on the request of the applicant, may refer back the recommendations of the committee for rectification of any obvious error or for reconsideration of the facts not considered earlier.

(2) The committee after rectification of the error or reconsideration of the facts as aforesaid shall furnish to the Board its fresh or amended recommendations within such period as may specified by the Board.

9. Decision of the Board :–(1) The Board, after examining the recommendations of the committee, shall finally decide the dispute and make such orders as it may deem fit for the resolution of the dispute under intimation to the applicant, the Chairman of the committee and the concerned Collectorate.

(2) On receipt of the Board’s order as aforesaid, the concerned Collectorate shall implement the order in such manner and within such period as may be specified by the Board in the order.

10. Appeal against the order :–In case the registered person is not satisfied with the orders of the Board, issued under sub-rule (1) of rule 70, he may file an appeal in the manner specified in sub-section (6) of section 47A of the Act.

CHAPTER XI RECOVERY

PART – I

1. Application :–The provisions of this chapter shall apply to recoveries made under section 48 of the Act.

2. Definitions :–(1) In this chapter unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “Annex” means an Annex to this chapter;

(c) ”attachment officer” means an officer, not below the rank of Principal Appraiser or Superintendent or Senior Auditor, authorised by the Recovery Officer to perform any of the functions under this chapter;

(d) “defaulter” means a person mentioned in the demand note, who has failed to discharge his liabilities in payment of Government dues;

(e) “demand note” means a note received by the Sales Tax Recovery Officer from the referring authority specifying the details regarding the defaulter and the Government dues;

(f) “execution” means steps taken for the recovery of Government dues under this chapter in pursuance of a demand note;

(g) “Government dues” means recoverable amounts of sales tax, additional tax, surcharge or any other tax, duty or other levy being collected, in the same manner as sales tax is collected, an adjudged penalty or fine or any amount unpaid which may be payable under any bond, guarantee or instrument executed under the Act or such other laws or the rules made thereunder and against the recovery of which there is no bar or valid stay order from the competent court;

(h) “immovable property” means a property which cannot be taken into custody for removal without physically knocking it down;

(i) “movable property” means a property which can be taken into custody for removal without physically knocking it down and includes currency and coin, shares, documents and instruments;

(j) “receiver” means a person appointed by the Recovery Officer to manage, run and account for any attached business or property;

(k) “Recovery Officer” means an officer of Sales Tax defined in clause (13) of section 2 of the Act, but shall not be below the rank of Assistant Collector of Sales Tax;

(l) “referring authority” means an officer, not below the rank of an Assistant Collector, desiring to recover government dues through Recovery Officer;

(m) “share” means share in a corporation and private limited or public limited company and includes stock, debenture stock, debentures or bonds;

(n) “offices” means the offices of referring authority and Recovery Officer;

(2) All other expressions used but not defined in this chapter shall have the same meanings as are assigned to them in the Act.

3. Initiation of recovery action :–(1) On expiry of thirty days from the date on which the Government dues are adjudged, the referring authority shall deduct the amount from any money owing to the person from whom such amount is recoverable and which may be at the disposal or in the control of such officer.

(2) In case the government dues are not fully recovered under sub-rule (I), the referring authority may,¾

(a) serve a notice to the customs, central excise, sales tax or income tax officers in the form as set out in Annex-III to deduct the Government dues from any money owing to the defaulter which may be under their control; and a copy of such notice shall be endorsed to the defaulter;

(b) require by notice in writing, any person or organization who holds, or may subsequently hold, any money for or on account of the defaulter, to pay to such officer the amount specified in the notice;

(c) require, by notice in writing, the customs officers to stop the clearance of any goods imported by the defaulter; and

(d) attach the bank accounts of the defaulter.

4. Stoppage of clearances and sealing of business premises :–(1) In case the government dues are not recovered in the manner prescribed in rule 74, the referring authority shall serve upon the defaulter a notice as set out in Annex – IV, informing him that removal of any goods from his business premises shall be stopped with effect from the date specified in the notice till such time the dues are paid or recovered in full:

Provided that if the government dues still remain unpaid, the referring authority shall seal the business premises of the defaulter till such time the dues are paid or recovered in full.

(2) If the referring authority is satisfied that the defaulter is likely to conceal, remove or dispose of the whole or any part of such of his movable or immovable property, as shall be liable to attachment in the process of recovery, and that the realization of government dues in consequence be delayed or obstructed, he may at any time after the issue of the notice under sub-rule (1), direct, for reasons to be recorded in writing, execution of the notice by ignoring the specified time limit.

(3) The referring authority may, if he deems fit, publish such notice as mentioned in sub-rule (1), in one or more newspapers circulated in the district of normal residence of the defaulter.

5. Demand note :–In the event of failure of recovery measures taken by the referring authority under rules 74 and 75, the referring authority, shall issue a demand note, in the form set out in Annex – I, to the Recovery Officer, specifying therein the details of Government dues meant for recovery and shall also certify that the formalities under clauses (a), (b), (c), (ca), (d) and (f) of sub-section (1) of section 48 of the Act have been completed and there exists no bar or stay order against the proposed recovery.

6. Attachment and sale of property :–The Recovery Officer, on receipt of the demand note, shall serve upon the defaulter a notice as set out in Annex – V and his movable and immovable property shall stand attached and subsequently shall be sold if the recovery is not otherwise effected.

7. Master registers to be maintained by the referring authority and the Recovery Officer :–(1) The referring authority and the Recovery Officer shall maintain master registers in the form set out in Annex – II and every notice, order and demand note shall be entered in this register serially, and they shall authenticate all entries by affixing their signatures and seal thereon.

