Sales Tax (Case Laws)

Interpretation of statutes----Retrospective effect---Scope---Statute, which is procedural in nature, can operate retrospectively unless it affects an existing right on the date of promulgation or causes injustice or prejudice to a substantive right---If such statute Read More...

Sales Tax Rules, 2006---R. 36---SRO 555(I)/2006, dated 05.06.2006---Post-sanction audit of refund claims---Notice, issuance of---Scope---Deputy Commissioner or Commissioner Inland Revenue, Powers of---Scope---Petitioners (companies/registered taxpayers) invoked Read More...

Sales Tax Rules, 2006---R. 36---SRO 555(I)/2006, dated 05.06.2006---Post-sanction audit of refund claims---Notice, issuance of---Scope---Deputy Commissioner or Commissioner Inland Revenue, Powers of---Scope---Petitioners (companies/registered taxpayers) invoked Read More...

Sales Tax Act (VII of 1990)---S.47---Reference to High Court---Factual controversy---Scope---Findings of fact given by Appellate Tribunal are not open to further examination by the High Court---High Court cannot entertain any question on a finding of Read More...

S. 11---Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Order-in-Original, absence of---Fresh/Second Show-Cause Notice, issuance of---Legality---Commissioner Inland Revenue, powers of----Scope---Plea of the Inland Revenue Read More...

Sales Tax Act (VII of 1990)----Sixth Schedule, Entry No.105---Customs Act (IV of 1969), First Sched. & Fifth Sched.---Exemption from duty---Packing material---Provisions of two laws---Appellant company claimed that packaging material was entitled to exemption Read More...

Ss. 3 & 11---Delay in furnishing Sales tax payments---Penalty under S.11 of the Sales Tax Act, 1990, imposition/recovery of--- Scope---Department imposed penalty on the registered person for not depositing sales tax for a period of one and half Read More...

Sales Tax Act (VII of 1990)-----Ss. 3 &11---Late payment of sales tax---Penalty, imposition/recovery of---Scope---Mens rea of taxpayer, absence of---Willful default--- Department imposed penalty on the registered person for not depositing sales tax for a period Read More...

Sales Tax Act (VII of 1990)---Ss.3 & 11---Delay in furnishing Sales tax payments---Willful default---Penalty, quantum of---Scope---Department imposed penalty on the registered person for not depositing sales tax for a period of one and half Read More...

Sales Tax Act (VII of 1990)---S. 73--Adjustment of input tax--Requirement of S. 73 of the Sales Tax Act, 1990, non-compliance of--Question was, whether or not, non-compliance, of requirement of S. 73 of the Sales Tax Act, 1990 (‘the Act, 1990’) would be Read More...

Sales Tax Act (VII of 1990)----Ss.7, 7A, 8, 8B & 10---Sales Tax Special Procedure Rules 2007, R.SH---Sale tax, collection of---Import of machinery---Petitioners were manufacturers of steel products and were aggrieved by imposition and collection of sales tax at Read More...

Sales Tax Act (VII of 1990)----S. 11---Assessment Order passed beyond Show-Cause Notice--- Effect---Record revealed that taxpayer was not confronted with any invoice or allegation---Show-Cause Notice, was totally silent and had not mentioned any allegation which had Read More...

Sale of Goods Act (III of 1930)-------S. 64A---Provincial Government tender for supply of imported tractors---Suit for recovery of advance income tax and sales tax paid by the supplier on import of tractors---Single Judge of the High Court dismissed the claim of Read More...

Constitution of Pakistan----Art. 199---Provincial laws on sales tax on services---Constitutional jurisdiction of (Islamabad) High Court---Scope---Constitutional petition filed before the Islamabad High Court---Maintainability---Petitioner-company had carried out Read More...

Ss. 36 & 47---Notifications SRO 598(I)/90 dated 7-6-1990 & SRO 553(I)/94 dated 9-6-1994---Sales tax, recovery of---Tax exemption---Show-cause notice---Limitation---Dispute of exemption from payment of sales tax was with regard to product namely Read More...

Sales Tax Act (VII of 1990)---S. 25---Federal Excise Act (VII of 2005), S. 46---Audit, selection for---Commissioner, powers of---Scope---Plaintiff/taxpayer/company challenged notice issued by the Commissioner Inland Revenue under S.46 of the Federal Excise Act, 2005 Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Zero-rating---Scope---Appellant showed zero- rated supplies of goods to various registered persons---Cross-matching of the sales tax returns of Read More...

Necessary ingredients—Fiscal statute normally contains two provisions; charging provisions which impose charge to tax and machinery provisions which provide machinery for quantification of tax and the levy and collection of tax so imposed— Charging Read More...

Language—Retrospective applicability—Principle—In a taxing statute, as in other statutes, there should be no departure from general rule that words used in a statute must first be given their ordinary and natural meaning—It is only when such Read More...

Quashing of criminal proceedings without petitioner approaching Trial Court---Recovery of bogus tax returns Initiation of proceedings---Limitation---Petitioner was accused of committing fraud in receiving bogus tax returns---Petitioner Read More...

Withholding of tax—Retrospective effect—Applicability—Authorities issued show cause notice to respondent company for certain discrepancies with regard to withholding of short/less amount of sales tax as withholding agent while making purchases etc. Read More...

Constitution of Pakistan, Art. 199- Constitutional petition-- Quashing of proceedings---Inherent jurisdiction of High Court-Scope---When a criminal matter is pending before a Trial Court and interim challan has been submitted, under Read More...

Words or and --Scope--In legislative instruments/provisions  word  or is employed in disjunctive sense (means it separates things) and word "and" in conjunctive sense (means it combines things)---In certain cases, words and and Read More...

Word "or"--Scope-Word "or" appearing in which means that words owns and has his own manufacturing facility vise to S.2(17) of Sales Tax Act, 1990, is used in disjunctive sense, have been used to convey different Read More...

Reference-Commercial Exporter-Expeditious Refund System-- Particulars of registration, change of---Commissioner Inland Revenue---Suo motu powers---Respondent entity was registered as "Manufacturer-cum-exporter" for the purposes of tax Read More...

Reference--- Refund claims-Scrutiny-Factual controversy---Dispute was with regard to invoices issued by suppliers who had either been declared blacklisted or were non-existent with "registration suspended" status--- Show-Cause Notices Read More...

Sales Tax Act (VII of 1990)---Preamble---Laws which impose tax on sales---Interpretation---Such laws, being tax laws, are subject to a strict construction in accordance with the tax statutes generally---In other words, a sales tax statute must be strictly construed Read More...

Condition (x), first proviso ("the impugned proviso") [as substituted vide Notification S.R.O. 491(I)/2016 dated 30.06.2016]---Notification S.R.O. 777(I)/2018 dated 21.06.2018---Input tax adjustment---Disallowance of input tax on packing material---Withdrawal of a Read More...

Ultra vires, doctrine of-----Scope---Doctrine of ultra vires envisages that an authority can exercise only so much power as is conferred on it by law---Any action of the authority is intra vires when it falls within the limits of the power conferred on it but ultra Read More...

Interpretation of statutes-----'Proviso' to a section---Scope---Normal function of a proviso is to except something out of the enactment or to qualify something enacted therein---If the enacting portion of a section is not clear a proviso appended to it may give an Read More...

Interpretation of statutes--Curative and remedial legislation---Purpose and scope-- Retroactive/retrospective application---Curative statute is meant for lawmakers to recuperate the prior enactment for rectifying the defect or omission---In order to find out whether Read More...

Manufacturer of polyester staple fiber (PSF) in North-West Frontier Province (now Khyber Pakhtunkhwa)—Exemption from sales tax, removal of—Sales tax imposed on raw materials i.e. mono-ethylene glycol (MEG) and pure terephthalic acid Read More...

Manufacturer of polyester staple fiber (PSF) in North-West Frontier Province (now Khyber Pakhtunkhwa)—Exemption from sales tax, removal of—Sales tax imposed on raw materials i.e. mono-ethylene glycol (MEG) and pure terephthalic acid Read More...

Exemption from duty and taxes... Applicability--Dispute was with regard to exemption granted to respondent tax-payer on the plea that goods were supplied by Norwegian Refugee Council to internally displaced persons---Any person could be Read More...

Manufacturer of polyester staple fiber (PSF) in North-West Frontier Province (now Khyber Pakhtunkhwa)—Exemption from sales tax, removal of—Sales tax imposed on raw materials i.e. mono-ethylene glycol (MEG) and pure terephthalic acid Read More...

Wrong provision of law—Effect— Show-cause notice was set aside by Customs Appellate Tribunal for mentioning of S.U(3) instead of S.36 of Sales Tax Act, 1990— Validity—Merely because show-cause notices were labelled under S.ll(3) instead of Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Further tax--- Registered person-Scope---Show-cause notice was issued to the applicant alleging supplies made to unregistered persons and Read More...

Courts ought to abstain from deciding larger question, if a case could be decided on narrower grounds----It is preferred for the courts to confine determination to question pivotal for the determination of a case. Read More...

Allegation of issuing fake/flying invoices and claiming input tax against such invoices—Liability raised against tax payer based on presumptions—No attempt made by the Department to verify the invoices—In the present case the show cause notice was Read More...

