Law: Sales Tax Act, 1990

Section: 3,13,Sixth Schedule

Sales Tax Act (VII of 1990)-- --Ss.3, 13 Sixth Sched.--Sales Tax (Special Procedures) Rules, 2007, Chap. XV--SRO No.253(l)/2019 dated 26.02.2019- Vires--Levy of sales tax--Cotton Seed--Exemption from sales tax-- Statutory exemption from sales tax could not be overridden by notification / SRO issued under Sales Tax Act, 1990--Scope-- Petitioners impugned SRO No.253(l)/2019 dated 26.02.2019 which sought to recover sales tax on supply of cotton seed, inter alia, on ground that such supply enjoyed statutory exemption under S.13 read with Sixth Sched. to Sales Tax Act, 1990--Validity-- Statutory exemption could not be overridden by a notification, and Sixth Sched. to Sales Tax Act, 1990 clearly placed supply of cotton seed within statutory exemption from sales tax and nothing existed which could suggest that such exemption could be taken away by resort to an insertion carried out vide impugned notification--High Court held that Chap. XV of Sales Tax (Special Procedures) Rules, 2007 as inserted by impugned SRO No.253(l)/2019 dated 26.02.2019 was illegal and ultra vires the Sales Tax Act, 1990 and any sales tax collected or paid on supply of cotton seed had been unlawfully demanded / collected, and the petitioners / taxpayers would be entitled to refund of same -- Constitutional petition was allowed, accordingly. Insaf Cotton Ginning and Pressing Factory and Oil Mills v. Federation of Pakistan and others 2016 PTD 2585; Dawn Ginning Industries and Oil Mills v. Federation of Pakistan and others [W.P. 5571 of 2015 Multan Dawn Ginning 1]; Mustafa Impex and others v. Pakistan and others PLD 2016 SC 808; FBR v. Dawn Ginning Industries and Oil Mills [C.P. 1028 of 2017] (Dawn Ginning 2); PMDC v. Malik Muhammad Fahad and others 2018 SCMR 1956 and Multiline Associates v. Ardeshir Cowasjee and others 1995 SCMR 362 rel. JUDGMENT AGHA FAISAL, JUSTICE:---.--- The present petitions have assailed SRO 253(I)/2019 dated 26.02.2019 (“Impugned SRO”); seeking to recover sales tax on the supply of cotton seed, notwithstanding Entry 81 of the Sixth Schedule (“Sixth Schedule”) to the Sales Tax Act, 1990 (“Act”), wherein the same enjoys statutory exemption. Since the subject matter was…

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