2004 PTD 2085

Sales Tax Appeals Nos.H-82/2000/6261, decided on 13th April, 2004. Versus A.S. Jaffery

Citation2004 PTD 2085

CourtCustoms, Excise and Sales Tax Appellate Tribunal

ORDER

YASMEEN ABBASEY, MEMBER (JUDICIAL).-----‑‑ ‑This appeal challenges the vires of the order, dated 2‑9‑2000 passed by the Additional Collector of Customs, Sales Tax and Central Excise Adjudication, Hyderabad, whereby he enforced a demand of tax in respect of the exempted goods.

2. According to the facts available on record, the appellant imported clover seeds. The said item was exempt in terms of the then Entry No.4 of the Sixth Schedule to the Sales Tax Act, 1990. The entry provides that the importation of seeds of fruits and spores for sowing will remain exempt from payment of sales tax in terms of section 13 of the Sales Tax Act, 1990. The audit officer of the respondent raised a demand of tax on its local supply and the respondent enforced the same vide the impugned order. Hence the present appeal.

3. The learned counsel for the appellant states that since his goods stood exempt vide Entry No.4 of the Sixth Schedule to the Sales Tax Act, 1990 hence there was no question of demand of tax.

4. The departmental representative, however, supported the impugned order for the reasons given therein.

5. We have heard the rival parties at length. The sole issue for decision is whether or not the tax was chargeable on the supplies made by the appellant. This issue has already been a moot point before the Superior Courts and in particularly in the case of Army Welfare Sugar Mills v. Federation of Pakistan 1992 SCMR 1652 and Messrs Premier Distributors v. Federation of Pakistan 2002 PTD 654. Their lordships held that the goods enjoying exemption under section 13(1) of the Sales Tax Act, 1990 go out of the purview of the Sales Tax Act and the supply of such goods at all the stages of the market mechanism do not fail within the purview of taxable supply being the supply of goods which are exempt from payment of sales tax under section 13 and consequently such goods go out of the scope of section 3(1) of the Sales Tax Act, 1990. Thus the demand of sales tax from the appellant in respect of goods which were out of the scope of sales tax provisions was not justified.

6. For the foregoing reasons we find that the impugned order has not been passed in accordance with law and the same is accordingly set aside.

C.M.A./125/Tax (Trib.) Appeal accepted.