COMMISSIONER INLAND REVENUE vs Rana RIASAT TUFAIL and others
This Intra-Court Appeal (ICA) was filed by the Commissioner Inland Revenue challenging the order dated 10-06-2013 passed by a learned Single Judge in Chamber, which directed the tax department to allow sales tax refund to the respondents. The primary legal issue was whether the revenue authority could lawfully withhold a sales tax input refund claim on the ground that the invoices belonged to suppliers/units that were subsequently blacklisted under the Sales Tax Act, 1990 and Sales Tax Rules, 2006. The High Court affirmed the findings of the learned Single Judge, holding that withholding the refund was without legal justification. The court observed that the original order allowing the refund claim dated 05-04-2008 had attained finality as it was never challenged. Furthermore, at the time of the transaction, the supplying entities were admittedly not blacklisted, and their blacklisting occurred subsequently without any final order existing against them. Consequently, the Intra-Court Appeal was dismissed, establishing that subsequent blacklisting of suppliers cannot retrospectively invalidate legitimate sales tax refund claims.
- Can a sales tax input refund be withheld on the basis of subsequent blacklisting of supplying entities?
- Does subsequent blacklisting of a supplier retrospectively disentitle a buyer from claiming a sales tax refund for past valid transactions?
- Can an administrative authority withhold sales tax refund when the underlying order allowing the refund has attained finality without challenge?
- sections 6 of the Sales Tax Act, 1990
- section 73 of the Sales Tax Act, 1990
- Rule 12(5) of the Sales Tax Rules, 2006
ORDER
Through this ICA, the appellant has impugned the order dated 10-6-2013 passed by the learned Single Judge in Chamber.
2. The basic grievance of the appellant is that the respondent was not entitled to the refund claimed by it for the tax period June, 2001. Learned counsel argued that the learned Single Judge in Chamber failed to appreciate the fact that the respondent No,1 has claimed refund on the invoices of blacklisted units which is in violation of sections 6 and 73 of the Sales Tax Act, 1990 read with Rule 12(5) of the Sales Tax Rules, 2006.
3. Learned counsel for the respondents argued that the blacklisting of the entitles against whom the refund was claimed was subsequent to the period for which the refund was claimed. He further argued that the petitioner is entitled to the refund as even today there is no final order issued by the appellant with respect to the three units that have been blacklisted. The respondents filed an input refund claim for the tax period June, 2001 against 19 suppliers. Out of these the appellant did not issue refund against three entities, who was stated to be blacklisted.
4. Heard learned counsel for the parties and reviewed the record available on the file.
5. We have reviewed the impugned order wherein it has been held that withholding of the refund claim against three entities is without any legal justification because the respondents were allowed the refund claim on 5th of April, 2008, which order has never been challenged and has attained finality. Nothing has been argued before use to show how this finding of the learned Single Judge in Chamber is illegal or contrary to the record. Furthermore, the blacklisting order is subsequent to the period for which refund is being claimed. At the time of the transaction the three entities were admittedly not blacklisted. Also there is no final order even today against the three blacklisted units. Therefore, no case for interference is made out.
6. In the light of the aforesaid, this ICA is dismissed.
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- Commissioner Inland Revenue vs M/s Tariq Poly Pack (Pvt) Ltd. 2015 LHC 1600
- COMMISSIONER INLAND REVENUE vs TARIQ POLY PACK (PVT) LTD. 111 Trax 405
- COMMISSIONER INLAND REVENUE vs TARIQ POLY PACK (PVT.) LTD. 2015 LHC 1600, 2015 PTD 2256
- Messrs SHAMA EXPORTS (PVT.) LTD., FAISALABAD vs C.I.R. (A), FAISALABAD 2017 PTD (Trib.) 70
- M/s. Shama Exports (Pvt.) Ltd., Faisalabad. vs : The CIR(A), Faisalabad and PTCL 2017 CL. 239
- Messrs AL-ZAMIN TEXTILE MILLS LTD., FAISALABAD vs C.I.R.(A), FAISALABAD and others 2015 PTD (Trib.) 1363
- COMMISSIONER INLAND REVENUE, FAISALABAD vs Messrs NAGRA SPINNING 2019 PCRLJ 590, 2019 PTD 257