ADDITIONAL COLLECTOR SALES TAX, MULTAN VS Messrs AL-GHAZI TRACTORS LTD., DERA GHAZI KHAN, 2005 PTD-LAHORE-HIGH-COURT-LAHORE 2364 (2005)

Sales Tax Act (VII of 1990)---

----Ss. 3(2)(a), 13 & 47---Notification No. S.R.O. 839(I)/98, dated 23-7-1998---Exemption from input tax on agricultural tractors listed under PCT heading 87.01 of the First Schedule to the Sales Tax Act, 1990---Contention of the appellant (department) was that mere fact that the tractors manufactured by the registered company were supplied to the organization like Civil Aviation Authority, Heavy Mechanical Complex, Housing Cooperative Society and Municipal Corporation would lead to the assumption that the tractors were not supplied for "agricultural purpose" and under the Notification No. S.R.O. 839(I)/98 dated 23-7-1998 exemption would be available to only such tractors as were supplied for "agricultural purpose"---Validity---Held, in view of clear wording of the exemption notification, admitted fact that the tractors were agricultural tractors and the findings of facts recorded that the purchasers were using the tractors for agriculture purpose, there was no question of law arising in the cases within the meaning of S.47, Sales Tax Act, 1990---Appeals were dismissed in limine by the High Court.

Ch. Saghir Ahmad, Standing Counsel for the Federation.

ORDER

1. This order shall dispose of STA No.482 of 2002 and S.T.A. No.483 of 2002 as these proceed against common judgment,, dated 30-3-2002 passed by Appellate Tribunal (Customs, Sales Tax and Central excise), Lahore.

2. The agricultural tractors, listed under PCT heading 87.01 were exempted from input tax vide Notification S.R.O. 839(I)/98, dated 23-7-1998 issued by Federal Government of Pakistan under section 3(2)(a) of Sales Tax Act, 1990. Admittedly, respondent No.1 in these cases in manufacturer/supplier of the agricultural tractors. Show-Cause Notices were issued to him alleging that the tractors have been supplied to various buyers for the purpose other than agriculture and the sales tax was not paid. Demand of taxes payable were accordingly raised. The notice was contested by respondents No.1 stating that they are manufacturer of agricultural tractors only and consequently supplying the same. It was further stated that these tractors can be used only for agriculture purpose. It was then contended that it would not at all possible for respondent No. 1 to control the use of tractor by the buyer. Vide Order-in-Original, dated 30-7-2001 passed in two cases the Collector of Sales Tax (Adjudication), Multan held that exemption was not available to respondent No.1 with the observation that the tractors supplied by respondent No.1 may have been for agriculture purpose, but these have not been utilized for agriculture purpose. Feeling aggrieved respondent No.1 filed appeals before the said learned Tribunal, which have been allowed vide judgment, dated 30-3-2002.

3. The learned Standing Counsel contends that the mere fact that the tractors were supplied to the organization like Civil Aviation Authority, Heavy Mechanical Complex, Housing Co-operative Society and Municipal Corporation would lead to the assumption that the tractors were not supplied for agricultural purpose. The learned Standing Counsel is of the view that under the said Notification exemption would be available to only such tractors as are supplied for agriculture purpose.

4. We have given some thought to the contentions of the learned Standing Counsel.

5. Now the said Notification states that the exemption in the matter of input tax would be available for the agricultural tractors falling under the heading 8701.9019 of the First Schedule in sale Tax Act, 1990. Now heading 87.01 is described as follows:

"Tractors (other than the tractors of heading 87.09)."

Heading No.87.09 is as follows:--

87.09 Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles.

Now, there is no dispute that the tractors being manufactured and supplied by respondent No.1 are agricultural tractors. Besides the learned Tribunal has recorded a finding of fact after examining several documents that various buyers, in fact, were using the tractors for agricultural purpose. It has also been found and not controverted by the learned Standing Counsel that the department had made no effort to verify the actual use of the tractors purchased from respondent No.1. In view of clear wording of the said exemption Notification, admitted fact that the tractors are agricultural tractors and the findings of facts recorded that the purchasers are using the tractors for agriculture purpose, we find no question of law arising in these case within the meaning of section 47 of the Sales Tax Act, 1990. Both these Sales Tax Appeals are dismissed in limine.

M.B.A./A-499/LAppeal dismissed.