Law: Sales Tax Act, 1990

Section: 7,7A,8,46,66

Sales Tax Act (VII of 1990)---Ss. 7, 7-A, 8, 46. & 66---S.R.O. 578(I)/98, dated 12-6-1998---Refund of input tax---Application for---Dismissal of application---Appeal to Appellate Tribunal---Appellants filed an application under S.66 of Sales Tax Act, 1990 for refund of input tax paid on purchase of High Speed Diesel, left unadjusted in the relevant tax period---Since adjustment of input tax paid on purchase of High Speed Diesel was held not admissible in terms of Sr. No.(11) of S.R.O. 578(I)/98 dated 12-6-1998, a show-cause notice was issued to appellants and after hearing parties, Adjudicating Officer; rejected refund---Appeal filed against rejection order having been dismissed by Collector, appellants had filed appeal to Appellate Tribunal---Claim of appellant was "that they had purchased High Speed Diesel .for consumption in their "Power-House" for generation of electricity which was used in manufacturing and production of taxable goods---Intention of appellants at the time of. purchase of diesel was nothing, but to generate power through which appellants could operate their machines for production of taxable goods---Purpose for which supplies were received as also the amount of input tax paid, having never been doubted" at least by "Departmental Authorities, their refusal to allow either refund or adjustment, could not be supported on any premise---Once a registered person established that the goods in question on which input tax had been paid were used or to be used for the purpose of manufacture or production of taxable goods or for taxable supplies made or to be made by him, then subject to terms of S.7 of Sales Tax Act, 1990, he would become entitled to the deduction of said input tax paid by him for the said purpose from output tax that was due from him in respect of particular tax period---Appellate Tribunal directed that input tax refund/adjustment be allowed on High Speed Diesel which had been used or to be used for, manufacture or production of taxable goods or for taxable supplies made or to be made by appellants. Messrs Sheikh Spinning Mills Ltd. v. Federation of Pakistan and others 2002 PTD 2959 and Central Board of Revenue,, Islamabad v.…

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