Law: Sales Tax Act, 1990

Section: 46, 2(1)(B)

Law: Sales Tax Rules, 2006

Section:

  SUMMARY;   Nature of Appeal The appellant, a registered manufacturer and seller of ceramic and porcelain tiles, filed a direct appeal under section 46 of the Sales Tax Act, 1990 against the order dated 17.01.2023 passed by the Commissioner Inland Revenue, Enforcement-II, LTO Lahore. Through the impugned order, the Commissioner declined to direct GEPCO and SNGPL to exclude or adjust extra tax and further tax charged in the appellant’s electricity and gas bills for various billing months between 2020 and 2022. Background and Commissioner’s Findings The appellant had applied to the Commissioner seeking exclusion and adjustment of extra tax and further tax, relying on an earlier Tribunal order dated 21.06.2022 in STA No. 979/LB/2022 passed in its own case. The Commissioner, however, observed that during the impugned months the appellant remained a “consecutive non-filer” of sales tax returns and was treated as a non-active taxpayer under section 2(1)(b) read with the Sales Tax Rules. On this basis, he held that GEPCO and SNGPL were legally bound under Rule 158J and SRO 1222(I)/2021 to charge extra tax and further tax and rejected the appellant’s request. Arguments of the Appellant The learned Authorized Representative contended that the appellant was at all times a registered person under section 2(25) of the Act, and its registration was never suspended, blacklisted, or cancelled. It was argued that exclusion from ATL was merely a temporary procedural issue, later rectified upon filing of returns. Reliance was placed on the Tribunal’s earlier decision in STA No. 979/LB/2022 and on the Supreme Court judgment in M/s Rafhan Maize Products Co. Ltd v. ATIR, wherein it was held that section 3(1A) applies only to supplies made to persons who have not obtained registration, and that registered persons cannot be treated as unregistered merely due to suspension or non-ATL status. Department’s Position The learned Departmental Representative supported the impugned order and argued that non-appearance of the appellant on ATL for the relevant months automatically obligated the utilities to charge extra tax and further…