Law: Sales Tax Act, 1990

Section: 46,7,8

Sales Tax Act (VII of 1990)---Ss. 7, 8 & 46---Determination of tax liability---Entitlement to deduct input tax---Disallowing tax credit---Grounds expressed by appellant's Representative in appeal were, firstly, that Collector (Adjudication) had erred in treating the input tax paid on the purchase of High Speed Diesel as inadmissible for adjustment; secondly that Collector (Adjudication) erred in calculating the sales tax liability on account of supply of electricity to residential colony and street lights etc. and thirdly Collector (Adjudication) had erred in treating the input tax claimed on electricity during period when unit remained closed and did not produce taxable goods---First ground, regarding admissibility of input tax paid on High Speed Diesel, was settled by Federal Board of Revenue in cases of electricity producing Companies like the appellant---Federal Board of Revenue had accepted recommendation based on admission by the department; that High Speed Diesel was consumed as fuel and was taken directly in the cost; direction of Federal Board of Revenue in clarification letter also strengthened the appellant's case---Impugned orders to the extent of said issue were vacated and department was directed to allow adjustment of input on High Speed Diesel in view of direction given by Federal Board of Revenue---Regarding secondly, appellant had conceded on chargeability of Sales Tax against supply of electricity to its residential colonies and streets---Grievance of appellant against rate/value of the supplied electricity, was entertained as same was consequential to the main issue---Department was directed to charge sales tax on the supply in question applying the same rate of electricity at which appellant had sold to any other commercial entity during the relevant period; as Third ground was of disallowing adjustment of input on electricity consumed by the appellant during non-productive period; as per appellant's assertion number of auxiliaries remained operative in exigency of the business and explanation that shutting down of unit completely, during non-productive period, would have incurred huge losses to the appellant, required verification…

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