Law: Sales Tax Act, 1990

Section: 3,2(33)(44)

Law: Constitution of Pakistan, 1973

Section: 199

Sales Tax Act (VII of 1990)---Ss. 3 & 2(33)(44) ---Constitution of Pakistan (1973), Art. 199--­Constitutional petition---Levy of sales tax---Scope---Principles---. Advances received by the assessee without coming into existence of the transaction of sale---Not taxable---Existence of contract of sale of goods---Events---Part payment after coming into existence of the . transaction of sale---Taxability---Question- as to whether the deposits /advances received by the assessee were in pursuance of any transaction of supply or were mere advances/deposits in pursuance of any dealership or any agency agreement or any other arrangements being question of fact was declined to be. determined by the High Court under its Constitutional jurisdiction tinder Art.199 of the Constitution and left the matter to be decided by concerned tax officials after obtaining necessary particulars and giving opportunity of being heard to the assessee and then decide the question of chargeability to sales tax or otherwise of the advances/deposits. The assessees are liable to pay the sales tax under section 3 of the Sales Tax Act, 1990, on taxable, supplies at the time when the transaction of supply takes place. The transaction of supply shall come into existence when a contract of sale of goods comes into existence i.e., when the supplier transfers or agrees to transfer the specified goods to the buyer, or a lease or other disposition of goods in furtherance of the business is carried out for consideration or the other conditions prescribed in section 2(33) of the Sales Tax Act, 1990 are satisfied. Where a transaction of supply takes place under a contract of sale, meaning thereby, transfer of goods from supplier to buyer or where an agreement to sell takes place meaning thereby, that the transfer of goods is to take place at a future time, the sales tax shall be charged on the happening of any of the following events:--- (a) When a delivery of goods is made; or (b) the price is paid in full. If after coming into existence of the transaction of sale,, as explained above any part payment is received by the supplier from the buyer the supplier shall be liable to account for the part…

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