M/s. RAMMA PIPE AND GENERAL MILLS (PVT.) LIMITED through its Director vs

This constitutional petition was filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, challenging the computation of tax liability under Section 80-C of the Income Tax Ordinance, 1979. The petitioner's grievance centered on the inclusion of sales tax paid on supplied goods within the petitioner's taxable income, arguing that such inclusion was legally impermissible. The core legal question was whether sales tax paid by a taxpayer could be treated as part of their income for the purpose of calculating income tax under the specified ordinance. Upon review, the respondents conceded that the amount paid as sales tax cannot be deemed income of the petitioner and, therefore, cannot be subjected to income tax. Consequently, the Court held that the tax liability must be recalculated after deducting the sales tax paid. The judgment establishes the principle that sales tax paid on goods supplied does not constitute income and must be excluded from the computation of tax liability under Section 80-C of the Income Tax Ordinance, 1979.