12. We are afraid, the view expressed in the impugned judgment that verification of electricity bills, placed on the website of the appellant, is permissible and reliance can be placed on any other extraneous information
other than the amount of tax due indicated in the sales tax return under section 11A, is not the correct legal position. For section 11A to come into operation, only the amount of tax due indicated by the taxpayer in the sales tax return is to be considered. We may add for the sake of completeness that even though the taxpayer is under a legal obligation to file a true and correct return, any alleged violation of the same can only be resolved through adjudicatory process provided under section 11 of the Act subject to the selection of the case of the taxpayer under the Act and not through the mechanism of section 11A which is purely a recovery provision.

13. Under section 11A the amount of tax due indicated by the taxpayer in the sales tax return is considered to be correct and final. It is then used as a benchmark to see whether the taxpayer has deposited the said amount of tax due along with the sales tax return. In case of failure to deposit the indicated amount of tax due or in case of short payment, recovery proceedings can be initiated against the taxpayer under section 11A. 14. Even otherwise, Section 11A has practically lost its efficacy after the new e-filing system has been enforced. The new system does not entertain any electronic return if the amount of tax deposited by the taxpayer is less than the amount of tax due indicated in the return. Reference is made to Rule 18 of the Sales Tax Rules, 2006.

12. We are afraid, the view expressed in the impugned judgment that verification of electricity bills, placed on the website of the appellant, is permissible and reliance can be placed on any other extraneous information
other than the amount of tax due indicated in the sales tax return under section 11A, is not the correct legal position. For section 11A to come into operation, only the amount of tax due indicated by the taxpayer in the sales tax return is to be considered. We may add for the sake of completeness that even though the taxpayer is under a legal obligation to file a true and correct return, any alleged violation of the same can only be resolved through adjudicatory process provided under section 11 of the Act subject to the selection of the case of the taxpayer under the Act and not through the mechanism of section 11A which is purely a recovery provision.
</br/> 13. Under section 11A the amount of tax due indicated by the taxpayer in the sales tax return is considered to be correct and final. It is then used as a benchmark to see whether the taxpayer has deposited the said amount of tax due along with the sales tax return. In case of failure to deposit the indicated amount of tax due or in case of short payment, recovery proceedings can be initiated against the taxpayer under section 11A. 14. Even otherwise, Section 11A has practically lost its efficacy after the new e-filing system has been enforced. The new system does not entertain any electronic return if the amount of tax deposited by the taxpayer is less than the amount of tax due indicated in the return. Reference is made to Rule 18 of the Sales Tax Rules, 2006.

16. In PTR 270/2012, the only claim of the applicant department in show cause notice was that as the suppliers were blacklisted, therefore, the invoices become inadmissible for input tax adjustment under rule 12(5) of the rules.
As we have already discussed above, rule 12(5) provides that during the period of suspension of registration, the invoices issued by such person shall not be entertained and once such person is blacklisted, the refund and input tax credit claimed against the invoices issued by him, whether prior or after blacklisting shall be rejected through speaking order. The careful reading of rule 12(5) as a whole shows that through speaking order, all invoices issued after blacklisting of unit will be rejected. However, the word prior used in rule 12(5) does not mean that all cluster of invoices issued prior to blacklisting will be rejected but it postulates that out of basket of invoices issued prior to blacklisting of supplier, those invoices will be rejected which were issued after suspension but before blacklisting of the unit. The words through speaking appealable order and after affording an opportunity of being heard in Rule 12(5) enlarges the scope of rule 12(5) and empowers the assessing authority to reject even those specific invoices through speaking and reasoned order after hearing, which were though issued prior to blacklisting but were found fake and have direct nexus with blacklisting. In our view, it will be a fallacy to hold that mere blacklisting will automatically reject claims of input tax and refund against all validly issued previous invoices, when the supplier was not blacklisted rather was duly registered and active on FBR website and said invoices having not been declared fake specifically, have no nexus with blacklisting. No doubt ambiguity abounds rule 12(5) but it will be unreasonable to hold that merely because supplier has become blacklisted, the entire series of invoices issued by him before blacklisting will be rejected. It will also infringe the accrued vested rights of the registered person/purchaser who held valid invoices when the supplier was not blacklisting rather active and duly registered. It is also settled law that where two interpretations are possible then one which advances the cause of justice is to be adopted and in case of any doubt, it has to be resolved in favour of the taxpayer.

16. In PTR 270/2012, the only claim of the applicant department in show cause notice was that as the suppliers were blacklisted, therefore, the invoices become inadmissible for input tax adjustment under rule 12(5) of the rules.
As we have already discussed above, rule 12(5) provides that during the period of suspension of registration, the invoices issued by such person shall not be entertained and once such person is blacklisted, the refund and input tax credit claimed against the invoices issued by him, whether prior or after blacklisting shall be rejected through speaking order. The careful reading of rule 12(5) as a whole shows that through speaking order, all invoices issued after blacklisting of unit will be rejected. However, the word prior used in rule 12(5) does not mean that all cluster of invoices issued prior to blacklisting will be rejected but it postulates that out of basket of invoices issued prior to blacklisting of supplier, those invoices will be rejected which were issued after suspension but before blacklisting of the unit. The words through speaking appealable order and after affording an opportunity of being heard in Rule 12(5) enlarges the scope of rule 12(5) and empowers the assessing authority to reject even those specific invoices through speaking and reasoned order after hearing, which were though issued prior to blacklisting but were found fake and have direct nexus with blacklisting. In our view, it will be a fallacy to hold that mere blacklisting will automatically reject claims of input tax and refund against all validly issued previous invoices, when the supplier was not blacklisted rather was duly registered and active on FBR website and said invoices having not been declared fake specifically, have no nexus with blacklisting. No doubt ambiguity abounds rule 12(5) but it will be unreasonable to hold that merely because supplier has become blacklisted, the entire series of invoices issued by him before blacklisting will be rejected. It will also infringe the accrued vested rights of the registered person/purchaser who held valid invoices when the supplier was not blacklisting rather active and duly registered. It is also settled law that where two interpretations are possible then one which advances the cause of justice is to be adopted and in case of any doubt, it has to be resolved in favour of the taxpayer.

15. The basic function of the FBR is to declare a tax system and collect tax as per the Act. Section 40B of the Act of 1990 and 45(2) of the Act of 2005 gives the FBR or the Chief Commissioner the authority to post an officer to monitor production,
sales of taxable goods and stock positions. For the purposes of the FBR or the Chief Commissioner no restriction has been placed by the Act of 1990 or Act of 2005 on the power of monitoring. However the said sections require the Commissioner to have material evidence and pass a speaking order under the said sections.

Show-Cause Notice
The decision of the FBR or the Chief Commissioner does not require material evidence but can be a decision based on broader principles. At this point, there is no specific allegation raised against the Appellants or the Petitioner for evasion of tax. The Appellants and the Petitioner were given due notice under 40B of the Act of 1990 and 45(2) of the Act of 2005 and were given sufficient reasons for invoking these sections. Hence a show cause notice is not required and a hearing is not required because an order under Section 40B of the Act of 1990 and 45(2) of the Act of 2005 is not an adverse order against the Appellants or the Petitioner for which a show cause notice or hearing is required. In this regard we note that the Appellants and the Petitioner have not challenged the vires of the sections but have only challenged the impugned orders dated 19.12.2013 and 21.2.2014.

16. We have also taken notice of the arguments raised by the Appellants and the Petitioner that the Respondents can utilize Section 40B of the Act of 1990 and 45(2) of the Act of 2005 to enter and sit within their business premises for an unlimited period of time and disturb their ability to do business. The orders dated 19.12.2013 and 21.2.2014 issued by the Chief Commissioner do not provide any timeframe within which the process of monitoring should be completed by the officers. However the section also does not stipulate any timeframe. In order to prevent arbitrary exercise of powers under Section 40B of the Act of 1990 and 45(2) of the Act of 2005,we are of the opinion that when such an order is passed by the FBR or the Chief Commissioner or Commissioner, the order must provide a reasonable timeframe within which the monitoring will take place and be completed. In the event that the required data and information is not obtained within the contemplated time, the FBR, the Chief Commissioner or Commissioner are always free to extend the time by informing the taxpayer.

