Law: Sales Tax Act, 1990

Section: 3,2(46)

(a) Sales Tax Act (VII of 1990)--S. 3---Stock held in form of drums of lubricants---Benefit of wastage in respect of such stock, assessee's entitlement to---Scope---No statutory or non-statutory power existed allowing benefit to assessee on wastage to such stock---Assessing Officer had no power to allow wastage during storage/transit or handling of oil cargo---Amount of sales tax, if remitted by Assessing Officer on wastage of oil, would be liable to be recovered from assessee---Illustration. (b) Sales Tax Act (VII of 1990)--- ----Ss. 2(46) & 3---Stock of lubricants held in form of drums---Liability of assessee to pay sales tax on that part of stock held for self consumption---Scope---Such part of stock held by assessee for self consumption and that supplied to others would constitute taxable activity and sales tax would be chargeable on both such supply transactions---Value shown by assessee in invoices issued to others would provide a credible value standard for calculating sales tax on supply for its self consumption---Illustration. ORDER The appellant has filed appeal before this Tribunal against Order-in-Appeal No.ST-346 of 2012 dated 5-7-2012 passed by the Commissioner Inland Revenue (Appeals-II), Islamabad on the following grounds:-- (1) The impugned order raises the objection of wastes not allowed as claimed by respondent registered person. The verdict doesn't provide any documentary evidence or definite information as envisaged under section 122(5) of Income Tax Ordinance, 2001. It is submitted that facts are not established as the Hon'ble Commissioner Appeal vide his Order No. ST-242-2011 dated 14-12-2011 has already allowed wastage up to 1.4 %, to the respondents (copy enclosed for ready reference). The fact is that the product is left un-used inside of carriers in addition to it the aspect of evaporation may please also be kept in mind. Therefore, wastage factor is actually more than anticipated in impugned order: Hence, this needs to be dropped. (2) The second issue raised is stock held in form of drums of lubricants and valued as suppressed sales is malicious and of sheer ulterior motives without basic understanding of actual business. The…

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