Law: Sales Tax Act, (III of 1951)

Section: 2(16),3(1),3(3),3(4)

Law: Central Excise Act, (I of 1944)

Section: 4(1)

Sales Tax Act (II of 1951)--Ss. 2(16) & 3(1)(3)(4), proviso [as amended by Finance Ordinance (XXIV of 1981)] Central Excises and Salt Act (I of 1944), S. 4(1) ---Terms 'Value of goods' 'Sale price' Meaning Sales tax rate Reduction in Applicability of such reduced rate Effective date Whether when goods produced or manufactured or when value of goods determined Rate of sales tax reduced by Finance Ordinance which came into force on 25 6 1981 Substantial quantities of products lying at assessees respective factories on such date Sales tax authorities demanded sales tax at old rates in respect of such products Rate of sales tax was reduced while goods were still lying in factory or warehouse of assessee, they were therefore to be charged with tax at reduced rate No reason present as to why levy of sales tax be anterior to the day relevant for the purpose of determining the value of goods under Act Excise duty, held, became leviable as soon as excisable goods came into existence and thus differed from sales tax which became leviable when sale price was determined under Sales Tax Act, 1951. Colony Textile Mills Limited v. Collector 1980 C L C 1660; Noorani Cotton Corporation v. Sales Tax Officer P L D 1965 S C 161 and Muhammad Younis v. Central Board of Revenue P L P 1964 S C 113 ref JUDGMENT This order will dispose of two writ petitions, registered as W.P. No. 3359 of 1981 and W.P. No. 1265 of 1982. These have been heard together as common questions of law arise in them. 2. The petitioner in W.P.No.3359 of 1981 manufactures rubber products. Its products are subject to both excise duty as well as sales tax. The Petitioner in W.P. No. 1265 manufacturers biscuits, lozenges, sweets, etc. its products are subject to sales tax only. Prior to June 1981 the petitioners in both writ petitions paid sales tax at the rate of 20% in respect of their products. On 25 6 1981 the Finance Ordinance, 1981 came into force. It reduced the rate of tax to 12½%. At the time when the Ordinance came into force fairly substantial quantities of the products of the petitioners were lying in their respective factories. The sales tax authorities demanded sales tax at the old rate, that is 20%…

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