Law:

Section:

Sales Tax Act (VII of 1990)--- ----S. 7---Special Procedure for Collection and Payment of Sales Tax (Electric Power) Rules, 2000 R. 7(2) (S.R.O. 124(1)/2000 dated 15-3-2000)---Determination of tax liability---Adjustment of input tax of electricity bills---Disallowance of---Department contended that electricity bills were not in the name of registered person, the Adjudicating Officer rightly disallowed the claim of adjustment input tax and that First Appellate Authority was not justified in ordering to allow the credit of input tax on utility bills---Validity---Input tax paid at an earlier stage was deductible from the tax liability arising from the payment of output tax, and S.7 of the Sales Tax Act, 1990 supported the point of view---Record showed that the taxpayer had paid input tax irrespective of the fact whether the bills were in his name or not---Evidence established that the fact of payment of input tax and the same was refundable to the taxpayer from his output tax---No illegality or irregularity was found in the order of First Appellate Authority---Appeal of the department was rejected by the Appellate Tribunal. ORDER SYED MUHAMMAD JAMIL RAZA ZAIDI (JUDICIAL MEMBER).---This appeal challenges the validity of order passed by the Commissioner Inland Revenue (Appeals-II) Karachi whereby he allowed the appeal of the respondent and directed the Department to allow the input tax claimed by the registered person on account of utility bills. The Department now challenges the validity of said order and it has been contended by the Department:-- "....2. That the learned Commissioner (Appeals) erred in law and allowed the input tax adjustment on the utility bills whereas the same is not covered by the Sales Tax Act, 1990 and rules made there under. Therefore the order passed by the appellate authority is unjust, illegal, void and is liable to be set aside. (3) The Commissioner (Appeals) erred in law and allowed the input tax on Electricity and Gas in spite of the fact that according to Sub-Rule (2) of Rule-7 of S.R.O. 124(1)/2000 dated 15-3-2000, (copy) attached the Registered Person shall be entitled to claim input tax adjustments against such invoices in the tax…

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