(2) The referring authority and the Recovery Officer shall exchange their information for completion of corresponding entries in the master registers of both offices in the form of a monthly return which shall be the exact replica of Annex – II, after filling the respective columns by the concerned office.

8. Power to require information to be furnished :–The referring authority or the Recovery Officer may, by requisition in writing, require any person or organisation, whether registered under the Act or otherwise, to furnish any information, required for the proceedings under this chapter.

9. Mode of service of notice :–All notices or orders served under this chapter, unless otherwise specifically provided, shall be served —

(a) by tendering the notices or orders or sending by registered post or courier service, to the person for whom these are intended or to his agent, at his last known address; or

(b) if the notice cannot be served in the manner as provided in clause (a), by affixing it on the notice board in the office of the Recovery Officer.

10. Disposal of proceeds of execution :–(1) Whenever Government dues are realized, by sale or otherwise, in execution of a notice of recovery, they shall be applied to the following purposes in their respective order, namely:—

(a) first to pay the expenses of the sales;

(b) then to pay the freight or other charges, if any, payable in respect of goods, if notice of such charges has been given to the person holding the goods in custody;

(d) then to pay the charges due to the person holding such goods in custody.

(2) After making all payments under sub-rule (1), the balance, if any, shall be paid to the owner of the goods, provided that he applies for it within six months of the sale of the goods or shows sufficient cause for not doing so.

11. Ruling regarding disputes :–Save as otherwise expressly provided in the Act or this chapter, any question arising between the referring authority and the defaulter or their representatives, relating to the execution of a notice or discharge or satisfaction of a demand note duly issued under this chapter, or relating to the confirmation or setting aside by an order under this chapter of a sale held in execution of such notice, shall be determined by the Recovery Officer, before whom such question arises.

12. Property liable to attachment and sale in execution :–The following is liable to attachment and sale in execution of a notice, namely: Lands, houses or other buildings, goods, bank notes, Government securities, bonds or other securities for money, cheques, bills of exchange, hundies, promissory notes, shares in corporation and, save as hereinafter mentioned, all other saleable property, movable or immovable, belonging to the defaulter, or over which, or the profits of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the defaulter or by another person in trust for him or on his behalf:

Provided that the following particulars shall not be liable to attachment or sale, namely:—

(i) the necessary wearing apparel, cooking vessels, beds and bedding of the defaulter, his wife and children, and such personal ornaments, as, in accordance with religious usage, cannot be parted with by any woman;

(ii) tools of artisan, and, where the defaulter is an agriculturist, his implements of husbandry and such cattle and seed grain as may, in the opinion of the Recovery Officer, be necessary to enable him to earn his livelihood as such;

(iii) stipends and gratuities allowed to a pensioner of a Government or payable out of any service or family pension fund notified in the official Gazette by the Federal Government or the Provincial Government in this behalf, and political pensions;

(iv) the wages of labourers and domestic servants, whether payable in money or in kind;

(v) salary to the extent of first hundred rupees and one half of the remainder;

(vi) all compulsory deposits and other sources in or derived from any fund to which the Provident Funds Act, 1925 (XIX of 1925), for the time being applies, in so far as they are declared by the said Act not to be liable to attachment;

(vii) any allowance forming part of the emoluments of any servant of the Government or local authority which the Federal or Provincial Government may, by notification in the official Gazette, declare to be exempt from attachment, and any subsistence grant or allowance made to any such servant while under suspension;

(viii) any expectancy of succession by survivor-ship or other merely contingent or possible right or interest; and

(ix) a right to future maintenance.

13. Objections and investigations, thereof :–(1) When any objection is raised to the attachment or sale of any property in execution of a notice, on the ground that such property is not liable to such attachment or sales, the Recovery Officer shall proceed to investigate into it.

(2) If the Recovery Officer is satisfied that the objection is raised to delay the proceedings, he shall reject the objection summarily.

(3) Pending investigation, the Recovery Officer may adjourn recovery proceedings, upon such terms as to security or otherwise as he may deem fit.

(4) The objector shall produce evidence to prove the legitimacy of the objection, failing which the Recovery Officer shall reject the objection.

14. Removal of attachment on satisfaction of cancellation of a demand note :–When the Government dues are paid to the Recovery Officer or the demand note is cancelled, the attachment shall be deemed to be withdrawn and the withdrawal shall, if the defaulter so desires, be proclaimed at his expense, and a copy of the proclamation shall be affixed in the manner provided by this chapter for a proclamation of sale of immovable property.

15. Officer entitled to attach and sell :–The attachment and sale of movable and immovable property may be made by such officer as the Recovery Officer may direct in each case of recovery.

16. Adjournment or stoppage of sale :–(1) The Recovery Officer may adjourn any sale proceedings to a specified day and hour, and an officer conducting any sale may adjourn any sale hereunder to a specified day and hour by recording his reasons for such adjournment.

(2) Every sale shall be stopped if, before the lot is knocked down, the amount due is tendered to the officer conducting the sale or proof is given to his satisfaction that the amount has been paid to the Recovery Officer, who ordered the sale.

17. Defaulter not to interfere with attached property :– Where a notice has been served on a defaulter under rule 77, the defaulter or his representative in interest shall not sell, mortgage, charge, lease or otherwise deal with any property belonging to him except with the permission of the Recovery Officer.

18. Prohibition against bidding or purchase by officer :– No officer or other person having any duty to perform in connection with any sale under this chapter shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property being sold.

19. Assistance for action :–(1) An officer authorised to attach or sell any property or charged with any duty to be performed may take along with him a contingent of sales tax staff and sepoys, armed or otherwise, for any assistance he may require in the performance of his duties.

