Law: Sales Tax Act, 1990

Section: 2,2(14)(20)

[INTERPRETATION OF STATUTE].......Machinery section has to be construed in a manner where by the realization of proper tax is made possible. Any construction otherwise defeating the intention of legislature and preventing the realization of the tax is to be avoided. (As per Mr. Justice Mansoor Ahmad).SALES TAX ACT, 1990----Section 2(14)(20)---The provisions regarding input as well as output tax as defined in the definition clause of the Act read with sections 7 and 8 thereof are only the modalities prescribed to protect the interest of the exchequer against any pilferage, evasion or fraud. (As per Mr. Justice Nasim Sikandar).The input tax paid by the appellant goes to national exchequer as input tax, it is a trust till the time it was to be adjusted or refunded. (As per Mr. Justice Nasim Sikandar).Section 3---The provisions of sections 7 and 8 of the Act are not charging provisions and -that these are machinery provisions to crystalise the liability to pay the tax as contemplated in sub-section (3) of section 3 of the Act. (As per Mr. Justice Nasim Sikandar).The charging provisions of section 3 read with sub- section (3) thereof are conditional that the levy would be subject to other provisions of the Act. The other provisions inter alia contemplate input tax and output tax and their adjustment in certain specific situations. (As per Mr. Justice Nasim Sikandar).If the appellant paying input tax on the supply of goods received by him was not entitled to its adjustment or refund then he was not covered by the charging provisions of section 3 inasmuch as he never made taxable supplies. (As per Mr. Justice Nasim Sikandar).The view that Sales Tax Act is not a tax on consumption is not well based, sub-section (1) and sub-section (3) of section 3-B make it clear that the incidence of tax charged under section 3 has to pass on to the consumer ultimately.--(As per Mr. Justice Nasim Sikandar) --It will be seen that charging provisions of section 3 of the Act provided for the charge and levy of a tax known as Sales Tax. This charge is "subject to the provisions of this Act". Sub-section (3) of section 3 goes to state that liability to pay tax shall be, in the case of…

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