Value Addition:-
When provisions of sections 7, 7(A), 8 and 10(1) of the Act and SRO 645(I)/2006 are read in juxtaposition it becomes quite clear that registered person covered under SRO 645(I)/2006
is to pay the final tax due on fixed value addition, and not on minimum value addition, therefore, the petitioner would not be entitled to any such refund or set off of input tax paid by the petitioner in relation to purchase of further goods and service used in further value addition undertaken by the petitioner under section 7 of the Sales Tax Act 1990. Further, the question of adjustment of input tax and consequently refund of the petitioner under the regime of SRO 645(I)/2006 is not tenable. The liability under SRO 645(I)/2006 should be considered to be a final tax liability. This being so, this petition fails and the same is dismissed.

In this case, even the requirements of the Cr.PC for issuance of search warrant have not been complied with. The search warrant was issued by Civil Judge/Magistrate 1st Class, Sheikhupura on 11.12.2007
whereas the search was carried out one year later on 2.12.2008 and more importantly the search warrant was issued in favour of Respondent No.4 who on his own endorsed the search warrant in favour of Respondent No.3. The procedure regarding issuance of Search warrant is provided for in Sections 96, 98 and 103 of the Cr.PC whereby firstly the search warrant is to be obtained from Illaqa Magistrate where search of the premises is to be made. Under Section 103 of the Cr.PC before making a search, the officer or other person about to make it shall call upon two or more respectable inhabitants of the locality in which the place to be searched is situate to attend and witness the search, which are taken into possession. 6. In view of the aforesaid, this petition is allowed. The search warrant dated 11.12.2007 issued by Civil Judge/Magistrate 1st Class, Sheikhupura is set aside. The Respondents are directed to return all the records, documents and computers confiscated by the Respondents during search on 2.12.2008 to the Petitioner immediately.

The above mentioned judgments of Peshawar High Court and august Supreme Court are squarely and fully applicable to the case of present petitioners as the facts of these cases are identical for the reason that Northern Bottlers,
like present petitioners, are bottlers under a bottling agreement with M/s. Pepsico. Inc., USA and are purchasing concentrate from M/s. Pepsi Cola International, Hattar, and in such circumstances, the Honble Peshawar High Court and the august Supreme Court have laid down that bottling agreement is not covered under the term franchise services as given under the Act, 2005, and there is no element of fee, royalty etc. Needless to say that decisions rendered by the Apex Court are binding on this Court under Article 189 of the Constitution of the Islamic Republic of Pakistan, 1973. The facts of the present cases are not distinguishable.

The above mentioned judgments of Peshawar High Court and august Supreme Court are squarely and fully applicable to the case of present petitioners as the facts of these cases are identical for the reason that Northern Bottlers,W.P. No. 16047 of 2010
like present petitioners, are bottlers under a bottling agreement with M/s. Pepsico. Inc., USA and are purchasing concentrate from M/s. Pepsi Cola International, Hattar, and in such circumstances, the Honble Peshawar High Court and the august Supreme Court have laid down that bottling agreement is not covered under the term franchise services as given under the Act, 2005, and there is no element of fee, royalty etc. Needless to say that decisions rendered by the Apex Court are binding on this Court under Article 189 of the Constitution of the Islamic Republic of Pakistan, 1973. The facts of the present cases are not distinguishable.

Loading & Unload Charges
We are in agreement with the findings by Appellate Tribunal that the payment of freight, loading and unloading charges was not in furtherance of business carried out for consideration;


rather was an ancillary service provided to the consumer, that too on occasional basis. Two incidents of making payments of freight, loading and unloading charges cannot make all transactions as taxable in relevant period. Under Section 3(1)(a) of the Act of 1990 (charging section), sales tax is levied on the value of taxable supply made by a registered person in the course or furtherance of any activity carried out by him. As found (ibid), payment of freight, loading and unloading charges, made occasionally and recovered from the consumer/customer could not be termed as a taxable activity, hence was not taxable. The judgment, in Messrs Wah Nobel Chemical Ltd., (supra), relied upon by learned counsel for respondent No.1 is also on the same preposition where similar conclusion was drawn.

(a) Whether Appellate Tribunal was justified to construe the provisions of section 73 of the Sales Tax Act, 1990 while holding a personal Bank Account as Business Bank Account?

(b) Whether Appellate Tribunal was justified to hold the carriage loading/unloading charges and commission as not part of the value of supply in view of the law contained in section 2(46) of the Act?

The honourable High Court gave answers in affirmative.i.e. against the applicant dept.

(c) is also resettled hereunder:- c. Whether Appellate Tribunal was justified in basing his decision upon the interpretation of the words furtherance of business which were not in force during the period involved?

Definition of word supply was substituted under Section 2(33) of the Act of 1990 by Finance Act, 2008 whereas tax period relevant to this case is May, 2001 to May, 2006. Contention of learned counsel for the applicant/department is correct that the tax period to which the controversy of levying tax relates, is prior to 01.07.2008, therefore, the definition relied upon by Appellate Tribunal was not applicable as it did not contain the words furtherance of business, yet these words are available in Section 3 (1)(a) of the Act of 1990 (charging section). Absence of said words from definition at relevant time would not change the finding given by Appellate Tribunal above. Answer to this question is also in affirmative (against the applicant department).

(a) Whether Appellate Tribunal was justified to construe the provisions of section 73 of the Sales Tax Act, 1990 while holding a personal Bank Account as Business Bank Account?

(b) Whether Appellate Tribunal was justified to hold the carriage loading/unloading charges and commission as not part of the value of supply in view of the law contained in section 2(46) of the Act?

The honourable High Court gave answers in affirmative.i.e. against the applicant dept.

(c) is also resettled hereunder:- c. Whether Appellate Tribunal was justified in basing his decision upon the interpretation of the words furtherance of business which were not in force during the period involved?

Definition of word supply was substituted under Section 2(33) of the Act of 1990 by Finance Act, 2008 whereas tax period relevant to this case is May, 2001 to May, 2006. Contention of learned counsel for the applicant/department is correct that the tax period to which the controversy of levying tax relates, is prior to 01.07.2008, therefore, the definition relied upon by Appellate Tribunal was not applicable as it did not contain the words furtherance of business, yet these words are available in Section 3 (1)(a) of the Act of 1990 (charging section). Absence of said words from definition at relevant time would not change the finding given by Appellate Tribunal above. Answer to this question is also in affirmative (against the applicant department).

