Law:

Section:

Sales Tax Act (VII of 1990)--- ----Ss.2, 3 & Third, Sched.---Sales Tax General Order No.1 of 1998, dated 17-6-1999---Constitution of Pakistan (1973), Art. 199--­Constitutional petition-- -Principal companies, under a manufacturing agreement providing raw material to the manufacturing companies for the manufacture of cigarettes for the Principal Companies---Show-cause notice based on Sales Tax General Order No. 1 of 1998 was issued to the Principal Companies for the charge of sales tax on the retail price of the cigarettes on conversion charges only---Validity---Manufacturing Companies were making taxable supplies to the Principal Companies, although the raw material was supplied to them by the Principal Companies for the manufacture of cigarettes sticks and packets--­Manufacture of cigarettes as well as its supply by the manufacturing Companies would, thus, constitute a taxable activity---Manufacturing Companies, therefore, were liable to pay sales tax on the cigarettes manufactured by them for their Principal Companies---High Court struck down the show-cause notice on the ground that the same had been issued in violation of the, express provisions of the Sales Tax Act, 1990---Principles. Messrs Central Insurance Co. v. The Central Board of Revenue 1993 SCMR 1232; Messrs Julian Hoshang Dinshaw Trust and others v. Income Tax Officer and others 1992 SCMR 250; Collector Customs, Custom House, Lahore v. Messrs S. M. Ahmad & Company (Pvt.) Limited, Islamabad 1999 SCMR 138; Tandlian Wala Sugar Mill Limited v. Federation of Pakistan 2001 SCMR 1398 & F.S. Tobacco Company (Pvt.) Limited v. Superintendent, Central Excise and Sales Tax 1995 PTD 874 ref. JUDGMENT NASIR-UL-MULK, J.-By this single judgment it is proposed to decide Writ Petitions Nos. 1960, 1961, 1962, 1963 of 1999 and 1495 of 2001 as they involve common questions of law and similar questions of facts. The petitioners in all these writ petitions manufacture cigarettes for Tobacco Companies (hereinafter called the Principal Company). The Principal Company in Writ Petitions Nos. 1960, 1961 and 1962 of 1999 is Messrs Lakson Tobacco Company whereas Pakistan Tobacco Company is the principal company in…

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