Law: Sales Tax Act, 1990

Section: 2,.2(35)(41)(46),3(1),72

(a) Taxation----Tax, levy/charge of---Exemption---Burden of proof---Principles stated. To bring a subject to charge and levy of tax, the burden is upon the Revenue to establish that said subject is chargeable to tax. When such burden is discharged by the Revenue, then burden shifts on the assessee, who seeks exemption from the levy of such charge. "Charge and exemption" are two different concepts in taxation laws. An assessee though chargeable to tax can claim exemption by virtue of an exemption clause provided in the relevant law/schedule. In such situation, the claimant of exemption has to establish and prove such claim. (b) Sales Tax Act (VII of 1990)---Ss.2(35)(41)(46), 3(1) & 72---C.B.R's Circular No.18-STT/2002, dated 22-3-2002---Medicines supplied as samples free of cost to medical practitioners by pharmaceutical company---Charging of sales tax on such medicines---Scope---ht order to bring a supply within ambit of sales tax, there must be a taxable supply by registered person in consideration of money or kind and sales must be made during course or in furtherance of any taxable activity---Supply of medicines by company "free of cost" without receiving any "consideration in money or kind" could not be termed as taxable supply, thus, would not be liable to levy of sales tax---C. B. R's Circular No. C. No.19-STT/2002, dated 22-3-2002 declaring such medicines not chargeable to sales tax was binding on all officers of Sales Tax Department in discharge of their administrative functions---Principles. (c) Interpretation of statutes--- ----Fiscal statutes---Charging provision---Interpretation of---Principles stated. In taxing statutes, charging provisions are regarded as most significant as these define the scope and application of the proposed charge of tax upon a subject. Charging provisions are required to be construed strictly. In taxing statute, a tax on any person is to be levied by clear and unambiguous words and the expressions used in charging sections are not to be stretched by any process of interpretation, so as to bring a person within the tax net not falling under the clear and plain language of the statute. (d) Interpretation of statutes---…

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