Law: Sales Tax Act, 1990

Section: 8,8(1)(d),10,10(2),11(2),33(5),33(11),33 (13),33(19),36,46,46(2),47,66,132

Law: Sales Tax Refund Rules, 2002

Section: 8

Law: Income Tax Ordinance, 2001

Section: 131,132,132(1)

THIS ORDER PASSED BY: FAHIM AHMED SIDDIQUI, JUSTICE;---.--- The Commissioner (Legal), Inland Revenue, Regional Tax Office, Hyderabad has filed the instant Sales Tax Reference Application on behalf of the Department of Sales Tax against a single order dated 29-06-2010, passed by the Appellate Tribunal Inland Revenue (Pakistan) in S.T.A. No. 901/H/09 to S.T.A. No. 905/H/09. Regarding the impugned order, the applicant has raised the following question of law for the opinion of this Court. i) Whether the Tribunal erred in law by declaring the order passed by the relevant officer of the sales tax as having without pecuniary jurisdiction by disregarding Section 36 of the Sales Tax Act, 1990 and Rule 8 of Sales Tax Refund Rules, 2002, which specifically allows for the recovery of inadmissible refund by the officer-in-charge of the Refund Division? ii) Whether the Tribunal has erred in law by setting aside the orders of the Collector (Appeals) and all the relevant Order-in-Original since the Tribunal was not invested with the power to set-aside the orders impugned in terms of subsection (2) of Section 46 of the Sales Tax Act, 1990? iii) Whether the Tribunal has erred in law by declaring the refund obtained by the respondent as legal in the presence of Section 8(1)(d) of the Sales Tax Act, 1990 which disentitles a registered person for claiming input tax on fake invoices? 2. The factual matrix of the case is that the respondent filed different refund claims amounting to Rs. 2,402,146,929/- for the tax period from November 2002 to April 2005. Out of the said amount, an amount of Rs.2,315,785,749/- was sanctioned in terms of sections 10(2) and 66 of the Sales Tax Act, 1990 read with the Sales Tax Refund Rules, 2002 notified vide SRO 575(I)/2002 dated 31-08-2002. Nevertheless, an amount of Rs.86,152,520/- was deferred owing to various objections raised by the STARR (Sales Tax Automated Refund Repository). The STARR objected that various suppliers were found to be ˜blacklisted, ˜de-registered or with status of ˜registration suspended. Purportedly, the respondent was called upon by various notices to ˜Show Cause as to why not the refund claim up to the extent of…

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