Sales Tax Instructions

Sales Tax Instructions, 2009
Please refer to Collectorate of Sales Tax (West) Karachi‘s letter No.1/1/Add.Coll
/Misc.Corrs/Vol.1/97, dated 4 th May, 1998, Letter No. 1-Law/ST(WAD-DT/96/ dated 30-
04-1998 and letter No. 1/Law & Recovery/ST/W/96/1573, dated 03.12.1997 on the above
subject. A meeting of Member (Sales Tax) was also held with All Pakistan Textile
Processing Mills Association in Islamabad on 14.05.1998 and again in the Chamber of
the Collector of Sales Tax (West), Karachi on 16.05.1998 on the above subject. The
Association pointed out that recoveries were being made by the Collectorates without
issuing formal Orders-in-Original. In certain cases even proper Show Cause
Notices/Demand Notices have not yet been issued.
2. Collector of Sales Tax (West), Karachi informed the Member (Sales
Tax) and the Association on 16.05.1998 that:-
(i)
(ii)
(iii)
Recovery shall no more be effected without issuing formal Orders-in-
Original and that in cases where SCNs were not yet issued, the same
shall be done;
Cases shall be decided by the concerned Adjudicating Officer on merits
after hearing the party‘s representative and in terms of Board‘s letter C.
No.1(4)GST/91, dated 04.07.1995. The Collector agreed that the cases
made out before amendments in the Sales Tax Act, 1990. in FY 1996 are
to be decided in the light of the provisions of the Act at that time read
with Sales Tax Circular No.4 of 1995.
The cases shall be got adjudicated on merits expeditiously in a manner
that all Orders-in-Original are issued well before the 30 th September,
1998.
3. Board desires that Collector of Sales tax (West), Karachi (in particular)
and all other Collectors of Sales Tax (in general), where such a situation prevails, should
dispose off the cases on merits in terms of the arrangement outlined in paragraph 2 above.
[Issued by the C. B. R., Islamabad, under the signature of Mr. Akhtar Ali, Secretary
(STP), addressed to the Collector, (West), Karachi, with reference to his letter No.1/1/Add.Coll
/Misc .Corrs/ Vol.I/97, dated 4 th May 1998.] Copy of the letter is reproduced below:-
COLLECTORATE OF SALES TAX (WEST), KARACHI
C.NO.1/1/ADD.COLL/MISC./CORRS/VOL.I/97
SUBJECT:
DATED 4 TH MAY1998
RECOVERY OF DUES FROM TEXTILE PROCESSING UNITS.
Kindly find enclosed a letter received from M/s. Al-Abid Silk Mills Ltd., Karachi
representing against the adjustment of an amount of Rs.5,124,362/- form their pending refund
claim. The brief background of the matter is that some textile processing units working under the
Fixed Amount of Sales tax (Processed Fabrics) Rules, 1991 claimed concessional rate of sales tax
in terms of SRO 782(I)/91 dated 17.08.1991, on the ground that they had exported more than 50%
of their annual production in the preceding year. Nearly 40 such cases were rejected by the
Collector of Central Excise and Sales Tax, Karachi in December 1991. However, in the
meanwhile, the processors had on their own account been paying sales tax on the concessionary
rate in anticipation of a decision in their favour. Consequently, demand was raised for differential
amounts of sales tax along with additional tax and surcharge under section 34 of the Sales Tax