Law: Sales Tax Act, 1990

Section: 3,2(3)(a),2(9),6,7,11,22,26,33(2)(cc)

Law: Customs Act, 1969

Section: 79,104

Sales Tax Act (VII of 1990)---Ss. 3, 2(3)(a), 2(9), 6, 7, 11, 22, 26 & 33(2)(cc)----Customs Act (IV of 1969), Ss. 79 & 104---S.R.O.No.1185(I)/90, dated 18-11-1990--­S.R.O No. 112(I)/90, dated 1-11-1990---Scope of tax---input tax adjustment---Disallowance of input tax adjustment on purchase of raw material from an importer on the ground that supplier being unregistered could not issue a sales tax invoice which the appellant had to possess to be entitled to claim input tax adjustment in view of S.7(2)(1) of the Sales Tax Act, 1990---Validity---Supplier was an importer/wholesaler---Provisions of Ss.2(3)(a) & 2(9) of the Sales Tax Act, 1990 (as these sections existed during May, 1996) show that sales tax paid by wholesaler whose suppliers were not liable to sales tax being exempt under S.R.O. No.1185(I)/90, dated 18-11-1990 at previous stage will be input ax for a registered person who subsequently purchased these goods from the wholesaler---Importer or a wholesaler was not required to be registered under S.14 of the Sales Tax Act, 1990 in view of S.R.O. No.112(I)/90, dated 1-11-1990---Since, suppliers were making exempt supplies, they were not legally bound to issue sales tax invoice which was only required under S.23 of the Sales Tax Act, 1990 where taxable supplies had been made-Neither supplier could issue nor appellant could obtain sales tax invoice about the disputed supply---Provision of S.7 of the Sales Tax Act, 1990 as it stood in May, 1996, provided that the appellant could claim input tax in case of goods imported into Pakistan if he held the bill of entry duly cleared by the Customs under S.79 or 5.104 of the Customs Act, 1969---Appellant had bill of entry duly cleared under the Customs Act, 1969 and input tax had been paid at the import stage---Appellant thus had rightly claimed input-tax adjustment---Claim of input-tax adjustment being valid and legal, appellant could neither be asked to pay this amount nor could he be charged with payment of any additional tax or penalty---Order for payment of tax alongwith additional tax and penalty was illegal and the same was set aside---Appeal was accepted. JUDGMENT MIAN ABDUIL QAYYUM MEMBER…

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