COMMISSIONER INLAND REVENUE REGIONAL TAX OFFICE, PESHAWAR vs CHERAT CEMENT COMPANY LTD

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COMMISSIONER INLAND REVENUE REGIONAL TAX OFFICE, PESHAWAR VS CHERAT CEMENT COMPANY LTD. NOWSHERA. Sections 7 & 66---Sales Tax Act, 1990---Refund of claim---Relevant tax period---Limitation period---Exemption period---Scope. During the period from 13-06-1997 to 05-09-2000 supply of cement was exempted from tax. The respondent/taxpayer claimed refund of tax paid during the period of exemption. The question before the Supreme Court was whether the claim of refund made by the respondent/taxpayer was barred by limitation under Section 66 of the Sales Tax Act, 1990. Held: Since the "relevant tax period" did not and could not exist during the period of exemption, no date within that period could serve as the starting point of limitation envisaged by Section 66 of the Sales Tax Act, 1990. The end of the period of exemption did not mark the last day for the commencement of limitation because up to that point in time there was, in law, no "time period" within the meaning of the statutory provision. If any question of limitation could arise under Section 66 of the Sales Tax Act, 1990, the date for commencement of limitation would only lie in the successive tax periods which became operative after the expiry of the exemption period. For purposes of computing limitation, time did not begin to run from the end of the period of exemption or any date prior thereto falling within the exemption period. The period of exemption ended on 05-09-2000 and the application for refund was made by the end of August/beginning of September 2001, which was well within, or at the most towards the end of, a period of one year from the end of exemption. The limitation period did not begin to run from 05-09-2000 or any date prior thereto but rather, if at all, from the successive tax periods after that date. Therefore, the refund claim was within time and could not be defeated or denied on the ground of being time barred. The Supreme Court declined to interfere with the findings of the High Court and Appellate Tribunal Inland Revenue, which had correctly concluded that the respondent/taxpayer was entitled to refund of the remaining amount of Rs.6,439,608. Appeal was dismissed, in circumstances.

COMMISSIONER INLAND REVENUE REGIONAL TAX OFFICE, PESHAWAR vs CHERAT CEMENT COMPANY LTD — 2026 SCMR 545 SUPREME-COURT

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