| Case ID |
1e2a5060-1b66-47c4-a7ed-209ff7102003 |
| Body |
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| Case Number |
Special Sales Tax Reference Application No.81 of 2 |
| Decision Date |
Sep 27, 2006 |
| Hearing Date |
|
| Decision |
The Sindh High Court dismissed the reference application under section 47(1) of the Sales Tax Act, 1990, affirming that the Sales Tax Department of the Federal Government was not empowered to charge further tax under section 3(1A) of the Sales Tax Act, 1990, without corresponding provisions in the Sindh Sales Tax Ordinance, 2000. The decision clarified that the chargeability of sales tax on services rendered to unregistered persons was restricted to 15% of the value of taxable services, and thus, the Tribunal's findings were upheld. The court noted that the legislature had merely provided an enabling provision for the Federal Sales Tax Department to charge tax on services under the Sindh Sales Tax Ordinance, 2000 in the same manner as under the Sales Tax Act, 1990, and confirmed that there was a clear distinction between the charging provisions and the machinery part of the statute. |
| Summary |
This case revolves around the interpretation of the Sales Tax Act, 1990, and the Sindh Sales Tax Ordinance, 2000, particularly concerning the chargeability of sales tax on services rendered to unregistered persons. The Sindh High Court focused on whether further tax could be levied under the provisions of the Sales Tax Act when services were provided to non-registered persons. The court held that the sales tax applicable on such services was strictly limited to 15%, as per the provisions of the Sindh Sales Tax Ordinance, 2000, which did not allow for the imposition of further tax without explicit legislative backing. This case underscores the importance of clear statutory provisions in tax law and the limitations on the powers of tax authorities in the absence of such provisions. The ruling serves as a significant precedent for similar cases in tax law, emphasizing the necessity for legal clarity and the importance of adhering to established statutory frameworks when imposing tax liabilities. |
| Court |
Sindh High Court
|
| Entities Involved |
Collector of Sales Tax and Federal Excise,
Messrs Qasim International Container, Terminal Pakistan Ltd
|
| Judges |
MUHAMMAD MUJEEBULLAH SIDDIQUI,
FAISAL ARAB
|
| Lawyers |
Mr. Raja Muhammad Iqbal
|
| Petitioners |
COLLECTOR OF SALES TAX AND FEDERAL EXCISE
|
| Respondents |
Messrs QASIM INTERNATIONAL CONTAINER, TERMINAL PAKISTAN LTD
|
| Citations |
2007 SLD 1661,
2007 PTD 250
|
| Other Citations |
1990 PTD 29,
1991 PTD 178,
2002 PTD 121,
2004 89 Tax 371 (H.C. Kar.),
2004 PTD 901
|
| Laws Involved |
Sales Tax Act, 1990,
Sindh Sales Tax Ordinance (VIII of 2000)
|
| Sections |
47(1),
3(1A),
3A,
3AA,
33(2)(cc),
3(2),
3(3)
|