| Case ID |
de1f9e5b-5207-4d45-826a-d62f10d9dedb |
| Body |
View case body. Login to View |
| Case Number |
Civil Appeals Nos.1866 of 1996, 1262 of 1999, 1288 |
| Decision Date |
Nov 11, 2003 |
| Hearing Date |
|
| Decision |
The Supreme Court of Pakistan ruled that sales tax is to be paid based on the receipt of advance payments rather than upon delivery of goods. The Court interpreted the relevant sections of the Sales Tax Act, 1990, affirming that the intention of the law was to ensure timely payment to the government treasury. It was emphasized that each case should be evaluated based on its specific circumstances, particularly the nature of the business practices involved. The Court also addressed the imposition of penalties and additional taxes, highlighting that such measures should only apply if the non-payment of tax was determined to be willful or mala fide. The Court's decision clarified the definition of 'time of supply' under the Sales Tax Act, ensuring that manufacturers cannot retain sales tax amounts beyond the required payment period. |
| Summary |
In the landmark case involving D.G. Khan Cement Company Ltd. and the Federation of Pakistan, the Supreme Court of Pakistan addressed critical issues surrounding the interpretation of the Sales Tax Act, 1990. The case revolved around whether sales tax should be calculated based on advance payments received or upon the delivery of goods. The Court determined that the sales tax is due upon receipt of advance payments, thereby ensuring that the government receives its due revenue in a timely manner. This decision is pivotal for manufacturers, clarifying that sales tax obligations arise at the time of payment rather than at the point of sale. The ruling reinforces the need for compliance with tax regulations and sets a precedent for future cases involving sales tax interpretations. The case also tackled the imposition of penalties for late payments, emphasizing that additional taxes should only be applied in cases of willful evasion. This ruling serves as a significant reference point for legal practitioners and businesses navigating the complexities of sales tax law in Pakistan. Key terms associated with this case include 'Sales Tax Act', 'tax compliance', 'penalties', and 'taxable supply', which are trending in legal discussions. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
FEDERATION OF PAKISTAN,
D.G. KHAN CEMENT COMPANY LTD.
|
| Judges |
MUNIR A. SHEIKH,
IFTIKHAR MUHAMMAD CHAUDHRY,
RANA BHAGWANDAS
|
| Lawyers |
Raja Muhammad Akram, Senior Advocate Supreme Court for Appellants (in Civil Appeal No. 1866 of 1996),
Raja Abdul Ghafoor, Advocate-on-Record for Respondents Nos. 2 to 7 (in Civil Appeal No. 1866 of 1996),
A. Karim Malik, Advocate Supreme Court for Appellants (in Civil Appeal No. 1262 of 1999),
Abdul Latif Yousafzai, Advocate Supreme Court and M. S. Khattak, Advocate-on-Record for Appellant (in Civil Appeal No. 1288 of 2000),
Tasleem Hussain, Advocate-on-Record (absent) for Respondent No. 2 (in Civil Appeal No. 1288 of 2000),
Raja Abdul Ghafoor, Advocate-on-Record for Respondent No. 3 (in Civil Appeal No. 1288 of 2000),
Imtiaz Rashid Siddiqui, Advocate Supreme Court for Appellants (in Civil Appeal No. 1293 of 2001),
Sheikh Salah-ud-Din, Advocate-on-Record (absent) for Respondents (in Civil Appeal No. 1293 of 2001),
Ahmar Bilal Sufi Advocate Supreme Court and Imtiaz Rashid Siddiqui, Advocate Supreme Court for Appellants (in Civil Appeals Nos. 1294 and 1296 of 2001),
Sheikh Salah-ud-Din, Advocate-on-Record (absent) for Respondents (in Civil Appeals Nos. 1294 and 1296 of 2001),
Mian Qamar-ud-Din Ahmad, Advocate Supreme Court and Imtiaz Rashid Siddiqui, Advocate Supreme Court for Appellants (in Civil Appeal No. 1306 of 2001),
Sheikh Salah-ud-Din, Advocate-on-Record for Respondent (in Civil Appeal No. 1306 of 2001)
|
| Petitioners |
others,
D.G. KHAN CEMENT COMPANY LTD.
|
| Respondents |
FEDERATION OF PAKISTAN,
others
|
| Citations |
2004 SLD 309,
2004 PTCL 224,
(2004) 90 TAX 1,
2004 PTD 1179,
2004 SCMR 456
|
| Other Citations |
PLD 1991 SC 963,
PTCL 1995 CL 415,
2003 PTD (Trib.) 928,
2001 PTD (Trib.) 2888,
2002 PTD (Trib.) 300,
GST 2002 CL 280 (Trib.),
1999 PTD 3907
|
| Laws Involved |
Sales Tax Act, 1990
|
| Sections |
2(22),
3,
28,
30,
34
|