Law: Sales Tax Act, 1990

Section: 3,4,7,10

(a) Sales Tax Act (VII of 1990)----S.10--Refund of sales tax--Scope--Appellant Assailed disallowing of input tax against packing material--Validity--Consumption of packing material was necessary for packing of confectionary items and there was no provision in the Sales Tax Act, 1990, or the Rules made thereunder which restricted the consumption of packing material and in case packing material exceeded 3.6% of the total amount of refund claimed even then the samples of goods exported were to be drawn at the time of exports as provided under S. 25(A) of the Sales Tax Act, 1990, but no such samples were drawn by the sales tax department without which rejection of refund was not only against the letter and spirit of the impugned agreement but also unjustified and unlawful-- Appeal was accepted. (b) Sales Tax Act (VII of 1990)-- --S.4--“Zero rating”--Scope--Sales tax functionaries were not empowered to restrict and fix input tax refund on exports as it is the Federal Government who may, by a notification in the official gazette, restrict amount of credit for input tax actually paid and claimed by a person making zero-rated supplies of goods otherwise chargeable to sales tax under the 2nd proviso to Cl.(c) of S.4 of the Sales Tax Act, 1990. (c) Sales Tax Act (VII of 1990)----S. 10--Refund of input tax--Scope--Rejection of refund on the basis of an agreement made between sales tax department and an Association of taxpayers, which is not converted into law by the Federal Government, is illegal and void. 2011 PTD (Trib.) 20; 2012 PTD (Trib.) 31 and 2010 PTD (Trib.) 2126 rel. (d) Sales Tax Act (VII of 1990)-- --Ss. 3, 7--Scope of sales tax--Determination of tax liability-- Scope--Any agreement between an Association of taxpayers and the revenue department has no binding effect against the express provisions of law unless the same is supported by any superior or subordinate legislation. Messrs Muhammad and Company’s case 2005 PTD 72 ref. Messrs Crescent Re-Rolling Mills, Lahore’s case 2005 PTD 2436 = GST 2005 CL 73 and Messrs Tauqir Ashraf and Company, Lahores’ case 2007 PTD 47 rel. ORDER: SHAHID MASOOD MANZAR, CHAIRMAN.---The instant appeal has been filed against…

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