Law: Sales Tax Act, 1990

Section: 7,8,8A,10,11,22,26,3,7,21,47,73

Sales Tax Act (VII of 1990)---Ss. 3, 7, 21, 73 & 47-Input tax adjustment-Blacklisted suppliers- Blacklisting of suppliers subsequent to transaction with taxpayer- Effect and scope-Department impugned order of Appellate Tribunal whereby refund on invoices was allowed to the taxpayer-Contention of the Department was that suppliers of taxpayer were blacklisted and suspended units, therefore, invoices issued by them could not be used to claim input tax adjustment/refund of sales tax-Validity-Perusal of order of Appellate Tribunal revealed that finding of fact had been recorded to the effect that taxpayer had made payments to its suppliers through banking channels by complying with provisions of S. 73 of the Sales Tax Act, 1990 and that at the time of making such transactions, said suppliers were enjoying their status as operative persons having normal behavior and no dispute existed as to the fact that refund was denied only for the reason that the suppliers were only subsequently blacklisted-Validly issued invoices by suppliers when such suppliers were active and registered, would not be effected by subsequent blacklisting of such suppliers unless invoices in question were specifically declared fake through a speaking order after hearing the parties and if the same had a direct nexus with subsequent blacklisting of the said supplier(s)-Refund, in the present case, therefore could not have been denied to the taxpayer and order of Appellate Tribunal could not be interfered with-Reference was answered accordingly. Commissioner Inland Revenue v. Tariq Poly Pack (Pvt.) Ltd. 2015 PTD 2256 rel. ORDER This application by way of reference has been filed under section 47 of the Sales Tax Act, 1990 ("Act") against the order dated 17.09.2014 ("impugned order") passed by the learned Appellate Tribunal Inland Revenue ("Tribunal"). 2. The following questions of law are raised for our opinion:- i. Whether on the facts and in the circumstances of the case, the decision of learned Appellate Tribunal to allow refund on the invoices of blacklisted units is consistent with the provision of sections 7, 8, 8A, 10, 11, 22 and 26 of the Sales Tax Act, 1990? ii. Whether on the facts…

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