| Case ID |
319f6856-9614-4a5e-8f2b-3bfd7820436b |
| Body |
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| Case Number |
S.T.R. Nos.20 of 2007 and 2 of 2008 |
| Decision Date |
Apr 09, 2008 |
| Hearing Date |
Apr 09, 2008 |
| Decision |
The Lahore High Court ruled that electricity produced by the petitioner and supplied for self-consumption constitutes a taxable supply under the Sales Tax Act. The court upheld the Appellate Tribunal's decision, confirming that self-consumption of electricity in a housing colony at the applicant's plant-site falls within the definition of taxable supply. The court found that the amount of sales tax amounting to Rs. 4,33,741 was correctly levied as it met the criteria of being a taxable activity. The judgment emphasized that the supply of electricity, even when consumed internally, is subject to sales tax unless explicitly exempted. |
| Summary |
In the case of Fauji Kabirwala Power Company vs. Collector of Customs and Sales Tax, the Lahore High Court examined the applicability of sales tax on electricity self-consumed by the power company. The court determined that the electricity supplied for self-consumption fell under the taxable supply as defined by the Sales Tax Act. The ruling clarified that even if no monetary transaction occurred for the self-consumed electricity, the act of supplying electricity to oneself constitutes a taxable activity. This decision is pivotal for understanding the implications of self-consumption of utilities and the obligations under sales tax regulations, particularly in the energy sector. The case references previous judgments which established the precedents for taxable supplies and the definitions under the law, ensuring that entities cannot evade tax liabilities simply due to internal consumption. The court's decision reinforces the legal framework governing sales tax liabilities for power generation companies and sets a clear standard for future cases. |
| Court |
Lahore High Court
|
| Entities Involved |
|
| Judges |
SYED HAMID ALI SHAH,
S. ALI HASSAN RIZVI
|
| Lawyers |
|
| Petitioners |
FAUJI KABIRWALA POWER COMPANY
|
| Respondents |
COLLECTOR OF CUSTOMS AND SALES TAX
|
| Citations |
2009 SLD 1323,
2009 PTD 316
|
| Other Citations |
Haji Sultan Ahmed v. Chairman, C.B.R., Islamabad and 5 others 2008 PTD 103,
Sheikhoo Sugar Mills Ltd. v. Government of Pakistan and others 2001 SCMR 1376 = 2001 PTD 2097,
Karachi Development Authority v. Central Board of Revenue and another 2005 PTD 2131
|
| Laws Involved |
Sales Tax Act,
Special Procedure for Collection and Payment of Sales Tax (Electric Power) Rules, 2000
|
| Sections |
2(41),
Rr.2(1)(h),
4
|