| Case ID |
5131f9d9-4eaa-49f3-914d-a2c5c004146b |
| Body |
View case body. Login to View |
| Case Number |
Writ Petitions Nos. 2027 and 259 of 1998 |
| Decision Date |
Apr 14, 1998 |
| Hearing Date |
|
| Decision |
The Lahore High Court dismissed the writ petitions filed by Messrs Ashraf Sugar Mills concerning the applicability of sales tax on Bagasse produced for self-consumption. The court found that the definition of 'manufacture' under the Sales Tax Act, 1990 includes the production of goods for self-consumption. Therefore, even though the petitioners argued that Bagasse was not sold to third parties, the court upheld that the production of Bagasse constituted a taxable activity under the law. The court emphasized that the legislature did not exceed its limits by imposing tax on such production, and thus the petitioners were liable for the sales tax during the relevant period. The court also noted that the Central Board of Revenue's circular lacked jurisdiction but that this did not change the tax liability determined under the Sales Tax Act. |
| Summary |
In the case of Messrs Ashraf Sugar Mills vs. Central Board of Revenue, the Lahore High Court addressed critical issues regarding the Sales Tax Act, 1990, particularly focusing on the definition of manufacture and taxable supply. The case arose from the petitioners' contention that they should not be liable for sales tax on Bagasse, a by-product of sugar production, which they consumed themselves without selling to third parties. The court ruled that self-consumption does not exempt the production of goods from tax obligations as defined in the Sales Tax Act, affirming that the production of Bagasse fell within the ambit of manufacture. This ruling has significant implications for businesses involved in the production of goods, emphasizing the importance of understanding tax liabilities under the Sales Tax Act. The decision reinforces the authority of the legislature to impose taxes on the manufacture of goods, irrespective of whether they are sold or consumed internally. The case highlights the need for businesses to remain compliant with tax regulations and to seek legal advice when uncertain about their tax obligations. Keywords: Sales Tax Act, manufacture, taxable supply, Bagasse, tax liability, Lahore High Court. |
| Court |
Lahore High Court
|
| Entities Involved |
Not available
|
| Judges |
MALIK MUHAMMAD QAYYUM, J
|
| Lawyers |
Ijaz Ahmad Awan,
A. Karim Malik,
Imtiaz Rasheed Siddiqui,
Ali Sibtain Fazli
|
| Petitioners |
Messrs ASHRAF SUGAR MILLS
|
| Respondents |
CENTRAL BOARD OF REVENUE and others
|
| Citations |
1998 SLD 564,
1998 PTD 3856,
(1998) 77 TAX 238
|
| Other Citations |
Not available
|
| Laws Involved |
Sales Tax Act, 1990
|
| Sections |
2(35),
2(16),
2(41),
3
|