(2) In addition to sub-rule (1), such officer may apply to the officer in charge of the nearest police station for such assistance as may be necessary in the discharge of his duties.

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PART – II

ATTACHMENT AND SALE OF MOVABLE PROPERTY

20. Warrant of attachment :–Where any movable property is to be attached, the Recovery Officer shall furnish a warrant, in the form prescribed in Annex – VI, to the attachment officer, in writing and signed with his name along with official seal, specifying therein the name of the defaulter and the Government dues to be realized.

21. Service of copy of warrant :– (1) The attachment officer shall cause a copy of the warrant to be served on defaulter or his agent in person.

(2) If service of a copy of warrant in terms of sub-rule (I) is not immediately possible, the same shall be considered to be served when affixed on the notice board in the office of the Recovery Officer.

22. Attachment :–If, after service of copy of the warrant, the amount is not paid forthwith, the officer shall proceed to attach the movable property of the defaulter:

Provided that the standing crops or the agricultural produce lying in the field or stored in or near the dwelling house of the defaulter or stored on the land owned, leased or cultivated by the defaulter, which represent the agricultural produce of the land owned, leased or cultivated by the defaulter, shall not be attached.

23. Property attached how to be dealt with :–(1) Whether the property to be attached is movable property in the possession of the defaulter or in the possession of any other person on behalf of the defaulter, the attachment shall be made by actual seizure.

(2) When anything is seized, the attachment officer, as soon as may be, inform in writing the person from whose possession the things are seized, of the grounds of such seizure.

24. Search how to be made :–All searches shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1998).

25. Seizure after search of a building or premises :–(1) The attachment officer, if he has reasons to believe that any movable property liable to seizure is hidden, concealed or stored in any building or premises, he may break open any inner or outer door or window of the building or premises in order to seize such movable property:

Provided that the officer has notified his authority and intention of breaking open if admission is not given. He shall, however, give all reasonable opportunity to women to withdraw.

(2) The attachment officer shall, after seizure of moveable property, prepare an inventory of the property in the presence of two or more persons who shall witness the process and sign the inventory.

26. Seizure between sunrise and sunset :– The attachment by seizures shall be made after sunrise and before sunset and not otherwise.

27. Seizure not to be excessive :– The attachment by seizure shall not be excessive, that is to say, the property attached shall be as nearly as possible, proportionate to the recoverable Government dues.

28. Attachment of movable property which cannot be removed due to certain reasons :–Where it is not practicable to seize any movable property, the attachment officer may serve on the owner of goods or any person holding them in his possession or charge an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission in writing of the Recovery Officer:

Provided that the attachment officer shall inform the Recovery Officer, in writing, of the reasons due to which the movable property could not be seized.

29. Storage of seized movable property :– (1) All things seized for the purposes of attachment under this chapter shall, without unnecessary delay, be delivered into the care of the officer of sales tax authorised to receive the same, unless otherwise specifically provided by the Act or rules made thereunder.

(2) If there be no such officer at hand, such things shall be carried to and deposited at the Custom House nearest to the place of seizure.

30. Attachment of negotiable instrument :–When the property to be attached is a negotiable instrument not deposited in a court, nor in the custody of a public officer, the attachment shall be made by actual seizure, and the instrument shall be brought before the Recovery Officer and held subject to his orders.

31. Attachment of property in custody of public officer :–When the property to be attached is in the custody of any public officer, the attachment shall be made by a notice to such officer requesting that such property and any interest or dividend becoming payable thereon, may be held subject to the further orders of the Recovery Officer by whom the notice is issued.

32. Attachment of share in movable property :–(1) Where the property to be attached consists of an interest of the defaulter in movable property belonging to him and others as co-owners, the attachment shall be made by a notice to the defaulter prohibiting him from transferring such share or interest or subjecting the same to a charge in any manner.

33. Attachment of property in partnership :–(1) Where the property be attached consists of an interest of the defaulter, being a partner, in the partnership property, the Recovery Officer may make an order charging the share of such partner in the partnership property and profits, with payment of the amount due under the notice, and may by the same or subsequent order, appoint a receiver of the share of such partner in the profits, whether already declared or accruing, and of any other money which may become due to him in respect of the partnership, and direct maintenance of accounts and enquiries and make an order for the sale of such interest or may make such other order as the circumstances of the case may require.

(2) The other partners shall be at liberty at any time to redeem the interest charged or, in the case of a sale being directed, to purchase the same.

34. Sale :–(1) The Recovery Officer may direct that any movable property attached under this chapter or such portion thereof as may seem necessary to satisfy the notice shall be sold.

(2) The sale shall be made in one or more lots, as the Recovery Officer may consider desirable and, if the Government dues to be realized by sale are satisfied by the sale of a portion of the property, the sale shall be only with respect to that portion of the property and the sale of the remaining property shall be stopped.

35. Proclamation of sale :–(1) When any sale of movable property is ordered by the Recovery Officer, he shall issue a proclamation of the intended sale, specifying therein the time, place and whether the sales is subject to confirmation or not.

(2) The proclamation shall be made in writing in Urdu, English and language of the province where sale is intended and shall be publicized by –

(a) affixing a copy thereof at the notice board in the office of the Recovery Officer;

(b) affixing copy thereof at such places as the Recovery Officer may direct; and

36. Sale after fifteen days :–Except where the property is perishable or if the expenses of keeping it in custody is likely to exceed its value, no sale of movable property under this chapter shall be ordered without the consent, in writing, of the defaulter, until after the expiry of at least fifteen days from the date on which a copy of proclamation of sale was affixed in the office of the Recovery Officer.

