KARACHI: The Sindh High Court (SHC) on Thursday again issued notices to FBR chairman, Inland Revenue (IR) commissioner on an application filed by M/S Tufail Chemical and Surfactants (Pvt) Ltd against the imposition of sales tax on services over toll manufacturing business.
A two-member bench comprising Justice Munib Akhter and Justice Abdul Malik Gaddi heard the application, during the hearing assistant attorney general and standing counsel requested for some time to taken instructions etc.
Earlier, counsel for the petitioner stated that his applicant was a manufacturer of sulphonic acid, formic acid etc, and its by-product sodium sulphate and chemical auxiliaries products. The Sindh Revenue Board (SRB) assistant commissioner-10 issued a show cause notice dated February 2016 asking the petitioner, why Sindh sales tax on services on toll manufacturing processing to the tune of Rs 18.576 million where the Sindh sales tax on services on this toll manufacturing or processing activity amount to Rs. 2.6 million may not be assessed under Section 23 (1) of SSTS Act 2011, in addition, default surcharge under section 44 of SSTS act, should not be levied and why penal action under Section 2,3,6(d) /2011 and 13 of table on section 43 of SSTS act should not be taken.
The counsel said that there was an apparent tug of war between the FBR and SRB and officers under both the respondents’ authorities were demanding tax on toll manufacturing business from the taxpayers which is illegal, mala fide. He asked the court to direct the respondents not to take any action until final judgment.
