Law: Sales Tax Act, 1990

Section: 7(1), 8(1), 10

Sales Tax Act (VII of 1990)--- ----Ss. 7(1), 8(1) & 10---Taxable supplies---Lost / damaged goods---Input tax, adjustment of---Scope---Whether the taxpayer (Gas supply Company/SSGC) was entitled for adjustment of entire input tax including that which had been paid on Unaccounted for Gas ( UG ), notwithstanding the threshold fixed by OGRA?--Held : If any sales tax is paid on a product, which for some reason is not fully utilized in the production or manufacture of the finished goods, the input tax so paid can still be claimed and be fully adjusted against the tax liability---In the present case, the taxpayer's claim for adjustment of such input tax was denied by the Department on the ground that the said input was never used in final production of the finished goods---Loss of input/ raw materials does not fall within the scope of "used or to be used for any purpose other than for taxable supplies made or to be made as stipulated in S. 8(1) of the Sales Tax Act, 1990---Therefore, the proposed question was answered in the affirmative i.e. in favor of the taxpayer (SSGC) and against the Department---Thus, the order of the Appellate Tribunal Inland Revenue stood set-aside /modified---Special Sales Tax Reference Application filed by the taxpayer (SSGC) was allowed. Commissioner Inland Revenue v. Mayfair Spinning Mills Ltd. and others 2025 SCMR 1 ref. ORDER Today, Mr. Khalid Jawed Khan, Advocate has filed Vakalatnama in Special Sales Tax Reference Application No.582 of 2019 on behalf of the Respondent which is taken on record. On 09.12.2024, the following order was passed:- Learned counsel for the application in SCRA No.76 of 2017 has relied upon a recent Judgment of the Hon ble Supreme Court dated 12.11.2024 passed in Civil Appeals Nos.947 of 2002, 980, 981 and 982 of 2007, 224 of 2010 and Civil Petition No.246 of 2009 The commissioner Inland Revenue, Legal Zone, Large Taxpayer Office, Lahore and another v. M/s. Mayfair Spinning Mills Ltd. and others and learned counsel submits that the Hon ble Supreme court has now decided the controversy that any input tax claimed on loss or damaged goods or as is in the case in hand Unaccounted for Gas (UFG) the entire…