37. Sale by public auction :–Sale by public auction shall be governed by the provisions of Chapter V of the Customs Rules, 2001.

38. Sale by tender or sealed bids :–The Recovery Officer may, if he deems fit, order sale by tender or sealed bids.

39. Preference for the co-owner :–Where the movable property to be sold is share belonging to the defaulter and one or more co-owners, and the bid of such co-owner and some other person is the same, the bid of co-owner shall have preference.

40. Transfer of title :– On completion of sale proceedings the Recovery Officer shall grant to the purchaser a certificate specifying therein the property purchased, the price paid and the name of the purchaser, and the sale shall thereupon become absolute.

41. Irregularity not to vitiate sale :–Any error or irregularity in publishing or conducting the sale of movable property shall not vitiate the sale if the provisions of this chapter have been substantially complied with.

42. Negotiable instrument or share in a corporation :–Notwithstanding anything contained in this chapter, where the property to be sold is a negotiable instrument or a share in a Corporation, the Recovery Officer may, instead of directing the sale to be made by public auction, authorise the sale of such instrument or share through a broker.

43. Order for payment of coin or currency notes to the Referring Authority :– Where the property attached is currency coins or currency notes, the Recovery Officer may, at any time during the continuance of the attachment, direct that such coins or notes, or part thereof, sufficient to satisfy the demand note, to be paid over to the referring authority.

PART III

ATTACHMENT AND SALE OF IMMOVABLE PROPERTY

44. Attachment of immovable property :–Attachment of the immovable property of the defaulter shall be made, by the Recovery Officer, by an order prohibiting the defaulter from transferring or subjecting the property to a charge in any manner and prohibiting all persons from taking any benefit under such transfer or charge.

45. Service of order :–A copy of the order of attachment shall be served on the defaulter in the same manner as of service of notices laid down in this chapter.

46. Proclamation of attachment :–The order of attachment shall be proclaimed on or adjacent to the property attached by affixing a copy of order of attachment at a conspicuous place and a copy of the same shall also be affixed at the notice board in the office of the Recovery Officer.

47. Sale and proclamation of sale :–(1) The Recovery Officer may direct that any immovable property, which has been attached, or such portion thereof, as may be necessary to satisfy the demand note, shall be sold if the amount due is not otherwise recoverable.

(2) Where an immovable property is ordered to be sold, the Recovery Officer shall cause a proclamation to be made in the same manner as provided in rule 106.

48. Contents of proclamation of sale :–(1) A proclamation of sale of immovable property shall be drawn after proclamation of attachment and shall specify therein the time and place of sale and also specify—

(a) the location of property to be sold;

(b) as fairly and accurately as possible, the revenue or rent, if any, assessed upon the property or any part thereof; and

(2) The proclamation may also specify any other thing which the Recovery Officer considers material for a purchaser to know in order to judge the nature and value of the property.

49. Time of sale :–No sale of immovable property under this chapter shall, without the consent in writing of the defaulter, take place until after the expiration of thirty days from the date on which copy of the proclamation of sale was affixed on the property or in the office of the Recovery Officer, whichever is later.

50. Sale to be by public auction or tender :–The sale shall be made by public auction or tender and shall be subject to confirmation by the Recovery Officer.

51. Deposit by purchaser and re-sale in default :–(1) On every sale of immovable property, the person declared to be the purchaser shall pay immediately, after the declaration, a deposit of twenty-five per cent of the amount of his purchase money to the officer conducting the sale; and in default of such deposit the property shall forthwith be re-sold.

(2) The full amount of purchase money payable shall be paid by the purchaser on or before the fifteenth day from the date of sale of the property.

52. Procedure in default of payment :–(1) In default of payment within the time mentioned in sub-rule (2) of rule 122, deposit made vide sub-rule (1) thereof shall be kept as deposit to be dealt with as mentioned in rule 124.

(2) The immovable property shall be re-sold and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may be subsequently sold.

53. Amount recoverable from purchaser in default :–Any deficiency of price which may happen on a re-sale by reason of a purchaser’s default including all expenses attending such re-sale, shall be recoverable from defaulting purchaser up to the maximum of deposit money and if there is any surplus, after meeting the deficiency, the same shall be refunded to the defaulting purchaser.

54. Authority to bid :–All persons bidding at a sale shall be required to declare if they are bidding on their own behalf, or on behalf of their principals and, in the later case, they shall be required to deposit their authority, and in default their bid shall be rejected.

55. Application to set aside sale of immovable property :–(1) Where immovable property has been sold in execution of a notice, the defaulter, or any person whose interests are affected by the sale may, at any time within thirty days from the date of sale, apply to the Recovery Officer to set aside the sale on his depositing—

(a) for payment to the Referring Authority, the Government dues specified in the proclamation of sale as that for the recovery of which sale was ordered with a surcharge thereon at the rate of ten per cent per annum, calculated from the date of the proclamation of sale to the date when deposit is made; and

(b) for payment to purchaser, a sum equal to ten per cent of the purchase money.

(2) Where a person makes an application under rule 127 for setting aside sale of his immovable property, he shall not, unless he withdraws that application, be entitled to make an application under sub-rule (1).

