S.T.A. No.35/LB of 2001, decided on 8th March, 2002. Versus S.T.A. No.35/LB of 2001, decided on 8th March, 2002.

1. MIAN ABDUL QAYYUM, MEMBER (JUDICIAL).‑‑ ‑This appeal is directed against the sale tax Order‑in‑Original No. 1516 of 2001, dated 9‑10‑2001 (dispatched on 15‑11‑2001) passed by the learned Deputy Collector (Adjudication), Multan, whereby the appellant has been directed to pay Rs.24,.915 as sales tax alongwith additional tax calculated up to the time of deposit in accordance with section 34 of the Sales Tax Act, 1990. A penalty of Rs.4,000 has also been imposed.

2. Annexure "E" available at page 25 of the appeal file carries the details of the sale of fixed assets on the basis of which the appellant has been held to pay an amount of Rs.24,915 as sales tax. The same is re produced as under:‑‑

2. Particular

3. Weight Rate

4. Amount

5. Amount of Sales Tax

6. Disposal of Fixed Assets Motor Vehicle LOV‑8218 Transferred to Staff

7. Member against his advanced & profit earned.

8. 87,571

9. 13,136

10. Sub Total:

11. 87,571

12. 13,136

SCRAPE SALE

13. Steel Burada 1

14. Truck sale to Rana

15. Mehmood Ahmad

16. 1 Truck 55,000

17. 55,000

18. 8,250

19. Sub Total:

20. 55,000

21. 8,250

MUD SALE

22. Mud Sale to Barrat Hussain

23. 29 Truck 150

24. 4,350

25. 653

26. Mud Sale to Hazoor Bux

27. 09Truck 150

28. 1,350

29. 203

30. Mud Sale to Abdul Ghafoor

31. 06 Truck 150

32. 900

33. 135

34. Mud Sale to Manzoor Ahmad

35. 03 Truck 200

36. 600

37. 90

38. Mud Sale to Jamil Ahmad

39. 12 Trolly 222

40. 2,660

41. 399

42. Mud Sale to Jahangir

43. 06 Truck 500

44. 3,000

45. 450

46. Sub Total:

47. 12,860

48. 929

49. Sales of Old Vehicle Tyres SGF‑7 Pajero old tyres sold To Mazhar Ali

50. 04 Nos. 500

51. 2,000

52. 300

53. Sub Total;

54. 2,000

55. 300

MISCELLANEOUS INCOME

56. Amount received from Ghulam Hussain (Layyah Depot) against Shortage of Sugar Cane.

57. 8,620

58. 1,293

59. Refund of amount recovered Against shortage of Sugarcane in 1997‑98.

60. (2,000)

61. Amount written off.

62. 46

63. 7

64. Sub Total:

65. 6,666

66. 1,300

67. Grand Total:

68. 1,64,097

69. 24,915."

3. Learned counsel for the appellant has relied on judgment dated 13‑9‑2001 passed by Hon'ble Sindh High Court, Karachi reported in 2002 PTD 976 to contend that no sales tax was leviable on the goods sold by the appellant, the details of which have been given in annexure‑E as the same was not in furtherance of the regular business activity of the appellant which was engaged in manufacturing sugar.

4. The learned D.R. when confronted with this esteemed Authority of the Hon'ble Sindh High Court, Karachi had nothing to say in defence of the impugned order.

5. Admittedly the appellant is primarily engaged in the business of manufacturing sugar. Admittedly the disposal of motor vehicle, steel Burada, mud sale and sale of old vehicle tryers is not the ordinary business of the appellant. The disposal of these assets can, therefore neither be a taxable activity nor taxable supply for purposes of Sales Tax Act, 1990. The judgment by the Hon'ble Sindh High Court, Karachi covers the point. Following the said judgment, it is held that the sale of these items was not amendable to sales tax. Regarding the amount of Rs.8,620 received from Ghulam Hussain of Layyah Depot against shortage of sugarcane and refund of amount of Rs.2,000 recovered against shortage of sugarcane in 1997‑98 the same too is not liable for payment of any sales tax. Keeping in view the above discussion, the impugned order is not sustainable and the same is set aside. The appeal is accepted.

70. C.M.A./717/Tax (Trib.) Appeal accepted.