Law: Sales Tax Act, 1990

Section: 50

Law: Sales Tax Rules, 2006

Section: 390

Law: Law Reforms Ordinance, 1972

Section: 3

SALES TAX ACT, 1990 (VII OF 1990)---Section: 50 - Law Reforms Ordinance, 1972, Section: 3 - Refund claims of Recognized Agricultural Tractor Manufacturers Rules, 2012, Rule: 2 & 3 - SRO. 563(I)/2022 dated 29.04.2022 - SRO. 363(1)/2012, dated 13.04.2012 - Sales Tax Rules, 2006, Rule: 390 - Retrospective application of an amendment made in the Sales Tax Rules, 2006 by the F.B.R - Refund of input tax - Show Cause Notice - Application of SRO 563 to appellant’s claim by the DCIR - Taking away vested rights while substituting the rules and exercising rule making power delegated upon F.B.R by the legislature - Challenge to - FACTS This is an appeal under Section 3 of the Law Reforms Ordinance, 1972 and brings a challenge to the order dated 20.12.2022 passed in W.P No.80856 of 2022 by a learned Single Judge of this Court. The relief claimed in the constitutional petition was for seeking a declaration regarding SRO No.563(I)/2022 dated 29.04.2022 (SRO 563) to be struck down as having been issued without lawful authority. Further reliefs were claimed on the basis of the former SRO No.363(I)/2012 dated 13.04.2012 (SRO 363) under which the appellant claimed the benefit of refund for the months of July 2021, September 2021, November 2021, December 2021 and February 2022 which accumulates to PKR 3,806,855,796 (the refund amount claim). The appellant before the learned Single Judge sought to restrain any action to be taken either by the Federal Board of Revenue (FBR) or any of its officials under SRO 563 as also the proceedings before respondent No.8 in respect of the show cause notice issued on 31.5.2022 was sought to be quashed. ARGUMENTS The arguments in this Court centered on Rule 390 inserted through SRO 563 which made applicable the Chapter to existing and future refund claims as filed by the registered agricultural tractor manufacturers engaged in supply of agricultural tractors. At first blush, this rule is actuated by bad faith and doubtless intended to stall and prevent the disbursement of refund claims which were already pending. It is a well-worn rule that a mala fide act is an act without jurisdiction and is a fraud on the statute. DECISION (a) Rights vested in…

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