Input adjustment

2024 PTD 1174 PESHAWAR-HIGH-COURT Judicial Precedent

Ss.3, 7, 47 & 74Notification SRO 480(I)/2007 dated 09-06-2007ReferenceInput adjustmentExtension in time

Respondent / Peshawar Electric Supply Company was issued with show cause notice relating to inadmissible input adjustment by the Company

Matter was decided by Appellate Tribunal Inland Revenue in favour of respondent / Company

Validity

Notification SRO 480(I)/2007 dated 09-06-2007 was issued under S.74 of Sales Tax Act, 1990 and was not without jurisdiction

Extension of time as per verbiage of S.74 of Sales Tax Act, 1990 was time bound and the Legislature itself had not restricted jurisdiction of Federal Board of Revenue relating to extension of time even after the period which had lapsed

Input adjustment was linked with taxable supply which meant economic / taxable activities carried out by any person whether or not for profit and included an activity carried on by it that involved supply of goods and anything done or undertaken during commencement or termination of economic activity

Respondent / Electric Company paid sales tax at the time of purchasing taxable goods, therefore the tax remained with revenue as a trust which was adjustable by the company at the time of its output tax payable by respondent / Electric Company in course of taxable activities

Even if the electricity was lost either on account of pilferage or at the time of distribution which was a natural process as electricity passing through wires was certainly lost due to technical issues, however, such activity of respondent / Electric Company did not fall within the mischief of taxable activities

Respondent / Electric Company was entitled to input adjustment of sales tax paid at the time of purchasing taxable goods against electricity produced by it however the same was lost either on account of pilferage, distribution losses or technical reasons

High Court declined to interfere in judgment passed by Appellate Tribunal Inland Revenue

Reference was disposed of accordingly.

2013 PTD 843 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

Input adjustmentScope

Such adjustment could not be disallowed because genuineness of the purchase invoices had not been challenged.