56. Application to set aside sale of immovable property on ground of non-service of proclamation or irregularity :–Where immovable property has been sold in execution of a demand note, the referring authority, the defaulter, or any other person whose interests are affected by the sale, may, at any time within thirty days from the date of sale, apply to the Recovery Officer to set aside the sale on the ground that proclamation of attachment or proclamation of sale was not made in the prescribed manner and he could not pay the Government dues or on ground of a material irregularity in publishing or conducting the same:

Provided that –

(a) no sale shall be set aside on any such ground unless the Recovery Officer is satisfied on the basis of evidence produced before him that the applicant has sustained losses by such reasons; and

(b) an application made by defaulter under this rule shall be disallowed unless he deposits the amount recoverable from him in execution of demand note.

57. Setting aside of sale where defaulter has no saleable interest :–At any time within thirty days of the sale, the purchaser may apply to the Recovery Officer to set aside the sale on the ground that the defaulter had no saleable interest in the property sold.

58. Confirmation of sale :–(1) Where no application is made for setting aside the sale under this chapter or where such an application is made and disallowed, the Recovery Officer shall, if the full amount of purchase money is paid, make an order confirming the sale and there upon the sale shall become absolute.

(2) Where such application, is made and allowed or in case of an application to set aside the sale on deposit of amount and penalty and surcharge the deposit is made within thirty days of sale, the Recovery Officer shall set aside the sale:

Provided that no such order shall be made unless notice of the application has been given to the persons affected thereby.

59. Return of purchase money in certain cases :–Where a sale of immovable property is set aside, any money paid or deposited by the purchaser on account of the purchase, together with the penalty, if any, deposited by him, shall be paid to the purchaser.

60. Sale Certificate :–(1) Where a sale of immovable property has become absolute, the Recovery Officer shall grant a certificate specifying therein the property sold and the name of the person who at the time of sale was declared to be the purchaser.

(2) Such certificate shall state the date on which the sale became absolute.

61. Postponement of sale to enable defaulter to raise amount due under notice :–(1) Where an order or proclamation of sale of immovable property has been made and the defaulter satisfies the Recovery Officer that there are reasons to believe that amount of the note can be raised by mortgage or lease or private sale of such property, or some part thereof, or of any other movable or immovable property, the Recovery Officer may, on the application of the defaulter, postpone the sale on such terms and for such period as he thinks proper, to enable defaulter to raise the amount.

(2) In such case, the Recovery Officer shall grant a certificate to defaulter authorizing him, within a period to be mentioned therein and notwithstanding any thing contained in this chapter, to make the proposed mortgage, lease or sale:

Provided that all money payable under such mortgage, lease or sale shall be paid not to the defaulter but to the Recovery Officer.

Provided further that no mortgage, lease or sale under this rule shall become absolute until it has been confirmed by the Recovery Officer.

62. Issue of fresh proclamation before re-sale :–Every re-sale of immovable property, in default of payment of purchase money within the period allowed for such payment, shall be made after the issue of a fresh proclamation in the same manner as provided for the proclamation of sale.

63. Bid of co-owner to have preference :–Where the property sold is a share of undivided immovable property of two or more persons, of whom defaulter is a co-sharer and the bid of the co-sharer and some other person is the same, the bid of the co-sharer shall have preference.

PART – IV

APPOINTMENT OF RECEIVER

64. Appointment of receiver for business :–(1) Where the property of defaulter consist of a running business, the Recovery Officer may attach the business and appoint a person as receiver to manage the business.

(2) Attachment of a business under this rule shall be made by an order prohibiting the defaulter from transferring or subjecting the business to a charge in any manner and prohibiting all persons from taking any benefit under such transfer or charge and intimating that the business has been attached under this Rule.

(3) Proclamation of attachment under this rule shall be made in the same manner as provided for proclamation of sale under rule 106.

(4) Where the Recovery Officer so directs, such order shall also be published in newspapers.

65. Appointment of receiver for immovable property :–Where immovable property is attached, the Recovery Officer may, instead of directing a sale of the property, appoint a person as receiver to manage such property.

66. Qualification for receiver :– (1) Any person from the general public can be appointed as receiver upon having sufficient knowledge of the kind of business or the property for which he is to be appointed as receiver.

(2) Notwithstanding anything contained in sub-rule (1), any officer of customs, central excise or sales tax, not below the rank of Principal Appraiser or Superintendent or Senior Auditor, may be appointed as receiver of the attached business and property.

67. Manner of working of receiver :– (1) Where it appears to the Recovery Officer to be just and convenient, he may by order:—

(a) remove any person from the possession or custody of an attached business or property;

(b) commit the same to the possession, custody or management of the receiver; and

(c) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has or such of those powers as the Recovery Officer thinks fit:

Provided that nothing in this rule shall authorise the Recovery Officer to remove from the possession or custody of business or property any person whom any party to the recovery proceedings has not a right to remove.

(2) The Recovery Officer may, by general or special order, fix the amount to be paid as remuneration for the services of the receiver but a Government officer appointed as receiver shall not be entitled to such remuneration.

(3) Every receiver appointed by the Recovery Officer, except Government officers, shall—

(a) furnish such security, if any, as the Recovery Officer deems fit, to account duly for what he shall receive in respect of the business or property;

(b) submit his accounts as such periods and in such forms as the Recovery Officer directs;

(d) be responsible for any loss occasioned to the business or property by his willful default or gross negligence:

Provided that the Government officer appointed as receiver shall furnish all such information as desired by the Recovery Officer regarding the progress of recovery along with accounts of proceeds after such intervals as prescribed by the Recovery Officer.

(4) The profits or rents and profits of such business or property shall, after deducting the expenses of management, be adjusted towards discharge of the Government dues and the balance, if any, shall be paid to the defaulter.

68. Withdrawal of management :–The attachment and management under aforesaid rules may be withdrawn at any time at the discretion of the Recovery Officer, or if the Government dues are realized by receipt of such profits and rent or are otherwise paid.

