Law: Sales Tax Act, 1990

Section: 11,3,7

Law: Constitution of Pakistan, 1973

Section: 199

Sales Tax Act (VII of 1990)---Ss. 3, 7 & 11---Constitution of Pakistan (1973), Art.199---Constitutional petition--Charge of sales tax---Determination of tax liability and assessment of tax---Petitioner/(Re-rolling Mills) were charged with Sales Tax pursuant to C.B.R. Order dated 25-10-1997, wherein 200 units of electricity consumption was treated as reflecting manufacture of one metric ton of mild steel products---Such indirect calculation of production based on electricity consumption, was devised with the consent of Re-rolling Mills Association, of which petitioner was a member---Subsequently by order dated 24-4-2001 C.B.R. amended the calculation and reduced to 130 units electricity consumption that represented the manufacture of one metric ton of mild steel products---New formula for assessing production was challenged by petitioner solely on the ground that department had applied it retrospectively with effect from 1-7-2000---Maintainability of constitutional petition filed by petitioner was opposed on grounds of estoppel, laches and availability of alternate remedy---On the merits, department, however was unable to show law authorizing C.B.R. to impose a retrospective formula of assessment on the bases of alleged consent of petitioner's Association rather than the petitioner itself --Validity---Taxing Department must justify its taxing measures on the basis of lawful authority and taxing measures could not be validated on the basis of the consent of an assessee---Executive measures having adverse effect on the propriety or rights of a citizen, could not be applied retrospectively---Important factual point in the case was that petitioner had accepted the validity and binding effect of the assessment formula agreed to by petitioner's Association---That agreement, however was about assessment rather than charging of a tax---Consent in such matters was a means of settlement---Question being whether agreement with Association had provided retrospective application of assessment formula; matter was sent back to department for verification, whether the date of enforcement of new assessment formula was needed as stated in the impugned order---If such date was…

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