Law: Sale Tax Rules, 1951

Section: R-19

(a) Sales Tax Rules, 1951 --- R. 19 Vendor or purchaser inter related/associated or affiliated concerns or where one is subsidiary to other Rule 19, held, attracted. (b) Sales Tax Rules, 1951--R. 19 Assessee assembling radio and other company carrying on business Assessee and company inter related and under agreement entire goods assembled by assessee were agreed to be sold to company Company selling goods to consumers in country admittedly on higher price than that receiving from assessee Company during relevant year not selling goods to any wholesaler meaning thereby that sales were made directly by company to consumers Whether for relevant assessment year price on which sales tax was chargeable from assessee was sale price at which goods were sold by assessee to Company or at price at which same goods were in its turn sold by company to consumer Held, sales tax was chargeable from assessee on sale price at which goods were sold by assessee to company and not at price which goods were sold by company to consumers. JUDGMENT NASIR ASLAM ZAHID, J. By this judgment we propose to dispose of Sales Tax Reference No. 4 of 1972 as well as Reference No. 5 of 1972. Except for the fact that Sales Tax Reference No. 4/72 relates to assessment year 1961-62 and Sales Tax Reference No. 5/72 relates to assessment year 1962-63, the facts are similar in both cases, assessee is the same and the question referred by the Income Tax Appellate Tribunal (Karachi Bench) Karachi is also identical and which is as follows: "Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that rule 19 of the Sales Tax Rules, 1951 was inapplicable? 2. Very briefly the facts relevant for decision of the present reference are that the assessee assembles radios of the famous brand `Philips' and there is another concern carrying on business in Pakistan under the, name of `Philips Electrical Company' (hereinafter referred to as `the Company'). It is an admitted position that these two companies, namely the assessee and the Company are associated/inter related or affiliated companies within the meaning of the words used in rule 19 of the Sales Tax Rules. Under an…

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