Summary: (a) Sindh Sales Tax on Services Act (XII of 2011)--- ----S. 24---Notification No.SRB-3-4/7/2013 dated 18.06.2013 issued by the Sindh Revenue Board---Services rendered by a restaurant---Registration---Scope---Exemption, entitlement to---Whether appellant being a restaurant was liable to be registered under S. 24 of Sindh Sales Tax on Services Act, 2011 (‘the Act 2011’)?---Appellant claimed exemption as per Notification No.SRB-3-4/7/2013 dated 18.06.2013 (‘Notification SRB-2013’)---Held: Bare reading of Notification SRB-2013 categorically showed that services provided or rendered by restaurants and caterers are taxable in case its turnover exceeds 3.6 million rupees in a financial year or their total utility bills (gas, electricity and telephone) exceed Rs.40,000/- in any month during the subject financial year---In the present case , although appellant's turnover did not exceed 3.6 million rupees in the subject financial year but its total utility bills remained Rs.48,482/- i.e. exceeding Rs.40,000/- in the month of August 2022---Therefore, the appellant was liable to be registered under S. 24 of the Act 2011---Appellate Tribunal Sindh Revenue Board maintained the findings of Commissioner - Appeal---Appeal, filed by Registered Person, was dismissed. (b) Sindh Sales Tax on Services Act (XII of 2011)--- ----Ss. 24, 24B & 43, Table, S.No.1---Taxable services, rendering of---Non-registration---Subsequent registration---Whether compulsory---Penalty, imposition of---Scope and effect---Whether penalty amounting to Rs.100,000/-imposed upon the appellant (restaurant) in terms of serial No.1 of the Table under S. 43 of the Sindh Sales Tax on Services Act, 2011 (‘the Act 2011’) was justified?---Held: Penalties for non-registration before providing taxable services are provided in terms of serial No.1 of the Table under S. 43 of the Act 2011 ; which provisions shows that penalty in terms of serial No.1 of the Table under S. 43 of the Act, 2011 deals with two situations i.e. “not getting registered voluntarily ” and “ being registered voluntarily” provided under Ss. 24 & 248 of the Act, 2011 , respectively ; it is very much clear from the wordings of statute that the penalty provided in the first part (in column No. 2) is applicable in single situation i.e. “not getting registered voluntarily” and the assessing officer has discretion to impose penalty either of Rs.10,000/- or five per cent of the amount of sales tax---However, the penalty provided in the second part is applicable to twin situations i.e. “non-compliance of notice (requiring the taxpayer to get registered voluntarily)” or “when an order has been passed making taxpayer a taxpayer registered compulsorily", wherein the law to get registered prescribes minimum penalty of Rs.100,000/----Situations mentioned at serial No.1 (in column (2)) are interconnected---In case a person, liable to be registered, does not get himself registered, the assessing officer issues a notice requiring such person to get himself registered voluntarily---In case such person responds to such notice positively and gets himself registered, assessing officer, considering the existence of registration prior to providing taxable services, may impose either of the penalties i.e. Rs.10,000/- or five per cent of the amount of sales tax---However, in case of non-compliance of the notice, the assessing officer is liable to register said person compulsorily and also impose a penalty of Rs.100,000/----Word “shall” used with the penalty (in column (2)) makes it directory in nature, therefore; no discretion can be exercised by the assessing officer in case the taxpayer does not comply with the notice---Therefore, in the present case, the imposition of penalty amounting to Rs.100,000/- in terms of serial No.1 of the Table under S. 43 of the Act, 2011 was justified---Appellate Tribunal Sindh Revenue Board maintained the findings of the Commissioner Appeals---Appeal, filed by registered Person, was dismissed. Syed Armughan Memhmood (ITP) for Appellant. Ms. Komal Laghari, AC (Unit-34) for Respondents. Dates of hearing: 16th, 30th October and 20th November, 2023.

