Law: Sales Tax Act, 1990

Section: 10, 10(1), 10(3), 67

Law: Constitution of Pakistan, 1973

Section: 199, 23, 24

Tag Line: Challenge has been laid to the pre-refund audit proceedings and the consequent show-cause notice dated 09.06.2023 issued by the respondent-FBR, with the averments that the same be declared illegal, unlawful and violative of the provisions of Section 10 of the Sales Tax Act, 1990 ("the Act"). Prayer has also been made that respondent No.3 be directed to refund the excess amount of input tax paid by the petitioner amounting to Rs.2,214,825,246/-. It is the case of the petitioner that the petitioner pays input tax applicable at 17% whereas the output tax is charged, on the goods (fertilizers), at the reduced rate of 2% by virtue of Eighth Schedule to the Act and hence, the petitioner is entitled to the above referred amount of tax refund for the period of January, 2021 to June, 2022; however, the refund claims remained pending for payment with the respondent-FBR despite timely filing of the same along with the requisite documents and timeframe envisaged under Section 10 of the Act has not been adhered to by the respondent-FBR. 

The following legal questions arise out of the factual layout of the case and call for the opinion of this Court: 

i) What is the scope of Section 10 of the Act and whether the elapse of time stipulated thereunder ipso facto renders the refund claim admissible and due?