| Case ID |
f6a9e653-041e-4e4d-935a-33ee45aa017d |
| Body |
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| Case Number |
Civil Appeals Nos. 45 K to 50 K of 1982 and 82 K o |
| Decision Date |
Jan 18, 1989 |
| Hearing Date |
|
| Decision |
The Supreme Court of Pakistan granted leave to appeal to resolve the conflict regarding the interpretation of the Sales Tax Act, 1951. The Court concluded that yarn, being a partly manufactured good, is liable for sales tax under the Act. The judgment emphasized that ginned cotton is similarly classified as a partly manufactured good in the context of yarn. Furthermore, it was reaffirmed that the keeping of goods by the manufacturer for personal use is regarded as a sale. The decision also highlighted that merely because goods were incorporated into an end product does not exempt them from sales tax. The Court dismissed the appeals, confirming the levies imposed by sales tax authorities on the raw materials used in the manufacture of exported goods. |
| Summary |
This case revolves around the interpretation of the Sales Tax Act, 1951, particularly sections 3(6)(d) and 2(12), concerning the liability of sales tax on partly manufactured goods. The Supreme Court of Pakistan addressed the issue of whether yarn and ginned cotton, used in the manufacture of cloth, are subject to sales tax. The Court ruled that these items are indeed liable for sales tax, stressing that the act of incorporating goods into a finished product does not exempt them from taxation. The decision serves as a precedent for the treatment of raw materials and partly manufactured goods under the Sales Tax Act, reinforcing the principle that manufacturers must account for sales tax on all stages of production. This ruling is crucial for businesses in the textile industry and has implications for how sales tax is assessed on exported goods. The case highlights the importance of compliance with sales tax regulations and provides clarity on the definitions of manufactured goods within the context of Pakistani law. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
ABBASI TEXTILE MILLS LTD,
COMMISSIONER OF SALES TAX (EAST), KARACHI,
MUHAMMAD HALEEM, C.J.,
SHAFIUR RAHMAN,
ZAFFAR HUSSAIN MIRZA,
SAAD SAOOD JAN, JJ
|
| Judges |
MUHAMMAD HALEEM, C.J.,
SHAFIUR RAHMAN,
ZAFFAR HUSSAIN MIRZA,
SAAD SAOOD JAN, JJ
|
| Lawyers |
S. Ali,
Athar,
Ali Amjad,
Yousuf Rafi,
Mrs. Rashida Patel,
S. Shahudul Haque,
Muzaffar Hasan
|
| Petitioners |
ABBASI TEXTILE MILLS LTD
|
| Respondents |
COMMISSIONER OF SALES TAX (EAST), KARACHI
|
| Citations |
1990 SLD 182,
1990 PTD 189,
(1991) 63 TAX 1
|
| Other Citations |
2016 PTD 1675,
PLD 1997 SC 32
|
| Laws Involved |
Sales Tax Act, (III of 1951),
Constitution of Pakistan, 1973
|
| Sections |
3(6)(d),
2(12),
185(3)
|