Law: Sales Tax Act, 1990

Section: 2(22A),2(20)(c),2(4),7

Law: Constitution of Pakistan, 1973

Section: 199

Sales Tax Act (VII of 1990)--- ----Ss. 2(22A), 7, 2(20)(c) & 2(4)---Constitution of Pakistan, Art. 199---Constitutional petition---Interpretation of Ss. 2(22A) and 7 of the Sales Tax Act, 1990---Provincial sales tax---Adjustment of provincial input tax by the taxpayer under S. 7(1) of the Sales Tax Act, 1990---Specific nature of right of adjustment of input tax---Determination of sales tax liability---Petitioner / taxpayer impugned denial of input tax adjustment on provincial sales tax paid by petitioner---Such adjustment was denied to the petitioner by the Department on the ground that notwithstanding promulgation of provincial sales tax law in three Provinces, the same were not recognized as provincial sales tax law for the purpose of input tax adjustment by the Department---Department further contended that S. 2(22A) of the Sales Tax Act, 1990 provided a discretion to decide as to which provincial sales tax should be allowed for adjustment of input tax under S. 7 of the Sales Tax Act, 1990----Held, that basic right of the petitioner was provided under S. 7(1) of the Sales Tax Act, 1990 wherein taxpayer was entitled to adjustment of input tax from their output tax for a given tax period---Sales Tax Act, 1990 had clearly defined input tax under S. 2(14) and output tax under S. 2(20)(c) to mean provincial sales tax levied on services rendered or provided to the person---Section 2(22A) of the Sales Tax Act, 1990 defined provincial sales tax to mean tax levied under provincial laws which meant provincial sales tax as promulgated in any or all of the Provinces of Pakistan and further defined that for purposes of the Islamabad Capital Territory, provincial sales tax would be that which was declared by the Federal Government to be a provincial sales tax for purposes of input tax adjustment, which declaration was required in the Official Gazette only for the purpose of Islamabad Capital Territory---Respondent Department, in the present case, had assumed under the cover of S.2(22A) of the Sales Tax Act, 1990 a discretionary power to decide as to which provincial sales tax should be allowed for input tax adjustment, and such discretion had the effect that S. 7 of…

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