HAMID NAWAZ
LAHORE: Justice Syed Mansoor Ali Shah of the Lahore High Court while declaring secction 8(1)(CA) of the Sales Tax Act, 1990 as unconstitutional, set aside the notice and order of Deputy Commissioner Inland Revenue Lahore for the recovery of Rs 9.61 million from D G Khan Cement Company Limited.
Through a 17-page judgment, the court also disposed of about a dozen petitions having common questions of law and facts arising out of them.
The court held that the default of the petitioner company is the non-deposit of tax in the government treasury by the supplier for no fault of the buyer as supplier is not a puppet of the buyer and "does not dance to his tune." Therefore, the said act is a clog on the right of the taxpayer to do the business or trade.
The court observed that fundamental rights and their protection is essential in a democratic dispensation. In the absence of human rights, democracy loses its soul. A democracy without human rights is like an empty vessel, the judgment concluded.
The cement company had assailed the tax imposed by the Federal Board of Revenue being offensive to the fundamental rights. According to details, the petitioner company purchased raw materials from various suppliers and made payments to them through proper banking channels in accordance with law. The petitioner company was considered as defaulter of tax because its suppliers had failed to deposit the same in the government treasury.
The counsel for the petitioner company submitted that the company has no control over the supplier. Revenue officials argued that in case of fraud and collusion, supplier as well as the buyer are responsible while standing counsel representing the Attorney General as well as the Federation submitted that the impugned provision has been introduced in the law to address the issue of "tax fraud".
The court later set aside the notice and order of revenue official, declaring the Sales Tax Act, 1990 unconstitutional.
Comments
Comments are closed.