Law: Sales Tax Act, 1990

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

Law: Federal Excise Act, 2005

Section: 14(3A)

Sales Tax Act (VII of 1990)--- ----Ss. 2(33)(35), 3(1)(a), 11 & 46---Calculation of sales tax on the basis of consumption of electricity---Sales tax, in the present case, was calculated by the department on the basis of consumption of electricity and not on the basis of the actual supply---Departmental presumption was that since the assessee was in a position to produce more for which certain formula was adopted on the basis of consumption of energy, supply of the product should have been on the basis thereof---Validity---Under S.3(1)(a) of the Sales Tax Act, 1990 sales tax was charged on sale and supply of goods, which necessarily entailed 'delivery of goods' or 'receipt of money consideration' and no corroboratory evidence for any clandestine removal of goods, or for receipts of money consideration had been provided by the department---Assessment of sales tax on the basis of consumption of electricity units was hardly a safe yard stick to assess the production---Production, was not covered within the definition of "supply" as given under S.2(33) of the Sales Tax Act, 1990---Under S.2(35) of the Sales Tax Act, 1990, the yard stick to charge and levy sales tax, was the sale constituting a taxable activity for a taxable supply---Dispossession and actual transfer of goods by the manufacturer to the other party, was a basic requirement to bring the goods within the charge---Unless the department was in a position to establish that the assessee had more production, and same had been transferred to another party, sales tax could not be charged---Departmental case, was totally based upon hypothetical calculation, without any proof, which established beyond any shadow of doubt that impugned liability of sales tax, was based on the figures and calculations---Sales tax imposed on the basis of assumptions and presumptions was not warranted in law, and would be liable to be struck down---Impugned show-cause notice as well as consequent orders by both the authorities below, were declared to be illegal, void, ab initio and were set aside, in circumstances. Messrs Avari Hotel Ltd. v. The Collector of Sales Tax and 3 others 2000 PTD 3765 rel. THIS ORDER PASSED BY: CH.…

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