The Federal Board of Revenue (FBR) in order to meet its budgetary targets and recovery of taxes has directed its field formations to apply for vacation of stay orders before the High Courts, whereby the chargeability and collection of sales tax on supply of CNG have been stayed in different petitions.
In this regard, based upon the judgement of Supreme Court of Pakistan, the FBR has issued instructions to the Chief Commissioners Inland Revenue Regional Tax Offices Peshawar and Bahawalpur that applications for vacation of stay orders be filed before the High Court, whereby the chargeability and collection of sales tax on supply of CNG have been stayed in different petitions, so that recovery of taxes could be materialised for meeting the budgetary targets.
According to the FBR’s instructions to the above mentioned RTOs, a letter dated November 20, 2014, received from Chief Commissioner Inland Revenue, Large Taxpayer Unit (LTU), Lahore, it has been informed that the Peshawar High Court, Peshawar & Lahore High Court, Bahawalpur Bench, Bahawalpur, have granted stay to CNG stations, resulting in stay of almost Rs 920,402 million.
As per a decision of the Supreme Court of Pakistan, whereby the court has vacated the stay granted by Islamabad High Court on the issue of charging sales tax on supply of CNG while observing as under:
“The learned Addl. Attorney General appearing on behalf of the petitioner contended that where vires of a statement is questioned, injunction suspending its operation could not be issued; that such order being amendable to intra court appeal under section 15 of the Ordinance, X of 1980, Code of Civil Procedure (Amendment Ordinance, 1980, could not be dismissed, notwithstanding the counsel representing the petitioner before the High Court on account of misunderstanding opted to withdraw it in order to approach this court. Relying on the judgement rendered in the case of Hussain Baksh Vs Settlement Commissioner, Rawalpindi and others [PLD 1970 SC1], the learned Addl. Attorney General contended that since the matter relates to vires and interpretation of statute, no order could be passed without hearing the Attorney General for Pakistan.
Points raised need consideration. We, would, therefore, like to hear the other side. Issue notice. In the meantime, the operation of the impugned order is suspended. As the matter relates to collection of tax, it be listed within a fortnight subject to the approval of Chief Justice of Pakistan before a bench of three Judges”, it added.
The FBR said that based upon the above judgement of Supreme Court of Pakistan, applications for vacation of stay orders shall be filed before the High Court, whereby the chargeability and collection of Sales Tax on supply of CNG have been stayed in different petitions, so that recovery of taxes could be materialised for meeting the budgetary targets.
In case, the High Court does not accept the departmental request for vacation of stay, a proposal for filing of CPLA may be sent to the Board for approval, at the earliest, FBR further added.
SOURCE: RECORDER REPORT