LAHORE ELECTRIC SUPPLY COMPANY LTD. VS COMMISSIONER INLAND REVENUE, REGIONAL TAX OFFICER, LAHORE, 2017 PTD-LAHORE-HIGH-COURT-LAHORE 2488 (2017)

Sales Tax Act (VII of 1990)---

----Ss. 47, 3 & 7---Determination of sales tax liability---Jurisdiction of High Court under S.47 of the Sales Tax Act, 1990---Nature---Question before the High Court was whether the Appellate Tribunal and forums below were justified in holding that the taxpayer, an Electricity Supply Company, was liable to pay full amount of sales tax collected, which was charged through consumer bills, and not just the tax according to the amount of units declared in its return, which was substantially less---Held, no substance existed in the Reference and High Court declined to exercise its jurisdiction under S.47 of the Sales Tax Act, 1990.

Khurram Shahbaz Butt for Petitioner.

ORDER

AYESHA A. MALIK, J.---This is a Reference under Section 47 of the Sales Tax Act, 1990 ("Act").

2.Following question of law is pressed for our opinion, which is asserted to have arisen out of order dated 8.6.2017 passed by the Appellate Tribunal Inland Revenue, Lahore ("Appellate Tribunal"):--

(a)"Whether on the facts and in the circumstances of the case, the impugned order having been passed by the Appellate Tribunal after the laps of three months and fourteen days from the date of hearing, could stand the test of judicial efficacy and can hold field as a lawful order, in view of the law laid down by the Hon'ble Apex Court, in the case reported as 2015 SCMR 1550 in re: M/s. MFMY Industries Ltd. and others v. Federation of Pakistan?"

(b)"Whether on the facts and in the circumstances of the case, the learned Appellate Tribunal has failed to pass a speaking and a reasoned order in consonance with the requirements of section 24A of the General Clauses Act, 1897?"

3.We have heard the learned counsel and have gone through the record and find that show cause notice was issued to the Applicant on 19.1.2015 wherein the main allegation was that the Applicant has collected sales tax through the electricity bills along with electricity charges from steel melters and re-rollers for the tax period July 2014 against 72,672,922/- kwh whereas it has deposited amounts against 4,169,138 kwh. Therefore the short fall amount of Rs.479,526,978/- is liable to be recovered from the Applicant. The Applicant filed its reply and the matter was heard at length and was decided against the Applicant by the Deputy Commissioner Inland Revenue vide his order dated 14.9.2015. The Applicant appealed the said order and the matter was heard by the Commissioner Inland Revenue who also dismissed the case vide his order dated 25.11.2015. Both the orders of the Deputy Commissioner Inland Revenue and the Commissioner Inland Revenue have explained in great detail that the tax paid by the steel melters and re-rollers has to be deposited with the government exchequer on the basis of tax collected and not on the basis of billed amounts. After going through the record both the Deputy Commissioner Inland Revenue and the Commissioner Inland Revenue found that the Applicant has short paid sales tax amounting to Rs.479,526,978/- for the tax period of July 2014 which stands recoverable from the Applicant along with the surcharge. The Applicant filed an appeal before the Appellate Tribunal. The Appellate Tribunal heard the matter and vide order dated 8.6.2017 upheld both the orders passed by the Deputy Commissioner Inland Revenue and the Commissioner Inland Revenue stating therein that sales tax has to be deposited on the basis of the collected amount and that the Applicant had declared less units in its sales tax return as compared to the number of units declared in its bill which were actually supplied to the consumer. Hence the Applicant was required to pay the full amount of sales tax which was charged through the electricity bills.

4.Under the circumstances, we find no substance in this Reference, hence decline to exercise our jurisdiction. Reference application is decided against the Applicant.

5.Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per section 47(5) of the Act.

KMZ/L-8/L Application dismissed.