ISLAMABAD ELECTRIC SUPPLY COMPANY LTD. vs COMMISSIONER INLAND REVENUE ISLAMABAD R

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ISLAMABAD ELECTRIC SUPPLY COMPANY LTD. VS COMMISSIONER INLAND REVENUE ISLAMABAD R.58H (as it existed between July 2008 to December 2010)---Sales Tax Act (VII of 1990), S. 7(1)---Output tax of Electricity Distribution Supply companies (DISCOs)---Scope---Appellants (DISCOs) at the relevant time purchased electricity from WAPDA and the Pakistan Electric Power Company Ltd. (PEPCO) and supplied the same to their consumers---Sales tax paid by the appellants on the purchase of electric power was their input tax and that charged by them from the consumers was the output tax---Applicable rate of tax at the relevant time, both on the input tax and the output tax was 17%---In the present case the consumers were steel-melters, steel re-rollers and composite units of steel melting and re-rolling ("the consumers")---As to the sales tax charged by the appellants from these consumers for the supply of electricity, i.e., 17% there was no dispute that this constituted appellants' output tax---Dispute was regarding the amount charged by the appellants from the consumers under R. 58H of the Sales Tax Special Procedures Rules, 2007, which amount also appeared on the electricity bills of the consumers and was so paid by the latter, and was claimed by the appellants to be part of the output tax---Held, that appellants had conflated their own tax payment/liability (insofar as the output tax was concerned) with the tax liability of the consumers; the two were separate and distinct and the mere fact that, for purposes of administrative convenience, the Federal Government had considered it expedient to utilize the mechanisms of, and available through, the appellants (i.e., the electricity bills issued by them) to charge and collect the tax payable by the consumers did not, and could not, alter the position in law---Tax liabilities of the appellants and the consumers were separate and distinct---Amount collected under R. 58H of the Sales Tax Special Procedures Rules, 2007 was not part of the output tax of the appellants---Appeals were dismissed.

ISLAMABAD ELECTRIC SUPPLY COMPANY LTD. vs COMMISSIONER INLAND REVENUE ISLAMABAD R — 2022 PTD 765 SUPREME-COURT

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