DAWAT SARAYE vs FEDERATION OF PAKISTAN Ss — 2023 PTD 1667 LAHORE-HIGH-COURT-LAHORE

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DAWAT SARAYE VS FEDERATION OF PAKISTAN Ss. 14(1), 14(2),13(2), 3(1a), 3(5), Sixth Sched., Serial No. 53, Table 2---Registration number, not obtained---Exempted supplies---Further tax and extra tax was charged from the petitioner in the electricity bill for "not obtaining registration number" as well as "not being active taxpayer"---Petitioner invoked constitutional jurisdiction of the High Court against imposition of further and extra taxes by the Commissioner contending that for providing exempt supplies, he was not required to be registered, hence he was not on active taxpayer list, thus impugned levies (further tax and extra tax) were against the spirit of relevant law---Validity---Section 14 of the Sales Tax act, 1990 ('the act, 1990'), deals with registration and requires every person, engaged in making taxable supplies in Pakistan including zero rated supplies to register himself if he falls within the categories noted in subsection (1) as (a) to (f)---Section 14(2) of the act, 1990 envisages an option for a person who is not engaged in making taxable supplies in Pakistan by stipulating (words/phrases in the S. 14(2) as ) "if required to be registered "and "may apply for registration"---Tenor of the provision of S. 14 does not compel one to read 'may' as ' shall'---Using the word 'may' is an option with the person not engaged in making taxable supplies, if he intends to import or export---However, if any other provision of the act 1990 or any other federal law requires registration, the Commissioner can ask him to register even if he is making exempt supplies---Interpretation of the respondent / Department of reading 'may' as 'shall' is fallacious in absence of a determination that such taxpayer is required to be registered under any other provision or federal Law---However, on a notice for registration required under another provision or law, if the person making exempt supplies does not comply, the Commissioner may pass an order for imposition of further or extra tax---Section 3(1a) of the act, 1990 envisages that the tax is leviable where taxable supplies are made to a person who has not obtained registration number or is not on active taxpayer list---Condition of taxable supply being electricity is though fulfilled, but the petitioner being recipient of supply is not required to be registered compulsorily---Phrase " who has not obtained registration number" implies that a person, required to be registered under S. 14(1) of the act 1990 or any other provision or law has not obtained registration, shall be burdened with further tax---High Court was not in agreement with the interpretation of the Commissioner that a person falling under S. 14(2) of the act, 1990 would also be caught by the phrase "not obtained registration", for not opting for registration and only way to avoid it is to get registration---Respondent / Commissioner in the impugned order has himself admitted that petitioner falls under S.14(2) of the act, 1990---It is not established through an order, after issuing notice for registration, that petitioner is required to be registered under any other provision of the act, 1990 or Federal Law---High Court declared imposition of further and extra taxes as illegal---Constitutional petition was allowed, in circumstances.

DAWAT SARAYE vs FEDERATION OF PAKISTAN Ss — 2023 PTD 1667 LAHORE-HIGH-COURT-LAHORE

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