Law: Sales Tax Act, (III of 1951)

Section: 17

Sales Tax Act (III of 1951)---S. 17(1)--Notification S.R.O. No.7 dated 27-6-1951, item No.35--Prescription chemicals are covered by Item No.35 of S.R.O. No.7 dated 27-6-1951-¬Prescription chemicals having been imported by assessee for manufacturing pharmaceutical products, held, were exempt from payment of sales-tax. JUDGMENT AJMAL MIAN, J.-- This is a reference made under section 17(1) of the Sales Tax Act, 1951, hereinafter referred to as the Act, for soliciting the opinion of this Court on the following legal question-- "Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in directing the Sales Tax Officer to allow the refund of sales-tax paid to Customs stage on prescription chemicals treating the same as exempt from the payment of sales tax under Item No. 35/35B of Notification No.7, dated 27th June, 1951 as amended from time to time." 2. The brief facts leading to the making of the above reference are that the respondent-assessee is a company registered in U.K. but it has an office in Pakistan and manufactures pharmaceutical products. It seems that the respondent-assessee imported certain prescription chemicals in the assessment years 1967-68, 1968-69 and 1969-70 and paid inter alia Balm-tax on the aforesaid import. The respondent-assessee filed an application before the Sales Tax Officer for the refund of Rs.4,041, Rs.12,418 and Rs 11,011 being the amount of sales-tax paid in the above 3 assessment years. The Sales Tax Officer by an order dated 10 10-1973 dismissed the above application. Against which, the respondent-assessee filed 3 direct appeals before the learned Income Tax Appellate Tribunal, which were allowed by a common order dated 24-12-1974 and it was held that the prescription chemicals imported by the respondent-assessee were covered by Item No. 35 of S.R.O. No.7, dated 27-6-1951. Thereupon, the applicant department filed an application before the learned Income Tax Appellate Tribunal for making the reference to this Court whereupon, the above reference has been made. 3. In support of the above reference Mr. Nasrullah Awan, learned counsel for the applicant department, has contended that…

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