Law: Sales Tax Act, 1990

Section: 7(1),8(1)(a),8(1)(b)

(a) Notification--- ----Provisions of substantive law could not be nullified through a notification or under any sub-legislative measure---Notification deriving its legitimacy on basis of substantive provisions of main enactment could not be termed as violative thereof. (b) Sales Tax Act (VII of 1990)---Ss. 7(1) & 8(1)(a)(b)---S.R.O. 578(I)/98, dated 12-6-1998---Input tax paid on purchase of diesel consumed in running of generator for manufacture and production of taxable goods---Claim for adjustment of such input tax---Validity---Legislature under S.8(1)(b) of Sales Tax Act, 1990 specifically empowered Federal Government to deny adjustment of input tax on any item that might be used by taxpayer for manufacture or production of taxable goods or supplies---Section 8 of Sales Tax Act, 1990 on account of non obstante clause would override and prevail over provision contained in S.7 thereof---Such power conferred on Federal Government could only be invoked, when any item was duly notified in official Gazette---S.R.O. 578(I)/98, dated 12-6-1998 derived its legitimacy from provisions of S.8(1)(b) of that Act---Applicant's claim was rejected in circumstances. (c) Sales Tax Act (VII of 1990)--- ----S. 8(1)(b)---Notification disallowing tax credit for specified period--Subsequent withdrawal of such notification---Effect---Federal Government was competent to include any item in notification on which adjustment of input tax could not be claimed and to delete any item therefrom---Subsequent withdrawal of notification would not create any justification to avoid tax for period during which same was chargeable. Sheikh Spinning Mills Ltd v. Federation of Pakistan PTCL 2003 CL 411 ref. ORDER FAISAL ARAB, J.---The present Special Sales Tax Reference arises from the judgment, dated 7-3-2006 passed by the Customs, Excise and Sales Tax Appellate Tribunal Bench-II, Karachi in Appeal No.H-03/2006 (K-2), wherein following questions of law have been raised for this Court's consideration:-- (a) Whether on facts and circumstances of the case the learned Appellate Tribunal of Customs, Excise and Sales Tax, Karachi, Bench-II was justified to disallow input tax paid on purchase of…

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