Law: Sales Tax Act, 1990

Section: 2(25),3,3(1)(a),7,8,14,23,25(3),36(1),36 (2)

Law: Sales Tax Rules, 2006

Section: 6

(a) Sales Tax Act (VII of 1990)--- ----Ss. 36(1) & 36(2)---Recovery of tax not levied or short levied---Show cause notice---Limitation---Scope---Sections 36(1) & 36(2) of Sales Tax Act, 1990 established that show-cause notice issued beyond very time of limitation was in flagrant disregard of law in inasmuch as recovery of sales tax not levied beyond three years was not only barred by time limitation but was also ex-facie violation of S. 36(2) of Sales Tax Act, 1990. Messrs Xen Shahpur Division v. Collector Sales Tax (Appeals) Collectorate of Customs, Federal Excise and Sales Tax, Faisalabad and 2 others 2008 PTD 1973 rel. (b) Sales Tax Act (VII of 1990)--- ---S.3---Sales Tax on value/price fixed by Board of Revenue---Double Taxation---Sugar mills manufacturing white crystalline sugar made its supply to wholesalers and charged sales tax at 16% on such value as fixed and notified by Federal Board of Revenue for period under reference---Rationale behind fixation of value in case of white crystalline sugar and payment of sales tax thereon was that such fixed price at the time of making its supply by sugar mills was to provide a complete ouster appallingly on all its subsequent stages of supply mainly (including) wholesale and retail sale---Sales tax was no doubt a value added tax but this was not the case, in case notified by Board for purposes of sales tax irrespective of value at which its supply was actually made or any addition in its price occurred subsequently in due course of business---Sales tax once paid on basis of fixed value of locally produced white crystalline sugar by Sugar Mills provided a complete exoneration to all persons doing its business as a wholesaler and retailer from payment of any further additional amount on this account and if any effort was made to recover sales tax at any stage of its subsequent supply other than on basis fixed value would defeat the purpose behind fixation of value of locally produced white crystalline sugar and if its demand was created on basis of 'fixed value' again from its wholesaler and retailers despite payment of sale tax on such value by its manufacturing mills would definitely end up with double…