Law: Sales Tax Act, (III of 1951)

Section: 7

Sales Tax Act (III of 1951)--S.7---S.R.O. 9(1)83, dated 5-1-1983---Customs General Order, dated 10-9-1986 ---Manufacture of Blasting Powder ---Chargeability to sales sax--­Exemption---Tax already paid on the sulphur, a component of blasting powder was deductible from the sales tax of the manufactured powder. Sales tax on the blasting powder was chargeable under the notification, dated 1-7-1981 and the notice for the recovery of the sales tax for the period from 1-7-1981 to 4-11-1985 was issued by the Assistant Collector on 4-9-1985. The assessee did not plead the exemption of the sales tax under the notification dated 1-1-1983 and the fulfilment of the conditions contained therein and consequently the assessee would not be entitled to the exemption on sales tax under the said notification. The exemption of sales tax on the blasting powder under Customs General Order dated 10-9-1986 would be available only from the date of issue of said Customs General Order which having no retrospective effect would not be applicable to the assessee. During the period for which the sales tax was being demanded from the assessee, neither there was any such notification in the field under which sales tax on the blasting powder was exempted nor the existing law provided that-the sales tax would not be recoverable on the sale of such goods. Under the Sales Tax Act, 1951 the sales tax was recoverable from the manufacturer on the production of the goods. Assessee with reference to an observation made by the Deputy Collector in his order contended that the, tax already paid on the sulphur, a component of blasting powder is deductible from the sales tax of the manufactured powder. The Collector Appeals while upholding the order of the Deputy Collector affirmed the observation, therefore, the contention to that extent being not without force, the assessee in the light of the order of the Deputy Collector Appeals would be entitled for the adjustment/refund of the sales tax which was used in the manufacture of blasting powder. JUDGMENT The petitioner being an organization of Pakistan Mineral Development Corporation is engaged in the business of manufacturing of the blasting powder. The…

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