2019 PLP 1534 (PTD)

SHAHID KARIM, J.

This petition challenges the notices dated 13.12.2017 issued by the relevant officer of the Federal Board of Revenue (FBR) under Section 11 of the Sales Tax Act, 1990 (Act, 1990). The said notice has been issued by the respondent No.6. Prior to this, a notice under Section 14 of the Act, 1990 was served on the petitioner by which the petitioner was required to get registered under the provisions of the Act, 1990.

2. The learned counsel for the petitioner contends that the business being conducted by the petitioner is of the nature of the services being rendered and is covered by Sr. No.37 of the second schedule to the Punjab Sales Tax on Services Act, 2012. Therefore, the petitioner is not liable to be registered with FBR and so the insistence of FBR for the petitioner to have itself registered is unlawful and has no basis in law. However, the learned counsel for the department, on the other hand, contends that the petitioner is manufacturer of copper wires and is thus liable to be registered under the Act, 1990. Since the petitioner has failed to get himself registered, FBR was constrained to compulsorily register the petitioner and an undertaking was given on 13.12.2017.

3. It seems that the issue relates to the precise authority of FBR and the Punjab Revenue Authority (PRA) and the question is as to which of these two authorities will exercise the power to require the petitioner to have itself registered and to pay sales tax. It is to be borne in mind that the petitioner pays the provincial sales tax to PRA. That is a question which needs to be resolved between the authorities and the case of the petitioner is that it has no cavil with having itself registered but clearly the petitioner cannot be compelled to get registration with both FBR as well as PRA. This contention of the petitioner has substance and after the devolution of certain powers upon the promulgation of the eighteenth amendment of the Constitution the sales tax on services has become the exclusive domain of the provinces and in case the petitioner renders those services and is covered by the Act, 2012, it is not liable to have itself registered with FBR. However, the petitioner cannot be burdened with a compulsory registration as well as an adjudicative process to which the petitioner cannot be subjected without reasonable cause and without lawful basis. The matter ought to be resolved and decided inter se FBR and PRA. This and similar other matters have arisen which give rise to issue of comparative jurisdiction of FBR and PRA. Doubtless, the tax liability of the registered persons in all such cases cannot be made a rolling stone and if a registered person like the petitioner is quite willing to pay the tax, then only one of the authorities can take cognizance of the matter and recover liability and the imposition. The said imposition cannot be permitted to be recovered by both the authorities viz. FBR and PRA.

4. In view of the above, this petition is disposed of with a direction to FBR to have the matter resolved with PRA within a reasonable period of time. In this regard, the relevant officer of FBR shall touch base with the officer of PRA and any further proceedings against the petitioner shall only be continued after such issue has been resolved between FBR and PRA. Until then the matter relating to the registration of the petitioner and the payment of sales tax in terms of the impugned show-cause notice are held in abeyance. MH/M-95/L Order accordingly.