KARACHI, Nov 23: Sales Tax could only be levied and collected on the basis of actual taxable supplies made by a “registered person” in terms of Section-3 of the Sales Tax Act, 1990, a division bench of the Sindh High Court observed on Friday.
The observation came in an order on sales tax appeals of two motor vehicle spare parts importers. The appellants contended that they had regularly filed sales tax returns showing all transactions/taxable supplies made by them during the period in question and had accordingly adjusted/paid the input/output tax.
The sales tax department rejoined that taxable supplies as per the sales tax returns were of a lower value than the amount showed in the bank account of the assessees during audit.
Representing the appellants, Barrister Khalid Jawed Khan argued that unlike income tax law, there was no concept of “deemed taxable supplies” under the Sales Tax Act. The entire amount that might be deposited in the bank account of a registered person could not presumptively be treated as proceeds of taxable supplies made by that person.
In order to collect sales tax, the lawyer submitted, the sales tax department was required to identify the evaded taxable supplies and then link them to the amount deposited in banks. Until some evaded taxable supply was identified by the department, the amount in the bank could not be deemed to be proceeds of taxable supplies. On facts, he pointed out, the department had merely alleged taxable fraud without identifying any evaded taxable supply.
Agreeing with the contentions raised by the appellants, the bench, which consisted of Justices Shabbir Ahmed and M. Mujibullah Siddiqui, allowed the appeals.
KIDNAPPING CASE: Justice Shabbir Ahmed of Sindh High Court, who is also administrative judge of the anti-terrorism court in Karachi, on Saturday acquitted two accused Abdul Karim alias Mama and Ghulam Rasool in a kidnapping for ransom case, adds PPI.
The anti-violent crime cell on Monday produced the accused and requested the court for extension of police remand.
It was submitted by the police that abductee Rajesh Kumar and his brother are only witnesses in the case who went to Lahore for attending a religious congregation. They stated besides the above witnesses, there was no evidence found against them.
The AJ after statement by the investigation officer, declined to extend further remand and ordered to release them if not involved in other cases.
Accused are charged with kidnapping Rajesh Kumar, son of businessman, from Mai Kolachi Road, in limits of TPX police station Karachi, on July 22. They demanded Rs50 million from abductee’s family.
However, police said they released the abductee after detaining him three month in their custody.