Summary: (a) Sales Tax Act (VII of 1990)--- ----Ss.38 & 40---Raid, search warrant, access to and seizure of business records by FBR---Issuance of search warrant---Precondition of pending proceedings---Scope---The challenge in the present Constitutional petition concerned the legality of the raid, search, and seizure of the petitioner's business records conducted by Inland Revenue authorities under Ss. 38 & 40 of the Sales Tax Act, 1990---The main issue before the High Court was whether, in the absence of any pending proceedings under the Act, 1990, the authorities were justified in obtaining and executing a search warrant and taking custody of the petitioner's documents, or whether such action exceeded the lawful scope of powers conferred under the Act, 1990---Held: In the present case, admittedly the impugned order and the search warrant in question were issued in pursuance of the desk audit analysis highlighting concealment of sales but there were no proceedings pending under the Act, 1990 for which the documents could be useful or relevant, which was a precondition under S. 40 of the Act, 1990 for issuance of search warrant---When there were no proceedings pending under the Act, 1990, the provision of S. 40 of the Act for search could not be invoked---The desk audit analysis could at best be treated as inquiry or investigation but did not amount to proceedings under the Act, therefore, the provision of S. 40 of the Act could not be invoked in the impugned order or search warrant, therefore, to that extent the impugned order and search warrant were not sustainable---Indeed the respondents could neither invoke the provisions of S.40 of the Act nor they could compel production of any record or documents that were not in plain sight or had not been voluntarily made available, however, perusal of the copy of Resumption Memo (appended with reply), showed that same had been duly stamped by the petitioner, as required under S. 38(1) of the Act---Though the petitioner in the present petition had challenged the impugned order and impugned search warrant claiming that the respondent No.4 along with officials and policemen entered its business premises and took away the record but it was nowhere specifically pleaded that said record was not in plain sight or was forcibly taken into custody by respondents---On the other hand, the respondents in their reply though defended the impugned order and search warrant on legal plane yet nowhere stated that the record was made available voluntarily for inspection and taken into custody on request---This being a factual dispute could not be decided in the Constitutional petition, therefore, the respondents were directed to return the data and record as per Resumption Memo to the petitioner after retaining the duplicate copies thereof---Constitutional petition was partially allowed, in circumstances. Pakistan Chipboard (Pvt.) Ltd. through Chief Executive Officer v. Federation of Pakistan and others 2015 PTD 1520 ref. (b) Sales Tax Act (VII of 1990)--- ----Ss.38 & 40---Search warrant, access and seizure of business records by FBR---Legality and scope---Plain reading of S. 38(1) of the Act, 1990 shows that any officer, authorized by the Commissioner Inland Revenue, shall have free excess to the business or manufacturing premises, registered office or any other place where any stock, business record or documents required under this Act are kept or maintained belonging to the registered person or a person liable for registration or whose business activities are covered under this Act or who may be required for any inquiry or investigation in any tax fraud---Under S. 38 of the Act, 1990, an officer authorized may inspect and also take into custody the record mentioned therein, as he may deem fit, against a signed receipt---Purpose of visit, in terms of S. 38 of the Act, is to see whether proper record under the Act, relevant Rules and Regulations is maintained or not, and the authorized officer in this regard must produce the copy of authorization before commencing the inspection and visit must be confined to inspect the record and documents that are in plain sight or voluntarily made available for inspection by the persons present at the premises on request, and consequently only such record can be taken into custody within the meaning of S. 38 of the Act---Whereas under S. 40 of the Act, 1990, where any officer of Inland Revenue has reason to believe that any document or things which in his opinion, may be useful for, or relevant to any proceedings under this Act are kept in any place, he may, after obtaining warrant from Magistrate, enter that place or cause a search to be made at any time. Ghulam Hussain v. Federation of Pakistan through Ministry of Finance, Islamabad and 5 others 2021 PTD 1379; Messrs Apple Paper Products (Pvt.) Ltd. Through Director Chief Executive Officer v. Federation of Pakistan through Chairman and 2 others 2019 PTD 787; Agha Steel Industries Ltd. through Authorized