FAISALABAD ELECTRIC SUPPLY COMPANY LTD., FAISALABAD vs The COMMISSIONER INLAND REVENUE, LARGE TAXPAYERS' OFFIC

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FAISALABAD ELECTRIC SUPPLY COMPANY LTD., FAISALABAD VS The COMMISSIONER INLAND REVENUE, LARGE TAXPAYERS' OFFICE, FAISALABAD Ss. 8(1)(a), (f), (g), (h) & (i) & 11(2)---Tax credit not allowed---Chargeability---Burden of proof---Argument of the Department was that, during scrutiny, it found Registered Person (Electricity Supply Company / DISCO) to have claimed / adjusted inadmissible input tax during four tax periods on purchase of certain items (office equipment, mineral water, travel sets, soaps and sugar)---Registered person filed appeal before the Appellate Tribunal Inland Revenue as the Commissioner maintained Order-in-Original for recovery of amount along with default and penalty---Validity---Inland Officer failed to establish as to how the items purchased by the appellant fell within the categories of goods permanently attached to immovable property, or building material, or goods for personal use etc., or any of the specific category listed in Cls. (a), (f), (g), (h) and (i) of S. 8(1) of the Sales Tax Act, 1990---Initial burden to prove chargeability was on the Department, which did not appear to have been discharged in the present case---While examining details of goods and services provided by the appellant along with the details of utilization in the taxable activities which was placed on the record, Appellate Tribunal Inland Revenue Land that the same did not come within the ambit of said provisions of the Sales Tax Act, 1990, and the Officer Inland Revenue failed to substantiate and correlate the disallowance of input tax with the said provisions of the Sales Tax Act, 1990---Provisions of S.8(1)(a) of the Sales Tax Act, 1990, authorize deduction for all such input tax that relates to goods that contribute directly or indirectly, and even remotely, in furtherance of taxable activity---Thus, assessment order as well as appellate order in respect of adjustment of input tax were passed on the basis of wrong assumption and application of law and incorrect appreciation of facts---Appellate Tribunal Inland Revenue set-aside the impugned orders and allowed the appeal filed by the registered person.

FAISALABAD ELECTRIC SUPPLY COMPANY LTD., FAISALABAD vs The COMMISSIONER INLAND REVENUE, LARGE TAXPAYERS' OFFICE, FAISALABAD Ss — 2025 PTD 602 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

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