Comprehensive mechanism is given by legislature under the Act of 1990, both for expeditious issuance of refund and for protecting National Exchequer from any loss.
Under sub-section (2) of Section 8B of the Act of 1990, refund is to be issued on fulfillment of the conditions and subject to restriction specified by law. At the same time, under sub-section (3) of Section 10; where there is reason to believe that a person has claimed a refund which was not admissible to him, the proceedings for recovery of same are to be completed within sixty days after due enquiry, audit or investigation regarding its admissibility. Chapter V of the Sales Tax Rules, 2006 (the Rules) provides a procedure for claiming refund, its scrutiny and issuance. Rule 36 of the Rules allows a post refund audit after issuance of refund. Section 66 of the Act also deals with the refund, which is required to be claimed within one year and Section 67 postulates further payment in shape of compensation if due refund is not made within time specified under Section 10. The Appellate Tribunal as well as Authorities under the Act of 1990 are to keep in mind the principle embodied in Section 8A of the Act. It enjoins, joint and several liability on registered persons, in supply chain; if a registered person, receiving a taxable supply from another registered person, has reasonable grounds to suspect that some or all of the tax payable in respect of the supplies would go unpaid. Honble Supreme Court in Commissioner of Income-Tax, Companies Zone-II, Karachi v. Messrs Sindh Engineering (Pvt.) Limited, Karachi (2002 SCMR 527 = 2002 PTD 419) has held that non-exercise of jurisdiction by Appellate Tribunal is a question of law. Relevant excerpts from the judgment are reproduced for facility:- 10. ¦.Undoubtedly when a Tribunal declines to exercise jurisdiction for one or the other pretext then the basic question of law emerges for consideration whether the decision under challenge is legally justified or not. Here we are not confronted with the situation of counting the shares of the Government or private persons in the respondents organization but our problem is whether jurisdiction has been justifiably exercised by the Tribunal and High Court or not. There is no cavil with the proposition that non-exercise or mis-exercise of jurisdiction by a forum/Tribunal is relatable to the question of law. However, the forum/Tribunal seized with a proposition is free to form its opinion independently by exercising jurisdiction in a prescribed or settled manner. As it has been pointed out hereinabove that Income Tax Appellate Tribunal had not independently assigned any reason in holding that respondent organization was a public company because it has based its finding on some earlier decision referred to hereinabove and we were not aware that what reasons prevailed upon learned Tribunal while deciding those cases. Thus in such-like situation it was obligatory upon the Tribunal either to have disclosed the facts as well as reasons of earlier case on which reliance was placed or the respondents case should have been examined independently. As such, we are of the opinion that the Income Tax Appellate Tribunal did not exercise its jurisdiction in accordance with law. Therefore, question of non-exercising of jurisdiction properly by the Tribunal, being a question of law, was liable to be answered by the High Court in its appellate jurisdiction under section 136(2) of the Ordinance but it failed to do so.

Comprehensive mechanism is given by legislature under the Act of 1990, both for expeditious issuance of refund and for protecting National Exchequer from any loss.
Under sub-section (2) of Section 8B of the Act of 1990, refund is to be issued on fulfillment of the conditions and subject to restriction specified by law. At the same time, under sub-section (3) of Section 10; where there is reason to believe that a person has claimed a refund which was not admissible to him, the proceedings for recovery of same are to be completed within sixty days after due enquiry, audit or investigation regarding its admissibility. Chapter V of the Sales Tax Rules, 2006 (the Rules) provides a procedure for claiming refund, its scrutiny and issuance. Rule 36 of the Rules allows a post refund audit after issuance of refund. Section 66 of the Act also deals with the refund, which is required to be claimed within one year and Section 67 postulates further payment in shape of compensation if due refund is not made within time specified under Section 10. The Appellate Tribunal as well as Authorities under the Act of 1990 are to keep in mind the principle embodied in Section 8A of the Act. It enjoins, joint and several liability on registered persons, in supply chain; if a registered person, receiving a taxable supply from another registered person, has reasonable grounds to suspect that some or all of the tax payable in respect of the supplies would go unpaid. Honble Supreme Court in Commissioner of Income-Tax, Companies Zone-II, Karachi v. Messrs Sindh Engineering (Pvt.) Limited, Karachi (2002 SCMR 527 = 2002 PTD 419) has held that non-exercise of jurisdiction by Appellate Tribunal is a question of law. Relevant excerpts from the judgment are reproduced for facility:- 10. ¦.Undoubtedly when a Tribunal declines to exercise jurisdiction for one or the other pretext then the basic question of law emerges for consideration whether the decision under challenge is legally justified or not. Here we are not confronted with the situation of counting the shares of the Government or private persons in the respondents organization but our problem is whether jurisdiction has been justifiably exercised by the Tribunal and High Court or not. There is no cavil with the proposition that non-exercise or mis-exercise of jurisdiction by a forum/Tribunal is relatable to the question of law. However, the forum/Tribunal seized with a proposition is free to form its opinion independently by exercising jurisdiction in a prescribed or settled manner. As it has been pointed out hereinabove that Income Tax Appellate Tribunal had not independently assigned any reason in holding that respondent organization was a public company because it has based its finding on some earlier decision referred to hereinabove and we were not aware that what reasons prevailed upon learned Tribunal while deciding those cases. Thus in such-like situation it was obligatory upon the Tribunal either to have disclosed the facts as well as reasons of earlier case on which reliance was placed or the respondents case should have been examined independently. As such, we are of the opinion that the Income Tax Appellate Tribunal did not exercise its jurisdiction in accordance with law. Therefore, question of non-exercising of jurisdiction properly by the Tribunal, being a question of law, was liable to be answered by the High Court in its appellate jurisdiction under section 136(2) of the Ordinance but it failed to do so.

----Ss. 2(s), 156, 168, 179, 181, 194-A & 196---Smuggling---Confiscation of vehicle and conviction of accused-Appeal against acquittal---Special Judge (Customs)
acquitted the accused and ordered to release vehicle in question---Appellate Tribunal upheld findings of Special Judge---Appellate Tribunal had not recorded its findings on any other material, but complete reliance had been made on the decision given by the Special Judge (Customs)--- Appellate Tribunal was supposed to apply its mind apart from the decision of the Special Judge, made in a criminal case; and had to decide the matter in accordance with law, which had not been done---Order of acquittal was set aside, in circumstances.

----Ss. 2(s), 156, 168, 179, 181, 194-A & 196---Smuggling---Confiscation of vehicle and conviction of accused-Appeal against acquittal---Special Judge (Customs)
acquitted the accused and ordered to release vehicle in question---Appellate Tribunal upheld findings of Special Judge---Appellate Tribunal had not recorded its findings on any other material, but complete reliance had been made on the decision given by the Special Judge (Customs)--- Appellate Tribunal was supposed to apply its mind apart from the decision of the Special Judge, made in a criminal case; and had to decide the matter in accordance with law, which had not been done---Order of acquittal was set aside, in circumstances.

Under provisions of S.45 of Sales Tax Act, 1990, adjudication had been assigned to the Officers of the Sales Tax Department upto the rank of Additional Collector---
Appeal against the order of the Adjudication passed by the Additional Collector and other officers below in rank to him had been provided to the Collector of Sales Tax (Appeals) in terms of S.45-B(1) of Sales Tax Act, 1990---Powers of adjudication granted under S.45 of Sales Tax Act, 1990 to the Additional Collector had not been delegated to the Collectors of Sales Tax---Collector (Appeals) was functioning as appellate forum and reviewing authority against the order passed by the Additional Collector, Deputy Collector, or Assistant Collector under S.45-A of the Sales Tax Act, 1990---Remedy against the order of the Collector of Sales Tax (Appeals) had been provided to the Appellate Tribunal---Impugned order was coram non judice and being not sustainable under the law was set aside; and case was remanded to Additional Collector to adjudicate upon the matter afresh strictly in accordance with law.

Therefore, keeping in view the above provisions of law it is clear that the Collector has not been empowered to exercise powers of adjudication which have been vested in officers of the lower ranks uptil the rank of the Additional Collector. This has purposely been done by the legislature. Collector (Appeals) is functioning as appellate forum and reviewing authority against the order passed by the Additional Collector, Deputy Collector, or Assistant Collector under section 45-A of the Sales Tax Act. Remedy against the order of the Collector of Sales Tax (Appeals) has been provided to the Appellate Tribunal. In view of the above discussion the impugned order dated 30-12-2006 is corum non judice and is not sustainable under law as such, hence, the same is set aside. Case is remanded to the learned Additional Collector concerned to adjudicate upon it afresh strictly in accordance with law.