Company Secretary and another v. Directorate of Intelligence and Investigation through Director and 2 others 2019 PTD 2119; Messrs Iqbal and Sons through Authorized Representative v. Federation of Pakistan through Secretary and 3 others 2017 PTD 590; Messrs Stylo Shoes through Managing Partner and another v. Deputy Director and others 2013 PTD 1780; Z & J Hygienic Products (Pvt.) Ltd. v. Collector Sales Tax (2011) 103 TAX 281; A.M.Z. Spinning and Weaving Mills (Pvt.) Ltd. through Manager Finance v. Federation of Pakistan through Secretary, Revenue Division/Ex-Officio Chairman, C.B.R., Islamabad and 2 others 2009 PTD 1083; Messrs Food Consults (Pvt.) Ltd., Lahore and others v. Collector (Central Excise and Sales Tax), Lahore and 2 others 2004 PTD 1731; Messrs Ihsan Yousaf Textile Mills (Pvt.) Ltd., Faisalabad v. Federation of Pakistan through Ministry of Finance, Islamabad and 4 others 2003 PTD 2037 and Director Intelligence and Investigation v. M/s BIOCOS International and 5 others PLJ 2020 Lah. 1 ref. (c) Sales Tax Act (VII of 1990)--- ----Ss.40 & 40-A---Search warrant, access and seizure of business records by FBR---Legality and scope---As per the language employed in Ss. 40 & 40A of the Act 1990, the requirement of law appears to be that where an officer of sales tax has reason to believe that any document or things, which in his opinion may be relevant to any proceedings under the Act, are concealed or kept in any place and there is a danger of removal of such documents or records, he may, after obtaining warrant from Magistrate, enter that place and cause a search to be made at any time and the search authorized shall be carried out strictly in accordance with relevant provisions of the Code of Criminal Procedure, 1898. Collector of Sales Tax and Central Excise (Enforcement) and another v. Messrs Mega Tech (Pvt.) Ltd. 2005 PTD 1933 rel. Muhammad Ajmal Khan, Omer Wahab and Azeem Ullah Virk for Petitioner. Mrs. Kausar Parveen, Advocate/Legal Advisor along with Muhammad Ayaz Nawaz, Deputy Commissioner, Inland Revenue Zone-V, RTO, Lahore for Respondents. Date of hearing: 29th November, 2023.

Summary: The authorized officer has no power, under Section 38 of the Sales Tax Act, to compel production of any record or document that is not in plain sight or that has not been voluntarily made available. Furthermore, Section 40 only permits searches and seizures IF proceedings are already pending under the act --- The petition challenges an order and a search warrant issued under Sections 38(1) and 40 of the Sales Tax Act, 1990, allowing an authorized officer (respondent No.4) to inspect and seize records of the petitioner. The petitioner, a manufacturer/exporter of sanitary products, contests the legality of the search and seizure, arguing that no proceedings are pending against them. --- The petitioner contends that Section 38 allows only routine visits to inspect records, while Section 40 permits searches and seizures only if proceedings under the Act are pending. The respondent department argues that a desk audit revealed the petitioner's alleged concealment of sales, justifying the order, search warrant, and subsequent raid. --- The court examines Sections 38 and 40 of the Act, emphasizing that Section 40 requires pending proceedings for a search warrant. Referring to legal precedents, the court concludes that, in this case, no proceedings are pending, rendering the order and search warrant unsustainable. --- Regarding Section 38(1), the court clarifies that records can only be taken into custody if they are in plain sight or voluntarily made available for inspection. The court directs the respondents to return the seized data and records to the petitioner after retaining duplicate copies, as there is a factual dispute about whether the records were forcibly taken into custody. --- In summary, the court partially allows the Writ Petition, declaring the order and search warrant invalid due to the absence of pending proceedings, and directs the return of seized records. --- ''The purpose of visit, in terms of Section 38 of the Sales Tax Act, 1990 (Act), is to see whether proper record under the Act, relevant Rules and Regulations is maintained or not, and the authorized officer in this regard must produce the copy of authorization before commencing the inspection and visit must be confined to inspect the record and documents that are in plain sight or voluntarily made available for inspection by the person(s) present at the premises on request, and consequently only such record can be taken into custody within the meaning of Section 38 of the Act. The authorized officer has no power, under Section 38 of the Act, to compel production of any record or document that is not in plain sight or that has not been voluntarily made available as above. Further pendency of proceedings under the Act for which such documents may be useful or relevant is a precondition in terms of Section 40 of the Act for issuance of search warrant.''

