Law: Sales Tax Act, 1990

Section: 66,3(B),47

(a) Taxation--- ----Direct and indirect taxes---Distinction stated. The federal taxes including customs, excise duty and sales tax are indirect taxes, the burden of which is always borne by the end, consumers and not by the seller/registered person or importer/assessee. Whereas in direct taxes such as income tax and wealth tax, burden is borne by the person upon whom the tax is levied. In 'other words, in indirect taxes the assessee, importer or the registered person is only an intermediary or a tax collecting agent. In case of indirect taxes due to an inbuilt mechanism, the duty or taxes are inclusive in the cost/value of the goods sold, therefore, the same passes on to the end consumer at the time of such transaction. (b) Sales Tax Act (VII of 1990)---Ss.3(B) & 66---Central Excise Act (I of 1944), S.3(D)---Sale of pay-phone cards by Pakistan Telecommunication Company Limited through its sale agent, a tele-card company----Collection of sales tax and excise duty on gross amount of such cards---Refund claim by tele-card company (applicant)---Validity---In sale of air time service, role of applicant was nothing more than merely of sale agent of PTCL and not provider of such service---Amount of duty and taxes charged on such cards was included in their cost, which had been paid by end customers while purchasing such cards---Applicant being a intermediary and not provided of such service could not claim refund of such taxes/duty---Refund claim was rejected in circumstances. (c) Sales Tax Act (VII of 1990)--- ----S.47---Reference to High Court---Questions proposed in reference involving factual controversy---Effect---Such questions could not be allowed to be converted into legal issues only by dint of draftsmanship or employment of legal language in framing thereof. Fecto Belarous Tractor Ltd. v. Government of Pakistan PLD 2005 SC 605 rel. JUDGMENT AQEEL AHMED ABBASI, J.---Through this Sales Tax Reference Application under section 47 of the Sales Tax Act, 1990, the applicant has impugned the Order No.K-255 of 2007 dated 26-12-2008 passed by the learned Customs, Central Excise and Sales Tax Appellate Tribunal Karachi Bench-I, Karachi, wherein the following…

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