Before the issuance of the show cause notice no meaningful effort was made by the sales tax officials to conduct an audit nor was a proper inquiry made by exercising powers conferred under the Sales Tax Act, 1990 (‘Act of 1990’) in order to verify the Read More...

Fiscal statute—While interpreting fiscal statutes, the court looks to what is clearly said and there is no room for any intendment nor is there any equity about a tax—There is no presumption as to tax and nothing was to be read in or implied and one Read More...

Right to fair trial—Reverse onus on Read More...

Manufacturer of polyester staple fiber (PSF) in North-West Frontier Province (now Khyber Pakhtunkhwa)—Exemption from sales tax, removal of—Sales tax imposed on raw materials i.e. mono-ethylene glycol (MEG) and pure terephthalic acid Read More...

Exempted goods----Import and supplies-----Scope----Authorities contended that benefit of notification SRO No.549(I)/2008, dated Read More...

Accused was granted bail with the consent of Special Prosecutor (Customs) subject to the deposit of 25% of the alleged evaded Read More...

Deposit instead of recognizance ----Scope-----Criminal court, at the time of granting bail, cannot Read More...

Assessment of tax and recovery of tax not levied or short levied erroneously Read More...

Input tax, adjustment of-Scope and nature-Section 7 of the Sales Tax Act, 1990 by nature is a beneficial provision of law Read More...

Whether any time limit for adjustment of input tax---Held, that section 7(1) of the Sales Tax Act, 1990 does not stipulate any Read More...

Import of new machinery and spare parts--Input tax, refund/adjustment of-Time and manner of claiming the adjustment of input Read More...

Refund of input tax---Scrutiny and processing refund claim---Scope---Registered person claimed refund of amounts of input tax Read More...

Limitation... Condonation of delay, non-availing of---Authorities assailed order passed by Appellate Tribunal Inland Revenue without filing application for condonation of delay-----Reference application was barred by time for 03 months and 03 days---Office raised Read More...

Condonation of delay---Scope---If decisions are assailed they should be done within the prescribed period, and it should not be assumed that delay would be condoned when there is no valid reason to condone the Read More...

Port of clearance/-Determination/Petitioner company was aggrieved of denial of authorities to clear goods imported by petitioner at Karachi Port/Plea raised by petitioner company was that total import for financial year was less than Read More...

Appeal to Appellate Tribunal /Scope/Department sought vacation of stay granted by the Tribunal wherein the operation of order passed by the Federal Board of Revenue (FBR) under S.40B of the Sales Tax Act, 1990, was suspended till the Read More...

Illegally adjusted input tax---Default surcharge and penalties---Amnesty Scheme---Purpose of an amnesty scheme is to incentivize payment and collection of stuck-up revenue---Taxpayer who had made voluntary payment before the cut-off date under the amnesty scheme can Read More...

Judgment is an authority only in respect to what it decides, and only with regard to the proposition of law raised, in that case, and therefore point not argued before the Court cannot be considered to have been dealt with by its Read More...

Power vested in any authority can only be exercised by that authority, in default whereof, the entire action would be without jurisdiction, void ab initio and of no legal effect. 

Question of jurisdiction in forum is considered to be very important and Read More...

When term satisfaction is used for the purpose of judicial determination, it is necessary that nothing more nor less it should be bona fide and not actuated by malice, a fact and not a pretext and the same can be determined from all fact and circumstance of the Read More...

Change of address---Tax payer was aggrieved of order passed by tax authorities under S. 21(2) of Sales Tax Act, 1990, whereby taxpayer was blacklisted-----Validity----Taxpayer sought through a letter restoration of its registration and had also informed to tax Read More...

[as inserted by Finance Act, 2017]---SRO No.583(I)/2017 dated 1-7-2017---Vires of notification---Variation in incidence of taxation---Federal Read More...

Constitution of Pakistan, Art.199---Constitutional petition---Amendment, vires of---Doctrine of “Reading Down”--- Applicability---Petitioners were Read More...

Constitution of Pakistan, Art.199---Constitutional petition---Amendment, vires of---Doctrine of “Reading Down”--- Applicability---Petitioners were running their industrial units in erstwhile federally Administered Tribal Area Read More...

Notification SRO 509(I)/2009 dated 09-07-2007 and SRO 1125 (I)/ 2011 dated 31-12-2011---Civil Procedure Code (V of 1908), S.11---Suit for Read More...

Documents relating to the income tax could not be made the basis for creating sales tax liability against any registered person without any Read More...

Sales Tax General Order No. 105/2019 dated 13.12.2019---Sales Tax Liability---Adjustment/refund of sales tax paid under special procedures---Scope---Petitioner, an importer of palm oil, sought input tax adjustment for Read More...

Protection against double punishment and self-incrimination. Scope issuance of a notice regarding the same taxed amounts tantamount to double jeopardy which cannot be given legal credence but also offends and defies the fundamental rights set out in Art. 13 of the Read More...

Smuggling seizure of things liable to confiscation extent of confiscation scope dumper truck was intercepted, post a chase on the highway, and inside a concealed specially designed tank was discovered loaded with ostensibly smuggled Read More...

Input tax, apportionment Question was with regard to adjustment of input tax on payments made against Capacity Purchase Price Validity Amount received on account of Capacity Purchase Price was not part of supply under R. 13(3) of Sales Tax Act, 1990 dealt with a Read More...

Taxpayer was imposed upon a liability to pay sales tax on account of acquisition of taxable goods for construction of immovable property----Commissioner (Appeals) upheld the imposition of tax---Appellate Tribunal party allowed the appeal filed by Read More...

Income tax record could be looked into for the purposes of conducting investigations and if any difference was detected by the detecting agency then it should be substantiated with solid and convincing material evidences as records relating to income tax could not Read More...

Question before High Court was whether after expiry of timeframe prescribed by S.11(5) of Sales Tax Act, 1990 for issuance of show- cause notice, could the same be extended or resurrected in a time- barred cause under SRO No.394(1)/2001 dated 20.05.2009 read with Read More...

The procedure prescribed under S.25 of the Act Shall be adopted for conducting audit, and said S.72B(2) of Sales Tax Act, 1990, procedure prescribed under S.25 of the Act shall be adopted for conducting audit, and said S.72B(2) could not be construed in a manner to Read More...

Illegally adjusted input tax---Default surcharge and penalties---Amnesty Scheme---Purpose of an amnesty scheme is to incentivize payment and collection of stuck-up revenue---Taxpayer who had made voluntary payment before the cut-off date under the amnesty scheme can Read More...

Since such taxpayer was being dealt with through a special regime, therefore the general treatment may not be applied for recovery of additional sales tax in terms of S.3(1)(A) of Sales Tax Act, 1990 from such taxpayer-Rule 58H of Sales Tax (Special Procedure) Read More...

Judgment is an authority only in respect to what it decides, and only with regard to the proposition of law raised, in that case, and therefore point not argued before the Court cannot be considered to have been dealt with by its Read More...

---Levy/charge/tax, imposition of---Scope---Tax, levy or charge can only be imposed under a clear mandate and sanction of law. 

---Levy of tax---Scope—Measure of a tax must have a reasonable nexus with it, the subject matter, and that a tax cannot Read More...

Equipment eligible for zero rating of sales tax under SRO No. 530(1)/2005 dated 6-6-2005 (‘the SRO’)----Plea by tax department that electricity meters are consumer durables and are not eligible for classification as equipment and hence not covered by the Read More...

Legislature had consciously given a right to a buyer in such cases to reclaim input tax so paid, where registration of the supplier was suspended or blacklisted, either as a refund or by way of adjustment---Subsequent blacklisting did not disentitle the buyer from Read More...

Alleged goods/services were not directly in use for manufacturing or production of taxable goods yet they were indirectly used for the progress, promotion, advancement and enhancement of business activity and there was nothing emphatic in the Sales Tax Act, 1990, Read More...

Determination of tax liability---Scope---Once a registered person established that the goods/services in question on which input tax had been paid were used or to be used “directly, indirectly or even remotely” for the purpose of ‘taxable Read More...

Scope---Keyword used in S.7 and S.8(1)(a) of the Sales Tax Act, 1990, is “purpose” which means that input tax can be deducted on goods used for the purpose of taxable supplies---In other words, issue of adjustment of input tax is to be resolved with Read More...

No condition of direct relationship of input goods to manufacturing of finished goods is provided in S. 8(1)(a) of Sales Tax Act, Read More...

In the present case the consumers were steel-melters, steel re-rollers and composite units of steel melting and re-rolling (“the consumers”)---As to the sales tax charged by the appellants from these consumers for the supply of electricity, i.e., 17% Read More...

Special procedure for payment of extra sales tax on specified electric home appliances-Assessment of tax and recovery of tax not levied or short levied or erroneously refunded-Scope-- Appellant was engaged in business of Storage Read More...

Certain transactions not admissible-Scope-Appellant had transacted all payments to his suppliers through Banking channel by complying with the mandatory provisions of S. 73 of the Sales Tax Act, 1990, which was the sole obligation of the buyer to ensure veracity of Read More...

