| Case ID |
14a1e3f4-d6a3-4151-a331-1fc472cb1b1a |
| Body |
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| Case Number |
Sales Tax Case No. 171 of 1971 |
| Decision Date |
Apr 04, 1984 |
| Hearing Date |
Apr 03, 1984 |
| Decision |
The court ruled that the Sales Tax Officer was justified in charging sales tax on the value of yarn used in the manufacture of Mazari cloth. The court highlighted that the term 'use' in the context of the Sales Tax Act should encompass not only the independent use of goods but also their incorporation into other products. The Supreme Court's precedent in Noorani Cotton Corporation was cited, establishing that sales tax can be levied on partly manufactured goods when they are incorporated into another product, thus affirming the Tribunal's ruling. The decision clarifies the application of sales tax concerning raw materials and manufactured goods, emphasizing the need for compliance with the provisions of the Sales Tax Act. |
| Summary |
The case of Gul Ahmad Textile Mills Ltd. vs. Commissioner of Sales Tax centers around the interpretation of sales tax obligations under the Sales Tax Act of 1951. The main contention was whether sales tax could be imposed on yarn used in the manufacture of Mazari cloth. The Sindh High Court, referencing previous Supreme Court rulings, concluded that the term 'use' should be interpreted broadly, allowing for taxation on goods that are integrated into other products. This case is significant for manufacturers as it delineates the boundaries of tax liability concerning raw materials and finished goods, reinforcing the legal framework governing sales tax in Pakistan. Keywords: Sales Tax, Mazari Cloth, Textile Industry, Tax Liability, Pakistan Law, Supreme Court Rulings. |
| Court |
Sindh High Court
|
| Entities Involved |
COMMISSIONER OF SALES TAX,
GUL AHMAD TEXTILE MILLS LTD.
|
| Judges |
NAIMUDDIN SAEEDUZZAMAN SIDDIQI,
ALI NAMAZ BUDHANI
|
| Lawyers |
Ali Athar,
Nasrullah Awan
|
| Petitioners |
Messrs GUL AHMAD TEXTILE MILLS LTD., KARACHI
|
| Respondents |
COMMISSIONER OF SALES TAX (CENTRAL), KARACHI
|
| Citations |
1985 SLD 166,
1985 PTD 211,
(1984) 50 TAX 73
|
| Other Citations |
Latif Bawany Jute Mills Ltd. and 4 others v. The Sales Tax Officer, Companies Circle I, Dacca and another 1971 P T D 26,
Commissioner of Sales Tax v. Crescent Textile Mills Ltd. 1975 P T D 75,
Commissioner of Sales Tax, North Zone (West Pakistan), Lahore v. H. Muhammad Hussain & Co., Lahore 1974 P T D 20,
Commissioner of Sales Tax, Rawalpindi Zone, Rawalpindi v. Shafiq Corporation Limited., Gujrat 1974 P T D 15,
Messrs Paracha Textile Mills v. Commissioner of Sales Tax 1980 P T D 17,
Messrs Abbasi Textile Mills Ltd. v. Commissioner of Sales Tax (East), Karachi 1982 P T D 17,
Hunza Astan Textile Woollen Mills Ltd. v. Commissioner for Sales Tax, Rawalpindi Zone, Rawalpindi 1973 P T D 544,
Noorani Cotton Corporation v. The Sales Tax Officer P L D 1965 S C 161
|
| Laws Involved |
Sales Tax Act, 1951,
Constitution of Pakistan, 1973
|
| Sections |
3,
3(6)(d),
17(2),
189
|