IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION

(SPECIAL STATUTORY JURISDICTION)

VALUE ADDED TAX APPEAL NO. 68 OF 2018

IN THE MATTER OF:

An appeal under Section 42(2)(Ga) of the Value Added Tax Act, 1991.

And

IN THE MATTER OF:

M/S. City Sugar Industries Ltd.

.... Appellant

-Vs-

Customs, Excise and VAT Appellate Tribunal and others

....Respondents

Mr. M.A. Hannan with Mr. Abdus Samad Azad, Advocates

...... For the appellant

Ms. Mahfuza Begum, Deputy Attorney General, Ms. Sayeda Sabina Ahmed Molly, Mr. Ali Akbor Khan, Assistant Attorney Generals.

....... For the Respondents-government.

Heard on 16.11.2023, 23.11.2023, 30.11.2023 and 13.12.2023

Judgment on 15.01.2024

Present:

Mr. Justice Md. Iqbal Kabir

and

Mr. Justice S.M. Maniruzzaman

S.M. Maniruzzaman, J:

The instant VAT Appeal filed under Section 42 (1)(Ga) of the Value Added Tax Act, 1991 (in short, the Act, 1991) is directed against the order dated 30.08.2018 passed by the respondent No. 1, Customs, Excise and VAT Appellate Tribunal (Tribunal) in Nathi No. CEVT/Case(VAT)-

150/216 communicated vide Nathi No. CEVT/Case (VAT)-150/216/125 dated 12.09.2018 dismissing the appeal and thereby upholding the order passed by the respondent No. 2, Commissioner, Customs, Excise and VAT Commissionerate, Dhaka (East), Dhaka vide Nathi No. 3(9)77/Re:Hi:/City Sugar Ind:/Ltd./Sadar Audit/2015/772 dated 14.08.2016 directing the appellant to pay amount of Tk. 87,65,617.50 as evaded VAT under Section 55(3) and Tk. 52,59,370.00 as interest under Section 37(3) of the Value Added Tax Act, 1991 (in short, the Act, 1991) total Tk. 1,40,24,988.00.

Facts, relevant for disposal of the appeal, in short, are that the appellant is a limited company incorporated under the Company Act, 1994 and is engaged in the business of manufacturing finished sugar by using imported raw sugar and after manufacturing sells the same in local market on payment of applicable duties and taxes in accordance with law. In course of business, the appellant obtained VAT registration certificate from the concerned VAT office under the Act, 1991 for the purpose of payment VAT and since then it has been paying VAT regularly with satisfaction of the VAT Authority.

Suddenly an audit team of the respondent No. 2 entered into the appellant’s factory for the purpose of audit and requested to produce necessary commercial documents and which were submitted by the appellant on 28.05.2015 before the audit team. Thereafter the audit team on 06.09.2015 submitted report to the authority concern. Further on 29.10.2015 the audit team requested the appellant to submit Mushok- Challan-11 in respect of purchasing packaging items for amount of Tk. 23,73,29,300.00 for the period of July,2012 to June, 2014 regarding payment of VAT and deduction of tax at source.

In response thereto, the appellant submitted Mushok-Challan-11 for amount of Tk. 9,21,83,058.00 in relating to 2(two) enterprises namely M/S City Fiver Ltd., Demra, Dhaka and M/S Macca Multilayer Ltd. Kerangionj Dhaks. The concerned VAT Authority further requested the appellant to submit Mushok-Challan-11 in respect of remaining amount of Tk. 14,51,46,242.00. In response thereto, the appellant supplied the Mushok- Challan-11 with name of the enterprises from which the Mushok-Challans had been issued by the (i) M/S Balaka Fiver Industries, Nayangonj (ii) M.s. Macca Multilayer Ltd., Teghoria, Kerariganj and (iii) M/S Nahid Enterprise, Lalbag, Dhaka.

Upon receipt thereto, the concerned VAT Authority sent all challans to the concerned Circle for examining and after producing of the said challans the concerned Circle informed that 72 (seventy two) challans amounting to Tk. 4,75,32,000.00, 15(fifteen) challans amounting to Tk. 69,90,000.00 and 8(eight) challans amounting to Tk. 39,15,500.00 issued by M/S Balaka Fiber