In case of penalty for late filing of returns, the initial onus of proving of mens rea is on the department---Imposing of penalties in case of committing default in payment of tax or late filing of sales tax returns is not automatic and some determination which Read More...

Findings of facts determined by the Tribunal/Appellate Tribunal Interference by the High Court Tax Tribunal is the final fact finding body only “question of law” is to be examined by the (High) Court in a Sales tax Reference.

Tribunal is the Read More...

Appeal before Commissioner Inland Revenue (Appeals) Maximum period of 180 days prescribed under section 45-2(B) of the Sales Tax Act, 1990 for deciding the appeal such prescribed time period was mandatory obligation fixed on the Commissioner (Appeals) by section Read More...

Ultimate test to determine whether a provision is mandatory or directory is that of ascertaining the legislative intent while the use of the word ‘shall’ is not the sole factor which determines mandatory or directory nature of a provision, it is Read More...

Selection of audit of taxpayer under S.72-B of Sales Tax Act, 1990-Records, documents, provision of-Scope---Petitioner/ taxpayer impugned selection for audit under S.72-B of Sales Tax Act, 1990 and subsequent notice to submit record under S.25 of the same, inter Read More...

Distinction between "obiter dicta" and "ratio decidendi"-Scope--Distinction was to be made between what was ratio decidendi of a case and what was mere obiter dicta---What was necessary for decision of the issue in a case was ratio decidendi and was binding however, Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded--Scope---Department conducted physical verification of the appellant's declared premises to ascertain the admissibility of zero rating facility on consumption of utilities and Read More...

Construction of statutory authority to public officials in a statute---Authority/power to file appeal or reference on behalf of public Department-Scope-Appeal under any statute could only be filed by authority/officer designated or prescribed for such purpose by Read More...

Persons authorized to file Reference under S.47 of Sales Tax Act, 1990 on behalf of Department---Nature of S.47 of Sales Tax Act, 1990---Scope---Question before High Court was whether reference under S.47 of Sales Tax Act, 1990 as it stood in the year 2007, could be Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded--Scope---Department conducted physical verification of the appellant's declared premises to ascertain the admissibility of zero rating facility on consumption of utilities and Read More...

Construction of statutory authority to public officials in a statute---Authority/power to file appeal or reference on behalf of public Department-Scope-Appeal under any statute could only be filed by authority/officer designated or prescribed for such purpose by Read More...

Persons authorized to file Reference under S.47 of Sales Tax Act, 1990 on behalf of Department---Nature of S.47 of Sales Tax Act, 1990---Scope---Question before High Court was whether reference under S.47 of Sales Tax Act, 1990 as it stood in the year 2007, could be Read More...

Show-cause notice--- Jurisdiction--Valuation Ruling (VR)---Object, purpose and scope--- Importer was aggrieved of show-cause notice issued by Deputy Collector for recovery of taxes including sales tax and income tax, on the plea of Read More...

Time and manner of payment of sales tax-Recovery of sales tax non-levied or short-levied at import stage--Payment of sales tax by Steel Melters, Re- rollers and Ship Breakers----Option to pay sales tax on ad valorem basis---No less of revenue-Scope-Appellant Read More...

Sales tax--Time and manner of payment of sales tax-Recovery of sales tax non-levied or short-levied at import stage-Scope-Collection, payment and enforcement of sales tax on imported goods is governed under Customs Act, 1969, as envisaged in S.6 of Sales Tax Act, Read More...

When an order is passed without jurisdiction it is coram non judice, it does not exist in the eyes of law and every person and authority has to ignore it.
 Where basic order is coram non judice whole superstructure built thereon by way of any show cause Read More...

Levy of sales tax---Cotton Seed---Exemption from sales tax----Statutory exemption from sales tax could not be overridden by notification/ SRO issued under Sales Tax Act, 1990--Scope---Petitioners impugned SRO No.253(I)/2019 dated 26.02.2019 which sought to recover Read More...

Constitutional petition--Determination of sales tax liability-Zero-rating-Tax credit not allowed---Input tax adjustment---Scope-Petitioner taxpayers impugned insertion of proviso in SRO No.1125(I)2011 dated 21.12.2011 via SRO No.491(I)/2016 dated 30.06.2016; whereby Read More...

Notification, vires of- Increase in tax- Phrase Board with the approval of Federal Minister-in-Charge-Scope- Petitioners were tax-payers and their grievance was that power of Federal Government could not be substituted to Federal Minister-in-Charge for the purposes Read More...

Value of supply ---Power of Department to fix the value of any imported goods or taxable supplies under S.2(46) of Sales Tax Act, 1990---Nature of provisos to S.2(46) of Sales Tax Act, 1990---Petitioner impugned notification issued under S.2(46) of Sales Tax Act, Read More...

Proviso to a statutory provision, construction of --- Principles ---“Proviso” to a section of a statute had an overriding effect and control over the whole section, and function of proviso was to exclude and take out certain cases from the rule to which Read More...

Commencement of the Finance Act, 2006---Amendment by Finance Act, 2006 in the Sales Tax Act, 1990---Not retrospective---Scope---Question before High Court was whether the Finance Act, 2006, was applicable with effect from 01-07-2006, for which declaration was issued Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Scope---Applicant was issued a show cause notice with the allegations that it imported “Fongitar and Polytar” liquid shampoos and got cleared the same by Read More...

Protection against double punishment and self-incrimination---Scope---One cannot be tried twice for the charge based on the same allegation and evidence in the same Read More...

Payment of sales tax liability---Default Surcharge---Recovery of default surcharge---Show cause notice and adjudication process to be followed for such recovery---Abdication of statutory duty by Department---Scope---Petitioners impugned notices for payment of sales Read More...

Further tax---Special procedure---Supplies to un-registered persons---Scope---Appellant was imposed upon further tax for its failure to pay further tax @2% of the value of supplies made to un-registered made to un-registered persons in terms of S.3(1A) of Sales Tax Read More...

Further tax---Special procedure---Scope---Section 71 of the Sales Tax  Act, 1990 override all other provisions of the Sales Tax Act, 1990, including S.3 thereof, therefore, further tax cannot be imposed on the five sectors zero-rated goods. Non-obstante Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Reasons to be stated for decision---Scope---Department issued a show cause notice to the taxpayer, alleging therein that it had evaded sales tax, which culminated in passing Read More...

Orders of Appellate Tribunal to be binding----Scope----Taxpayer assailed the order passed by Commissioner Inland Revenue under Read More...

Where two forums have concurrent jurisdiction, the aggrieved person in the first instance must preferably approach to the lower Read More...

Claim of 100% adjustment of input tax---Nature of S.8B(1) of Sales Tax Act, 1990---Scope---Department impugned order of Appellate Tribunal whereby it was held that taxpayer could adjust 100% of input tax---Contention of Department, inter alia, was that per S.8B(1) Read More...

Input tax adjustment---Denial of input tax  adjustment on direct constituents of taxable supply---Scope---Petitioners/taxpayers impugned show-cause notice issued by Department whereby certain input tax adjustments claimed by petitioners were deemed Read More...

Failure to apply for registration, assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Validation---Scope---Appellants assailed order passed by Judge Special Court (Customs, Taxation and Anti-Smuggling(, whereby the respondent Read More...

Posting of Officers of Inland Revenue / Federal Board of Revenue (“FBR”) at manufacturing premises of taxpayer---Omission of proviso to S.40B of Sales Tax Act, 1990 vide Finance Act, 2018---Effect---Plaintiff impugned order of Commissioner to post Read More...

Constitutional jurisdiction of High Court---Conduct of inquiries by Sales Tax Authorities---Power to summon person to give evidence and produce documents in inquiries---Scope---Petitioners impugned notices issued under S.37 of Sales Tax Act, 1990 on ground that same Read More...

Constitutional jurisdiction of High Court---Writ of quo-warranto---Essentials---While considering a writ in nature of quo warranto, it was imperative to consider intent and motive of petitioner(s), and if it was manifest that petitioner had invoked Constitutional Read More...

Power of the Federal Board of Revenue and Commissioner (Inland Revenue) to call for record---Expression “satisfying himself”---Scope---Appellant assailed the order passed by Commissioner Inland Revenue (CIR) whereby he, while exercising power under Read More...

Selection of audit of taxpayer under S.72B of Sales Tax Act, 1990---Access to records and documents under S.25 of Sales Tax Act, 1990---Distinction between nature and scope of powers under Ss.25 & 72B of Sales Tax Act, 1990---Sections 25 & 72B of Sales Tax Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Further tax---Supply to END Consumer---Scope---Appellant was imposed upon a liability for its failure to pay full amount of further tax @ 2% in respect of supplies made to Read More...

Adjustment of input tax in excess of ninety per cent---Procedural lapse---Scope---Department assailed the registered person’s act of adjusting 100% input tax instead of 90% in violation of S.8B of Sales Tax Act, 1990---Validity---Department was seeking Read More...

(i) Whether under s.25(1) of the 1990 Act, (“the Commissioner”) and under s.45 of the 2005 Act, (“the Officer of Inland Revenue”) can have access to records or documents without assigning any reasons. The Read More...

