Law: Sales Tax Act, (III of 1951)

Section: 17,17(1)

Sales Tax Act (III of 1951)---S. 17(1)--Sales tax--Exemption--Questions whether goods on which exemption was claimed were cotton lint or delinted cotton or cotton waste or whether cotton lint and cotton waste meant the same thing, being questions of fact and not that of law, held, were rightly rejected by Tribunal. Colony Textile Mills Ltd. v. Commissioner of Sales Tax 1976 PTD 128 and (1980) 42 Tax 114 distinguished. JUDGMENT NASIR ASLAH ZAHID, J.--This application has been filed under section 17(2) of the Sales Tax Act, 1951 by the department. The matter arises out of the assessment order passed by the Sales Tax Officer, Companies Circle XXII, Karachi, in respect of assessment year 1967-68 whereby the Sales Tax Officer rejected the plea of the respondent-Company that sales of lint cotton was not subject to sales tax. According to the order of the Sales Tax Officer, lint cotton was neither cotton nor cotton-seed and hence it was chargeable to sales tax. Respondent/ assessee filed an appeal, and, by order dated 22-4-1975 of the Income-tax Appellate Tribunal Karachi, the appeal was allowed. The order dated 22-4-1975 of the Tribunal is reproduced here:-- "Appellant is a private limited company manufacturing edible oils. The only objection is to charging of sales tax on cotton lint at Rs .1,12, 482. It is urged that lint is fiber attached to unginned cotton and is, therefore, not liable to sales tax. Previously the appellant was duly granted exemption on this item. On being questioned the Departmental Representative admits that cotton lint is not liable to sales tax and the Sales Tax Officer has acted erroneously in charging it to sales tax. After hearing both the sides we therefore, direct that the amount of sales of cotton lint at Rs.1,12,482 may be excluded from the sales being charged to sales tax in the year 1967-68. The department, being aggrieved, filed an application under section 17 (1) of the Sales Tax Act before the Tribunal praying that the following question may be referred to the High Court: "Whether on the facts and in the circumstances of the case the learned Tribunal was justified in holding that cotton lint in not liable to sales tax." The…

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