Law: Sales Tax Act, 1990

Section: 2(41),3(1A),13

Law: Sales Tax Act, 1990

Section: 2(41),3(1A),13

Law: Sales Tax Rules, 2006

Section: 19of6thSchedule,14,Rule4

ORDER Sales Tax Act, 1990 (VII of 1990) - Sections: 2(41), 3(1A), 13 read with item no. 19 of 6th Schedule, 14, Rule 4 of chapter 1 of Sales Tax Rules, 2006 - Further tax - Petitioners do not make any taxable supplies - Demand of additional amount of further tax on account of non-registration - It is contended by the petitioners that they are not bound to obtain Sales Tax registration under Act, as consequence, they are under no obligation to pay further tax and section 3(1A) has no application to their case - validity - Whether scope and purpose of section 3(1A) is to broaden tax net by incentivizing registration under Act - Held yes - Whether legislature has achieved this by building a disincentive for persons who have not obtained registration number under Act by enhancing and loading price of taxable supplies made to them with further tax at rate of one percent of value of taxable supplies - Held yes - Whether petitioners who are manufacturer and sellers of flour stand exempt from payment of Sales Tax u/s 13 read with item no. 19 of 6th schedule of act - Held yes - Whether petitioners who do not make taxable supplies under law are under no legal obligation to register and, therefore, section 3(1A) does not relate to them - Held yes - Whether section 3(1A) of Act has no applicability to case of petitioners who enjoy exemption and are not making any taxable supplies in terms of section 2(41) of act - Held yes - Whether petitioners have paid further tax during pendency of these petitions and clam refund/adjustment of said amount - Held yes - Whether after declaration that further tax is not applicable to case of petitioners who enjoy exemption, procedure and functionality of this principle can best be left to FBR which shall devise mechanism to provide relief to petitioners who do not all within ambit of section 3(1A) of Act - Held yes. The scope und purpose of the above sub-secti0n is to broaden the tux net by incentivizing registration under the Act. Legislature has achieved this by building a disincentive for persons who have not obtained registration number under the Act by enhancing and loading the price of the taxable supplies made to them with "further…

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