Law: Sales Tax Act, 1990

Section: 2,2(16)(17)(33),3

Sales Tax Act (VII of 1990)---Ss. 2(16)(17)(33) & 3---Gamma sterilization of medical/surgical products through radiation by petitioner for pharmaceutical companies on payment of sterilization charges---Plea of Revenue that such activity of petitioner was manufacturing and its unit was manufacturer, thus, liable to pay sales tax on such receipts---Validity---Sales tax could be levied on value of taxable supplies or goods imported into Pakistan---Petitioner received medical products from their manufacturers and after passing through process of sterilization returned same to manufacturers---Petitioner charged sterilization charges from manufacturers---Medical products after going through process of sterilization were not converted into another distinct article or product nor were so changed, transformed or reshaped becoming capable, of being put to use differently or distinctly---Process of sterilization would not fall within definition of `manufacture'---Such activity was neither a sale nor lease nor disposition of goods nor a supply nor petitioner was a manufacturer---Levy of sales tax on such activity under S.3 of Sales Tax Act, 1990 would depend upon taxable supplies made in furtherance of taxable activity. Messrs AMIE Investment (Pvt.) Ltd. v. Additional Collector and others 2006 PTD 1459 and Ramna Fitting and Pipe Industry v. The Collector of Sales Tax 2002 PTD 470 rel. JUDGMENT MUHAMMAD MUNIR PERACHA, J.---During the course of audit of the records of the petitioner, by the Collectorate of Sales Tax, Rawalpindi, from the period 1998-99 to 2000-2001, the following irregularities were discovered:-- (i) "Messrs Al-Technique Corporation of Pakistan (Pvt.) Limited, Islamabad are mainly involved in irradiation, i.e. Gamma Sterilization, of medical/surgical products (syringes etc.) since 1987, in terms of provisions of section 2(16) of the Sales Tax Act, 1990 this activity is "manufacture" and status of unit as per the provisions of section 2(17) of the Sales Tax Act, 1990 is of "manufacturer" but unit didn't get sales tax registration on achieving prescribed turnover limit thus contravened, the provisions of section 14 of the Sales Tax Act, 1990 which is…

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