PART – V

MISCELLANEOUS

69. Offences and penalties :–(1) All cases relating to confiscation of goods or imposition of penalty with reference to operation of this chapter shall be adjudicated under Chapter VIII of the Act.

70. Continuance of proceedings :–(1) No proceedings shall cease to be in force by reason of the death of the defaulter.

(2) If, at any time before or after the issue of a demand note to the Recovery Officer, the defaulter dies, the proceedings under this chapter may be continued against the legal heirs of the defaulter, who shall be liable to pay, out of the properties left by the deceased defaulter to the extent to which the properties are capable of meeting the outstanding Government dues, and provisions of this chapter shall apply as if the legal heirs were the defaulter.

71. Recovery from surety :–When any person has, under this chapter become surety for the amount due by the defaulter he may be proceeded against under this chapter as if he were the defaulter.

72. Receipt to be given :–If any amount is received by any officer or other person in pursuance of this chapter, he shall issue receipt of the amount so received.

73. Delivery of property in occupancy of defaulter :–Where the immovable property sold is in the occupancy of the defaulter, or of some person on his behalf or of some person claiming under a title created by the defaulter subsequent to the attachment of such property and a certificate in respect thereof has been granted under rule 131, the Recovery Officer shall, on the application of the purchaser, order delivery to be made by putting such purchaser or any person whom he may appoint to receive such delivery on his behalf, in possession of the property and, if need be, by removing any person who refuses to vacate the same.

74. Delivery of property in occupancy of tenant :– Where the immovable property sold is in the occupancy of a tenant or other person entitled to occupy the same and a certificate in respect thereof has been granted under rule 131, the Recovery Officer shall, on the application of the purchaser, order delivery to be made by affixing a copy of the certificate of sale at some conspicuous place on the property, and proclaiming to the occupant that. the interest of the defaulter has been transferred to the purchaser.

75. Resistance or obstruction by defaulter :–Where the Recovery Officer is satisfied that resistance or obstruction was occasioned without any just cause by the defaulter or by any person at his instigation, he shall direct that the applicant be put into the possession of the property, and where the applicant is still resisted or obstructed in obtaining possession, the Recovery Officer may also, at the instance of the applicant, order the use of force.

76. Resistance or obstruction by a bonafide claimant :–Where the Recovery Officer is satisfied that the resistance or obstruction was occasioned by any person other than the defaulter, claiming in good faith to be in possession of the property on his own account or on account of some person other than the defaulter, the Recovery Officer shall make an order dismissing the application.

77. Dispossession by certificate holder or purchaser :–(1) Where any person other than defaulter is dispossessed of immovable property by the holder of a certificate, issued under rule 131, for the possession of such property or where such property has been sold in execution of demand note, by the purchaser thereof, he may make an application to the Recovery Officer, complaining of such dispossession.

(2) The Recovery Officer shall fix a day for investigating the matter and shall summon the party against whom the application is made to appear and answer the same.

78. Bonafide claimant to be restored to possession :–When the Recovery Officer is satisfied that the applicant was in the possession of the property on his own account or on account of some person other than defaulter, he shall direct that the applicant be put into possession of the property.

79. Rules not applicable to transferee lit pandate :–Nothing in rules 148 and 149 shall apply to resistance or obstruction in execution of a certificate for the possession of a property by a person to whom the defaulter has transferred the property after the institution of proceedings in which the order was passed or to the dispossession of any such person.

80. Delivery of moveable property, debts and share :–(1) Where the property sold is moveable property of which actual seizure has been made, it shall be delivered to the purchaser.

(2) Where the property sold is moveable property in the possession of some person other than the defaulter, the delivery thereof to the purchaser shall be made by giving notice to the person in possession prohibiting him from delivering possession of the property to any person except the purchaser.

(3) Where the property sold is a debt not secured by a negotiable instrument or is a share in a corporation, the delivery thereof shall be made by a written order of the Recovery Officer prohibiting the creditor from receiving the debt or any interest thereon, and the debtor from making payment thereof to any one except the purchaser, or prohibiting the person in whose name the share may be standing from making any transfer of the share to any person except the purchaser, or receiving payment of any dividend or interest thereon, and the manager, secretary, or other proper officer of the co-operation from permitting any such transfer or making any such payment to any person except the purchaser.

81. Execution of documents and endorsement of negotiable instruments :–Where any endorsement or execution of documents is required to transfer a negotiable instrument or any share to purchaser under this chapter, such document shall be executed or endorsement shall be made by the Recovery Officer.

82. Form :–Any notice, proclamation, certificate or order to be issued under this chapter shall be in such Form as the Central Board of Revenue may, from time to time, prescribe. In case the Central Board of Revenue has not prescribed any of such Forms, it shall be in such form as adopted by the Recovery Officer.

Annex-I
(See rule 76)

FORM OF DEMAND NOTE

C. No_______________ Dated_______________

SUBJECT: ______________________________________________________

Reference _______________

(e.g. Order-in-Original No., Bank Guarantee No., Insurance Guarantee No., etc.)

