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SHC stops FBR from collecting sales tax from Imagin Paper Products

SHC stops FBR from collecting sales tax from Imagin Paper Products

KARACHI: The Sindh High Court (SHC) has restrained the Federal Board of Revenue (FBR) from recovering sales tax from M/s Imagin Paper Products.

The court took the action on a constitutional petition filed by the petitioner against impugned demand notice and also sought zero rated sales tax on its products.

While the hearing of the petition, a two-member bench, headed by Justice Aqeel Ahmed Abbasi also issued notices to the tax authorities and deputy attorney general of Pakistan, directing them to file their respective comments on the next date of hearing. The court adjourned the hearing for January 18, 2017.

Earlier, counsel for the petitioner stated that petitioner is manufacture, importer and exporter of articles of paper and paperboard and purchases paper, paperboard, glue, jam pins, wires etc form local market and pays input tax on the said purchase invoices.

According to the petitioner, exercise books, copies, registers and other items have been declared as zero rated under section 4 of the Sales Tax Act, 1990 read with SRO 549(1)/2008 dated 11/06/2008, as such the petitioner does not charge sales tax on its supplies, however, officials of the tax authorities issued show cause notice to the petitioner under section 48 of the Sales Tax Act, 1990 and being aggrieved, the petitioner filed an appeal along with stay application which are pending before the authority concerned.

The counsel further argued that despite pending appeal, tax authorities have threatened the petitioner of coercive action.

Citing Chairman Federal Board of Revenue (FBR), the Chief Commissioner Inland Revenue Regional Tax Office, the Commissioner Inland Revenue Appeal-IV, the Commissioner Inland Revenue Zone-IV Regional Tax Office, the Deputy Commissioner Inland Revenue In-charge Refund Division and others as respondents, the petitioner pleaded the court to declare the act of the respondents as illegal, mala fide and arbitrary and restrain them from taking any coercive action against it.