| Case ID |
3ba8ce17-26bc-4870-b005-aac18f8e4c10 |
| Body |
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| Case Number |
Civil Petitions Nos. 846-L and 2074-L of 2017 |
| Decision Date |
May 27, 2021 |
| Hearing Date |
May 27, 2021 |
| Decision |
The Supreme Court of Pakistan dismissed the leave petitions filed by the department against various orders of the High Court concerning the Sales Tax Act, 1990. The Court held that the provisions of section 4 of the Sales Tax Act, which allows for zero rating of taxable supplies, take precedence over the further tax provisions under section 3(1A). The Court rectified erroneous observations made by the High Court in previous judgments, affirming that the Sales Tax Act operates as a single integrated tax regime rather than imposing multiple tax regimes. The decision reinforces the understanding of taxable supplies and their treatment under the law, ensuring clarity in the application of the Sales Tax Act, particularly concerning exports and supplies to unregistered persons. |
| Summary |
In the landmark case decided on May 27, 2021, the Supreme Court of Pakistan addressed the complexities surrounding the Sales Tax Act, 1990, particularly focusing on the zero rating of taxable supplies. The case revolved around the interpretation of sections 3 and 4 of the Act, which dictate the tax obligations of registered and unregistered persons. The Court clarified that zero-rated supplies made under SRO No. 1125(I)/2011 are not subject to further tax, thereby rectifying previous judicial misunderstandings. This ruling is significant for businesses operating in sectors affected by the Sales Tax Act, particularly those involved in export-oriented activities. The decision emphasizes the importance of understanding the integrated tax framework established by the Sales Tax Act, which aims to streamline tax obligations and support local industries engaged in manufacturing export products. The Supreme Court's ruling serves as a crucial reference for future cases involving sales tax issues, ensuring that the principles of the Act are applied consistently and fairly. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
COMMISSIONER INLAND REVENUE, MULTAN,
ACRO SPINNING AND WEAVING MILLS LTD.
|
| Judges |
UMAR ATA BANDIAL, JUSTICE,
SYED MANSOOR ALI SHAH, JUSTICE,
MUNIB AKHTAR, JUSTICE
|
| Lawyers |
Sarfraz Ahmad Cheema, Advocate Supreme Court for Petitioners
|
| Petitioners |
COMMISSIONER INLAND REVENUE, MULTAN AND OTHERS
|
| Respondents |
ACRO SPINNING AND WEAVING MILLS LTD., MULTAN AND OTHERS
|
| Citations |
2021 SLD 1630,
2021 PTD 1355,
2021 SCMR 1308,
(2021) 124 TAX 205
|
| Other Citations |
MKB Spinning Mills (Pvt.) Ltd. v. Federation of Pakistan and others 2018 PTD 2364,
Pakistan Beverage Ltd. v. Large Taxpayer Unit 2010 PTD 2673
|
| Laws Involved |
Sales Tax Act, 1990
|
| Sections |
3,
3(1),
3(1A),
4
|