Law: Sales Tax Act, 1990

Section: 2(22),2(28),2(30),3(a),6,6(3),34

Law: Constitution of Pakistan, 1973

Section: 199

Law: Sale of Goods Act, (III of 1930)

Section: 5

JUDGMENT SAIYED SAEED ASHHAD, C.J.- The Petitioners which are assembler cum-manufacturer of Nissan Diesel Trucks and a registered person in terms of Section 2(19) of Sales Tax Act, 1990 (hereinafter referred to as "the said Act") have filed this Constitutional Petition, wherein following reliefs have been sought. (a) Declare that the clarification given by Respondent No. 2 vide CGO 6 of 1995, dated 1-6-1995 is in conflict with definition of time and taxability of supply under section 2(30) read with section 6(3) of the Sales Tax Act, 1990 and liable to be struck down ab initio. (b) Declare that sales tax becomes due only at the time of removal of goods from the manufacturing premises and not before that. (c) Declare the order impugned passed by Respondents based upon C.B.R. directive vide CGO 6 of 1995 cannot have retroactive application hence bad in law and of no legal consequences of Petitioners. (d) Declare that evasion of sales tax is neither wilful nor caused of intentionally by the Petitioner therefore the levy of penalty as well as additional sales tax is not sustainable in law. (e) Direct the Respondent to refund Rs.1,584,892.46 collected from Petitioner being the amount of penalty plus additional sales tax plus 1% surcharge with authority of law. (f) Grant cost of petition. (g) Grant any other relief/reliefs deemed appropriate in the circumstances of this case. The brief facts of the case as stated by the Petitioners in their memo of petition are that on 31-12-1994 they were holding an amount of Rs.125,728,037 which they had received from their various customers/authorised agents on various dates against future purchase of different categories of vehicles completely knocked down (CKD) vehicles namely; completely built up (CBU) vehicles; and yellow cab vehicles. The petitioners further submitted that the vehicles falling under category 1 and 2 were exempted from levy of sales tax till 18-10-1993 whereas vehicles falling under category three continued to be exempted from sales tax till the filing of the petition. It was further submitted that on the basis of the above amount reflected in the balance sheet for the year ending on 31-12-1994 Respondents…

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