CHAUDHARY MUHAMMAD TAJ, J.---This appeal, by leave, is directed against the judgment passed by the High Court on 29-10-2003 whereby the appeal filed against the order recorded by the Sales Tax Tribunal Azad-Jammu and Kashmir was ,dismissed.
2. The facts necessary for the disposal of this appeal are that appellant is a Private Limited Company which carries on business of Foam at Mirpur. The appellant was exempted from payment of sales tax for a period of five years vide Government Notification, dated F-2-1995. The period ends on 3-1-2002. The Additional Collector Central Excise and Sales Tax Mirpur issued a show-cause notice to the appellant for having failed to produce record thereby contravening the provisions of Sales Tax Act, 1990. It was also stated that input tax was not claimed in accordance with sections 7 and 8 of the Act for having not produced bill of entry and sales tax invoices for, the period commencing from 4-1-2002 to 31-1-2002. The Additional Collector Sales Tax after hearing the appellant passed adjudication order imposing sales tax. The appellant filed an appeal before the Sales Tax Appellate Tribunal which was dismissed. Therefore, a further appeal before the High Court was also filed which also met the same fate. Hence, this appeal.
3. Mr. Muhammad Rafique Dar, the learned counsel representing the appellant, raised following points in support of the appeal:--
(i) That the judgment under appeal is against law as such is not maintainable. It was argued that the appeal was filed under section 47 of the Sales Tax Act which provides that questions of law shall be framed and decided and shall deliver judgment thereon specifying the grounds on which the judgment is passed and shall also send a copy of the judgment to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case in conformity with such judgment.
The learned counsel argued that the provisions of law were violated as no copy of the judgment was sent, to the Appellate Tribunal;
(ii) that important questions of law raised in the appeal were left over by the High Court which renders the judgment as illegal. The learned counsel pointed out that there are number of points which are found in the appeal but were not resolved by the High Court; (i.e) that the input tax was paid under section 6(1) of the Sales Tax Act. The relevant invoices were also produced before the Additional Collector Sales Tax who was bound under sections 7 and 8 of the Sales Tax Act to deduct input tax but illegally the same was denied;
(iv) that the input tax is paid under section 6(1) of the Sales Tax Act. In the same manner as if it was duty of the Customs payable under the Customs Act, 1969, therefore, Additional Collector Sales Tax could not challenge the legality of the invoices as he was bound to accept it;
(v) that the orders for all taxes which include additional tax, penalty etc. Are liable to be set aside.
The learned counsel referred to sections 6 (1), 7, 8, 46 and 47 of the Sales Tax Act, 1969 and also referred to 2003 PTD (Trib.) 928 and a case reported as the Commissioner of Income. Tax v. Messrs United Builders Corporation (1986 PTD 208) in support of his, sertions.
4. Ch. Muhammad Afzal, who appeared on behalf of the respondents, opposed the contentions of the learned counsel for the appellant on the following grounds:--
(i) that the appeal filed on behalf of the appellant was time-barred which was liable to be dismissed on this sole ground;
(ii) that the points raised and argued by the learned counsel before the High Court were duly attended to and decided. Rest of the points were not pressed. It was also contended that the appellant or his counsel did not file any affidavit in support of his assertion that any other point was argued but was not decided; (i.e) that the appellant furnished a bank guarantee for the period the appellant was exempted from sales tax i.e. For a period of five years. It expired on 3-1-2002. During the period of exemption a stay order was issued by the Supreme Court of Pakistan. The appellant managed to import the material for the period under discussion on the same guarantee without making any payment;
(iv) that the appellant never paid the tax in accordance with the requirement of law as such he was not entitled to any deduction of input tax under sections 7 and 8 of the Sales Tax Act; and
(v) that the law does not provide any other mode of payment except actual payment justifying the deduction. The learned counsel referred to the following authorities in support of his assertions:--
(1) Aksar Ali and 2 others v. Fazal Karim and 11 others (1982 CLC 1309), (2) Commissioner of Income Tax North Zone, West Pakistan, Lahore v. Mst. Wazirunnisa Begum (1972 SCMR 116), (3) Messrs Maqbool and Company Ltd. v. Commissioner of Sales Tax, Karachi 1985 PTD 36 and (4) B.P. Biscuit Factory Ltd. Karachi v. Commissioner of Income Tax, Central Zone `A'. Karachi (1991 PTD 835),
5. We have heard the learned counsel for the parties and also gone through .The record. Ch. Muhammad Afzal, who appeared on behalf of the respondents, raised a preliminary objection that the appeal filed on behalf of the appellant was time-barred as such the same could not be heard on merits. We have carefully gone through the facts in relation to announcement of the judgment and thereby issuance of a notice to the appellant who after obtaining the copies filed the appeal.
After deducting a period for obtaining copies necessary for filing the appeal, the appeal was within time, therefore, the objection merits no consideration.