Under provisions of S.45 of Sales Tax Act, 1990, adjudication had been assigned to the Officers of the Sales Tax Department upto the rank of Additional Collector---
Appeal against the order of the Adjudication passed by the Additional Collector and other officers below in rank to him had been provided to the Collector of Sales Tax (Appeals) in terms of S.45-B(1) of Sales Tax Act, 1990---Powers of adjudication granted under S.45 of Sales Tax Act, 1990 to the Additional Collector had not been delegated to the Collectors of Sales Tax---Collector (Appeals) was functioning as appellate forum and reviewing authority against the order passed by the Additional Collector, Deputy Collector, or Assistant Collector under S.45-A of the Sales Tax Act, 1990---Remedy against the order of the Collector of Sales Tax (Appeals) had been provided to the Appellate Tribunal---Impugned order was coram non judice and being not sustainable under the law was set aside; and case was remanded to Additional Collector to adjudicate upon the matter afresh strictly in accordance with law.

Therefore, keeping in view the above provisions of law it is clear that the Collector has not been empowered to exercise powers of adjudication which have been vested in officers of the lower ranks uptil the rank of the Additional Collector. This has purposely been done by the legislature. Collector (Appeals) is functioning as appellate forum and reviewing authority against the order passed by the Additional Collector, Deputy Collector, or Assistant Collector under section 45-A of the Sales Tax Act. Remedy against the order of the Collector of Sales Tax (Appeals) has been provided to the Appellate Tribunal. In view of the above discussion the impugned order dated 30-12-2006 is corum non judice and is not sustainable under law as such, hence, the same is set aside. Case is remanded to the learned Additional Collector concerned to adjudicate upon it afresh strictly in accordance with law.

48. It is important to highlight that as under Income Tax Ordinance, 2001, FEA also separately provides invasive powers of investigation under section 45 read with Chapter XIII of the Federal Excise Rules, 2005.
These powers are distinct from the general power to Audit as discussed above in the context of the Income Tax Ordinance, 2001.

50. Section 25(1) of STA simply provides for calling of the record by the tax regulator from a taxpayer. It is section 25(2) which provides that the officer of the inland revenue on the basis of the record obtained under sub-section (1) may, once in a year conduct audit. With the insertion of section 72B through Finance Act, 2010, FBR has been empowered to select persons for audit of tax affairs through computer balloting which may be random or parametric.

51. Section 25(2) of STA, taken independently, empowers the Commissioner to pick and choose from taxpayers whose record has been called under section 25(1). The said provision vesting the Commissioner with the power to pick and choose a taxpayer for audit, without any objective criteria, is ex facie discriminatory. Additionally, the scope of selection for audit is further restricted, as section 25(2) selects the taxpayers from amongst those taxpayers whose record has been earlier called under section 25(1). This alone is inconsistent with the concept of audit discussed above. Section 25(2) provides for unguided and uncanalised power to conduct audit which, for reasons given above, is ex facie discriminatory and hence unconstitutional and illegal.

52. The constitutionality of section 25(1) of STA can be saved if it is read down, as discussed above, and read in tandem with section 72B of the STA. Hence, section 25(1) provides the machinery provision for conducting of audit of the tax affairs of a taxpayer, after it has been selected for audit by the FBR under section 72B.

53. It is clarified that rest of section 25, including sub-section (1) remain intact and is not dependent on section 72B. Impugned Notice dated 14-12-2011 issued under section 25 of the STA by the Commissioner Inland Revenue (Zone-11) is therefore declared to be unconstitutional and illegal and hence set aside.

54. As a conclusion, for the above reasons, Section 177(1) of the Ordinance, Section 46(1) of FEA and Section 25(2) of STA are read down and shall provide the machinery provision to conduct audit after the taxpayer is selected for audit of its tax affairs by the FBR through computer ballot which may be random or parametric.

In case, where a PERSON, enjoying limited territorial jurisdiction, does an act or passes an order or initiates proceedings by locating himself outside his legally earmarked territorial jurisdiction,
the High Court within whose territorial jurisdiction such an act is done or order passed or proceedings initiated will assume jurisdiction under article 199 of the Constitution. This is being pointed out for the sake of clarity and does not apply to the facts of the present case.

Honble Supreme Court of Pakistan in Messrs Central Insurance Co. and others v. The Central Board of Revenue, Islamabad and others (1993 SCMR 1232),
held that interpretation by CBR (now FBR) is not judicial interpretation. Relevant excerpt is reproduced for ease of reference.

10. Nevertheless, contention of learned counsel for petitioner, that respondent No.5 has followed the interpretation made by FBR through impugned letter dated 06.08.2011, finds support from the reproduced part, ibid, which is against provision of Section 42 of the Act of 2005, as well as, judgment by Honble Supreme Court of Pakistan in Central Insurances case (supra). The orders-in-original challenged in this and connected writ petitions are set aside, however, petitioners are directed to plead their cases, as well as, interpretation before the Adjudicating Authority by reply to the show cause notices already issued. The Adjudicating Authority is directed to proceed in the matter with independent mind after addressing all the points raised or to be raised by the petitioners before it. The petition is allowed to the extent of Order-in-Original, however, interference against the impugned show cause notices is declined.

In these cases although the Petitioners have challenged the vires of Section 8B of the Act on the ground that it deprives them of their fundamental right to property under Article 23 of the Constitution,
they have failed to show what property they have been deprived of by way of Section 8B of the Act. They have also not been able to convince this Court that the objective of recovering and collecting tax through Section 8B imposes an unreasonable restriction on any proprietary rights of the Petitioners. The legislature in its wisdom legislated Section 8B of the Act for the efficacious fulfilment of the objects and purposes of the Act. In determining reasonableness of the restriction imposed under the law the Court must bear in mind the competing interests so as to serve the public purpose. The basic purpose is to recover the tax and to encourage the tax payer to document its transactions so that the taxable activity can be charged the required tax. Section 8B of the Act therefore has a rational nexus with the purpose of Act and with the scheme of the Act which requires adjustment of input tax to determine the tax liability and a refund of excessive amounts to the registered person. In terms of the mechanism provided under Section 7 of the Act, the Petitioners have not been able to show that when practically applying Section 8B of the Act, they are claimed amounts pending with the Respondents which they are entitled to.

The STA has clearly defined input tax under Section 2(14) of the STA and output tax under Section 2 (20) (c) of STA to mean provincial sales tax levied on services rendered or provided to the person.
Section 2(22A) of the STA defines provincial sales tax to mean tax levied under provincial laws. This means provincial sales tax as promulgated in any or all of the Provinces. Section 2(22A) of the STA further defines that for the purposes of Islamabad Capital Territory, provincial sales tax will be that which is declared by the Federal Government to be a provincial sales tax for the purposes of input tax adjustment. This declaration in the official Gazette is required for the Islamabad Capital Territory, which is not a Province. The Respondents No.1 and 2 under the cover of Section 2(22A) of the STA have assumed a discretionary power to decide which provincial sales tax should be allowed for input tax adjustment. The effect of this discretion is that the provisions of Section 7 of STA become subject to the discretion of the Respondent No.1. This clearly is not the scheme of the STA, which provides a specific right of adjustment to input tax. I am of the opinion that Section 2(22A) of the STA cannot be used to deny the right of input tax adjustment by a declaration in the official Gazette. Furthermore admittedly there is no declaration in the official gazette yet adjustment is being allowed for the province of Baluchistan and for the Islamabad Capital Territory. This act of the Respondents shows that their understanding of Section 2(22A) of the STA is that they have the ability to decide who should be granted input tax adjustment. Such an understanding is clearly against the specific provisions of the STA granting input tax adjustment.

e-filing of the returns along with required information does not take away the ability or the requirement of the Respondents to verify the information provided in the returns.


12. Section 11-A of the Act of 1990 enables the Respondents to collect short paid amounts without giving any show cause notice and without prejudice to any action prescribed under Section 48 of the Act of 1990. The purpose of this section is to enable the Respondents to recover the amount of less paid tax from the tax due as indicated in the returns without recourse to the person. The tax due is determined from the returns filed by a person and the information contained in the returns. The default become apparent from the return filed and no further information/document is needed. The return filed by the tax payer is the evidence which proves the default and renders the person liable for short paid amount under Section 11-A of the Act of 1990.

