Law: Sales Tax Act, 1990

Section: 2(33),2(35),3,3(1)(a),11,11(2),46

Law: Federal Excise Act, 2005

Section: 14(3A)

Law: Qanun-e-Shahadat (10 of 1984)

Section: 117,118

INTERPRETATION OF STATUTE A person must be taxed only if he comes within the letter of law otherwise, he is free even though his case falls within the spirit of law. Fiscal statutes should be strictly construed, as for as liability to tax is concerned. In fiscal statutes, only the letter of law is to be looked into and there is no room for any intendment, equity and presumption. Sales tax imposed on the basis of some assumption and presumption not warranted in law shall always be struck down. QANUN-E-SHAHADAT, 1984 Articles 117 & 118 An adjudication based on mere presumption of fact is not sustainable under Article 117 read with Article 118 of the Qanoon-e-Shahadat Order, 1984:------- Whole adjudication proceedings are based on mere presumption of fact. It is well- settled law that an adjudication based on mere presumption of fact is not sustainable under Article 117 read with Article 118 of the Qanoon-e-Shahadat Order, 1984. SALES TAX ACT, 1990 (VII OF 1990) Section 2(33) Production is not covered within the definition of supply as given under section 2(33) of the Act. Section 2(35) Under section 2(35) of Sales Tax Act, 1990, the yard stick to charge and levy sales tax is the sale constituting a taxable activity for a taxable supply. Section 3 Sales tax is on sale and supply of goods which necessarily entails 'delivery of goods' or 'receipt of money consideration' and no corroborating evidence for any clandestine removal of goods or for receipts of money consideration has been provided by the department without which whole exercise for creating huge liability of sales tax remains in thin air and of no legal effect -- The whole contravention case has been made out against the assessee by calculating sales tax on the basis of consumption of electricity and not on the basis of the actual supply. The departmental presumption was that since the assessee was in a position to producing more for which certain formula was adopted on the basis of consumption of energy; hence, the supply also should have been on the basis thereof. The case of the department remains that the assessee has not shown its complete supplies while he has the capacity to produce more which…

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