KARACHI: The Sindh High Court (SHC) directed the tax authorities and deputy attorney general of Pakistan to filed their respective para wise comments on a constitutional petition filed by M/s Sanaullah Textile Mills, M/s Sanaullah Longful Textile Pvt Ltd, M/s Sana Industries Pvt Ltd, M/s Gatron Industries Ltd and M/s Equity Textile Ltd against non-adjustment disallowance of input tax on sale tax paid on packing material.
A two-member bench, comprising Justice Aqeel Ahmed Abbasi and Justice Muhammad Arshad Khan was hearing the petition.
During the hearing, Taseer Khan has shown appearance on behalf of tax department and filed power and sought time for submit para wise comments, therefore, court granted his request and adjourned the hearing for 1st week of March, 2017.
Earlier, counsel for the petitioners stated that petitioners are inter alia engaged in the business of processing, manufacturing, packing and marketing of various products and instant petition is being filed against non-adjustment/ disallowance of input tax on sale tax paid on packing material w.i.f 1st July 2014 vide SRO 491 (1)/2016 (the impugned notification), whereby, condition X of SRO 1125 (1)/2011 stands altered so as to disallow the adjustment of sales tax being paid on packing material as input tax under the sales tax act, 1990.
Citing Chairman Federal Board of Revenue (FBR), Sectary Ministry of Finance, Chief Sales Tax Law & Procedure, Chief Commissioner Inland Revenue RTO and others, petitioners pleaded the court may declare that the proviso to condition (X) of SRO 491(1)/2016 is unlawful, unconstitutional and void bonito insofar as it relates to the disallowance of input on packing material.
They also pleaded the court may declare that denial to allow adjustment of input tax under the impugned notification on packing material is ultra-vires to the provisions of the sales tax act, 1990 as well as against the fundamental rights enshrined under the constitution and restrain them from taking any coercive action upon claiming input tax on packing material in their monthly sales tax returns filed under the act 1990 on the garb of condition X of the said notification.