13. Therefore, in view of the aforesaid for the purposes of Section 11-A of the Act of 1990 the electricity bills relied upon form part of the returns filed and the action initiated under Section 11-A of the Act of 1990 is based on the information provided in the returns of the Petitioners.

e-filing of the returns along with required information does not take away the ability or the requirement of the Respondents to verify the information provided in the returns.


12. Section 11-A of the Act of 1990 enables the Respondents to collect short paid amounts without giving any show cause notice and without prejudice to any action prescribed under Section 48 of the Act of 1990. The purpose of this section is to enable the Respondents to recover the amount of less paid tax from the tax due as indicated in the returns without recourse to the person. The tax due is determined from the returns filed by a person and the information contained in the returns. The default become apparent from the return filed and no further information/document is needed. The return filed by the tax payer is the evidence which proves the default and renders the person liable for short paid amount under Section 11-A of the Act of 1990.

13. Therefore, in view of the aforesaid for the purposes of Section 11-A of the Act of 1990 the electricity bills relied upon form part of the returns filed and the action initiated under Section 11-A of the Act of 1990 is based on the information provided in the returns of the Petitioners.

12. We are afraid, the view expressed in the impugned judgment that verification of electricity bills, placed on the website of the appellant,
, is permissible and reliance can be placed on any other extraneous information other than the amount of tax due indicated in the sales tax return under section 11A, is not the correct legal position. For section 11A to come into operation, only the amount of tax due indicated by the taxpayer in the sales tax return is to be considered. We may add for the sake of completeness that even though the taxpayer is under a legal obligation to file a true and correct return, any alleged violation of the same can only be resolved through adjudicatory process provided under section 11 of the Act subject to the selection of the case of the taxpayer under the Act and not through the mechanism of section 11A which is purely a recovery provision.

13. Under section 11A the amount of tax due indicated by the taxpayer in the sales tax return is considered to be correct and final. It is then used as a benchmark to see whether the taxpayer has deposited the said amount of tax due along with the sales tax return. In case of failure to deposit the indicated amount of tax due or in case of short payment, recovery proceedings can be initiated against the taxpayer under section 11A.

14. Even otherwise, Section 11A has practically lost its efficacy after the new e-filing system has been enforced. The new system does not entertain any electronic return if the amount of tax deposited by the taxpayer is less than the amount of tax due indicated in the return. Reference is made to Rule 18 of the Sales Tax Rules, 2006.

5. In view of above arrangements arrived at between the parties, the impugned notices for selection of audit for the Tax Year 2011 are set aside.
Respondent FBR will initiate the process of audit afresh in the light of the above guidelines and fully comply with the mandate given under Section 214C of the Income Tax Ordinance, 2001, Section 72B of the Sales Tax Act, 1990 and Section 42B of the Federal Excise Act, 2005.

Whether the Respondent No.1 was not required to provide the record regarding purchase, movement of goods, payment proof of their alleged suppliers to check the admissibility of refund as required under Section 22,
25 and 73 of the Sales Tax Act, 1990.

8. The above question as framed in this reference in our view is neither of law nor has raised a substantial legal controversy between the parties. Therefore, as observed above, we decline to entertain and answer the same.

Question of law:-
In The Lungla (Sylhet) Tea Co. Ltd. Syhet vs. Commissioner of Income Tax Dacca, Circle Dacca (1970 SCMR 872) that:-

It may be pointed out that it is not every question of law that must be referred to the High Court. There must be some substance in it.

In Revenue Legal Division Bahawalpur vs. Zulfiqar Ali (2012 PTD 964) that:- It is pertinent to mention that jurisdiction of this Court in terms of section 133(4) of the Ordinance ibid is of advisory nature clearly distinct and distinguishable from its appellate or revisional jurisdiction. The purpose of reference therefore should be only to resolve problematic and debatable legal question instead to get a decision for or against a party.

In Pakistan Steel Mills Corporation Pvt. Ltd. Karachi vs. Commissioner Inland Revenue (2012 PTD 723) that:-

We may observe that in case of any error in the finding of facts by the Tribunal the only course available to the applicant is to seek rectification of such error by moving appropriate application in accordance with law, which has not been done in the instant case. Moreover, question of fact cannot be examined by this Court in its reference jurisdiction.

[Scope of Reference]

7. In view of the law established in the aforesaid judgments, the scope of the reference is as follows:-

1. Jurisdiction of this Court is advisory in nature and could only be invoked to resolve problematic and debatable questions of law instead of getting a decision for or against a party.

2. Question of fact cannot be examined by this Court in its reference jurisdiction unless there is perversity in the finding of facts.

3. Only a question of law if duly raised before and ruled upon by the Tribunal could be said to have arisen out of order of Tribunal.

4. Every question of law must not be referred to High Court and only those questions of law having some substance in it should be referred.

5. Jurisdiction of this Court can only be invoked when the issues raised before and decided by Tribunal were of substantial nature and of general application to sizeable class of assessee.

6. When the question framed is not of general application and revolves around the fact of that particular case and that particular-assessee in that very assessment year, no substantial question can said to have arisen.

Whether the Respondent No.1 was not required to provide the record regarding purchase, movement of goods, payment proof of their alleged suppliers to check the admissibility of refund as required under Section 22,
25 and 73 of the Sales Tax Act, 1990.

8. The above question as framed in this reference in our view is neither of law nor has raised a substantial legal controversy between the parties. Therefore, as observed above, we decline to entertain and answer the same.

Question of law:-
In The Lungla (Sylhet) Tea Co. Ltd. Syhet vs. Commissioner of Income Tax Dacca, Circle Dacca (1970 SCMR 872) that:-

It may be pointed out that it is not every question of law that must be referred to the High Court. There must be some substance in it.

In Revenue Legal Division Bahawalpur vs. Zulfiqar Ali (2012 PTD 964) that:- It is pertinent to mention that jurisdiction of this Court in terms of section 133(4) of the Ordinance ibid is of advisory nature clearly distinct and distinguishable from its appellate or revisional jurisdiction. The purpose of reference therefore should be only to resolve problematic and debatable legal question instead to get a decision for or against a party.

In Pakistan Steel Mills Corporation Pvt. Ltd. Karachi vs. Commissioner Inland Revenue (2012 PTD 723) that:-

We may observe that in case of any error in the finding of facts by the Tribunal the only course available to the applicant is to seek rectification of such error by moving appropriate application in accordance with law, which has not been done in the instant case. Moreover, question of fact cannot be examined by this Court in its reference jurisdiction.

[Scope of Reference]

7. In view of the law established in the aforesaid judgments, the scope of the reference is as follows:-

1. Jurisdiction of this Court is advisory in nature and could only be invoked to resolve problematic and debatable questions of law instead of getting a decision for or against a party.

2. Question of fact cannot be examined by this Court in its reference jurisdiction unless there is perversity in the finding of facts.

3. Only a question of law if duly raised before and ruled upon by the Tribunal could be said to have arisen out of order of Tribunal.

4. Every question of law must not be referred to High Court and only those questions of law having some substance in it should be referred.

5. Jurisdiction of this Court can only be invoked when the issues raised before and decided by Tribunal were of substantial nature and of general application to sizeable class of assessee.

6. When the question framed is not of general application and revolves around the fact of that particular case and that particular-assessee in that very assessment year, no substantial question can said to have arisen.

Whether the Respondent No.1 was not required to provide the record regarding purchase, movement of goods, payment proof of their alleged suppliers to check the admissibility of refund as required under Section 22,
25 and 73 of the Sales Tax Act, 1990.