12). We find that the process of balloting was conducted from amongst a pool of persons objectively determined by the Board in accordance with a transparent policy, uniformly applied in accordance with law. The process was undertaken Read More...

While denying adjustment of input tax on ground of tax fraud, initial burden lay on Department to establish that invoices had been issued during a period where a supplier for suspended or blacklisted – In case invoices were not Read More...

While denying adjustment of input tax on ground of tax fraud, initial burden lay on Department to establish that invoices had been issued during a period where a supplier for suspended or blacklisted – In case invoices were not Read More...

However, the case of the applicant is quite distinguishing. No doubt, he has been charged with tax evasion and the criminal case is still pending against him and the same should be decided on its merits but it is also a fact that after Read More...

Applicant, named in supplementary final report (challan) without any specific role challenged the order of recovery passed by Assistant Commissioner of Sales Tax before Commissioner of Sales Tax which was allowed- Department did not Read More...

Applicant, named in supplementary final report (challan) without any specific role challenged the order of recovery passed by Assistant Commissioner of Sales Tax before Commissioner of Sales Tax which was allowed- Department did not Read More...

Complainant/taxpayer sought review of order of FTO whereby complaint against, inter alia, non-payment of additional payment for delayed refund, was rejected on ground that Federal Tax Ombudsman lacked jurisdiction.
Reappraisal of Read More...

Dept., during scrutiny of income tax returns of taxpayer, observed certain discrepancies and issued a show cause notice to the taxpayer confronting sales tax liability along with default surcharge and penalty.
Taxpayer was registered as a manufacturer with the Read More...

Tax cannot be charged and levied unless it falls squarely within the purview of the charging provisions. 
Person was to be taxed only if he comes within the letter of law otherwise, he is free even though his case falls within the spirit of the Read More...

Taxing statute-Scope-Only the letter of law, in fiscal statutes, has to be looked into and there is no room for any intendment, equity or presumption-Fiscal statutes were to be strictly constructed, as far as liability to tax is Read More...

Taxpayer was aggrieved of show cause notice issued by authorities beyond period specified in law---Plea raised by authorities was that order of extension was made on 24-09-2010 whereas judgment in case titled 'Collector of Sales Tax Read More...

Illegal claim of exemption-Appeal against acquittal-Absence of mens rea-Scope-Case against accused persons was that they were involved in unlawful and illegal claim of zero rated exemption of sales tax on import of processed cheese Read More...

Petitioner assailed order-in-original passed by Collector of Customs Read More...

Fundamental Rights of Fair Trial, Right to Information and Right of individuals to be dealt with in accordance with law-Nature and scope-Articles 10A & 19A of the Constitution guarantee that necessary information be disclosed and a Read More...

Question relating to fundamental rights enshrined in the Constitution cannot be agitated in Reference/advisory jurisdiction of High Court as the scope of advisory jurisdiction is limited to the extent of questions of law arising out of Read More...

Attachment of its Bank Accounts for recovery of outstanding liabilities under S.48 of the Sales Tax Act, 1990 read with R. 71 of the Sales Tax Rules, 2006 - Contention of taxpayer, inter alia, was that mandatory time period of 30 days Read More...

Officer of Customs is empowered to conduct audit, inquiry or investigation of an importer for the purpose of ascertaining the correctness of any declaration, document or statement for determining the liability of duty, taxes, fees, Read More...

Attachment of its Bank Accounts for recovery of outstanding liabilities under S.48 of the Sales Tax Act, 1990 read with R. 71 of the Sales Tax Rules, 2006 - Contention of taxpayer, inter alia, was that mandatory time period of 30 days Read More...

Directorate General of Post Clearance Audit---Jurisdiction---Deputy Director of Post Clearance Audit is not empowered to issue audit observation in the matter of sales Read More...

Directorate General of Post Clearance Audit-Jurisdiction-Officials of Directorate General of Post Clearance Audit are not designated as officers of Inland Revenue under S. 228 or any other section of  ITO, 2001and as such are not empowered to carry out audit Read More...

Collector of Customs (Adjudication) is not designated as an officer of Inland Revenue under S. 30, ST Act, 1990 or under any section of  ITO, 2001and as such is not empowered to exercise powers under any section of ST Act, 1990 and Read More...

Order passed by Competent Authority under the provisions of Ss. 80 & 83 of Customs Act, 1969 and Rr. 438 & 442 of Customs Rules, 2001 could only be corrected by revisional Authority in exercise of power under S. 195 of Customs Read More...

If such a scam has taken place in the department, why the responsible officers of the department were not put to task for registration of a fake concern with the office of the Sales Tax Department. Even, no effort was taken during the Read More...

Accused was convicted and sentenced by Trial Court for receiving illegal tax refunds through forged, manipulated, falsified and bogus invoices- Validity- Process of registration of a concern was manifold in which physical verification Read More...

Accused was convicted and sentenced by Trial Court for receiving illegal tax refunds through forged, manipulated, falsified and bogus invoices- Validity- Process of registration of a concern was manifold in which physical verification Read More...

Sales Tax Special Procedures Rules, 2007, R. 58H---Steel-melter---Taxable supplies made to unregistered persons--- Levy of further sales tax under S. 3(1A) of Sales Tax Act, 1990---Permissibility---Payment of sales tax under a specific Read More...

10). Learned counsel for the petitioner on conclusion of his arguments tried to argue that the Capital Development Authority has been collecting CVT or that it should be directed to do so. We have found the arguments of the learned Read More...

8. A plain reading of section 12(18) of the Ordinance shows that the said provision is attracted when loans, advances and gifts are received in cash. However, in the case before us, admittedly, no cash exchanged hands. Members of the AOP Read More...

It is the contention of counsel for the applicant Department that as the invoices issued from those sellers, who were subsequently declared as blacklisted or de-registered; therefore, no refund can be allowed to the respondent. In Read More...

It is the contention of counsel for the applicant Department that as the invoices issued from those sellers, who were subsequently declared as blacklisted or de-registered; therefore, no refund can be allowed to the respondent. In Read More...

Commissioner Inland Revenue passed impugned order on the basis of stock taking carried out on 11-12-2017 under S. 38 and passed the impugned order pertaining to the tax periods starting from April 2015 to October 2017, whereas the Dept. Read More...

So far as the Question No. 1 is concerned, the same pertains to pecuniary jurisdiction of the officer, who has passed Order-in-Original. In a case involving contravention on the part of a registered person with respect of assessment of Read More...

Assessment and recovery of sales tax- Assessing Authority, on physical stock taking of registered person under S. 38 of ST Act, 1990, observed considerable difference between declared closing stocks and physical closing stocks of Read More...

So far as the Question No. 1 is concerned, the same pertains to pecuniary jurisdiction of the officer, who has passed Order-in-Original. In a case involving contravention on the part of a registered person with respect of assessment of Read More...

Taxation---Presumption--Taxpayer can only be subjected to under unambiguous and clear provision of law--No room intendment and no presumption as to tax. 

-Double jeopardy--Person cannot be vexed twice for the same Read More...

No provision for conducting an audit of a taxpayer in S. 38, ST Act, 1990--- Officer of Inland Revenue empowered by FBR or Commissioner could have free access to the premises, stocks, accounts and records to examine and take into custody such records to inquire and Read More...

Import of re-rollable scrap---Recycling---Mutilating and scraping of serviceable goods---Object, purpose and scope---Purpose of mutilating and scrapping of serviceable goods is to convert them into unserviceable condition---Permitting Read More...

Law is something that has been passed through legislative process. By contrast, Rule is something that has been created by executive, by exercising power conferred upon them by law---Law carries more weight which prevails, as such, Rules Read More...

Law is something that has been passed through legislative process. By contrast, Rule is something that has been created by executive, by exercising power conferred upon them by law---Law carries more weight which prevails, as such, Rules Read More...

Petitioners were importers of re-roll-able scrap and were aggrieved of seizure of their imported products by customs authorities---Plea raised by customs authorities was that imported goods were prime quality goods and not scrap Read More...

Taxpayer sold his property and relocated to another place due to security concerns but tax authorities added capital gain from sale of property as taxable income under adventure in nature of trade---Plea raised by Dept. was that income Read More...

Petitioner imported a vintage vehicle but of same was denied on grounds that there was ambiguity in law regarding imposition of taxes on vintage vehicles.

No reference to any other restriction or Read More...

ten years old could be demanded from importer---Mere presumption as to allegation of smuggling in absence of any tangible material or evidence could not be approved particularly in respect of importable article beyond period available to Read More...

Appellant imported goods which were being transported to his buyer when the officers of customs intercepted the vehicle---Officers of Customs detained the goods on failure of driver of the vehicle to produce valid import documents-Deputy Read More...

Appellant imported goods which were being transported to his buyer when the officers of Customs intercepted the vehicle---Officers of Customs detained the goods on failure of driver of the vehicle to produce valid import Read More...

Smuggling---Officers of Customs---Jurisdiction--Scope---Appellant imported goods which were transported to his buyer when the officers of Customs intercepted the vehicle---Deputy Collector (Preventive) detained the goods on failure of Read More...

Appellant imported goods which were being transported to his buyer when the officers of customs intercepted the vehicle---Officers of Customs detained the goods on failure of driver to produce valid import documents---Deputy Collector of Read More...

