1985 PLP 190 (PTD)
Messrs ARAG INDUSTRIES Ltd. Versus THE COMMISSIONER OF SALES TAX (WEST), KARACHI and another
| Citation | 1985 PLP 190 (PTD) |
| Forum / Court | Karachi High Court |
| Bench Members | Nasir Aslam Zahid and Ally Madad Shah, JJ |
| Parties | Messrs ARAG INDUSTRIES Ltd. Versus THE COMMISSIONER OF SALES TAX (WEST), KARACHI and another |
| Primary Law | Sales Tax Act (III of 1951)‑‑ |
Q1: What are the key laws and sections cited in 1985 PLP 190 (PTD)?
This judgment primarily cites: Sales Tax Act (III of 1951)‑‑ as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1985 PLP 190 (PTD)?
The case was heard and decided by the Karachi High Court bench comprising: Nasir Aslam Zahid and Ally Madad Shah, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1985 PLP 190 (PTD) (Messrs ARAG INDUSTRIES Ltd. Versus THE COMMISSIONER OF SALES TAX (WEST), KARACHI and another). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Nasrullah Awan for Respondents.
- Date of hearing: 23rd January 1984.
- 2. The reference relates to the assessment year 1964‑65. At that time the name of the applicant‑Company was Habib Textile Mills Limited but the same was changed on 5‑7‑1968 to its present name that is Arag Industries Limited pursuant to section 11(2) & (5) of the Companies Act, 1913. In the year in question, the applicant/ assessee carrying on business of Textile Mill, had sold cotton yarn to various purchasers including manufacturers in possession of manufacturers' licences issued under section 8 of the Sales Tax Act, 1951. In the return submitted under section 10(1) of the 1951 Act to the department, the assessee had shown the sales including sales made to four licensed manufacturers mentioned in para 3 of the reference. The licences of the said four purchasers were later on cancelled by the department but it is' an admitted position that when the sales were made, the licences of the aforesaid four parties were in existence and had not been cancelled. It is contended by Mr. Mansoor Ahmad Khan, learned counsel for the applicants, that in these circumstances the assessee was entitled to exemption under section 4 of the Sales Tax Act, 1951 in regard to the sales made to the aforesaid four licensed manufacturers. The Income‑tax Tribunal took the view that the assessee was not ‑entitled to exemption. Learned counsel for the applicants has referred to the decision of a Division Bench of this Court in the case of Fazal Shafique Textile Mills Ltd. v. The Commissioner of Sales Tax reported in 1983 P T D 44. In that case an identical question had arisen in facts similar to the facts of this case and it was held that what was required under the provisions of the Sales Tax Act, 1951 to entitle an assessee to claim exemption of Sales Tax Act on sales under section 4(a) of the Act was that the sales were made by the assessee of partly manufactured goods to a licensed manufacturer. It is conceded by Mr. Nasarullah Awan, learned counsel for the department that the facts and point of law involved in the (1983) 47 Taxation 153 are the same as in the instant case. No argument had been advanced before us to take a different view that has been taken in (1983) 47 Taxation 153.
Headnotes / Summary
‑‑‑S.4‑‑Sale made to licensed manufacturers‑Entitlement to exemption‑ Assessee showing sales including sales made to four licensed manu facturers whose licences were cancelled later on, but when sales were made their licences were in existence‑‑Sales, held, were made to licensed manufacturers and assessee was entitled to exemption under S.4 in regard to sales made to licensed manufacturers. Shafique Textile Mills Ltd. v. The Commissioner of Sales Tax 1983 P T D 44 rel. Mansoor Ahmad Khan for Applicant.
Judgment & Decree
Mansoor Ahmad Khan for Applicant. Nasrullah Awan for Respondents. Date of hearing: 23rd January 1984. NASIR ASLAM ZAHID, J.‑‑ The question raised in this reference under section 17(1) of the Sales Tax Act, 1951 filed by the applicants is as follows:‑ "Whether in the facts and circumstances of the case, the assessee was not entitled to exemption under section 4 of the Sales Tax Act in regard to sales made to the four licensed manufacturers mentioned in para. 3 of the reference?"
2. The reference relates to the assessment year 1964‑
65. At that time the name of the applicant‑Company was Habib Textile Mills Limited but the same was changed on 5‑7‑1968 to its present name that is Arag Industries Limited pursuant to section 11(2) & (5) of the Companies Act, 1913. In the year in question, the applicant/ assessee carrying on business of Textile Mill, had sold cotton yarn to various purchasers including manufacturers in possession of manufacturers' licences issued under section 8 of the Sales Tax Act, 1951. In the return submitted under section 10(1) of the 1951 Act to the department, the assessee had shown the sales including sales made to four licensed manufacturers mentioned in para 3 of the reference. The licences of the said four purchasers were later on cancelled by the department but it is' an admitted position that when the sales were made, the licences of the aforesaid four parties were in existence and had not been cancelled. It is contended by Mr. Mansoor Ahmad Khan, learned counsel for the applicants, that in these circumstances the assessee was entitled to exemption under section 4 of the Sales Tax Act, 1951 in regard to the sales made to the aforesaid four licensed manufacturers. The Income‑tax Tribunal took the view that the assessee was not ‑entitled to exemption. Learned counsel for the applicants has referred to the decision of a Division Bench of this Court in the case of Fazal Shafique Textile Mills Ltd. v. The Commissioner of Sales Tax reported in 1983 P T D
44. In that case an identical question had arisen in facts similar to the facts of this case and it was held that what was required under the provisions of the Sales Tax Act, 1951 to entitle an assessee to claim exemption of Sales Tax Act on sales under section 4(a) of the Act was that the sales were made by the assessee of partly manufactured goods to a licensed manufacturer. It is conceded by Mr. Nasarullah Awan, learned counsel for the department that the facts and point of law involved in the (1983) 47 Taxation 153 are the same as in the instant case. No argument had been advanced before us to take a different view that has been taken in (1983) 47 Taxation 153.
3. We are of the` view that as the sales in this case had been made to licensed manufacturers, the assessee was entitled to exemption under section 4 of the Sales Tax Act in regard to the sales made to the aforesaid four licensed manufacturers. The question referred ' in this case is accordingly answered in the negative.
4. There will be no order as to costs. M.B.A. Question answered in negative