Summary: Background The petitioner, a private company engaged in importing and distributing drugs, challenged the denial of a concessionary sales tax rate under Entry 81 of the Eighth Schedule of the Sales Tax Act, 1990, for the import of sutures. This denial was based on SRO 526(I)/2021 issued under the DRAP Act, 2012, which reclassified sutures as "medical devices" instead of "drugs." Consequently, the petitioner was charged a statutory sales tax rate of 17% or 18%, instead of the concessionary rate of 1%. The petitioner argued that such reclassification and denial of the tax benefit were unlawful and inconsistent with the Drugs Act, 1976. ------ Issues: ------ 1) Whether SRO 526(I)/2021 issued under the DRAP Act, 2012, can override the provisions of the Drugs Act, 1976, and the Sales Tax Act, 1990. ------ 2) Whether rules and subordinate legislation can redefine the classification of sutures contrary to statutory provisions. ------ 3) Whether the petitioner is entitled to the concessionary tax rate under Entry 81 of the Eighth Schedule to the Sales Tax Act, 1990, based on the classification of sutures as drugs. ------ Holding/Reasoning/Outcome: ------ Holding: The Sindh High Court allowed the petition, declaring that the reclassification of sutures as "medical devices" through SRO 526(I)/2021 was inconsistent with the parent statutes, including the Drugs Act, 1976, and the Sales Tax Act, 1990. ------ Reasoning: Subordinate Legislation Cannot Override Parent Statutes: The court emphasized that rules and notifications, as subordinate legislation, cannot contradict or override the provisions of parent statutes. The Drugs Act, 1976, classified sutures as "drugs," and this statutory definition cannot be altered through subordinate legislation like SRO 526(I)/2021. ------ Scope of Rule-Making Power: The "removal of difficulties" clause under Section 36 of the DRAP Act, 2012, cannot be used to alter the substantive provisions of parent statutes. Such clauses are meant for procedural or implementation issues, not for reclassifying items already defined under the law. Conflict Between DRAP Act and Drugs Act: Section 32 of the DRAP Act explicitly states that its provisions are to be read in addition to, and not in derogation of, the Drugs Act, 1976. Therefore, the reclassification of sutures as medical devices through SRO 526(I)/2021 was beyond the scope of the DRAP Act. ------ Inconsistent Application: The petitioner provided evidence showing that other importers of sutures were granted the tax concession under Entry 81, highlighting discriminatory enforcement by the customs authorities. Outcome: The court ruled in favor of the petitioner, setting aside the denial of the concessionary tax rate and allowing the petitioner to clear its consignments under Entry 81 of the Eighth Schedule to the Sales Tax Act, 1990. ------ Citations/Precedents: PLD 2023 SC 609 (Government of Balochistan vs. Shah Muhammad) 2022 SCMR 1787 (Farrukh Raza Sheikh vs. The Appellate Tribunal, Inland Revenue, and others) PLD 2021 Sindh 492 (Abbu Hashmi vs. Federation of Pakistan and others) 2019 SCMR 282 (Messrs Pakistan Television Corporation Ltd. vs. Commissioner Inland Revenue) 2017 SCMR 1136 (Messrs Pakistan Television Corporation Ltd. vs. Commissioner Inland Revenue) PLD 1997 SC 582 (Elahi Cotton Ltd. vs. Federation of Pakistan) PLD 1990 Lahore 121 (Ittefaq Foundry vs. Federation of Pakistan and others) PLD 2014 SC 389 (Suo Motu Case) PLD 2011 SC 619 (Suo Motu Case)

Summary: (a) Sindh Sales Tax on Services Act (XII of 2011)--- ----Ss. 23 & 75---General Clauses Act (X of 1897), S. 27---Assessment of tax---Ex-parte proceedings---Notice to taxpayer, issuance of---Expression "served by post"---Scope---Presumption of effective service, rebutability of---Scope---Principle of audi alteram partem---Inapplicability---Section 23 of the Sindh Sales Tax on Services Act, 2011 (‘the Act 2011’) prescribes the procedure for assessment of tax and its subsection (2), while prescribing the procedure to be adopted by the Assessing officer prior to determining the tax liability, categorically shows that, prior to passing "the Original Order", the Assessing Officer must give to the taxpayer a show-cause notice ; its purpose is to put the person on notice about the allegations for which the authorities intend to proceed against him and to give an opportunity to explain his position---Main object of issuance of a show-cause notice is to intimate the concerned party about nature of allegations, contravention and penal action intended to be taken against him, therefore, it is mandatorily required to be served upon the taxpayer under S. 75 of the Act, 2011---Section 75 of the Act 2011 provides procedure for service of notice, order or requisition on a person named therein either in person, through agent, by registered post, by courier service or in the manner provided for service of a summons under the Code of Civil Procedure, 1908---However, S. 75 of the Act, 2011 is required to be read in juxtaposition with S. 27 of the General Clauses Act, 1897 (‘the Act 1897’) which provides that wherever in a Provincial or a Central Statute the expression "served by post" or any other similar expression is used, then "the service shall be deemed to be affected by properly addressing, prepaying and posting by registered post a letter containing the document"---Section 27 of the Act, 1897 provides for the raising of a presumption that unless contrary is proved, the service of addressee shall be deemed to have been affected---Though, undoubtedly, under S.27 of the Act, 1897 there is a presumption that the addressee has received the letter sent by registered post but such presumption is rebuttable and it is open to the party concerned to raise objection before the Court to deny the presumption by stating that he never received any notice---In the present case, the Appellant denied the presumption of effective service and the respondent / Department had produced proof of delivery of show-cause notice as well as "the Original Order", which were duly acknowledged by two persons including appellant---In such circumstances, the burden to prove