Procedure---Power of adjudication---Scope--- Record of case can only be demanded by Directorate General of Post Clearance Audit for conducting audit under S. 26(2), Customs Act, 1969 after serving notice/summon as per contemplation of Read More...

Brief facts of the case are that according to a contravention case the appellants imported 11 consignments of monofilaments yarn and classified the goods in Read More...

Tier-1 retailers---Option to pay sales tax under the turnover regime---Scope---Taxpayer as per provisions of S. 3(9A) of ST Act, 1990 applied to the Commissioner Inland Revenue, Large Taxpayers Unit for exercising its option to pay sales Read More...

Authorized officer to have access to premise stocks, accounts and records---Assessment of tax and recovery of t not levied or short levied or erroneously refunded---Scope---Director General of Intelligence and Investigation, during the Read More...

Authorized Officer to have access to premises, stocks, accounts and records---Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Searches under warrant---Search to be made in presence of Read More...

Sales tax is premised on a self-assessment paradigm, where the sales tax due is self-assessed by taxpayer and deposited along with the monthly sales tax return Supervision and monitoring of the self-assessment regime is through the Read More...

Similarly, the Indian Supreme Court in Chandavarkar S.R. Rao v. Asha Lata S. Guram 1986 4 SCC 447 held as under; “A clause beginning with the expression Read More...

Assessment of tax and recovery of tax not levied or short levied or erroneously refunded---Scope---Recovery of tax from a taxpayer, without due process of adjudication of the case cannot be equated with confession or admission of the charge---Coercive recovery from Read More...

Federal government is empowered to notify any goods on which sales tax shall be charged at the rate of zero percent, despite availability of S.3 of the Sales Read More...

Initial burden, in order to attract the provisions of S. 2(37), ST Act, 1990, lies on the Dept. to show that the registered person, knowingly, dishonestly or fraudulently and without any lawful excuse has done any act or caused any act Read More...

The Plaintiff has primarily impugned show-cause notice dated 24.01.2017 issued by Deputy Commissioner Inland Revenue, Lahore / Defendant No.4 through which it Read More...

Taxpayer claimed input tax adjustments against bill-of-entry of its sister concern on goods imported---Authorities in order-in-original denied input tax adjustments but Lower Appellate Court allowed the same---Authorities assailed Read More...

Referential legislation is of two types--One is where an earlier legislation or some of its provisions are incorporated in subsequent legislation; in such case, provision of earlier legislation or its portion so incorporated are Read More...

Declaratory amendment---Retrospectively--- Object, purpose and scope---Every statute, prima facie, has prospective application unless it is expressly provided that same will have retrospective operation---Not necessary that a declaratory Read More...

Use of login and passwords of a company by some fraudsters to file fake sales Read More...

Judicial review of delegated / subordinate legislation---Scrutiny of the Constitutionality of legislation by High Court under Art. 199 of the Constitution---Scope---Delegated legislation beyond powers conferred by parents statute---Principles of judicial review of Read More...

Nature and object of such legislation---Construction of delegated legislation---Invalidity of delegated legislation---Scope---Provisions of a statute, if they dealt with a subject matter in considerable detail, then scope of delegated Read More...

Monitoring or tracking of certain registered persons by electronic or other means---Point-of-sale real time monitoring of transactions of retailers---Power of Dept. to frame / amend Sales Tax Rules, 2006---Petitioners / taxpayers Read More...

Constitutional jurisdiction of High Court---Judicial review of statutory provisions---Scope---Statute could broadly challenge if it was in violation of guaranteed Fundamental Rights on ground that it was beyond capacity of the Read More...

Transmission of voice content through the internet---Exempted from Federal Excise Duty---All telecommunication facilities availed through the internet were exempted from Federal Excise Duty irrespective of their nature---Internet Read More...

Fiscal provision of a statute had to be construed liberally in favour of the tax Read More...

Blacklisting and suspension of registration of registered person---Tax fraud---Burden of proof-Scope---Registered person was alleged to have received refund of input tax against the sales tax invoices issued by suspended/blacklisted Read More...

Intention of Legislature as discernible from the provisions of S. 21(3) read with S. 8(1)(ca), of the ST Act, 1990 is that reclaim (refund) or adjustment of input tax (tax credit) should not be allowed for an invoice against which sales Read More...

Adjudication Officer after scrutinizing the detail of suppliers through computer database system through banking observed that certain suppliers had not declared or less declared the channel---Scope---Adjudication Officer after sales Read More...

Adjudication Officer during the course of examination of sales tax return of the registered person observed that it had claimed/adjusted input tax against the invoices issued by the suspended/blacklisted units Registered person had Read More...

Adjudicating Officer during the comparison of supplies made by the registered person and purchases declared by the buyers observed that supplies to certain extent of sales tax were not declared by the buyers in their sales tax Read More...

Applicant assailed order passed by Appellate Tribunal---Appellate Tribunal had observed that order-in-original was based on a defective notice bearing false figures of input tax never claimed by the registered person---High Court observed that only substantial legal Read More...

Tax fraud- Assessment of sales tax. Civil and criminal proceedings. Stay of criminal proceedings. Scope. Petitioner prayed for quashing of FIR lodged against him.

Pre-trial steps including arrest and Read More...

Dept., during audit proceedings, concluded that registered person had illegally adjusted inadmissible 'input tax against invoices issued by suspended unit
The Registered person did hold valid sales tax invoices duly incorporated in supplier's sales tax return and Read More...

Dept. conducted audit of registered person's sales tax records which resulted into certain discrepancies on the basis of which show cause notice was issued---ACIR passed sales tax order-in-original-Being dissatisfied and aggrieved by the said order registered person Read More...

Tax on sales cannot be imposed and levied without establishing, clandestine removal of goods and receipt of money consideration in its respect---Without building said relationship, no tax can be assessed and recovered Read More...

Allegation against the registered person was that he had declared value addition @ 8% which was on much lower side when compared with the other units engaged in the same business---Neither the goods in question were notified by the Federal Government under S. 7A, ST Read More...

No addition can be made in the value merely on the basis of estimates and presumptions or even by comparing sales and profitability of a registered person over its years of business as it is not a divine factum that a business always earns profit without embracing Read More...

The term 'instrument' has been defined in its ordinary sense, as a written legal document that defines rights, duties, entitlements or liabilities, such as statute, contract, will, promissory note or share certificate and with reference to commercial law, the terms Read More...

An 'agreement' is a manifestation of mutual assent by two or more persons, and as the parties’ actual bargain founded in their language, or by implication from other circumstances'. It is an act in law whereby two or more persons declare their consent as to Read More...

A 'bond' has been described as a "document containing confession of a debt", as a "written promise to pay money", or to do some act if certain circumstances occur, or a certain time elapse. There is no distinction between bonds and 'certificates of indebtedness' Read More...

Tax Dept. found that the respondent company had not deducted and paid tax on the mark-up accrued in terms of a finance/loan agreement executed between the respondent-company and a consortium of financial institutions and commercial banks, in respect of a long term Read More...

Ejusdem generis meant 'the same kind or class', which required that when a general word or phrase followed a list of specifics the former would be interpreted to include only the items of the same class as those listed-Where a word of wider meaning was included in a Read More...

Interim injunction, grant of by appellate Authority--- Principles---Taxpayer was aggrieved of notice issued by taxation officer under S.48 of Sales Tax Act, 1990 which he assailed before appellate authority where appeal was pending---Appellate authority neither Read More...

Exercise of discretion by Sales Tax Authorities-Vires of R. 12 of the Sales Tax Rules, 2006---Fundamental Rights to fair trial, due process of law and freedom of trade and business-Scope- Dept. impugned order passed by Single Judge of High Court in Constitutional Read More...

Fundamental Right to fair trial-Article 10A of the Constitution ensured the right to fair trial and an Authority was under duty to confront any person against whom any adverse order was being passed, with proper notice detailing reasons for taking such action-No Read More...

Registered person had claimed inadmissible input adjustment against invoices- Input adjustment against blacklisted units, were also added in the tow-cause notice---Assessing Officer initiated proceedings against the registered person for Read More...

Input tax, adjustment of- Authorities disallowed input tax on grounds that proper evidence/supporting documents by taxpayer---Plea raised by taxpayer was that proper opportunity of hearing was not allowed to him and claim of input sales Read More...

Provisos were intended to qualify the main part of the provision and carve out an exception from the same, taking out (as it were) something that but for the proviso would be included therein-Such provisos were generally referred to as "true" provisos-Sometimes a Read More...

Exemption from sales tax---'Proviso, interpretation of--First proviso to SRO 77' provided that exemption (from sales tax) shall be available to only such industrial units which had opened letters of credit for the import of plant and machinery upto the 31st January, Read More...

---Fiscal Statute---Exemption from tax-Where two reasonable interpretations of an exemption were possible, the one against the taxpayer and in favour of the revenue would be adopted. 
---Fiscal statute-Exemption from tax-Where a taxpayer fairly came within Read More...

Questions of law-In case of a tax reference before the High Court, all factual aspects of the case were closed by, and at the level of, the Appellate Tribunal; and it was only questions of law that could travel to the High Court---Factual points could not be allowed Read More...