WHEREAS a sum of Rs____________ (Rupees_____________________only), as Government dues (as per Schedule attached) is outstanding and needs to be recovered from the following;

M/s. _______________________________________________________

Address ____________________________________________________

Phone No. __________________________________________________

Sales Tax Registration No. _____________________________________
N.T.N. No __________________________________________________
CI&E’S Import/Export Reg. No. __________________________________
Known properties:____________________________________________

___________________________________________________________

2. The above-mentioned Government dues are on account of Sales Tax and other levies under the Sales Tax Act, 1990. It is certified that all other formalities under the Act and rules made thereunder have been completed as follows, and there exists no bar or stay order against recovery:

(a) Action taken under clause (a) of sub-section 48 of the Sales Tax Act, 1990____________________________________________________

(b) Action taken under clause (b) of sub-section 48 of the Sales Tax Act, 1990____________________________________________________

(c) Action taken under clauses (c) and (ca) of sub-section 48 of the Sales Tax Act, 1990____________________________________________

(d) Action taken under clause (d) of sub-section 48 of the Sales Tax Act, 1990____________________________________________________

3. You are, therefore, requested to recover the above-mentioned Government dues in terms of section 48 of the Sales Tax, 1990 and rules made thereunder. The Government dues may be remitted to the undersigned as soon as the same are recovered.

Referring Authority

(Name)

Assistant Collector of Sales Tax

Seal __________________________

To,

The Sales Tax Recovery Officer,

__________________________

__________________________.

SCHEDULE

S. No.	Description	Amount
1.	Serial No. ________
2.	File No.__________
3.	Sales tax	Rs. ____(Rupees __________________ only)
4.	Additional tax	Rs. ____(Rupees __________________ only)
5.	Central excise duty	Rs. ____(Rupees __________________ only)
6.	Customs duty	Rs. ____(Rupees __________________ only)
7.	Fines	Rs. ____(Rupees __________________ only)
8.	Penalty	Rs. ____(Rupees __________________ only)
9.	Personal Penalty	Rs. ____(Rupees __________________ only)
10.	Surcharge	Rs. ____(Rupees __________________ only)
11.	Penal surcharge	Rs. ____(Rupees __________________ only)
12.	License fee	Rs. ____(Rupees __________________ only)
13.	Income Tax	Rs. ____(Rupees __________________ only)
14.	Other	Rs. ____(Rupees __________________ only)
	(i)	Rs. ____(Rupees __________________ only)
	(ii)	Rs. ____(Rupees __________________ only)
	(iii)	Rs. ____(Rupees __________________ only)
	(iv)	Rs. ____(Rupees __________________ only)
	TOTAL	Rs. ____(Rupees __________________ only)

Annex-II
(See rule 78)

FORM OF MASTER REGISTER

1. Sr. No.________________________________________________________

2. Defaulters Name, Address and Phone No.____________________________

________________________________________________________________

3. Referring Authority._______________________________________________

4. (i) No. and date of issue and date of receipt of Demand Note_____________

(ii) Reference Nos._______________________________________________

5. Details of Government dues________________________________________

S. No.	Description	Amount
1.	Sales tax	Rs. ____(Rupees __________________ only)
2.	Additional tax	Rs. ____(Rupees __________________ only)
3.	Central excise duty	Rs. ____(Rupees __________________ only)
4.	Customs duty	Rs. ____(Rupees __________________ only)
5.	Fines	Rs. ____(Rupees __________________ only)
6.	Penalty	Rs. ____(Rupees __________________ only)
7.	Personal Penalty	Rs. ____(Rupees __________________ only)
8.	Surcharge	Rs. ____(Rupees __________________ only)
9.	Penal surcharge	Rs. ____(Rupees __________________ only)
10.	License fee	Rs. ____(Rupees __________________ only)
11.	Income Tax	Rs. ____(Rupees __________________ only)
12.	Other	Rs. ____(Rupees __________________ only)
	(i)	Rs. ____(Rupees __________________ only)
	(ii)	Rs. ____(Rupees __________________ only)
	(iii)	Rs. ____(Rupees __________________ only)
	(iv)	Rs. ____(Rupees __________________ only)
	TOTAL	Rs. ____(Rupees __________________ only)

6. Date of issue of notice under rule 74_________________________________
7. Date of issue of notice under rule 75_________________________________
8. Date of issue of notice and action taken under rule 77____________________

9. Known properties of the defaulter

(i) Movable_______________________________________________

(ii) Immovable_____________________________________________

10. Name and designation of Attachment Officer__________________________

________________________________________________________________

11. Details of movable properties attached

(i) _____________________________________________________

(ii) _____________________________________________________

(iii) ____________________________________________________

12. Date of proclamation of attachment of immovable properties________________________________________________________
________________________________________________________________

13. Details of immovable properties attached.

(i) _____________________________________________________

(ii) _____________________________________________________

(iii) _____________________________________________________

14. Date of appointment of receiver, name of receiver and details of business or properties.

(i) ____________________________________________________

(ii) _____________________________________________________

15. Date of sales of properties and their details.

________________________________________________________________
________________________________________________________________

16. Amount of sale proceeds or amount of profits along with mode of receipt.

________________________________________________________________
________________________________________________________________

17. Disposal of sale proceeds________________________________________
________________________________________________________________

18. Date of recovery and details of Government dues shown in column recovered along with the manner of recovery.

________________________________________________________________

Annex-III
(See rule 74(3))

FORM OF NOTICE TO SALES TAX, CUSTOMS
AND CENTRAL EXCISE AUTHORITIES

C.No____________________________ Dated_____________

SUBJECT:________________________________________________________

WHEREAS, Government dues amounting to Rs. __________________ (Rupees ______________________________________ only), are outstanding against M/s. ____________________________________________________________

(Name and Complete Address)

Sales Tax Registration No.___________________________________________ which they have failed to pay so far.

2. Now, THEREFORE, in exercise of the powers conferred by clause (a) of sub section (1) of section 48 of the Sales Tax Act, 1990, I do hereby require all Customs, Central Excise, Sales Tax and Income Tax Authorities that with immediate effect and till further orders—

(a) to deduct the aforesaid amount from any money owing to the said M/s _______________________________ which may be under the control of respective authorities; and

(b) the Government dues so recovered should be sent to the undersigned immediately.