8. The above question as framed in this reference in our view is neither of law nor has raised a substantial legal controversy between the parties. Therefore, as observed above, we decline to entertain and answer the same.

Question of law:-
In The Lungla (Sylhet) Tea Co. Ltd. Syhet vs. Commissioner of Income Tax Dacca, Circle Dacca (1970 SCMR 872) that:-

It may be pointed out that it is not every question of law that must be referred to the High Court. There must be some substance in it.

In Revenue Legal Division Bahawalpur vs. Zulfiqar Ali (2012 PTD 964) that:- It is pertinent to mention that jurisdiction of this Court in terms of section 133(4) of the Ordinance ibid is of advisory nature clearly distinct and distinguishable from its appellate or revisional jurisdiction. The purpose of reference therefore should be only to resolve problematic and debatable legal question instead to get a decision for or against a party.

In Pakistan Steel Mills Corporation Pvt. Ltd. Karachi vs. Commissioner Inland Revenue (2012 PTD 723) that:-

We may observe that in case of any error in the finding of facts by the Tribunal the only course available to the applicant is to seek rectification of such error by moving appropriate application in accordance with law, which has not been done in the instant case. Moreover, question of fact cannot be examined by this Court in its reference jurisdiction.

[Scope of Reference]

7. In view of the law established in the aforesaid judgments, the scope of the reference is as follows:-

1. Jurisdiction of this Court is advisory in nature and could only be invoked to resolve problematic and debatable questions of law instead of getting a decision for or against a party.

2. Question of fact cannot be examined by this Court in its reference jurisdiction unless there is perversity in the finding of facts.

3. Only a question of law if duly raised before and ruled upon by the Tribunal could be said to have arisen out of order of Tribunal.

4. Every question of law must not be referred to High Court and only those questions of law having some substance in it should be referred.

5. Jurisdiction of this Court can only be invoked when the issues raised before and decided by Tribunal were of substantial nature and of general application to sizeable class of assessee.

6. When the question framed is not of general application and revolves around the fact of that particular case and that particular-assessee in that very assessment year, no substantial question can said to have arisen.

7. Section 47(1) also shows that the authorization has to be valid at the time when the application/reference is preferred before the High Court. Therefore, the cutoff date is the date of the filing of the reference. In this case, admittedly, on the date of filing of the instant reference i.e.,
28.01.2013 Shafqat Mahmood was no more the Commissioner Inland Revenue (Zone-II), Large Taxpayers Unit, Lahore but had actually become the Chief Commissioner Inland Revenue (OPS), Regional Tax Office, Lahore. The submission of the learned counsel for the petitioner that one Shafqat Mahmood had signed the power of attorney, as well as, the affidavit while he was the Commissioner Inland Revenue (Zone-II), LTU, Lahore and, therefore, the instant reference is maintainable, is without force because the cutoff point is the time when the reference is filed before the High Court and, admittedly, at the time of the filing of the said reference, the said officer was not the Commissioner Inland Revenue enjoying territorial jurisdiction over the petitioner Company.

7. Section 47(1) also shows that the authorization has to be valid at the time when the application/reference is preferred before the High Court. Therefore, the cutoff date is the date of the filing of the reference. In this case, admittedly, on the date of filing of the instant reference i.e.,
28.01.2013 Shafqat Mahmood was no more the Commissioner Inland Revenue (Zone-II), Large Taxpayers Unit, Lahore but had actually become the Chief Commissioner Inland Revenue (OPS), Regional Tax Office, Lahore. The submission of the learned counsel for the petitioner that one Shafqat Mahmood had signed the power of attorney, as well as, the affidavit while he was the Commissioner Inland Revenue (Zone-II), LTU, Lahore and, therefore, the instant reference is maintainable, is without force because the cutoff point is the time when the reference is filed before the High Court and, admittedly, at the time of the filing of the said reference, the said officer was not the Commissioner Inland Revenue enjoying territorial jurisdiction over the petitioner Company.

Whether the show cause notice issued was barred by time in terms of subsection 2 of section 36 of Sales Tax Act, 1990 being issued after the expiry of 3 years and 5 months?


iii. Whether the payment made to the supplier of the applicant through the cheques can be termed as non-fulfillment of the procedure prescribed under section 73 of the Sales Tax Act 1990?

Show Cause Notice, is a foundational document, which is to comprehensively describe the case made out against the taxpayer by making reference to the evidence collected in support of the same. It is the narration of facts in the Show Cause Notice alongwith the supporting evidence which determines the offence attracted in a particular case. Show Cause Notice is not a casual correspondence or a tool or license to commence a roving inquiry into the affair of the taxpayer based on assumptions and speculations but is a fundamental document that carries definitive legal and factual position of the department against the taxpayer. 18. We, therefore, are of the view that Section 36 (1) of the Act does not apply to the facts and circumstances of the case. At best, the case of the petitioner falls under Section 36 (2) of the Act. Considering that the show cause notice dated 14.02.2007 has been issued after four years and notice under Section 36 (2) of the Act could only be issued within three years of the relevant date, the impugned Show Cause Notice is also barred by time. For the reasons given above, the first question is answered in the affirmative.

The question that requires determination is whether a person, who is not under a legal obligation under the Act to obtain registration number can be burdened with further tax for not obtaining the registration number? Admittedly the petitioners, who are manufacturers and sellers of flour (product of milling industry), stand exempt from payment of sales tax under section 13 read with item No.19 of the 6th Schedule of the Act.
By virtue of the above exemption the petitioners fall outside the scope and meaning of taxable supplies under Section 2 (41) of the Act. As the petitioners dont make any taxable supplies they are not bound to register under the Act. Section 14 of the Act provides that registration is required of such persons and regulated in such a manner as is prescribed under the Rules. Chapter-I of the Rules, inter alia, deals with Registration. Rule 3 explaining the applicability of the Chapter states that it is applicable on persons liable to be registered under the Act. Rule 4 provides that only persons making taxable supplies are under an obligation to register. Under section 2(41) of the Act taxable supply means supply of taxable goods other than a supply of goods which is exempt under section 13 of the Act, which is the case of the petitioners.

Every charging section maintains an insular independent status. Reference is also made to sub-sections 3(1A), 3(5) and 3(6) of STA, which clearly mark with precision the sub-sections they replace or substitute. Hence legislation must specifically provide for substitution.
Legislature could have replaced section 3(2)(a) under Section 3(1B) but it has not. Even otherwise, any such intention could have been easily actualized by the Federal Government by invoking the 1[Proviso] to section 3(2)(a) and taking out aerated waters from the Third Schedule, but this was not done. Hence, section 3(1B) only replaces sales tax imposed on the basis of VALUE of taxable supplies and does not extend or replace the other charging sections including section 3(2)(a), where taxable supplies are taxed on RETAIL PRICE. The impugned Rules state that Capacity Tax is in lieu of tax imposed under section 3(2) of STA when section 3(1B) unambiguously limits the substitution to section 3(1) of STA only. Therefore, it is clear that the Capacity Tax under the impugned Rules does not extend to sales tax being charged under section 3(2)(a) of STA as a consequence the impugned Rules, therefore, transgress the limits provided under section 3(1B) of STA.

The purpose of both the Sections is to enable the Respondents to carry out the investigation and inquiry and obtain necessary information. The Act contemplates an inquiry/investigation process in which ˜monitoring and ˜free access is necessary. To say that while invoking Section 40B of the Act, the Respondents cannot use their power under Section 38 of the Act would therefore go against the mandate of the law.
Both sections facilitate the inquiry process and since the Petitioners have been put to notice under Section 40B read with Section 38 of the Act no illegality is made out. It has been held in the case cited at 2008 SCMR 76 (supra) that this Court had no jurisdiction to quash an FIR as the same amounts to taking the role of the investigating agency while exercising constitutional jurisdiction. Quashing an FIR can only be done in exceptional circumstances, which do not exist in this case because the Petitioners have challenged the FIR on the ground that the record was illegally seized under Section 38 which could not be invoked when monitoring under Section 40B of the Act. Even otherwise, given the conduct of the Petitioners before this Court with reference to WP No.16359/2015, which has been dealt with by a separate order?

