LAHORE: The Lahore High Court has suspended the notices issued by the Lahore Electric Supply Company (Lesco) to various steel mills for the recovery of arrears of General Sales Tax (GST).

Justice Jawad Hassan passed the stay order on the petitions of Mughal Iron & Steel Industries and dozens of other mills.

On behalf of the millers, Advocate Mohsin Virk argued that the arrears of the GST could not be now imposed on the petitioners as the relevant law – Sales Tax Special Procedures Rules 2007 – formulating such imposition had already been repealed through an SRO on June 29, 2019.

He said the petitioners, being Lesco consumers, had been making regular payments of monthly electricity bills. He pointed out that during the tax period from July 2008 to June 2019, the petitioners had been paying the tax in the electricity bills under the 2007 rules.

The counsel contended that Lesco started sending notices to the steel mills for the recovery of the arrears under the head of increased rate of GST.

He said the respondent company had no authority to add the GST arrears in the current electricity bills.

He argued that as per the dictum laid down by the superior courts, the discos had no powers to collect the sales tax arrears under the provisions of the Sales Tax Act 1990.

He asked the court to set aside the notices issued by Lesco for being unlawful.

The judge issued notices to the respondents for submission of the replies and suspended the operation of the impugned recovery notices till the next date of hearing.

Published in Dawn, May 21st, 2021