Sales Tax Instructions

(vii)
(viii)
Sales Tax Instructions, 2009
simply sought confirmation of that interpretation from the Board. Whether or
not the Board issued any confirmation on this account did not effect the
legally tenable and correct interpretation of the said notification and any
reliance on Collectorate‘s aforesaid letter for explaining or justifying the
non-payment of the tax due under the law is of no avail in the case of M/s.
Mandviwalla Mauser Plastic Industries Limited;
Notwithstanding the accuracy of the contention of M/s. Mandviwalla Mauser
Plastic Industries Limited that they did not charge sales tax on their supplies
from any of their buyers during the period in question, the fact remains that
they did not start paying sales tax on the pointation by the Collectorate, vide
its letter dated 4-2-1997 or the Show Cause Notice dated 24-3-1997 and
rather kept on defending their position and started payment only after their
appeal had been rejected by the Collector (Appeals). Hence non-charging of
the sales tax from the buyers from the date on which their products were
found chargeable to sales tax is a clear breach of clause(a) of section 65; and
The case of M/s. Yahya Textile Mills, Multan is factually and legally
different from the case of M/s.Mandviwalla Mauser Plastic Industries
Limited. In case of M/s. Yahya Textile Mills, Multan the matter was decided
within the framework of Special Procedure for Ginning Industry Rules, 1996,
wherein, the same company carrying out ginning and spinning activities had
to take two separate sales tax registrations under the said Rules and ginned
cotton was used by that person for his other taxable activities registered
separately as per requirements of the rules. It was simply a case of involving
transfer of goods between two different divisions of the same manufacturer
company required to take two separate registrations under the special
procedures. Besides, they did never contest that ginned cotton supplied by
them was not chargeable to sales tax and there was a case of straightening the
records/accounts in accordance with the sales tax laws.
6. From the foregoing, it can be concluded that the act of M/s.Mandviwalla
Mauser Plastic Industries Limited of not starting payment of sales tax on the pointation of
their products chargeability to sales tax by the Collectorate of Sales Tax, Hub vide their
letter dated 4-2-1997 followed by the show cause notice dated 24-3-1997 and making the
date of appellate order of the Collector (Appeals) as date of finding their products as
taxable is not entitled to attract the provisions of section 65. Besides, the argument of
non-charging sales tax from the buyers does not absolve them from their obligation to
pay sales tax after the expiry of the concession under SRO 529(I)/88, dated 26-6-1988.
The request of M/s. Mandviwalla Mauser Plastic Industries Limited that they may be
allowed to issue sales tax invoices at this belated stage, so that their buyers may take
input tax adjustment, can‘t be allowed since it is not in accordance with the express
provisions of the Sales Tax Act, 1990 on the subject. Similarly, the argument that their
buyers have used the goods in question in the manufacture and supply of taxable goods
and have paid sales tax on the value of inputs supplied by them and hence there is no loss
to the Government, too, is not acceptable under the principle of VAT mode sales tax
adopted in the statutory provisions of the Sales Tax Act, 1990.