FAUJI FERTILIZER COMPANY LIMITED, RAWALPINDI vs FEDERATION OF PAKISTAN through Ministry of Finance, Islamabad

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FAUJI FERTILIZER COMPANY LIMITED, RAWALPINDI VS FEDERATION OF PAKISTAN through Ministry of Finance, Islamabad Ss. 2(33) & 2(35)---Sales Tax Rules, 2006, R. 9---Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Scope---Shifting of finished product---Concept of sale/supply for the purpose of taxable activity---Determination---Issuance of notice under R. 9 of the Sales Tax Rules, 2006 (Rule)---Contention of the petitioner was that the notice was vague and was based on presumptions and mala fide, as it was not covered under the Sales Tax Act, 1990 (Act) and Rules---Validity---Petitioner company through a letter did provide a list of the warehouses to the respondent department manually and exception was taken by the department to the said letter---Notice was without jurisdiction as the respondent department could not point out that moving the goods to warehouses, which, if was taken as not having been intimated to the department, constituted a transaction that could be termed as a sale or supply of goods subject to taxable activity---Notice was without lawful authority inasmuch as R.9 of Rules was not attracted in the facts and circumstances of the case, as the respondent department was unable to point out any violation of the law despite repeated inquiries from him by the High Court---Mere fact that the finished products had been shifted by the petitioner from its factory to warehouses, which were not duly notified, the same per se did not mean that sale tax was payable on the transaction unless the concept of sale, supply and taxable activities were attracted in the facts and circumstances---Notice was vague and was based on the assumption that there was taxable activity without pointing out any practical instance---Notice was held to be without lawful authority, which could not stand the test of the action taken under the Act and Rules by the Department, thus, the constitutional petition was maintainable---Constitutional petition was allowed, in circumstances.

FAUJI FERTILIZER COMPANY LIMITED, RAWALPINDI vs FEDERATION OF PAKISTAN through Ministry of Finance, Islamabad Ss — 2025 PTD 1751 ISLAMABAD

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