CHIEF COMMISSIONER/COMMISSIONER IR ZONE-II/ZONE-III, RTO, PESHAWAR vs AKBAR KHAN FILLING STATION S

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CHIEF COMMISSIONER/COMMISSIONER IR ZONE-II/ZONE-III, RTO, PESHAWAR VS AKBAR KHAN FILLING STATION S. 156a---Sale of petroleum products to petrol pump operators operating in Federally administered Tribal areas (FaTa)---Deduction of tax from the amount of commission or discount allowed to the operator---Refund, claim for---applicability of the Income Tax Ordinance, 2001---Enforcement of the Income Tax Ordinance, 2001 ('Ordinance of 2001') was not extended to the territorial limits of FaTa and, therefore, its provisions were not attracted to the income arising therein---It is not disputed that the respondents are operating petrol pumps in FaTa---Section 156 a of the Ordinance of 2001 provides that every person selling petroleum products to a petrol pump operator shall deduct tax from the amount of commission or discount allowed to the operator at the rates specified in Division VI a of Part III of the First Schedule---Tax deductible under subsection (1) shall be a final tax on the income arising from the sale of petroleum products---Obligation of deduction of tax is on the person selling the petroleum products to the operator of the petrol pump while the said deduction is relatable to the commission paid to or discount allowed by the latter---In the present case the respondents assert to be operators of petrol pumps and they were claiming refund of the tax deducted from their commission by the persons who had sold the petroleum products to them---Factum of income having been accrued was on account of the commission paid to the respondents for the sale of petroleum products and not the sale of the petroleum products to the consumers at the petrol pumps operated in FaTa---Deduction of tax fell under the final tax regime---admittedly, the contractual arrangement for the sale of petroleum products, the actual sale and payment as well as deduction of the tax had taken effect in the areas of Pakistan outside the territorial limits of FaTa and, therefore, the transactions and the income arising from such sale were not immune from the enforcement of the provisions of the Ordinance of 2001---Income derived by the respondents was on account of commission paid to them by the seller companies outside FaTa---Immunity from the payment of taxation under the Ordinance of 2001 shall not be claimed merely on the basis that the business premises have been established in FaTa, rather the onus was on the tax payer to establish the fact that taxable income was not being derived from the area where the statute was enforced and applicable---This crucial factum could not be successfully established by the respondents and their refund claims were, therefore, justifiably rejected by the taxation officer---Claim of refund of the tax deducted under section 156a of the Ordinance of 2001 was not tenable and, therefore, rightly rejected---appeals were allowed accordingly.

CHIEF COMMISSIONER/COMMISSIONER IR ZONE-II/ZONE-III, RTO, PESHAWAR vs AKBAR KHAN FILLING STATION S — 2024 SCMR 858 SUPREME-COURT

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