Law:

Section:

Sales Tax Act (VII of 1990)--- ----S.2(41)---Taxable supply---Levy of sales tax oh the disposal of old and used plant and machinery, electrical and mechanical equipment, furniture and fixture and fittings and motor vehicles by manufacturer of drugs and medicines---Validity---Disposal of goods could not be brought within the ambit of "taxably supply "---Business of assessee being manufacturing of drugs and medicines and not sale/supply of old and used vehicles or furniture, order of the levy of sales tax was set aside by the Tribunal. (1967) 19 STC 1 (SC) rel. ORDER MALIK A.R. ARSHAD (MEMBER JUDICIAL). ---This is an appeal against the order of the Collector (Adjudication) Karachi-III, Karachi, passed in Order -in-Original No. 126 of 2000, dated 30-9-2000. 2. On the objection of audit, show-cause notice was served upon the appellant that the appellant sold/deleted/transferred under lease the plant and ; machinery, electrical and mechanical equipment, furniture and fixture and fittings and motor vehicles; and on the disposal of these items sales tax had not been paid. After adjudication the liability was enforced; hence this appeal. 3. In defence the learned counsel submits that the disposal of old and used goods as well as old and used vehicles are not taxable supply within the meaning of section 2(41) of the Sales Tax. Act. The provision of law attracts to the supplies made in the capacity of importer, manufacturer, wholesaler, dealer or distributor and as such, the sale/disposal of the appellant cannot be said to be a supply within the ambit of the law. He further submits that without prejudice to his first point that the impugned order is illegal as much as prior to the Finance Act, 1997 in terms of the Sixth Schedule to the Sales Tax Act, 1990 all supplies made in Pakistan except those made by manufacturers were exempt from levy of sales tax. That entry at Serial No. 33 supports his submission, that by an office memorandum dated 3-6-2000 issued by the Ministry of Law, as a result of the reference, the C.B.R. has clearly stated that the sale, auction or otherwise disposal of goods moveable/fixed assets (including land, building, plant/machinery, equipment or…

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