6. Mr. Muhammad Rafique Dar, the learned counsel for the appellant, at the very beginning of his arguments laid a stress that number of important legal points were raised in the appeal before the High Court and those points were also argued but the learned Chief Justice in the High Court failed to resolve all the points argued before him. The learned counsel appearing from the opposite side opposed this contention on the ground that all the points raised and argued before the High Court were resolved. It was also contended that no affidavit in support of the aforesaid assertions was filed. A perusal of the record shows that the learned counsel did not file any affidavit. By now, it is a settled law that a counsel who does not file affidavit in support of his A assertion that the point was argued but not resolved would mean that he had abandoned the point and he would not be allowed to argue that point.
7. Mr. Muhammad Rafique Dar, the learned counsel forcefully argued that the appellant had made the payment under section 6(1) of the Sales Tax Act, therefore, he was entitled to deduction under sections 7 and 8 of the Sales Tax Act. It was argued by him that Additional Collector Sales Tax, through a show-cause notice demanded invoices which were produced before him but were illegally left out from the consideration. A scrutiny of the aforesaid documents shows that the amount was not paid. The appellant furnished a bank guarantee for exemption period mentioned above and on the strength of aforesaid guarantee the material was imported without payment of input tax and that was done under the orders of the Supreme Court of Pakistan while granting a stay order -meant for that period. At this stage when the learned counsel was confronted with the aforesaid fact he admitted that the tax was not paid but the material was imported on the bank guarantee which could be encashed. It was also argued by him that the question of making payment either cash or guarantee cannot be challenged by the Additional Collector. After careful thought, we are of the view that under section 7 of the Sales Tax Act it is necessary that the tax should be paid which does not include furnishing of a guarantee. Even otherwise, the relevant guarantee was not for the tax period under discussion but for the period for which the payment was exempted. For proper perception section 7 of the Sales Tax Act is reproduced:-- "7 Determination of tax liability.---(1) For the purpose of determining his tax liability in respect of supplies made during a tax period, a registered person shall subject to the provisions, of section 73, be entitled to deduct input tax paid during the tax period for the purpose of taxable supplies made, or to be made, by him from the output tax that is due from him in respect of that tax period and to make such other statements as are' specified in section 9.
(2) A registered person shall not be entitled to deduct input tax from output tax .Unless:---
(i) in case of ,a claim for input tax in respect of a tax supply made in Pakistan, he holds a tax invoice in respect of such supply for which a return is furnished;
(ii) in case of goods imported into Pakistan, he holds the bill of entry duly cleared by the Customs under section 79 or section 104 of the Customs Act, 1969 (IV of 1969); (i.e) in case of goods purchased in auction, he holds a treasury challan showing payment of sales tax.
(3) Notwithstanding anything in subsections (1) and (2), the Federal Government may, by a special order, subject to such conditions, 11imitations or restrictions as may be specified therein allow a registered person to deduct input tax, paid by him from the output tax determined or to be determined as due from him under this Act."
Reference in this regard may also be made to a case reported as Commissioner of Income-Tax, North Zone, West Pakistan, Lahore v. Mst. Wazirunnisa Begum (1972 SCMR 116), where it was held as under:-- mere declaration of the dividend at the annual general meeting of the Company amounts only to a decision by the Company to pay to the share holders dividend at a certain rate. It creates a right in favour of the share-holders and a corresponding liability on the Company to pay the amount but it does not at all mean actual payment. It is only when the warrant for payment is made out that the share-holders get into the position to receive the actual payment......... "
1991 PTD 835 it was held:--- "It may be pertinent to point out that the factum of payment of the sales tax, of which the refund was claimed by the applicant was not proved as a matter of fact either before the Income Tax Officer, or before the Assistant Appellate Tribunal. It may ,also be pertinent to mention that it is the case of the respondent that till the decision of the Supreme Court in the case of Messrs Noorani Cotton Corporation and another v. Sales Tax Officer, A. Ward, Lyallpur and another 1965 PTD 273 (which was decided on 10-11-1964). The Department and the manufacturers of the Cottonseed Oil and the Vegetable Ghee were under the misapprehension that no sales-tax was payable on. The Cotton seed Oil. Be that as it may, we are even otherwise inclined to hold that under subsection (1) of section 27 of the Act no refund can be claimed without providing the actual payment of the sales tax amount, of which refund is claimed."
8. The learned counsel also argued that under the provisions of Sales Tax Act it was obligatory that question of law should have been framed , decided and then a copy of the order should have been sent to the Sales Tax Appellate Tribunal which had to proceed further in light of the judgment. It may be mentioned that the Sales Tax Tribunal was arrayed as a respondent in the appeal filed before High Court and was duly represented and the judgment was announced in their presence, therefore, the objection is merely a technical one as neither the appellant is prejudiced for not sending a copy of the judgment to the Sales Tax Tribunal nor he has raised any other point which, for the aforesaid reason, renders the judgment illegal. The case-law referred to by the learned counsel for the appellant, with its distinct facts, is not applicable to the case in hand as such is not discussed.
9. In view of the above, the appeal is devoid of any force which is dismissed with costs. .