What empowers FBR to waive past ST liability?

The biggest anti-documentation law is part of the Sales Tax Act 1990, which empowers the Federal Board of Revenue (FBR) to waive past sales tax liability of any person on the ground that nobody had paid sales tax in the past. Sources told Business Recorder here on Tuesday that if sales tax is applicable on a specific sector, or item, but nobody has paid the levy in the past, a law is invoked to deal with such situations.
Anyone can claim sales tax exemption from past liabilities on the ground that nobody had paid sales tax for past years. This strange anti-documentation provision is still applicable, allowing the FBR to grant wavier of sales tax on past liabilities on the confirmation that nobody in the same sector has paid the tax. This is done in the name of general practice, applicable in field formations, and commitment of the taxpayer that he would start paying taxes from now onwards.
If someone has been caught for not paying sales tax for the last many years, the FBR asks the field formations to confirm that anyone else was paying sales tax on the same item or sector. In case all collectors verify that nobody had been paying sales tax, then waiver of past sales tax liability was granted to the applicant. Before the date of detection, if nobody has paid sales tax, the FBR can still grant waiver of past sales tax liabilities.
Sources said that the government is talking about documentation at every forum. However, it is a reality that a strange law still exists that waiver of sales tax could be obtained from the FBR on the argument that sales tax has not been paid anywhere in the country despite the fact that the persons are liable to pay it. It is unbelievable that such kind of tax laws still exist in the Sales Tax Act when tax department wanted to demonstrate its commitment for broadening the tax base.
It is important to mention that Abdul Wadood Khan of Directorate General of Training and Research and former Advisor to FBR Chairman on Sales Tax had repeatedly informed the FBR that section 65 of the Sales Tax Act should be abolished. In his different reports in the past, he pointed out the implications of section 66 on documentation of the economy. If right action had been taken on the reports of Wadood, such anti-documentation laws might not have existed.
According to one of his reports on the GST, section 65 of the Sales Tax Act 1990 was incorporated during initial years of promulgation of Sales Act, 1990 due to the reasons that the business community was not fully aware of the Sales Tax Act, 1990 and its implementation thereof. Section 65 has now become redundant in the wake of the fact that almost 19 years have passed and the business community is well aware of the applicability of sales tax on different items hence unnecessary exemption as provided under section 65 of the Sales Tax Act 1990 needs to be omitted, the report added.
The section 65 of the Sales Tax Act says, if in respect of any supply the Federal Government is satisfied that inadvertently and as a general practice:- Tax has not been charged in any area on any supply which was otherwise taxable, or according to the said practice the amount charged was less than the amount that should have actually been charged. Secondly, the registered person did not recover any tax prior to the date it was discovered that the supply was liable to tax and the registered person started paying the tax from the date when it was found that the supply was chargeable to tax.
It may, by a notification in the official Gazette, direct that the tax not levied or short levied as a result of that inadvertent practice, shall not be required to be paid for the period prior to the discovery of such inadvertent practice, section 65 added.