Law: Sales Tax Act, 1990

Section: 8,73

SALES TAX ACT, 1990----Sections 8 & 73----In cases of refund of input tax, to burden the buyer of goods, with the liability of its registered supplier, actually tantamounts to transferring the responsibility of recovery of sales tax from the department which has failed to take any action, to the registered buyer, as the .lbuyer cannot be punished for the neglect of the department-authority.---The learned two Court have concluded that the petitioner-authority has a remedy against the supplier of the respondent. Insofar as the respondent is concerned, it has taken the requisite steps for paying the dues on its supply, including the input/sales tax through a crossed cheque. In the absence of any official notification in the display by the petitioner’s software, the respondent had no means of establishing whether the sales tax on the supply made by the supplier and recovered from the respondent had been deposited or not. The record is also silent in this respect. Consequently, the petitioner did not have a cause of action against the respondent and its remedy lay against the supplier of the goods. The petitioner-authority appears to have taken no action against the defaulting supplier. For all these reasons, we consider that to burden the respondent buyer of goods with the liability of its supplier which is also registered person actually tantamounts to transferring the responsibility of recovery of sales tax from the petitioner which has failed to take any action, to the respondent. The respondent cannot be punished for the neglect of the petitioner-authority. Department has no cause of action where it claims that under Section 8(l)(ca) the buyer is not entitled to refund where its supplier fails to deposit sales tax in government treasury as it was the responsibility of department to take action against supplier, the buyer cannot be punished for neglect of department-authority. The department-authority did not have a cause of action against the buyer and its remedy lay against the supplier of the goods. ORDER: MR. CHIEF JUSTICE UMAR ATA BANDIAL:---.--- (1). During the tax period January, 2014, the respondent, a registered person, paid the price of the goods…

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