such contention laid upon the appellant---Although the appellant denied proper service of show-cause notice and "the Original Order" but he did not bring on record anything supporting his contention, and he did not even mention the source of information through which he came to know about "the Original Order"---Therefore, it stood proved that appellant was duly served with the show-cause notice prior to passing "the Original Order"---Perusal of "the Original Order" showed that the same had been passed on the strength of the record available on appellant's portal and not merely because of his absence---As the appellant was duly served but he deliberately remained away from the proceedings, therefore, principle of audi alteram partem' was not applicable in the present case---In absence of any defense, despite valid service, the Assessing Officer had no other option but to proceed against the appellant ex-parte---Appeal stood dismissed. Mst. Samina Begum v. Muhammad Haq Nawaz Khan and 2 others 2023 MLD 103 ref. (b) Sindh Sales Tax on Services Act (XII of 2011)--- ----S. 43---Qanun-e-Shahadat (10 of 1984), Art. 129(g)--Non-filing of returns by the taxpayer---Penalty, imposition of---Mens rea, presence / absence of---Effect---Burden of proof---Scope---Court to presume existence of certain facts---Scope---There is no cavil to the proposition that mens rea is the basic ingredient to impose any of the penalties prescribed under the law, while burden to prove existence of mens rea lies upon the department and to discharge such burden, the department has to bring on record that all possible measures were taken to get the law complied with by the taxpayer but he deliberately and willfully abstained himself from complying with the subject provisions of law---Record revealed that in compliance of S. 23 of the Sindh Sales Tax on Services Act, 2011 (‘the Act, 2011’), department issued show-cause notice which was duly served upon appellant but neither he responded to show-cause notice nor did he appear before the Assistant Commissioner---In such circumstances, following the rule of presumption provided under Art. 129(g) of the Qanun-e-Shahadat Order, 1984 (‘the Order, 1984’), the department was justified to draw an inference that appellant's appearance before the Assistant Commissioner would have caused an unfavorable result, therefore, he abstained himself from responding to show-cause notice---Therefore, appellant's absence before the Assessing Officer, despite valid service of show-cause notice, showed his deliberate and willful default to comply with the provision of law, which was sufficient enough to establish existence of mens rea in non-filing of subject returns by the appellant---In the present case, admittedly, the appellant did not carry out any taxable service, therefore; he filed "NULL" returns since the date of his registration with the department---Non-filing of return did not cause any loss to government exchequer, therefore, gravity of non-compliance of legal provision was on the lower side---Nevertheless, on account of non-compliance of S.30 of the Act 2011 by the appellant, the machinery of law came into motion, which could not be overlooked---In such circumstances, the idea of token penalty cames into operation, which in fact was a step toward reformation of the appellant in particular and society in general---Appellate Tribunal Sindh Revenue Board imposed "token penalty" upon the appellant of Rs.5,000/----Appeal stood disposed of accordingly. (c) Sindh Sales Tax on Services Act (XII of 2011)--- ----Ss. 30 & 43---Constitution of Pakistan, Arts. 5 & 18---Non-filing of returns by taxpayer---Penalty, imposition / quantum of---Right to freedom of trade etc.---Obedience of law and Constitution---Word “inviolable”, meaning of---Doctrine of sovereignty---Scope---Article 18 of the Constitution provides right to freedom of trade, business or profession but such right is not absolute as the same is subject to law which governs such trade, business or profession, therefore, Art. 18 has to be read in juxtaposition with Art. 5 of the Constitution---In order to secure fundamental rights, every citizen has to adhere to the relative law and policies issued by the Government having binding effect under the doctrine of sovereignty---Rights and duties are two sides of the same coin and both go side by side---Article 5 of Constitution categorically envisages the obedience of law and the constitution---Word “inviolable” used therein means that it is never to be broken and infringed; meaning thereby it is the sole responsibility of every citizen to obey law, rather than taking it (the law) for granted---To be loyal to the State is basic duty of all citizens and they have to be obedient to the Constitution and the law, wherever they may be---Degree of penalty must be proportionate to the wrong committed---Where the wrong was trivial or committed under some unavoidable circumstances or for the first time, mercy and leniency was a rule---In the present case, admittedly, the appellant did not carry out any taxable service, therefore; he filed "NULL" returns since the date of his registration with the department---Non-filing of return did not cause any loss to government exchequer, therefore, gravity of non-compliance of legal provision was on the lower side---Nevertheless, on account of non-compliance of S.30 of the Act 2011 by the appellant, the machinery of law came into motion, which could not be overlooked---In such circumstances, the idea of token penalty come into operation, which in fact was a step towards reformation of the appellant in particular, and society in general---Appellate Tribunal Sindh Revenue Board imposed "token penalty" upon the appellant of Rs.5,000/----Appeal stood disposed of accordingly. Mst. Fatima Faryad and others v. Government of Punjab and others 2020 CLC 836; President Balochistan High Court Bar Association and others v. Federation of Pakistan and others 2012 SCMR 1784 and Muhammad Aslam v. The State and another PLD 2006 SC 465 ref. Appellant in person. Nabi Bukhsh Shar, AC (Mirpurkhas) for Respondent. Dates of hearing: 7th September and 21st September, 2023.