The purpose of both the Sections is to enable the Respondents to carry out the investigation and inquiry and obtain necessary information. The Act contemplates an inquiry/investigation process in which ˜monitoring and ˜free access is necessary. To say that while invoking Section 40B of the Act, the Respondents cannot use their power under Section 38 of the Act would therefore go against the mandate of the law.
Both sections facilitate the inquiry process and since the Petitioners have been put to notice under Section 40B read with Section 38 of the Act no illegality is made out. It has been held in the case cited at 2008 SCMR 76 (supra) that this Court had no jurisdiction to quash an FIR as the same amounts to taking the role of the investigating agency while exercising constitutional jurisdiction. Quashing an FIR can only be done in exceptional circumstances, which do not exist in this case because the Petitioners have challenged the FIR on the ground that the record was illegally seized under Section 38 which could not be invoked when monitoring under Section 40B of the Act. Even otherwise, given the conduct of the Petitioners before this Court with reference to WP No.16359/2015, which has been dealt with by a separate order?

15.        The main contention of the department is that the petitioner has produced or manufactured the storage tanks which in their opinion are liable to be taxed under section 3 of the said Act and reliance in this regard is placed on the PCT Heading 73.22. We have examined that it is not the case of the department that the petitioner after producing or manufacturing the said storage tanks have ever sold these items. Sales Tax is a tax levied, as the name indicates, on the sale of certain goods which falls under the ambit of the said law barring the exemptions provided under the statute wherein certain items and goods have specifically been exempted from the said levy.
Putting this acid test to the goods alleged to have been manufactured and produced by the present petitioner if for the arguments sake it is accepted that the petitioner has produced or manufactured said goods, but the question is whether these items fall under the definition of goods or not. It has already been discussed in the upper paragraphs of this order that to constitute something as goods it must ordinarily be something which could be brought to the market and sold. We were able to lay our hands on a decision in the case of Addu Achiar V/s The Custodian Evacuee Property, Hyderabad Deccan, reported in A.I.R 1953 Hyderabad 14 wherein the High Court of Hyderabad Deccan bench observed as under:-

If the machinery and other articles pertaining to the factory are in the nature of permanent fixtures then they would be regarded as immovable property (para 5). The test as to whether a thing would be regarded as being embedded in the earth in order to constitute immovable property is whether its rests by its own weight on earth and whether it can change places and can change hands and can be removed from one place to another. This is based on the principle that whatever is fixed to the soil becomes in the contemplation of the law, a part of it. The correct test would be to ascertain whether it was to create a permanent improvement to the premises or was it merely a temporary annexation for the enjoyment of the chattel by the tenant. Where, therefore, a tenant running the factory in the premises of another, installs machinery it will always be presumed that he installs the same with the intention of removing the same whenever he chooses to vacate the premises.

  The amount of the degree of annexation is also a matter which will be taken into consideration in coming to a conclusion as to whether it is a permanent fixture or not. If the degree of annexation is such that the fixture cannot be taken away without destroying the principle it would be regarded as permanent fixture.      

Hence in view of the explicit findings of the courts and in view of the law discussed above, we are of the view that the Storage Tanks of the petitioner do not fall under the definition of the term goods as given under  subsection (6) of section 2 of the Act.

15.        The main contention of the department is that the petitioner has produced or manufactured the storage tanks which in their opinion are liable to be taxed under section 3 of the said Act and reliance in this regard is placed on the PCT Heading 73.22. We have examined that it is not the case of the department that the petitioner after producing or manufacturing the said storage tanks have ever sold these items. Sales Tax is a tax levied, as the name indicates, on the sale of certain goods which falls under the ambit of the said law barring the exemptions provided under the statute wherein certain items and goods have specifically been exempted from the said levy.

Putting this acid test to the goods alleged to have been manufactured and produced by the present petitioner if for the arguments sake it is accepted that the petitioner has produced or manufactured said goods, but the question is whether these items fall under the definition of goods or not. It has already been discussed in the upper paragraphs of this order that to constitute something as goods it must ordinarily be something which could be brought to the market and sold. We were able to lay our hands on a decision in the case of Addu Achiar V/s The Custodian Evacuee Property, Hyderabad Deccan, reported in A.I.R 1953 Hyderabad 14 wherein the High Court of Hyderabad Deccan bench observed as under:-

If the machinery and other articles pertaining to the factory are in the nature of permanent fixtures then they would be regarded as immovable property (para 5). The test as to whether a thing would be regarded as being embedded in the earth in order to constitute immovable property is whether its rests by its own weight on earth and whether it can change places and can change hands and can be removed from one place to another. This is based on the principle that whatever is fixed to the soil becomes in the contemplation of the law, a part of it. The correct test would be to ascertain whether it was to create a permanent improvement to the premises or was it merely a temporary annexation for the enjoyment of the chattel by the tenant. Where, therefore, a tenant running the factory in the premises of another, installs machinery it will always be presumed that he installs the same with the intention of removing the same whenever he chooses to vacate the premises.

  The amount of the degree of annexation is also a matter which will be taken into consideration in coming to a conclusion as to whether it is a permanent fixture or not. If the degree of annexation is such that the fixture cannot be taken away without destroying the principle it would be regarded as permanent fixture.      

Hence in view of the explicit findings of the courts and in view of the law discussed above, we are of the view that the Storage Tanks of the petitioner do not fall under the definition of the term goods as given under  subsection (6) of section 2 of the Act.

No illegality appears to have been committed which has prejudiced the applicant. During the arguments also, the learned counsel for the applicant did not try to rationalize the difference in tax assessment made by the department on the basis of documents belonging to the applicant and consequent show cause notice on merits of the facts

obtaining in the present case. He, however, questioned the entire proceedings so far conducted against the applicant on legal plane by referring to the proviso to section 25 and the scheme provided under section 38 of the Act, 1990, which we carefully examined, as discussed above, in view of the law as it stood then and found no force in it. The proposed questions are answered accordingly.

No illegality appears to have been committed which has prejudiced the applicant. During the arguments also, the learned counsel for the applicant did not try to rationalize the difference in tax assessment made by the department on the basis of documents belonging to the applicant and consequent show cause notice on merits of the facts

obtaining in the present case. He, however, questioned the entire proceedings so far conducted against the applicant on legal plane by referring to the proviso to section 25 and the scheme provided under section 38 of the Act, 1990, which we carefully examined, as discussed above, in view of the law as it stood then and found no force in it. The proposed questions are answered accordingly.

Whether the authority who issued the show cause notice was competent to issue the same under section 36 of the Sales Tax Act, 1990?
Whether order dated 25.03.2003 passed by the Additional Collector of Sales Tax is without jurisdiction and coram-non-judice?
Whether the provisions of section 34, 36 and 45(A) of the Sales Tax Act, 1990, have been correctly interpreted by the Appellate Tribunal?

Answer
Under the circumstances, we found the impugned order not sustainable for want of necessary findings over the prevalent facts and the relevant law, hence the instant Reference Application was remanded back to the learned Appellate Tribunal for decision on merits strictly in accordance with law within a period of 90 days from the receipt of the order, and these are the reason for the same.
Invoices:- We heard the learned counsel for the applicant and with his assistance went through the entire material available on the record. The respondent was served with a show cause notice dated 19.04.2000 containing the allegations that it had obtained refund unlawfully and fraudulently during the month of September, October and November 1990 on the basis of bogus and invalid sales tax invoices wherein the description of the purchased invoices did not match with the goods actually exported; and the refund so obtained by the respondent was recoverable from them under section 36, alongwith additional tax under section 34 of the Act, 1990.