Value Addition Tax (VAT), levy of Manufacturer', definition of---Scope--- Raw material imported by a "manufacturer" for his own consumption-Respondent-company, imported certain base oil and additives for use as raw material, which raw material they got blended into Read More...

Question before the High Court related to the circumstances in which a revised return filed under S.57 of the Income Tax Ordinance, 1979, was to be treated at par with a return filed under S.55 of the same Ordinance--- Held, that Read More...

Powers of the Commissioner to suo motu call for record of any legal proceedings under Sales Tax Act, 1990---Delegation of revisional jurisdiction by the Commissioner----Scope--Delegation of jurisdiction conferred under S.45A(4) of the Sales Tax Act, Read More...

Jurisdiction of High Court under S.47 of the Sales Tax Act, 1990----Nature and scope---High Court, under S.47 of the Sales Tax Act, 1990, was under obligation to answer questions of law raised in a reference before it and to deliver judgment while specifying the Read More...

Taxpayer was issued show-cause notice for tax deficit----During pendency of proceedings on show cause, authorities issued warning to suspend registration of taxpayer and taxpayer paid sum of Rs.4.8 million as recovered amount----Taxpayer had neither admitted Read More...

Recovery of taxes from a taxpayer without due process of adjudication of case, which is his basic, fundamental, constitutional and natural right cannot be equated with confession or admission of charges itself as same has to be adjudged upon---Coercive recovery from Read More...

Suspension of registration and recovery of sales tax----Two independent proceedings under S.21(2) & S.11 of Sales Tax Act, 1990 cannot be initiated simultaneously with a single show-cause notice i.e. suspension of registration and recovery of sales Read More...

Entitlement of zero rating of sales tax in terms of SRO No. 1125(I)/2011, dated 31.12.2011----Scope---Review----Mere filing of a review petition before the Supreme Court did not create any right in favour of dept./party filing the same and could restrain the High Read More...

Sales tax--Intra-court appeal---Order passed under S. 74 of the Sales Tax Act, 1990 for condonation of time-limit- Maintainability of intra-court appeal against such order--Scope- Question before the High Court was whether intra-court appeal against an order passed Read More...

Assessment of sales tax- Assessment of Tax and Recovery of Tax not levied or short levied or erroneously refunded Condonation of time-limit after expiry of limitation period for making assessment for recovery of tax short-levied--Nature of statutory limitation Read More...

Access to premises of registered person---Search under warrant--Exercise of powers under Ss. 38 & 40 of the Sales Tax Act, 1990-Limits to jurisdiction of officers under S. 38 of the Sales Tax Act, 1990-Obtaining of custody of records / documents of registered Read More...

Payment of sales tax---Steel melters, re-rollers and ship breakers---Procedure---Taxpayer was in business of manufacturing steel reinforcement bars by running a re-rolling mill and was aggrieved of recovery of sales tax on basis of consumption of electricity Read More...

Jurisdiction of High Court under S.47 of the Sales Tax Act, 1990---Notice---Question of law-Scope-Order for remand by Appellate Tribunal--Scope- Order by Appellate Tribunal remanding a matter by observing that certain facts had not been determined by the forum Read More...

Taxpayer Claimed exemption for sales tax output tax on supplies of “Ispaghol Husk”----Said claim of taxpayer was denied by adjudicating authority holding that claimed exemption related to agriculture produce of Pakistan, not subjected to further process Read More...

Procedure---Show cause notice--Preconditions---Proceedings under S..11 of Sales Tax Act, 1990 can only be initiated through process of audit under S.25 of Sales Tax Act, 1990----Self-assessed amount of tax due by taxpayer in its sales tax returns can only be altered Read More...

Assessment of tax----Self-assessed tax----Selection of tax payer----Show-cause notice, non-issuance of—Delegation of powers----Principles----Taxpayer was aggrieved of show-cause notice issued under S.11(2) of Sales Tax Act, 1990 for recovery of additional tax Read More...

Retrospective effect--Jurisdiction---Taxpayer was aggrieved of notice issued by authorities for recovery of deficient sales tax--- Appellate authority decided matter in favour of taxpayer on ground that reduction in rate of sales tax was beneficial which was Read More...

Question before the High Court related to the applicability of sales tax upon printing and subsequent supply of textbooks to Provincial Textbook Board; and whether Provincial Textbook Board was required to withhold sales tax in such transactions----Held, that in Read More...

Taxpayer was granted conditional stay by Commissioner-IR (Appeals) (CIR(A)) subject to payment of 10% outstanding demand.
The Commissioner-IR (A) was included as the “Income Tax Authority” under S.207 of the ITO Ord.2001 , working under the hierarchy Read More...

Right to a fair hearing and trial necessitated that no one should be penalized by the decision upsetting and afflicting his right or legitimate expectation unless he was given prior notice of the case, a fair chance to answer it and a fair opportunity to Read More...

Power of Commissioner to suspend registration ‘without prior notice’ after satisfaction that person had issued fake invoices, evaded tax or committed tax fraud [Rule 12(a)(i) of Sales Tax Rules, 2006]---Scope---Word ‘without prior notice’ had Read More...

Taxpayer allegedly adjusted input tax on the goods which were not used for taxable supply, this violating provisions of Ss.7, 8(1)(a) & 73 of the Sales Tax Act, 1990---Taxpayer on the basis of said allegation was called upon to show-cause as to why the evaded Read More...

Petitioners were flour mills and aggrieved of levy of extra tax at the rate of 5% of total electricity and gas billed amount.
Held, though flour was exempted from levy of sale tax, however, electricity and gas was required for manufacturing process and packing Read More...

In order to attract levy and charge of sales tax under Sales Tax Act, 1990, transfer of right to dispose of goods as an owner was essential to constitute ‘taxable supply’ in the context of S.3 of Sales Tax Act, 1990---Question of entitlement in respect Read More...

Applicant companies were engaged in purchase of Liquefied Petroleum Gas (LPG) from oil exploration and production companies and then sell the Gas in cylinders of various capacities to distributors---Cylinders were supplied to distributors against refundable security Read More...

Order assailed before High Court was with regard to findings of Appellant Tribunal on facts.
High Court, in exercise of advisory jurisdiction which was last fact finding forum had to decide reference application on facts and circumstances founded by Appellate Read More...

Grant of exemption is a delegated power of Federal Government and Federal Government may prescribe conditions subject to which exemptions are granted---Primary purpose of grant of exemptions is in respect of supply of goods or import of goods specified in Sixth Read More...

Retrospective effect---Scope---Petitioner company contended that contracts in question be dealt with in manner provided in Sales Tax Act, 1990 prior to promulgation of Finance Act, 2012.
Petitioner had already been awarded contracts against international tenders Read More...

Suspension of registration and blacklisting of registered person---Appellant/taxpayer, was alleged to be having no genuine business activities was involved in tax evasion and paper transaction with bogus units to avoid payment of sale tax---Commissioner Inland Read More...

Disputed question of fact---Assessee was aggrieved of order passed by authorities on grounds that he was not provided opportunity of hearing.
Disputed facts were agitated by petitioner and same could not be examine by High Court while exercising Constitutional Read More...

Deputy Commissioner, Inland Revenue/Adjudicating Authority, vide order-in-original rejected claim of the taxpayer with regard to adjustment of input tax---Appellate authority, declared order-in-original as bad in law and without merits dismissed said Read More...

Taxpayers, who was legally required to withhold 1/5th of his total input tax with regard to local purchases, did not withhold amount of withholding sales tax---Taxpayer was called upon to show as to why withholding sales tax, could not be recovered under S.11(2) of Read More...

Retrospectivity, even in a procedural law was to be avoided, if it would affect an existing right or otherwise caused inconvenience or injustice to anybody---In absence of clear intention of the legislature to apply a provision of statute with retrospective effect, Read More...

Taxpayer had received refund of input tax on the strength of invoices issue by an Undertaking whose registration was suspended---Based on said omission/irregularities, adjudication proceedings were initiated by Taxation Officer by way of issuance of a show-cause Read More...

Issuance of second show-cause notice regarding the same tax periods, would amount to imposition of double taxation and double jeopardy which could not be given legal credence, but also would offend and defy the Fundamental Rights set out in Art.13 of Constitution, Read More...

Taxpayer, did not charge/pay tax on supply made to unregistered persons in accordance with SRO No.283(I)/2011, dated 1-4-2011---Concerned Officer, noted that such facility of zero rating was available, if the unregistered persons had paid tax at 6% of the value of Read More...

Failure to charge/pay tax on supply by taxpayer (a Weaving Mill) to unregistered persons---Taxpayers had failed to deduct/deposit sales tax against the supplies made to unregistered persons (during the tax period 7/2011 to 12/2011) in accordance with S.3 of the Read More...

Failure to charge/pay tax on supply by taxpayer to unregistered person---Tax period involved in the present case, pertained, to July 2011 to October 2011, which fell under the ambit of SRO No. 283(I)/2011, dated 1-4-2011---Clause ‘V’ of said SRO released Read More...

