PESHAWAR: The Peshawar High Court has restrained Federal Board of Revenue (FBR) from recovering Rs1.5 billion sales tax from the Peshawar Electric Supply Company (Pesco).
The PHC bench, comprising PHC Chief Justice Mazhar Alam Miankhel and Justice Mohammad Ghazanfar, directed Pescso to file appeal before the relevant forum under the Sales Tax Act, 1990. The bench ordered that till decision on the Pesco’s appeal, FBR should not recover the impugned amount from the petitioner.
Advocate Shumail Ahmad Butt appeared for the petitioner and contended that the petition was of urgent nature as recently the deputy commissioner Inland Revenue had passed an order whereby it was declared that Pesco had to pay Rs1.5 billion as sales tax on account of sale and purchase of electricity for many years.
He added that the deputy commissioner had also issued directives that the said amount should be recovered from the bank accounts of the petitioner. He pointed out that the deputy commissioner had erred in its order as there was no outstanding amount against Pesco on account of sales tax.
Shumail Butt argued that in past when Tribal Electric Supply Company (Tesco) was established it had no licence of purchasing electricity due to which Pesco used to purchase electricity for Tesco from the Central Power Purchasing Agency (CPPA).
He added that the amount of energy purchased for Tesco was onward supplied to Tesco by Pesco and as such the petitioner got nothing to do with payment of its sales tax. He stated that instead of issuing notice to Tesco, the deputy commissioner Inland Revenue Department decided that sales tax had to be paid by Pesco.
The bench inquired as to why the petitioner had moved the high court as under the Sales Tax Act the appellate forum was available to it.
Butt contended that under the Sales Tax Act, the petitioner had to file appeal before the commissioner Inland Revenue, but there was a major flaw in the law that the commissioner had not been empowered to issue a stay order against the order of the deputy commissioner.
