Refund of sales Tax

Dispute was with regard to tax credit not allowed on the ground that sales tax was not deposited in Government treasury with regard to goods or service

Validity

Two conditions were necessary under Ss. 8 (ca) & 73 of Sales Tax Act, 1990, to claim refusal (i)supplier deposited sales tax in Government treasury and (ii) buyer had deposited through banking channel from his business account amount of sales tax invoices in favour of supplier

Buyer fulfilled his duty as per S.73 of Sales Tax Act, 1990 but supplier did not deposit sales tax amount in government treasury, therefore, buyer was not entitled to a refund of sales tax

Only duty on buyer under S.73 of Sales Tax Act, 1990 was that if payment of amount for transaction exceeding Rupees 50,000/- was made by a cross cheque drawn on a Bank or by cross Bank draft or cross pay order, or any other crossed banking instrument showing transfer of amount of sales tax invoice in favour of supplier from business Bank account of the buyer

Such condition as envisaged under S.73 of Sales Tax Act, 1990 was fully complied with by the buyer but law on the subject was silent that if department had recovered sales tax from supplier that would happen to refund of the buyer

Order of Appellate Tribunal Inland Revenue directing authorities to recover sales tax from supplier and then returned it to buyer was well reasoned

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

Reference was dismissed, in circumstances.

Consumption of packing material was necessary for packing of confectionary items and there was no provision in the Sales Tax Act, 1990, or the Rules made thereunder which restricted the consumption of packing material and in case packing material exceeded 3.6% of the total amount of refund claimed even then the samples of goods exported were to be drawn at the time of exports as provided under S. 25(A) of the Sales Tax Act, 1990, but no such samples were drawn by the sales tax department without which rejection of refund was not only against the letter and spirit of the impugned agreement but also unjustified and unlawful

Appeal was accepted.

Karachi Port Trust had admitted refund therefore, findings of Judge in Chambers of High Court were not against facts, law and documents on record

Similar question had already been decided in a Constitutional petition

High Court declined to interfere in the judgment and decree passed by Judge in Chambers of High Court as there was no perversity, illegality and incorrectness in same

Appeal was dismissed in circumstances.

Petitioners, who were manufacturers of export goods, were aggrieved by refusal of Collectorate to grant refund of sales tax, paid on inputs of manufactured goods exported

Right to recover refund of input sales tax conferred by Ss. 7, 10 of Sales Tax Act, 1990 was subject to conditions that could be imposed by the Federal Government in exercise of its powers contained in Ss.8 & 10 of the Sales Tax Act, 1990

Federal Government, with effect from 6-6-2005 (S. R. O.538(I)/2005) had decided to make all inputs of export goods manufactured by the petitioners to be sales tax free

No occasion, in circumstances, arose for refund of sales tax on inputs of export goods purchased after the said date

Petitioners though were able to export all their finished goods made from inputs purchased before 6-6-2005, but not within the final deadlines fixed by impugned notification

Petitioners had a right of refund of input tax only in respect of those raw materials that were purchased before target date i.e. 6-6-2005; and were consumed in finished goods that were duly exported from the country

Said vested right was liable to be enforced, if the petitioners would satisfy authorities on both counts namely, date of acquisition of raw materials as well as the factum of export of finished goods resulting from such raw material.

Assistant' Collector made a contravention case against the assessee and initiated proceedings after issuing show-cause notice to the assessee

Said show-cause notice was issued on 7-7-2004-Action against assessee, in circumstances, was initiated after lapse of three years and two days

Provisions of S.36(2) of Sales Tax Act, 1990, provided for a show-cause notice to be served within three years of relevant date in cases where the tax had erroneously been refunded

Present matter involved the controversy, which was governed under provisions of S.36(2) of Sales Tax Act, 1990

Such action had to be taken within the period prescribed by law

When a period was provided by special statute, then any proceedings or actions taken under the provisions of special statute, had to be taken within the stipulated period

Reopening the case of assessee after the expiry of prescribed period of limitation was not justified in law.

Assessee refusing to produce records for verification of amount claimed to be refunded on plea that Tribunal's orders implied that refund was to be made without verification

High Court upholding decision of Appellate Tribunal that order of refund of sales tax implied that refund would be without verification

Leave to appeal granted to consider contentions that question of verification of claim and determination of amount to be refunded in accordance with prescribed procedure, was not examined nor decided in first round of litigation, and whether High Court should have interfered in its discretionary jurisdiction, in case it was found just and fair that assessee should have responded to a call for verification of its claim as to exact amount to be refunded.

Refusal to grant leave by Supreme Court to appeal depending upon several considerations, fitness of case in a general sense, notwithstanding legal questions involved, is to be one of important considerations

Court's refusal to grant leave to appeal not to mean either that law laid down (in earlier identical case) was intended to be diluted or that principle laid down in another case would have no effect on account of said refusal to grant leave to appeal

But for petitioner's counsel being unaware of amendment in Act made about 2 years earlier and failing to bring it to notice of Court, result would have been different and law as subsequently declared, would then have applied-