Failure to submit documentary evidence at the initial stages of adjudication---Neither the Sales Tax Act, 1990 contain any express provision debarring a taxpayer from submitting any documentary evidence at a subsequent stage nor there is any provision in the Sales Read More...

Scrutiny of sales tax returns, revealed that taxpayer had purportedly adjusted input tax for relevant period on the strength of invoices issued by the supplier, whose registration was allegedly suspended subsequently---Adjudication proceedings were initiated by the Read More...

Zero rated supplies made to blacklisted units---Burden of proof-Respondent taxpayer claimed refund of a certain amount--- Taxpayer was served with a show cause notice alleging therein that taxpayer claimed refund against invoices of units that were Read More...

Blacklisting and suspension of registration of a registered person--- Power of Commissioner to suspend registration without prior notice [Rule 12 of the Sales Tax Rules, 2006]---Constitutionality- Commissioner could exercise such power under R. 12 if he was Read More...

In all proceedings whether judicial or administrative, the principles of natural justice had to be observed if the proceedings might result in consequences affecting the person or property or other right of the parties concerned---Where a person was empowered to Read More...

Taxpayers had assailed notices issued by Deputy Commissioner Inland Revenue---Plea raised by petitioners was that power to issue such notices was only conferred upon Chief Commissioner and Commissioner Inland Revenue.
FBR had issued notification by which it Read More...

Taxpayer had adjusted input tax during relevant financial year---Based on said omission and irregularity, adjudicating proceedings initiated by issuance of show-cause notice under S.11(2) of the Sales Tax Act, 1990 for recovery of adjusted amount of input tax, Read More...

Appellate Tribunal had inherent jurisdiction to rectify the error/mistake---Error/mistake floating on the surface of order, was not at all restricted to clerical error or arithmetical mistake, instead all types of errors; whether factual/legal or substantive or Read More...

If any refund claim or part thereof was found non-genuine and not admissible under the law, a notice would be served on the claimant requiring him to show cause in writing within fourteen days; as to why his claim or part thereof should not be rejected and claimant Read More...

Issue, in the present case, was whether Deputy Collector and Assistant Collector, could issue show-cause notice/pass order-in-original in excess of their monetary limit expressed in S.45 of the Sales Tax Act, 1990---Amount of refund involved in the case being Read More...

Making assessment of sales tax actually payable---Issuance of show-cause notice---Limitation---Show-cause notice by the Deputy Collector of Sales Tax Act, 1990 and order under subsection (2) of S.11 of the Sales Tax was issued on 3-7-2006 under subsection (4) of Read More...

Liability to pay tax of the person making supply would be in the case of supply of goods in Pakistan---Tax collected from the buyer by the seller in the capacity of agent of FBR, had to be deposited in the exchequer by him along with monthly sales tax return Read More...

For refund under S.10 of the Sales Tax Act, 1990, exporter had to submit with Collectorate, supportive documents prescribed in R.9 of Sales Tax Refund Rules, 2000---In the present case, appellant was holding taxable invoices issued by the suppliers as per S.23 of Read More...

Department in the cases similar to the appellant had paid refund inclusive of additional amount under S.67 of the Sales Tax Act, 1990, in spite of the fact that their suppliers were suspected/blacklisted by the Collector Headquarter, and charge of tax fraud under Read More...

Discrepancies of non-payment of sales tax for the relevant years on supply of coal having been observed, appellants were confronted through show-cause notice; against which explanation tendered by the appellants was treated as unsatisfactory---Assessing Officer Read More...

Exemption of sales tax under S. 65 of the Sales Tax Act, 1990, would be available to taxpayer subject to fulfilment of three conditions mentioned as (a)(b)(c); and all such conditions were apply collectively---Appellant had obtained coal mines on lease in tribal Read More...

Registered person claimed input tax adjustment on the basis of supplies, which had not been reconciled with the sales tax returns filed by the suppliers---Adjudicating authority passed order-in-original for recovery of sales tax along with default surcharge and Read More...

Taxpayers had assailed notices issued by Deputy Commissioner Inland Revenue---Plea raised by petitioners was that no such power was conferred upon Deputy Commissioner-IR to issue such notices---Validity---FBR intended such powers to be exercised by Commissioner of Read More...

Appellant/registered person, being wholesaler, filed refund claims to sales tax for relevant periods; against which certain objections were raised by the Computerized Risk Based Data---Adjudication proceedings, culminated in sales tax order-in-original, whereby Read More...

Conditions/situations mentioned in show-cause under S.11 of the Sales Tax Act, 1990; that the registered person had failed to file the returns; that the registered person had not paid the tax due on supplies or made short payment or had claimed input tax credit or Read More...

Appellant/registered person, along with 1197 other registered persons who were non-filers of sales tax returns, were required to file returns on monthly basis under S.26(1) of the Sales Tax Act, 1990 which they failed ---Sales Tax registration of all registered Read More...

Case of appellant/registered person was selected for audit proceedings, which were accordingly completed vide order-in-original by Deputy Commissioner (DCIR)---Appellant being aggrieved, assailed assessment made by DCIR before the Commissioner (Appeals) Read More...

Appellant/registered person, who was required to claim input tax adjustment at ninety percent of output tax, had adjusted hundred percent input tax---Registered person under subsection (2) of S.8-B of the Sales Tax Act, 1990, was allowed to adjust or claim refund of Read More...

Appellant company, contended that the department’s assertion regarding non-charging of sales tax on disposal of fixed assets was contrary to the facts, and the company had properly charged and deposited the sales tax---Appellant company, in support of said Read More...

Sales tax was chargeable on value of supply and not on the value of services, which was a domain of the Provinces----If the transportation charges were added as a value of supply in the value of condensate, which was chargeable at the rate of zero percent, resultant Read More...

Activity of “providing gas connection” and “supplying gas” were separate processes “Service charges” was a medium for supply of gas and it could not be termed as value of supply of gas and it could not be termed as value of supply Read More...

Non-admissibility of Input Sales Tax against Unaccounted for Gas (UFG) line losses---Appellant/taxpayer company incurred line losses/UFG line losses---Appellant/taxpayer company incurred line losses/UFG to the extent of 7.9% for the year under reference and Gas Read More...

Default surcharge and penalty/mala Read More...

Law recognizes no such thing as an unfettered discretion---All discretionary powers, especially that as conferred by statute, must be exercised in terms of well-established principles of administrative law, which were of longstanding authority ad had been developed, Read More...

Question as to whether such posting was time bound---Power under S.40B of the Sales Tax, 1990 had been granted to “monitor” the “production, sale of taxable goods and stock positions” of a registered person or class of such persons, by Read More...

Before imposition of penalty under Ss.33 & 34 of the Sales Tax Act, 1990; the Department must be satisfied that defaulting party/taxpayer acted deliberately in defiance of the law or was guilty of contumacious or dishonest conduct or acted in conscious disregard Read More...

Assessment of Tax and Recovery of Tax not levied or short levied or erroneously refunded---Mandatory nature of Departmental obligations under S.11 of the Sales Tax Act, 1990---Scope---Section 11 of the Sales Tax Act, 1990 was mandatory in nature and any order passed Read More...

Petitioners were glass bangles manufacturers and they were aggrieved of recovery of extra 5% in electricity and gas bills on the ground that they had not obtained sales tax registration number.
Levy of sales tax at the rate of 5% of total billed amount excluding Read More...

Special procedure for payment of sales tax by steel melters, re-rollers and ship breakers---Principles for collection of sales tax on supplies, class of supplies, and class of goods---power of FBR to prescribe special procedure for scope of and payment of sales Read More...

Question was with regard to supply of goods manufactured by petitioner to Afghanistan and applicability of Notification SRO No.190(I)/2002, dated 2-4-2002---Provision of S.4 of Sales Tax Act, 1990, was the parent law and provided for Zero Rate of sales tax on goods Read More...

Adjudication by officers of the Department---Adjudication by High Court under the Sales Tax Act, 1990 vis-a-vis delegation of powers under the Sales Tax Act. 1990---Scope---Officer(s) of the Sales Tax Department could exercise all powers and discharge all duties Read More...

Recovery of sales tax. Assessment of tax and recovery of tax not levied or short levied or erroneously refunded. Taxpayer impugned issuance of show-cause notice under Ss. 11(2) & 11(3) of the Sales Tax Act, , 1990 on the ground inter alia, that the proposed Read More...

Reference/appeal (erstwhile) to the High Court against order of Appellate Tribunal---Scope---Jurisdiction of the High Court under S. 47(5) of the Sales Tax Act, 1990, was restricted to matters involving only question of law---Reference or appeal (erstwhile) to the Read More...

Sales Tax, Collection of---Cement manufacturer exempted from sales tax---Question as to whether the manufacturer had collected sales tax on supplies made by it---Such question was a question of fact which could not be decided by the High Court in a reference filed Read More...

Power purchase agreement---Capacity Purchase Price---Nature---Tax credit not allowed---Taxable and non-taxable supplies---Special procedure for collection and payment of sales tax on electric power---Interpretation of R. 13(3) of the Sales Tax Special Procedure Read More...