Whether the authority who issued the show cause notice was competent to issue the same under section 36 of the Sales Tax Act, 1990?
Whether order dated 25.03.2003 passed by the Additional Collector of Sales Tax is without jurisdiction and coram-non-judice?
Whether the provisions of section 34, 36 and 45(A) of the Sales Tax Act, 1990, have been correctly interpreted by the Appellate Tribunal?

Answer
Under the circumstances, we found the impugned order not sustainable for want of necessary findings over the prevalent facts and the relevant law, hence the instant Reference Application was remanded back to the learned Appellate Tribunal for decision on merits strictly in accordance with law within a period of 90 days from the receipt of the order, and these are the reason for the same.
Invoices:- We heard the learned counsel for the applicant and with his assistance went through the entire material available on the record. The respondent was served with a show cause notice dated 19.04.2000 containing the allegations that it had obtained refund unlawfully and fraudulently during the month of September, October and November 1990 on the basis of bogus and invalid sales tax invoices wherein the description of the purchased invoices did not match with the goods actually exported; and the refund so obtained by the respondent was recoverable from them under section 36, alongwith additional tax under section 34 of the Act, 1990.

11. The impugned SRO as well as all the notification from 2011 onward are not issued only under Section 4(c) of the Sales Tax Act 1990 instead they are issued under Section 4(c), 3(2)(b), 3(6), 8 (1)(b) and Section 71 of the Sales Tax Act 1990.
Under Section 4(c) Respondent No.1 had the power to mentioned goods on which rates mention in Section 3 of the Act will not be applicable. Whereas under Section 3(2) (b) and 3(6) of the Act grants Respondent No.1 power to impose any tax. Under 8(1)(b) Respondent No.1 can restrict the claim of adjustment of input tax and under Section 71 Respondent No.1 can prescribe special procedure for scope, payment of tax etc in respect of any supplies. Therefore the impugned SRO is not ultra vires to the Act.
12. In view of what has been discussed above, the SRO 154(i)/2013 dated 28-02-2013 is not ultra vires the Sales Tax Act 1990 and therefore the writ petition is dismissed with no order as to costs.

5.         From perusal of the record and orders of forums below as well as from order of the Appellate Tribunal, it appears that since the very levy and charging of assessment fee and vend fee has been declared to be ultra vires by the Honourable Supreme Court, therefore, no occasion for addition of any such fee for the purpose of value addition in terms of section 2(46) of the Sales Tax Act, 1990, arises.
We do not find any substance in the instant reference application or the question No.1 as proposed and pressed by the learned counsel for applicant in the instant case as no question of law arises which may require any opinion of this Court, particularly, when the decision is based on the judgment of Honble Supreme Court. Accordingly, instant reference application is misconceived in law and facts, which is dismissed in limine.

6. We do not find any error in the impugned order passed by the Tribunal as it depicts correct factual and legal position. Admittedly, the subject controversy in the instant case was finally decided by the Tribunal vide its order dated 16.06.2008 while deciding the main appeal on merits.
No reference was admittedly filed by the applicant department before this Court within the stipulated period, instead the applicant department, after a lapse of a period of about four years, sought rectification of the order passed by the Tribunal, with a prayer to review its decision, which authority is not vested in the Appellate Tribunal. Moreover, scope of rectification is limited to the extent of rectification of a mistake apparent on the face of record of an order and which does not require any detailed scrutiny of facts and law. We may observe that subject controversy in the instant case was finally decided by the Tribunal vide order dated 16.06.2008.
5. While deciding the main appeal and not in the impugned order declining the rectification application of the department, therefore, no question of law as proposed in the instant reference arise from the impugned order.

6. We do not find any error in the impugned order passed by the Tribunal as it depicts correct factual and legal position. Admittedly, the subject controversy in the instant case was finally decided by the Tribunal vide its order dated 16.06.2008 while deciding the main appeal on merits.
No reference was admittedly filed by the applicant department before this Court within the stipulated period, instead the applicant department, after a lapse of a period of about four years, sought rectification of the order passed by the Tribunal, with a prayer to review its decision, which authority is not vested in the Appellate Tribunal. Moreover, scope of rectification is limited to the extent of rectification of a mistake apparent on the face of record of an order and which does not require any detailed scrutiny of facts and law. We may observe that subject controversy in the instant case was finally decided by the Tribunal vide order dated 16.06.2008.
5. While deciding the main appeal and not in the impugned order declining the rectification application of the department, therefore, no question of law as proposed in the instant reference arise from the impugned order.

"Whether under the facts and circumstances of the case supply of products/samples free of cost to medical practitioners/consumers is liable to sales tax under the Sales Tax Act, 1990 or not?"

Admittedly the samples were given by the respondent company free of cost and no consideration in terms of cash or kind was received by the respondent company meaning thereby there is no value of supply made free of cost or without any consideration. Since there is no consideration received by the supplier on "free of cost" supplies, hence the said supply in our view cannot be termed as a taxable supply within the meaning of Section 3 of the Act.
In view of hereinabove facts it emerges that on combined reading of the charging provisions as well as provisions relating to application of such charge the supplies made by the respondent "free of cost" without receiving any "consideration in money or kind" are not liable for the levy of sales tax. It is trite principle of interpretation of a taxing statute that charging provisions are required to be construed strictly. It is also a trite principle that in taxing statute, a tax on any person is to be levied by clear and unambiguous words and the expressions used in charging sections are not to be stretched by any process of interpretation, so as to bring a person within the tax net not falling under the clear and plain language of the statute. Similarly it is also a trite principle of interpretation of taxing statute that if there is any ambiguity the same has to be resolved in favour of subject. We are guided in this regard by a judgment of the Hon'ble Supreme Court reported as Re. Province of Punjab v. Muhammad Aslam 2004 SCMR 1649.
Moreover, there is a specific notification/circular letter No.(C.No.18/STT/2002 dated 22.3.2002 issued by the CBR/FBR, wherein it has been clarified by the CBR/FBR that "Bonafide samples of medicines provided free of any charge to medical practitioners will not be charged to Sales Tax". Such instructions are binding on all the officers of Sales Tax Department in discharge of their all administrative functions, as provided under Section 72 of the Act,

"Whether under the facts and circumstances of the case supply of products/samples free of cost to medical practitioners/consumers is liable to sales tax under the Sales Tax Act, 1990 or not?"

Admittedly the samples were given by the respondent company free of cost and no consideration in terms of cash or kind was received by the respondent company meaning thereby there is no value of supply made free of cost or without any consideration. Since there is no consideration received by the supplier on "free of cost" supplies, hence the said supply in our view cannot be termed as a taxable supply within the meaning of Section 3 of the Act.
In view of hereinabove facts it emerges that on combined reading of the charging provisions as well as provisions relating to application of such charge the supplies made by the respondent "free of cost" without receiving any "consideration in money or kind" are not liable for the levy of sales tax. It is trite principle of interpretation of a taxing statute that charging provisions are required to be construed strictly. It is also a trite principle that in taxing statute, a tax on any person is to be levied by clear and unambiguous words and the expressions used in charging sections are not to be stretched by any process of interpretation, so as to bring a person within the tax net not falling under the clear and plain language of the statute. Similarly it is also a trite principle of interpretation of taxing statute that if there is any ambiguity the same has to be resolved in favour of subject. We are guided in this regard by a judgment of the Hon'ble Supreme Court reported as Re. Province of Punjab v. Muhammad Aslam 2004 SCMR 1649.
Moreover, there is a specific notification/circular letter No.(C.No.18/STT/2002 dated 22.3.2002 issued by the CBR/FBR, wherein it has been clarified by the CBR/FBR that "Bonafide samples of medicines provided free of any charge to medical practitioners will not be charged to Sales Tax". Such instructions are binding on all the officers of Sales Tax Department in discharge of their all administrative functions, as provided under Section 72 of the Act,