KARACHI: An appellate bench of High Court of Sindh (SHC) comprising Justice Muhammad Iqbal Kalhoro and Justice Agha Faisal disposed of a constitutional petition filed by Qasimia CNG Filling Station, Khairpur, Sehwan CNG Filling Station, Sehwan Bypass, Zam Zam CNG Hyderabad and others in terms of judgments already passed and reported by SHC.
The petitioner impugned the demand for payment of extra tax, further tax raised by Chief Commissioner (Inland Revenue RTO II, Karachi). The other respondents include Federal Secretary Revenue and SSGC.
As the petition was taken up, the counsel from both the sides submitted that the issue involved in this petition has already been decided in a number of cases. They placed on record copies of those judgment including one Al Zarina Glass Industries Case, M Arif Ice Factory case and others and prayed that this petition can also be disposed off on same terms and conditions.
The dispute was discussed and adjudged in a petition filed by Digicom (Pvt.) Ltd which is as follows
“while examining the provisions of section 13(1) of the Sales Tax Act 1990 and SRO 460(I)/2013 dated 03.5.203, has been pleased to hold as under: – 7. On a minute examination of the provisions of Section 13(1) of the Act, it appears that it provides, notwithstanding the provisions of section 3 for exemption from the levy of sales tax on the supply or import of goods specified in the Sixth Schedule, subject to such conditions as the case may be, whereas, sub-section (2)(a) provides, that notwithstanding the provisions of sub-section (1), the Federal Government may by Notification in the official gazette exempt any taxable supplies made or import or supply of any goods or class of goods, from the whole or any part of the tax chargeable under this Act, subject to conditions and limitations specified therein. On perusal of S.R.O. 460(I)/2013 it reflects that it has been specifically issued in terms of sub-section (2)(a) of section 13 in addition to other relevant provisions of the Act, and, therefore, we are of the view that through S.R.O. 460(I)/2013 the Federal Government has fixed the rate of Sales Tax as mentioned in Column 2 of the Table of the SRO at different rates and such fixation of Sales Tax appears to be the final liability of Sales Tax at import and supply stage. The words used in section 13(2)(a) of the Act are very specific and provides for exemption any taxable import or supply of any goods from the whole or any part of the Sales Tax chargeable under the Act and not merely under Section 3(1) of the Act as contended by the learned Counsel for respondent No.2. This would mean that the provision of section 13 of the Act has an overriding effect on the chargeability of Sales Tax in terms of section 3(1) as well as 3(1)(a) of the Act. Once the mechanism has been prescribed by the Federal Government by issuance of a Notification in terms of various provisions of the Act, including 3 section 13(2)(a) of the ibid, the question of payment of any additional tax in terms of section 3(1)(a) of the Act, including 3 section 13(2)(a) of the ibid, the question of payment of any additional tax in terms of section 3(1)(a) of the Act, for supply of goods to unregistered person(s) does not arise. The provision of section 3(1)(a) could only be invoked in respect of goods which are being charged Sales Tax under section 3(1) of the Sales Tax Act 1990 at the rate specified therein at ad-valorem basis which is presently @ 17%. Once the mode and manner and the rate of Sales Tax has been altered, modified or fixed by the Federal Government either through subsection (2)(b) and (6) of Section 3, read with section 13, no further tax can be demanded once the liability of Sales Tax is discharged on the basis of a special procedure as contemplated under S.R.O. 460(I)/2013.”
The bench disposed of the petition ordering that same reasons, same terms and same extent would be followed.