Law: Sales Tax Act, 1990

Section: 7,8,8(1)(b),25,72B

ORDER M. M. AKRAM (Judicial Member): We intend to dispose of through this common order the titled cross-appeals which have been filed by the appellant registered person as well as the department against the impugned Order No.66/2019 dated 12.02.2019 passed by the learned Commissioner Inland Revenue (Appeals-I), Islamabad on the grounds as outlined in their respective memos of appeals. Subsequently, the registered person also filed the additional grounds as well in its appeal. 2. Brief facts culled out from the record are that the appellant is a petroleum exploration and production company having a permanent establishment in Pakistan of a non-resident company. Its principal activity is to extract from the wellheads the three main products i.e crude oil, condensate, and natural gas. Both crude oil and condensate are in liquid forms which are sold to oil refineries in Pakistan whereas natural gas is shifted to the processing plant and after some processing is directly transmitted to its sole customer i.e Sui Northern Gas Company Limited (SNGPL). The case of the appellant was selected by the Federal Board of Revenue (FBR) under section 72B of the Sales Tax Act, 1990 (“the Act, 1990”) for the tax periods from July 2013 to June 2014. Initially, the appellant challenged the selection of their case for audit by the FBR through Writ Petition No.570/2016 before the Hon’ble Islamabad High Court (IHC) whereby vide order dated 17.02.2016 the interim relief was granted by directing the assessing officer not to pass the final order till final disposal of the petition. However, the aforesaid writ petition was finally disposed of on 18.05.2018 on the same terms as the law articulated and annunciated by the Hon’ble Supreme Court in the case titled CIR Vs Allah Din Steel Re-rolling Mills, (2018 PTD 1444). After disposal of the appellant’s writ petition and keeping in view the law laid down by the Supreme Court in the aforesaid judgment, the assessing officer immediately sent a request to the FBR for extension in time for finalization of audit proceedings contemplated in section 25 of the Act, 1990. The said request was acceded to by the FBR and accordingly, the time was further…

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