| Case ID |
512cd1e9-152c-4529-b098-ac8c05549e7c |
| Body |
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| Case Number |
C.P. No. D-2110 of 1996 |
| Decision Date |
Apr 23, 2004 |
| Hearing Date |
Mar 03, 2004 |
| Decision |
The Sindh High Court ruled in favor of the petitioners, Ghandhara Nissan Diesel, Ltd., determining that the advance payments received by them from authorized agents were not liable to sales tax as no concluded contracts or sales had occurred. The court found that the petitioners did not willfully evade the sales tax, and thus the imposition of penalties and additional tax was unjustified. The judgment emphasized that the appropriate time for tax liability arises only when a sale is completed, not merely upon receiving advance payments. |
| Summary |
In the case of Ghandhara Nissan Diesel, Ltd. vs. Sales Tax Department, the Sindh High Court addressed the complexities surrounding sales tax liability on advance payments. The petitioners contended that the amounts received by them were merely advance payments for vehicles that had not yet been sold. The court analyzed the definitions within the Sales Tax Act, particularly focusing on the concepts of 'supply' and 'time of supply'. The ruling clarified that sales tax should be applicable only when a sale is finalized, not at the point of receiving advance payments. This decision is significant for manufacturers and suppliers in understanding their tax obligations, especially in scenarios involving advance payments and anticipated sales. |
| Court |
Sindh High Court
|
| Entities Involved |
Sales Tax Department,
Ghandhara Nissan Diesel, Ltd.
|
| Judges |
SAIYED SAEED ASHHAD, C.J.,
GHULAM RABBANI, J
|
| Lawyers |
Aziz A. Shaikh,
Sajjad Ali Shah
|
| Petitioners |
GHANDHARA NISSAN DIESEL, LTD.
|
| Respondents |
others,
SALES TAX DEPARTMENT
|
| Citations |
2004 SLD 2688,
(2004) 90 TAX 291,
2004 PTD 2771
|
| Other Citations |
1999 PTD 3907,
2002 PTD 2440,
2004 SCMR 456
|
| Laws Involved |
Sales Tax Act, 1990,
Constitution of Pakistan, 1973,
Sale of Goods Act, (III of 1930)
|
| Sections |
2(22),
2(28),
2(30),
3(a),
6,
6(3),
34,
199,
5
|