MESSRS TRIBAL TEXTILE MILLS LTD. Versus COMMISSIONER OF SALES TAX

SAAD SAOOD JAN, J .‑These are two applications under section 17 of the Sales Tax Act, 1951. Although they relate to two different assessment years the facts and the questions of law raised therein are identical. For this reasons they are being taken together.

2. The petitioner in the two petitions is a private limited company and is engaged in the business of manufacturing cotton‑yarn. As its total turn‑over in the assessment years in question was above the minimum taxable limit, it was assessed to sales tax. During the assessment proceedings it claimed adjustment in sales tax in respect of the raw material purchased by it from the local market. However, in support of its claim for adjustment it did not produce any evidence to show that the persons from whom it had purchased the raw material had paid any sales tax thereon. In the absence of such a proof the Sales‑tax Officer disallowed the claim. It challenged the decision of the Sales Tax Officer before the Appellate Tribunal but without any success. It has now come to this Court.

3. The questions of law formulated by the petitioner for the considera tion of this Court are:

(i) Whether on facts and in the circumstances of the case the learned members of the Appellate Tribunal were right in interpreting the provisions of sections 3, 4 and 27 and disregard the provisions of section 12 in coming to the conclusion that "as the goods can be sold without payment of the sales tax by so many different sellers, the duty lies on the purchaser manufacturer to show either by production of invoice that such sales tax was paid earlier or by some independent evidence of such happening."

(ii) Whether on facts and circumstances of the case the learned Tribunal was right in departing from interpretation put by the Department and the practice consistently followed over a long period of time and refusing the assessee's claim to refund under section 27 the Sales Tax Act, 1951.

4. In the Sales Tax Act, hereinafter referred to as the Act, the charging provision is contained in section 3. It inter alia makes all goods produced or manufactured in Pakistan subject to the levy of sales tax. It is payable by the manufacturers or producers of goods. There is no dispute that the j petitioner is a manufacturer of goods within the meanings of this section. Section 4 exempts certain goods from the levy of the tax. It deals with goods sold or imported by a licensed manufacturer, exporter or wholesaler. There was no evidence before the Tribunal nor was it alleged before it that the A petitioner had purchased the raw material from licensed manufacturers, importers or wholesalers; consequently, section 4 by expression is inapplic able to the case of the petitioner. Section 12 inter alia casts a duty upon the manufacturer or purchaser of goods to pay the tax leviable under the Act.

5. It is not disputed that sales tax is a single point tax. To give effect to this feature of the tax, Section 27(1) of the Act inter alia provides that where a manufacturer has purchased partly manufactured goods and tax has peen paid on those goods on any previous sale, a refund of the amount of the tax so paid shall be made to him. It will be noticed that a condi tion pre‑requisite for the grant of refund under this subsection is that the q tax should have been paid on a previous sale. The question whether tax was paid on a previous sale or not is one of evidence and we agree with the Tribunal that no legal presumption can be raised in this regard.

6. The precise contention of the learned counsel appearing for the petitioner is that under section 12 of the Act the seller of the partly manufactured goods is duty bound to pay the tax and the sales tax authorities have sufficient power to enforce the said duty. If the seller o partly manufactured goods does not care to perform his duty in this regard o the departmental authorities are remiss in enforcing the said duty the c manufacturer of finished goods should not be asked to bear the burden of the tax or be denied the benefits of the provisions of section 27(1). On the face of it this contention appears to be attractive but it cannot be accepted in view of the clear language of the subsection which as already indicated makes the grant of rend subject to the condition that the tax should have been paid as a matter of fact on the previous sale. As observ ed by Rowlett, J., in Cape Brandy Syndicate v. Inland Revenue Commis sioners (1921) 1 K B 64, in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. May be on account of this precondition a manufacturer of finished goods suffers because of the dishonesty of the seller from whom he has purchased the partly manufactured goods but then it is very possible that the total turnover of the seller may be below the minimum taxable limit. However, that may be, we do not see any reason why the sales tax authorities should dispense with the proof of the fulfilment of the said precondition before allowing adjustment or refund to the manu facturer of furnished goods. As already stated the petitioner did not pro duce any proof before the authorities under the Sales Tax Act to show that sales tax had already been paid on the raw material purchased by it. The said authorities were, therefore, justified in turning down its claim for adjustment.

7. As regard the second question dealing with the departmental practice the learned counsel appearing for the respondent denied that there was any such practice or that refund or adjustment was allowed without proof of the payment of sales tax. This disposes of the second question.

8. For the reasons stated above we decide both the questions against the petitioner. The petitioner shall bear the costs of these petitions.

Petitions dismissed.