Summary: Background:The Province of Sindh and Multiline Enterprises engaged in a contract for the supply of 15 crawler tractors, which needed to be imported due to local unavailability. The contract stipulated that all taxes and duties, particularly sales tax at the import stage and advance income tax, would be borne by the supplier (Multiline Enterprises) as per clause 26 relating to "Taxes and Duties". Subsequent changes in tax laws resulted in the withdrawal of sales tax exemption and an increase in advance income tax rates at the import stage. Multiline sought reimbursement for the sales tax paid and the additional advance income tax, citing Section 64A of the Sale of Goods Act, 1930. The High Court partially ruled in favor of Multiline for the sales tax reimbursement but dismissed the claim for additional advance income tax. Both parties appealed to the Supreme Court.----Issues:Whether Multiline is entitled to reimbursement for the sales tax paid at the import stage due to subsequent tax law changes.Whether Multiline is entitled to reimbursement for the additional advance income tax paid at the import stage due to increased tax rates.----Holding/Reasoning/Outcome:The Supreme Court dismissed Multiline's appeal for additional advance income tax reimbursement, aligning with the High Court's decision, as Section 64A of the Sale of Goods Act, 1930, does not apply to income tax, a direct tax. The Court allowed the Province of Sindh's appeal against the reimbursement of sales tax, stating that the contract's clause 26 clearly put the responsibility of any tax changes on Multiline. The Court found that Section 64A, which applies only when there is no stipulation in the contract regarding duty or tax changes, was not applicable due to the specific terms of the contract. The Court also rejected Multiline's argument based on the VAT mode of the Sales Tax Act, 1990, noting the direct contract between the seller (Multiline) and the final consumer (Province of Sindh) without a supply chain that characterizes VAT transactions. Therefore, the Supreme Court concluded that Multiline's suit should be dismissed in its entirety.-----Citations/Precedents:Section 64A of the Sale of Goods Act, 1930Sales Tax Act, 1990Pakistan Beverage Ltd. v Large Taxpayer Unit Karachi 2010 PTD 2673

Summary: Background: This case involves a dispute between M/s Sprint Oil and Gas Services Pakistan FZC (the petitioner) and Oil and Gas Development Company Limited (OGDCL), concerning the reimbursement of sales tax paid by the petitioner for cementation works carried out for OGDCL under two contracts. The petitioner contended that OGDCL was liable to reimburse the sales tax under provincial laws, while OGDCL disputed this claim. ---Issues: Whether the Islamabad High Court had jurisdiction to entertain the writ petition filed by the petitioner.Whether the petitioner had exhausted other available remedies before invoking constitutional jurisdiction. ---Holding/Reasoning/Outcome: The Supreme Court held that the Islamabad High Court lacked jurisdiction to entertain the petitioner's writ petition. It reasoned that provincial laws, particularly those related to sales tax, fall under the jurisdiction of the High Court of the respective province where they are enacted. Since the cementation works were not carried out in Islamabad and federal law interpretation was not required, the Islamabad High Court had no jurisdiction over the matter. Additionally, the Court noted that the petitioner had other adequate remedies available, such as arbitration or filing a suit, which should have been pursued before resorting to constitutional jurisdiction.The Court also emphasized that parties cannot confer jurisdiction on a court through agreement and highlighted the principle that jurisdiction is inherent to the court's authority. It refrained from delving into the merits of the case regarding the sales tax reimbursement, as it could impact the rights of the parties, leaving them free to litigate those issues separately. ---Citations/Precedents: Federal Government Employees Housing Foundation v Muhammad Akram AlizaiPetrosin Corporation (Pvt.) Ltd. v Oil and Gas Company Ltd.Nasiruddin Ghori v Federation of PakistanPrinciple reiterated in Eden Builders Pvt. Ltd. Lahore v Muhammad Aslam---Quote:Only the High Court of the province which has enacted a provincial law can interpret it. A High Court?s jurisdiction under Article 199 may not be invoked when contracts have to be interpreted, nor when evidence is required to be recorded. In its writ jurisdiction a High Court also does not enter the realm of disputed facts.

