Sales Tax Instructions

Sales Tax Instructions, 2009
According to the learned Deputy Attorney General the purpose as well as levy of additional tax
being more than clear, the aforesaid niceties of construction and finding of faults and
contradictions in various provisions of the Act could not be allowed to prevail to defeat a
provision whose sole aim is to document national economy. Reference is also made to re: The
State of Andhra Pradesh and another v. Nalla Raja Reddy and others (AIR 1967 SC 1458) to
submit that the alleged classification even if accepted to be present is not objectionable. It is
further contended that the impugned provision has not at all put any restriction on the right of the
business of the petitioners who were still free to make supplies only to registered persons. Also
that they are not restrained to make supplies to non-registered persons but the choice so exercised
only entails a liability to collect tax from them which as a matter of fact ought to have been paid
by them. Reference is also made to judgement of this Court recorded in re: Icc Textiles Ltd v.
Federation of Pakistan (PLD 1999 Lahore 251) wherein the principles for determination whether
the provisions for determination whether the provisions were discriminatory were enumerated.
Lastly reference is made to another judgement from Indian Jurisdiction reported as re: V.M. Syed
Muhammad and Co. v. State of Andhra (AIR 1954 SC 314). In that case the Supreme Court of
India affirmed the principle that guarantee of equal protection of laws does not require that the
same law should be made applicable to all persons. Further that classification for legislative
purpose is not forbidden provided it is based on some differential having a reasonable reference
to the object and purpose of law in question; that there was a strong presumption in favour of the
validity of legislative classification and it was for those who challenged it as un-constitutional to
allege and prove beyond all doubts that legislature arbitrarily discriminated between different
persons.
12. After considering the submissions made at the bar I am of the view that all of them are
necessarily mis-directed. These are relevant only against an assessment order passed by a Sales
Tax Officer. All contentions made are germane to appeal proceedings against an order in
original. The stress placed on the amended provision and on its alleged contradictions with other
provisions of the Act is again an objection against their application to a particular set of facts or
to a particular assessee. The different categories of the petitioners, in their own way, have
attempted to bring home that the amended provision, for one reason or the other, is not attracted
in their cases. It will be recalled that except for the beverage producers all other petitioners have
prayed for a declaration that the amended provision is ultra vires of the Constitution. The
beverage producers have made a further prayer for declaration that the amended provision is not
applicable to goods under the third Schedule i.e. on which sale tax is charged on the basis of
retail price. However, like the rest of the petitioners, they have not challenged a particular
assessment order or any other notice demanding the additional levy.
13. As noted above, none of the reasons advanced at the bar can be taken as a good ground
to declare the amended provision as repugnant to the Constitution or ultra vires of the powers of
the legislature. The provision in question as rightly pointed out by the learned counsel for the
revenue and the learned Deputy Attorney General requires only collection of tax for the exchequer
in a specific situation and the idea is clearly two-fold. The first of course is tapping any leakage
and second the documentation of the economy. The registered persons are not required to pay the
additional tax from their own pocket nor they add any thing to the prescribed tax. It only ensure
the enforcement of the will of the legislature that every person dealing in certain goods or supplies
shares the burden of tax. It is admitted that sole purpose behind the addition of new clause in
section 3 is that no person escapes sales tax for lack of proper man force with the revenue or that
no documentary evidence is available to evidence their supplies or engagement in a particular
business. Neither the intention, nor the words of statute are in any way offensive to the established
norms of judicial interpretation. It will further be noted that dealings with non-registered persons
have not been prohibited. The contention that the additional levy is not a sales tax as it is not
relevant to supply is also not correct. It is certainly relevant to supplies though made to a