Referring Authority

(Name)

Assistant Collector of Sales Tax

Seal __________________________

To,

(i) M/s__________________________________________(defaulter).

(ii) M/s_______________________ (clearing agent or representative).

(iii) All other concerned.

Annex-IV
(See rule 75)

FORM OF NOTICE OF RECOVERY

C.No._____________________________ Dated:______________

SUBJECT: Notice for Recovery under section 48 of the Sales Tax Act, 1990.

WHEREAS Government dues amounting to Rs. _______________ (Rupees ____________________________ only), are recoverable from you (M/s. ________________________________________________) on account of ________________________________________________________________.

2. AND WHEREAS, you have failed to deposit the above said Government dues recoverable from you and it is believed that the outstanding Government dues cannot be recovered from you in the manner so far followed;

3. Now, THEREFORE, you (M/s. _________________________________) are hereby served with this notice in terms of section 48 of the Sales Tax Act, 1990 to pay the amount within fifteen days from the date of service of this notice, failing which following proceedings under section 48 of the Sales Tax Act, 1990 will be initiated without any further notice: –

Removal of goods from your business premises shall be stopped and the business premises sealed after fifteen days of issue of this notice till such time the amount of tax is paid or recovered in full.

4. You are also directed not to directly or indirectly, sell, mortgage, charge, lease or otherwise deal with all movable and immovable property belonging to you except with the permission of the undersigned.

Referring Authority

(Name)

Assistant Collector of Sales Tax

Seal __________________________

To,

(iv) M/s__________________________________________(defaulter).

(v) M/s_______________________ (clearing agent or representative).

(vi) All other concerned.

Annex-V
(See Rule 77)

FORM OF NOTICE FOR ATTACHMENT AND RECOVERY

Subject: Notice for recovery under Section 48 of the Sales Tax Act, 1990.

WHEREAS, Government dues amounting to Rs. __________________ (Rupees____________________________________ only) are recoverable from you, M/s. ________________________________________________________

on account of _____________________________________________________

________________________________________________________________.

2. AND, WHEREAS, you have failed to deposit the above said Government dues recoverable from you and no recovery could be made in terms of Section 48 of the Sales Tax Act, 1990.

3. AND WHEREAS, it is believed that the outstanding Government dues cannot be recovered from you in the manner so far followed.

4. NOW, THEREFORE, you are hereby served with this notice in terms of Section 48 of the Sales Tax Act, 1990 to pay the amount within fifteen days from the date of service of this notice, failing which following proceedings under Section 48 of the Sales Tax Act, 1990 and the rules made thereunder shall be initiated without any further notice:-

(a) attachment and sale of moveable and immovable property; and

(b) appointment of receiver for the management of the movable or immovable property.

5. You are also directed not to directly or indirectly, sell, mortgage, charge, lease or otherwise deal with all movable and immovable property belonging to you except with permission of the undersigned.

6. You are also informed that all your movable and immovable properties shall stand attached on the expiry of 15 days of the service of this notice.

7. Such attached properties can be seized/sold under chapter XII of the Sales Tax Rules, 2004 or a receiver can be appointed to manage them. To avoid such a situation it shall be in your own interest to pay the Government dues within fifteen days from the date of service of this Notice.

______________________

(Name)
______________________

Sales Tax Recovery Officer

Seal

______________________

To,

(i) M/s__________________________________________(defaulter).

(ii) M/s______________________________ (agent or representative).

(iii) M/s. __________________________________ (other concerned).

Annex-VI
(See Rule 91)

FORM OF WARRANT OF ATTACHMENT

C. No._______________________________ Date: ___________

Subject: _________________________________________________________.

WHEREAS Mr. ___________________________________ (Designation ______________) has been appointed as Attachment Officer in terms of the chapter XII of the Sales Tax Rules, 2004 to attach the movable properties of M/s. ______________________________ for the recovery of outstanding Government dues amounting to Rs. _______________ (Rupees ____________________ only), recoverable from the above-mentioned defaulter.

THEREFORE, Mr. ________________________________ (Designation _____________) is hereby directed to seize the movable properties belonging to the defaulter while observing the provisions of chapter XII of the Sales Tax Rules, 2004 save exceptions as provided under the above said rules. He is also directed to report to the undersigned about the completion of attachment formalities as soon as these are completed.

______________________

(Name)
______________________

Sales Tax Recovery Officer

Seal

______________________

To,

(i) The Attachment Officer,

__________________,

along with a copy to be served on the defaulter or his agent.

(ii) Notice Board.

CHAPTER X REPEAL

1. Repeal :–(1) The following rules are hereby repealed, namely:-

(a) The Sales Tax Recovery Rules, 1992;

(b) The Supply of Zero-rated Goods to Diplomats, Diplomatic Missions, Privileged Persons and Privileged Organizations, Rules, 1996;

(d) The Filing of Monthly Returns Rules, 1996;

(e) The Debit and Credit Note and Destruction of Goods Rules, 1996;

(f) The Apportionment of Input Tax Rules, 1996;

(g) The Sales Tax Special Audit Rules, 1998;

(h) The Turnover Tax Rules, 1999;

(i) The Zero-rating of Supplies against International Tender for Afghan Refugees Rules, 2001;

(j) The Tax-payers (Authorised Representatives) Rules, 2001 and

(k) The Alternate Dispute Resolution Rules, 2002.

(2) The Sales Tax Refund Rules, 2002 shall stand repealed on the date chapter V of these rules comes into force.