Summary: (a) Interpretation of statutes--- ----Fiscal laws---Charging provision---Interpretation---Tax can be levied only under the authority of law through an express charging provision---There is no concept of enlarging scope of charging section on the basis of ambiguous and presumptive mechanism which the scheme of law imposing tax has not provided. The Commissioner, Inland Revenue, Karachi v. Messrs Attock Cement Pakistan Limited, Karachi 2023 SCMR 279; Chairman, Federal Board of Revenue, Islamabad v. Messrs Al-Technique Corporation of Pakistan Ltd., and others PLD 2017 SC 99 and Commissioner Inland Revenue, Gujranwala v. S.K. Steel Casting, Gunjranwala 2019 PTD 1493 rel. (b) Sales Tax Act (VII of 1990)--- ----Ss. 3, 22, 25 & 47---Sale tax, charging of---Reliance on income tax returns---Scope---Petitioner / registered person was aggrieved of charging of sales tax on the basis of tax returns filed before income tax authorities---Validity---Comprehensive machinery for determination of the tax liability of a registered person has been provided, which may include audit of its/his account/record in terms of S. 25 read with S. 22 of Sales Tax Act, 1990---Authorities under Sales Tax Act, 1990 may requisition record of income tax---If any discrepancy is found between income tax record and sales tax record maintained under two different regimes, then it is lawful for authorities under Sales Tax Act, 1990 to conduct audit of record maintained by registered person under S. 22 of Sales Tax Act, 1990---In certain cases authorities may under integrated system consult record of person with whom registered person has business relations---In the present case Assessing Officer while determining tax liability of petitioner entirely board its findings on the information relating to turnover of the petitioner in the income tax return, therefore, it was not lawful for Assessing Officer to have determined liability of petitioner/registered person under Sales Tax Act, 1990 on the basis of information received from income tax department/income tax returns---High Court set aside orders of fora below as very foundation of assessment was based on alien consideration and edifice built upon had to crumble---Tax reference was answered in positive. Haji Sultan Ahmed v. Chairman, Central Board of Revenue, Islamabad and 5 others 2008 PTD 103; Messrs Al-Hilal Motors Stores and others v. The Collector, Sales Tax and Central Excise (East) Karachi and others 2004 PTD 868 and Muhammad Siddique and others v. Deputy Collector Excise and Taxation, Sales Tax Officer, Mirpur and others 1990 PTD 1088 rel. Ishtiaq Ahmed (Senior) for Petitioner. Ms. Nazish Muzaffar for Respondent. Date of hearing: 4th October, 2023.

Summary: (a) Sales Tax Act, 1990: ---Ss. 25, 30, 47(5), 72-B--- Audit conducted by unauthorized officer---Invalidity of assessment orders based on audit reports by non-authorized personnel--- Assessment orders issued based on audits conducted by the Director General Audit Inland Revenue Receipts (DGAIRR), who is not an authorized officer under Section 30 of the Sales Tax Act, 1990, are invalid. Without further verification or a valid audit under Section 25 or 72-B, such assessments cannot be sustained. ----Cited Cases: Collector of Sales Tax and Central Excise, Peshawar v. Makk Beverages (Pvt.) Ltd. (2010 PTD 1355) (b) Tax Assessment: Judicial Precedents and Principles of Judicial Discipline--- When judicial precedents establish that assessments based on audits by unauthorized officers are invalid, subsequent cases must follow this principle for consistency and adherence to judicial discipline. ----Disposition: The Sales Tax References filed by the Commissioner Inland Revenue (Corporate Zone), Peshawar, were dismissed as the assessment orders were based on audits conducted by unauthorized officers. The Court directed that if the department intends to proceed further, it must conduct a fresh audit under applicable legal provisions.

