Law: Sales Tax Act, 1990

Section: 33(1),33(5),33(9)(a),33(6),33(1),33(16), 73

ORDER QAMAR-UL-HAQ BHATTI (JUDICIAL MEMBER): Vide this sales tax appeal, the appellant-registered person had assailed the order-in-Appeal No. 16/922 passed by the learned Commissioner Inland Revenue (Appeals-lll), Lahore dated 29 10.2014 on the following grounds:- (i) That the appellant made purchases from various suppliers; the payments were paid through cash to the suppliers against the purchases. The appellant could not follow the section 73 of the sales tax act, 1990 which is a procedural section not a statute section. Section 73 of the Sales Tax Act, 1990 is only of technical nature, it is therefore the rejection of Input tax only on the basis of section 73 of the Sales Tax Act, 1990 tantamount to double taxation, illegal and beyond the powers. (ii) That the right of input tax is the most valuable right and indeed an asset of a businessman. Its denial will have the effect of not only ruining the businessman but will also defeat the very object of the Act by thwarting the business activity. Basically, sales tax is a consumer tax, as the incidence of tax has to pass to the consumer ultimately. Under the scheme of the Act, sales tax is one time tax and the concept of claiming input tax was introduced to avoid multiplicity of taxation. Therefore, refusal of input tax on any technical ground will defeat not only valuable right of an individual but also the very object of the Act. [GST 2005 CL. 309]. iii. That there may not be legal liability on the part of a Government to refund any amount received by it as a tax or other levy by virtue of certain special provision under the special law but keeping in view that we are living in a democratic society governed by the rule of law and every Government, which claims to have ethical and moral values, must do what is fair and just to the citizens regardless of legal technicalities. [PLD 1998 SC. 64]. iv. That to withhold the amount paid as input tax in this situation amounts to confiscation, which the State cannot resort to except in due process of law. To State it does not behoove to eye upon the money paid by a citizen either on the promise of refund or adjustment or even due to any misconception. v. The amount paid…

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