2001 PLP (Trib (PTD)
N/A
| Citation | 2001 PLP (Trib (PTD) |
| Forum / Court | Customs, Excise and Sales Tax Appellate Tribunal |
| Bench Members | Abdul Majeed Tiwana, Chairman and Falak Sher, Member (Technical) |
| Parties | N/A |
| Primary Law | Sales Tax Act (VII of 1990) |
Q1: What are the key laws and sections cited in 2001 PLP (Trib (PTD)?
This judgment primarily cites: Sales Tax Act (VII of 1990) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2001 PLP (Trib (PTD)?
The case was heard and decided by the Customs, Excise and Sales Tax Appellate Tribunal bench comprising: Abdul Majeed Tiwana, Chairman and Falak Sher, Member (Technical).
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2001 PLP (Trib (PTD) (N/A). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Dr. Muhammad Shafiq for Appellant.
- Ms. Rukhsana Yasmin, D.R. and Ishtiaq Ahmed, Law Officer for Respondent.
- 6. Dr. Muhammad Shafiq, Advocate appeared on behalf of the appellants and argued that they were entitled to claim tax credit in terms of section 7 of the Act. He contended that input tax adjustment was a legal right which cannot be taken away by an executive order. He referred to STGO No.2/2000 issued by the Board and argued that the ruling contained in Board's Circular dated 23‑10‑1995 was revised and reversed through this Sales Tax General Order. He stated that while the case was under. consideration of the Tribunal, the appellants were forced to pay more than Rs.One Million through coercive means.
Headnotes / Summary
Ss.18, 7 & 59
S.R.O. 529(1)88, dated 1-7-1988
S.R.O. 580(1)/91, dated 27-6-1991
C.B.R.'s Circular No.1/25-STP/95, dated 23-10-1995-- C.B.R's STGO No.2/2000
Voluntary registration
Determination of tax liability
Credit of
Department initiated proceedings against assessee to recover adjusted input tax alongwith additional tax and penalty on the ground that since the assessee opted for voluntary registration, he was not entitled to seek input tax adjustment in terms of C.B.R. Circular No.1/25 STP/95, dated 23-10-1995
Person registered under S.18 of the Sales Tax Act, 1990 became a registered person in terms of S.2(25) of the Sales Tax Act, 1990 and was treated accordingly for the purpose of Sales Tax Act, 1990
Such person had the same rights and liabilities, as any other taxpayer has in tax-related matters
Nothing existed in S.7 of the Sales Tax Act, 1990 which debarred a person, who sought voluntary registration, from claiming input tax adjustment on his transaction and it treated the registered persons alike regardless of the consideration whether or not one was registered under S.14, 18 or 19 of the ' Sales Tax Act, 1990
Section 7 further authorised a registered person to deduct input tax from the output tax for the purpose of determining of his tax liability in respect of supplies made during a tax period
C.B.R.'s letter being in conflict with S.7 of the Act, was of no legal effect
Adjudicating Officer's observation that the assessee was not entitled to claim tax credit on "stock acquired before coming to sales tax net" and could not avail the benefit of S.59 of the Sales Tax Act, 1990 had no relevance and was not tenable
Both orders in original and in first appeal were set aside and appeal was accepted by the Tribunal.
Judgment & Decree
7. The learned law officer of the respondent Collectorate opposed the submissions made by the appellant and argued that they cannot lawfully claim input tax credit on the goods acquired by them and the legal position on this issue has been correctly spelled out in the impugned order. He requested that the appeal may be dismissed.
8. The submissions made by the appellant and the learned Law Officer have been examined. The point at issue in this case is whether a‑ person who seeks voluntary registration under section 18 of the Act is entitled to claim input tax adjustment in terms of section 7 (ibid). Section 18 which provides for voluntary registration reads as under:‑‑‑ "If any, person not otherwise liable for registration opts for registration he may make an application for registration in the prescribed manner to the Collector and on receipt of his application that person may be registered for the purpose of this Act."
9. Once a person is registered under this provision he becomes a registered person in terms of section 2(25) and is treated accordingly for the h purposes of the Act. He has the same rights and liabilities, as any other tax payer has, with regard to payment of sales tax under section 3, admission of input tax credit under section 7, filing of monthly tax return under section 26, maintenance of relevant record under section 22 and other tax‑related matters. There is no provision in the Act which operates specifically against a person who opts for voluntary registration.
10. This controversy started when the C.B.R. issued a Circular in October, 1995 saying that if a person does not intend to take benefit of tax exemption available under statutory Notification issued by the Federal Government under section 13 of the Act, he may pay sales tax on his supplies but he cannot be allowed adjustment of tax paid on his purchases as "he had on his own choice deposited the amount of tax which was not payable by him". What led the Board of Revenue to reach this conclusion cannot be made out because section 7 and other provisions of the Act do not support this viewpoint.
11. Section 7 authorises a registered person to deduct input tax from the output tax for the purpose of determining of his tax liability in respect of supplies made during a tax period. There is nothing in this section which debars a person, who seeks voluntary registration, from claiming input tax adjustment on his transactions. It treats the registered persons alike regardless of the consideration whether one is registered under section 14, 18 or 19 of the Act.
12. The Board's letter dated 23‑10‑1995 is in conflict with section 7 of the Act and is, thus, of no legal effect.
13. The Board has also revised its earlier ruling vide STGO No.2/2000 dated 11‑4‑2000 which provides that a voluntarily registered person has the same rights and liabilities which accrue to a registered person under the law.
14. The adjudicating officer has observed in the impugned order that the appellants were not entitled to claim tax credit on "stocks acquired before coming to sales tax net" and they could not avail the benefit of section 59 of the Act. This observation has no relevance and is not tenable since the appellants got voluntary registration in early 92 and they kept paying sales tax as a registered person in terms of section 7 of the Act. Section 59 of the Act cannot be invoked in this case.
15. In view of the above we find no merit/substance in the impugned orders. Both the order‑in‑original and order‑in‑appeal are hereby set aside. The appeal is accepted.
16. As regards the money which was recovered by the respondents allegedly through coercive means, the appellant may contact the Collector of Sales Tax, Peshawar for its adjustment/refund under the law.
17. Order as above. C.M.A./M.A.K./95/Tax(Trib.) Appeal accepted.