Law: Sales Tax Act, 1990

Section: 46,8

Sales Tax Act (VII of 1990)---Ss. 8 & 46---Dis-allowance of input tax---Registered person produced evidence regarding the admissibility of adjustment of input tax and on its basis the Adjudicating Officer accepted the claim of registered person excepting an amount which was held to be inadmissible being in excess of 20% of input tax claimed on the value of the exports---Adjudicating Officer, for making the said dis-allowance, relied upon an agreement executed between the Collector of Sales Tax and Association, whereby it was agreed that the consumption of packing material would be restricted up to 20% of total value of exports---On filing appeal by the registered person Collector (Appeals) directed to allow the adjustment of input tax as the claim of registered person was based on consumption of packing material in exports---Department had filed appeal against of Collector (Appeals)---Contention of department was that agreement executed between the Collector and Association was binding upon the contracting parties---Plea of department was that the claim of input adjustment being in excess of 20% limit had been rightly disallowed by the Assistant Collector---Representative of the registered person on the other hand had contended that the Agreement (with Association) relied upon by the Assistant Collector was not of binding nature because it was not reduced into a statutory instrument---Appellate Tribunal, in circumstances, directed the concerned officer to allow the adjustment of input tax to the registered person because same could not be denied on the basis of agreement which was not enforceable under the law. Messrs Crescent Re-rolling Mills GST's case 2005 CL 73; Messrs Mehmood and Co. v. Assistant Collector Sales Tax Lahore and others 2005 PTD 72 and 2007 PTD 47 ref. ORDER This appeal has been filed by the Revenue against the order of the Collector (Appeals) Faisalabad, dated 29-6-2009. The revenue feels aggrieved by the observation of the Collector (Appeals) to the effect that the Assistant Collector (Refund) Sales Tax and Federal Excise, Faisalabad was not justified to restrict the claim of input tax made by the registered person to the extent of 20%…

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