Petroleum products

For the purposes of petroleum products the Petroleum Products (Development Surcharge) Ordinance, 1961 by virtue of its S.4 would have an overriding effect over the Sales Tax Act, 1990.

Ministry of Petroleum on 23-9-1999 prescribed a price structure notification authorizing the taxpayer to charge sales tax on furnace oil, while permitting it to pass on the burden to the end consumers

Taxpayers made a number of representations and it took the Ministry of Petroleum more than a month to issue a notification in harmony with S.R.O. 922(I)/99 dated 16-8-1999 which showed negligence and lack of harmony between the two government departments i.e. Ministry of Petroleum and Revenue authorities

Taxpayer could hardly be blamed for it or saddled with the responsibility to pay sales tax for the intervening period

On one hand the taxpayer was obligated to pay sales tax, while on the other hand it was not allowed to pass on the burden of tax to the end consumers, due to the failure of the Ministry of Petroleum to prescribe a corresponding price notification

Such position would be against the spirit of sales tax, which was an indirect tax and the taxpayer was denied the status of collecting agent of indirect tax

Appeals were allowed, show cause notices, orders-in-original and orders of First Appellate Authority were annulled and bank guarantees, if any given by the taxpayer were revoked and withdrawn.

Question was as to how through a subordinate legislation i.e. (a notification), a statutory provision i.e. Item No.8 of the Sixth Schedule of the Sales Tax Act, 1990 could be amended or omitted

Statutory Regulatory Order (S.R.O.) could not bring about an amendment, repeal or omission in the statute

S.R.O. 922(I) of 1999 dated 16-8-1999 which purportedly took away the said statutory exemption was of no legal effect

Basis of show-cause notice in question was based upon the said S.R.O., and all subsequent proceedings and order became a nullity.

Commissioner Inland Revenue held no jurisdiction to pass an order assailing clearance of goods accorded by the officers of the Customs Department

Such matter related to Customs Act, 1969 and Commissioner Inland Revenue held no jurisdiction to object to the proper clearance of goods

Exercise of jurisdiction on part of Commissioner Inland Revenue under S.45A(4) of the Sales Tax Act, 1990 was not correct, proper and lawful since clearance was allowed by officers of the Customs department, who were not subordinate to the Inland Revenue and the Commissioner Inland Revenue held no such powers of amending or correcting their orders.