Law: Sales Tax Act, 1990

Section: 3(2)(a),3,7

Sales Tax Act (VII of 1990)-- --Ss. 3 & 7--Recovery of Sales Tax at one stage--Petitioners were operators of Compressed Natural Gas stations and plea raised by them was that they were required to pay sales tax at the stage of purchasing natural gas not on the value of natural gas but on the value at which they were required to sell Compressed Natural Gas to consumers, as such the same enhanced sales tax from 17 % to 32%--Validity--Sales tax was charged only at the rate of 17% at one stage i.e. at the time Compressed Natural Gas station operators purchased natural gas from gas company which otherwise could be charged at two stages i.e. at the time of making purchases of natural gas and then at the time of selling of Compressed Natural Gas to its consumers after giving adjustment of input tax paid on purchase of natural gas--Such two stage procedure was reduced to one without having any adverse effect on Compressed Natural Gas station owners as they even under S. 3(8) of Sales Tax Act, 1990, as it so stood to pay sales tax on the value of Compressed Natural Gas at the rate of 17 % only and the same was exactly that was being done--Instead of recovering sales tax at two stages, it was being done at one stage, which procedure was akin to the procedure envisaged under S. 3(2)(a) of Sales Tax Act, 1990--Entire burden of sales tax recovered by gas company from Compressed Natural Gas station operators at the time of selling natural gas was passed on to Compressed Natural Gas consumers and not a fraction of it was borne by Compressed Natural Gas station operators--Even if the levy was unlawful, even then the burden had transferred to the end consumer-- No illegality existed in charging sales tax in the manner provided under the provisions of S. 3(8) of Sales Tax Act, 1990--Constitutional petition was dismissed in circumstances. 2014 SCMR 220 and Cotton Ellahi's case PLD 1997 SC 582 ref. JUDGMENT FAISAL ARAB, C.J.--In all these connected petitions, the petitioners have challenged the vires of section 3(8) of the Sales Tax Act, 1990 whereby sales tax is charged on the value of CNG at the stage when natural gas is purchased by the CNG Stations. Section 3(8) reads as…

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