KARACHI: A division bench of Sindh High Court (SHC) has restrained the Federal Board of Revenue (FBR) and its subordinate officers from the recovery of Sales Tax of Rs 60 million following a constitutional petition filed by a local textile mills.
The bench comprising Justice Maqbool Baqar and Justice S.M. Farooq Shah also ordered issuance of notices to the Deputy Attorney General, Federal Board of Revenue (FBR) and other respondents for May 6.
Senator Mian Raza Rabbani and Saalim Salam Ansari, advocates on behalf of the petitioner contended before the division bench that under the sales tax amnesty scheme announced by the Government, the recovery of 2 percent ST can not be shifted to the manufacturers / textile mills on the ground that the registered buyers, who are legally liable to pay the tax did not pay the same.
They submitted that the law does not provide the shifting of the liability to pay the sales tax upon the manufacturers/ textile mills instead of registered buyers.
They further submitted that the demand notices issued on behalf of FBR are without jurisdiction, illegal and un-constitutional as the law and the Constitution do not provide any power to the FBR for recovery of ST of the period for which the petitioner was not under legal obligation to pay.
The petitioner's counsel further contended that the Sindh High Court has already issued interim stay order in respect of the Sales Tax on identical grounds.
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