Law: Sales Tax Act, (III of 1951)

Section: 17,3

Sales-tax Act, 1951 -Sections 2(11), 3(1)(4), 40 - Manufacturer and producer -Goods manufactured before 1st July 1951 and sold after 30th June 1951 -Whether liable to sales-tax under the Act of 1951 -Held yes - Licensed wholesaler -Goods in warehouse of such wholesaler on 1-7-1951, (date of enforcement of Act) whether imported or manufactured in Pakistan -Liable to tax on sale, appropriation or consignment - JUDGMENT CORNELIUS C.J. -This appeal is brought by special leave by the Commissioner of Sales-tax (Central), Karachi, and calls in question the answer given to a reference made to the High Court of West Pakistan under Section 17th of the Sales-tax Act, 1951. The subject-matter of the reference is the assessment of sales-tax upon certain goods manufactured by the respondent company, Dada Plastic Works, on dates prior to the 1st July 1951, which had up to that date been unsold in their hands but were sold later. On the 1st July 1951, the Sales-tax Act of that year came into force. It made material changes from the scheme of taxation under the preceding Act, namely, the Pakistan General Sales-tax Act, 1948, but of these specific mention need be made of only one. Under the Act of 1948, Dada Plastic Works would have been treated as a "dealer, and as Section 3 of that Act will show, the tax to be paid by such "dealer" would be assessed upon the "turnover" which meant the aggregate amount for which during the year of taxation, the dealer bought or sold "goods" of the kind enumerated in the definition of "goods" contained in that Act. Since the goods in this case remained unsold in the hands of the manufacturer so long as the old Act remained in force, their value could not conceivably be included in any return of "turnover" for any period covered by that Act. The tax authorities treated the sale-proceeds as taxable under Section 3 of the new Act. Sub-section (1) of this section provides that the tax shall be levied and collected on firstly, goods "produced or manufactured in Pakistan payable by the manufacturer or producer," clause (a), secondly, on goods "imported into Pakistan, payable by the importer" clause (b), thirdly, on goods "sold by a licensed wholesaler…

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