Summary: (a) Sales Tax Act (VII of 1990)--- ----Ss.3, 3(8) & 3B----Sales Tax Special Procedure Rules, 2007, R.20---SRO 236(I)/2014 dated 31.03.2014---Sales tax from the CNG sector, charging of---Scope---Sui Northern Gas Pipelines Limited ('SNGPL'), responsibility of---Scope---Department filed reference as the Appellate Tribunal Inland Revenue set-aside concurrent impugned orders---Concurrent adverse orders were passed by the Department against the Respondent (CNG Filling Station ) on the observation that the Sui Northern Gas Pipelines Limited ('SNGPL') was charging sales tax at the rate more than actual rate of CNG in the Nowshera Region so short charging sales tax by SNGPL was recoverable from CNG stations---Validity---For collection of sales tax from CNG Sector, keeping in view provisions of Ss. 3 & 3(8) of the Sales Tax Act, 1990, as well as mechanism and guidelines provided under R. 20 of the Sales Tax Special Procedure Rules, 2007 and SRO 236(I)/2014 dated 31.03.2014 respectively, it could be said that the value of supply of the CNG consumer was linked to the " total value added cost " notified by the Oil and Gas Regulatory Authority (OGRA) from time to time and accordingly it was the responsibility of the SNGPL to charge sales tax from the CNG sector against the rates notified by the OGRA---Thus, the impugned order passed by the Tribunal, accepting the appeal of respondent (CNG Station), was according to law---Resultantly, the questions of law were answered against the Department /Applicant---Reference Application, filed by department, was dismissed, in circumstances. (b) Sales Tax Act (VII of 1990)--- ----Ss.3 & 30---Sales tax, charging of---Scope---Officer---Jurisdiction---Department filed reference as the Appellate Tribunal Inland Revenue set-aside concurrent impugned orders---Concurrent adverse orders were passed by the Department against the Respondent (CNG Filling Station) on the observation that the Sui Northern Gas Pipelines Limited ('SNGPL') was charging sales tax at the rate more than actual rate of CNG in the Nowshera Region so short charging sales tax by SNGPL was recoverable from CNG stations---Validity---In the present case, the Assessing Officer had relied upon the information provided by the Director General Audit Inland Revenue Receipts ("DGAIRR") through its audit and had not undertaken any independent proceedings/audit and it had been settled that the DGAIRR did not fall within the categories of the officers as provided under S. 30 of the Sales Act, 1990---Since the DGAIRR did not fall within the categories of the officers as provided under S. 30 of the Sales Tax Act, 1990, therefore, on the basis of its audit report unless the revenue conducted an independent audit no assessment order could be passed--- Thus, the order of the Assessing Officer was not tenable on the said two premises---Impugned order passed by the Tribunal, accepting the appeal of respondent (CNG station), was according to law---Resultantly, the questions of law were answered against the Department/Applicant---Reference Application, filed by department, was dismissed, in circumstances. Messrs Makk Beverages (Pvt.) Ltd.'s case 2010 PTD 1355 ref. (c) Sales Tax Act (VII of 1990)--- ----Ss.3, 3(8) & 3B----Sales Tax Special Procedure Rules, 2007, R.20---SRO 236(I)/2014 dated 31.03.2014---Sales tax from the CNG Sector, charging of---Scope---Provision of S. 3B of the Sales Tax Act, 1990---Applicability---Department filed reference as the Appellate Tribunal Inland Revenue set-aside concurrent impugned orders---Concurrent adverse orders were passed by the Department against the Respondent (CNG Filling Station) on the observation that the Sui Northern Gas Pipelines Limited ('SNGPL') was charging of sales tax at the rate more than actual rate of CNG in the Nowshera Region so short charging sales tax by SNGPL was recoverable from CNG stations---Validity---Assessing Officer had invoked the provision of S. 3B of the Sales Tax Act, 1990, however, the said provision of law was not applicable to the present case as it had never been the case that the respondent had collected any tax from the consumer in excess of the actual payable---Therefore, the findings of the Assessing Officer on this score were also erroneous---Thus, the impugned order passed by the Tribunal, accepting the appeal of respondent (CNG station), was according to law---Resultantly, the questions of law were answered against the Department/Applicant---Reference Application, filed by department, was dismissed, in circumstances. Ishtiaq Ahmad (Junior) for Petitioner. Danish Ali Qazi for Respondents. Date of hearing: 4th October, 2023.