Adjudication of claims by Sales Tax authorities---Statutory limitation---Condonation---“Speaking order”---Scope---Petitioner/taxpayer impugned order of Commissioner Inland Revenue, whereby its claim for refund was denied on ground that Read More...

Constitution petition---Application for registration---Definition of manufacturer / producer for purpose(s) of Sales Tax Registration and taxable supplies---Toll manufacturing arrangement---Scope---Petitioner taxpayer had applied for sales tax registration as a Read More...

Taxation law---Definition clause of the statute---Construction---Scope---Definition clause provided a foundational basis while construing provisions of law and reference to ordinary dictionary meaning of a word was to be avoided in presence of such definition Read More...

Illegal adjustment of input tax---Deputy Collector, came to know that registered person, during relevant period had taken an illegal adjustment of input tax against fixed sales tax payable on the goods manufactured and cleared by registered person under the capacity Read More...

Reference---Penalty---Reduction in quantum of penalty imposed upon taxpayer under S.33 of the Sales Tax Act, 1990---Jurisdiction of High Court under S.47 of the Sales Tax Act, 1990---Quantum of the penalty imposed on taxpayer for non-filing of Sales Tax Return, was Read More...

Reference to High Court---Scope and nature---High Court was to decide on a Reference under S.47 of the Sales Tax Act, 1990 on facts and circumstances founded by the Appellate Tribunal which was the last fact finding forum and High Court could not change such Read More...

(!) Sindh Sales Tax Ordinance of 2000---

S.3---Constitution of Pakistan, Art. 160---Vires of provisions of Sindh Sales Tax Ordinance, 2000---Levy of tax---Province, power of---National Finance Commission (NFC) Award---Object, scope and Read More...

(g) Interpretation of Constitution---

Exception---Scope---“Exception” has to be given proper meaning and effect---To impute redundancy to even a statutory provision or to so interpret a statute that a part of it is rendered futile or Read More...

(i) Constitution of Pakistan----

Art. 70 (4), Fourth Schedule, Federal Legislative List, entry 49 [as amended by S. 101 of Constitution (Eighteenth Amendment) Act (X of 2010)]---Exception---Scope---Exception added to entry No. 49 of Federal Read More...

Mandatory/directory/provision, determination of--- Test--- Word “shall” used in a provision of law---Scope---Word ‘shall’ was to be construed in its ordinary grammatical meaning and normally the use of word ‘shall’ by the legislature branded a provision Read More...

---Sales tax, recovery of---Show cause notice---Adjudication proceedings---Order-in-original---Limitation period---Question as to whether the limitation period contained in the First provisos to the erstwhile Ss. 11(4) & 36(3) of the Sales Tax Act, 1990, and the Read More...

Casus omissus, principle of---Scope---Principle of reading in or ‘casus omissus’ was not to be invoked lightly, rather it was to be used sparingly and only when the situation demanded it---Courts should refrain from supplying an omission in the statute because Read More...

Directory’ and ‘mandatory’ provisions---Scope---When a statute required that a thing should be done in a particular manner or form, it had to be done in such manner, but if such provision was directory, the act done in breach thereof would not be void, even Read More...

Tax fraud---Claim/adjustment of input tax---Appellant/registered person had claimed/adjusted input tax on strength of false/flying invoices issued by the blacklisted/suspended units---Show-cause notice was issued to the registered person, who could not substantiate Read More...

Powers and functions of the Federal Board of Revenue---Officer of Inland Revenue---Directorate General (Intelligence and Investigation), Inland Revenue---Powers and functions of the Directorate under the Sales Tax Act, 1990---Petitioners impugned S.R.O. No. Read More...

Reference / appeal to High Court---Nature of jurisdiction  of High Court under S.47 of the Sales Tax Act, 1990---Question of law, determination of---Scope---Questions before the High Court involved the order of the Appellate Tribunal whereby proceedings against Read More...

---Object and rationale for law for limitation---Law of limitation was founded on public policy and State interest and was vital for an orderly and organized society---Statutes of limitation were jurisprudential necessities because they achieved Read More...

Recovery of sales tax---Adjudication---Limitation prescribed under s. 36(3) of the Sales Tax Act, 1990---Condonation of time limit and exercise of power under S.74 of the Sales Tax Act 1990---Scope---Question before the High Court was “whether limitation provided Read More...

Sales Tax---Scope and levy of---Supply, Sale and Transfer---Concept---Cellular/telecommunication services---Supply of Subscriber Identification Module (SIM) Cards by Cellular Service Company--- Supply of SIM Cards by the company did not necessarily constitute Read More...

Expression “transfer of the right to dispose of goods as owner”---Meaning and connotation---Term “sale” and the words “other transfer of the Right to dispose of goods as owner” used in S. 2(33) of the Sales Tax Act, 1990 were similar and had to be read Read More...

Imposition of wealth tax---Assessee, a private limited company, engaged in the business of manufacturing and fabrication of machinery parts, due to temporary cessation of business activities, leased out portion of its plot of land on a monthly rent; and declared the Read More...

Revisional jurisdiction of Inspecting Additional Commissioner (I.A.C.)---Scope and extent---Inspecting Additional Commissioner (I.A.C.), was not given free hand to invoke the provisions of S.17-B of the Wealth Tax Act, 1963, in each and every assessment/order made Read More...

Taxing statute---Provisions of taxing statute, were strictly interpreted and the charges were imposed on the taxpayer with a clear and unambiguous language---Court/Tribunal should apply correct law, whether, litigants pointed out or not---If there were two Read More...

Levy of Sales Tax---Default surcharge---Willful default---Interpretation of S.34 of the Sales Tax Act, 1990---Bare perusal of S.34 of the Sales Tax Act, 1990 revealed that payment of default surcharge was not confined only to cases of willful default but same could Read More...

“Supply”---Meaning of---Taxable activity---Taxable supply---Scope of sales tax---Question before the High Court was “whether placement of certain appliances at retail outlets by  taxpayer for sale of its goods, constituted “supply” in terms of S.2(33) Read More...

Determination of sales tax liability---Tax credit not allowed---Deduction / adjustment of input tax for purpose of taxable supplies---“Purpose” of taxable supplies---Scope---Interpretation and nature of Ss. 7 & 8 of the Sales Tax Act, 1990---Question before Read More...

---“Purpose”, meaning of---Purpose meant the intention or function of something, the thing that something was supposed Read More...

Offences and penalties under the Sales Tax 1990---Default surcharge / additional tax, imposition of---Mens rea for offences---Willful default / evasion of tax---Scope---Penalty could only be imposed where there was willful evasion of duties and taxes---For a Read More...

Determination of sales tax liability---Input tad adjustment---Refund / adjustment under S.66 of the Sales Tax Act, 1990---Remitting of penalty and additional tax---Scope---Questions before the High Court related input tax adjustment claimed under S. 66 of the Sales Read More...

Show-cause notice---Scope, object and contents of a valid notice. Show-cause notice, was a foundational document, which was to describe the case comprehensively, made out against the taxpayer by invoking relevant provisions of law and by making references on Read More...

Input tax, claim for---Tax payer had transacted all payments to his suppliers through Banking channel, by complying with the mandatory provision if S,73 of the Sales Tax Act, 1990, which was the sole obligation on the buyer to ensure veracity of transaction in Read More...

Scope of sales tax ---Taxable supply---Tax credit not allowed---Input tax adjustment---Question before the High Court was whether sales tax could be charged on sale of old vehicles and machinery which were not admissible for input tax deduction in terms of S. 8(1) Read More...

Prime liability to pay sales tax---Scope---Shifting of liability---Scope---Prime liability to pay sales tax was on the supplier under S.3(3)(a) of the Sales Tax Act, 1990; same could be shifted to the buyer only be way of notification under S.3-A of the sales Tax Read More...

Failure to get registered under S.14, Sales Tax, Act, 1990---Department, during audit of appellants record, observed that, appellants who supplied natural gas, and were engaged in the business of the power generation (Electricity); and its subsequent sales/supplies, Read More...

Retrospectivity---Scope---Executive order and notification, which were detrimental or prejudicial to the interest of a person imposing liability or obligation, could not operate retrospectively---Executive order and notification which conferred a benefit or right, Read More...

Offences and penalties---Failure to deposit tax amount---Issue or use a document which was forged or false---Tax fraud---Accused were charged with allegations that they were involved in charging sales tax on fake invoices and they were not depositing the same in the Read More...

Tax to be levied by law only---Nature and effect of Art.77 of the Constitution---Public interest litigation---Petitioners, in public interest, impugned increase in prices of petroleum products, inter alia, on the ground that the Federal Government had encroached Read More...

No appeal in a case when accused pleads guilty---Conviction was recorded on basis of confessional statement, law even ousted remedy of appeal as enshrined in S.412, Cr. Read More...

Assessment of tax---Recovery of tax, not levied or short-levied or erroneously refunded---Appellant/company was manufacture-cum-exporter and was engaged in making of zero-rated supplies of textiles and textile articles thereof---Department, while conducting post Read More...

Terms “Annulled and setting aside”---Applicability---Petitioner was taxpayer and his grievance was that when assessment order was annulled by the Commissioner Inland Revenue (Appeals), it had attained finality and Assessing Officer could not re-open the Read More...