' KHILJI ARIF HUSSAIN, J.---This appeal, by leave of the Court, has been directed against the judgment dated 27-1-2006 passed by High Court of Sindh, Karachi. In Special Sales Tax. Appeal No, 38 of 2004, which was directed against the order of Custom Excise and Sales Tax Appellate Tribunal, Karachi dated 31-1-2004.
2. The brief facts relevant for the disposal of instant appeal are that the appellant company is the manufacturers of tyre and other allied rubber goods. On 9-5-1998 an accidental fire statedly broke out in the appellant's mixing department of the industrial unit, causing damage to the sophisticated machinery rendering the mixing facility as unserviceable. The appellant in order to further process his rubber master batches raw material mixed with the other material in compound contracted with Messrs Diamond Rubber Mills (Ltd) and others who had the required equipment i,e, mixing plant to use their facilities/ equipment on the charges, as settled.
3. Thereafter when an adjustment of input-tax was claimed by the appellant for the payment made to vendor as processing charges, a show-cause notice dated 28-3-2001 was issued to him to the effect that the payment made for hiring machinery and to the supervising staff is not covered by the definition of 'supply' as given in section 2(33) of Sales Tax Act and therefore appellant is not entitled to claim for the adjustment of input-tax.
4. After hearing the appellant, order in original No,106(T) of 2001 was passed by the Deputy Collector Customs for the recovery of Rs,1,004,431 along with additional tax due under section 36 read with section 34 of the Sales Tax Act and penalty equal to 10% of the amount Of tax involved under section 33 (2)(CC) of the Sales Tax Act, 1990 was also imposed.
5. Aggrieved by the order in original, the appellant preferred appeal under section 46 of the Sales Tax Act, 1990 before Customs, Excise and Sales Tax Appellate Tribunal, Karachi which was dismissed on 31-1-2004. The appellant questioned the order passed by the Customs, Excise Sales Appellate Tribunal under section 47 of the Sales Tax 1990 before the High Court at Karachi, which appeal too was dismissed vide impugned judgment dated 27-1-2006.
6. Leave was granted by this Court on 2-10-2006 to consider the following questions:--
(a) Whether the input tax was paid by the manufacturer on the supplies not owned by him would be adjustable against the out put tax paid by him on such supplies going out of his factory?
(b) Whether adjustment of input tax will be permissible only in respect of the goods which belong to the vendor or are owned by the vendor and not in respect of the goods which belong to the vendee and are received by him only for the purpose of manufacturer?
(c) Whether provision of Sales Tax General Order No, 1 of A 1998 dated 17-6-1998 would prevail over the provisions of section 3(1)(a) and section 3 subsection (3) of the Sales Tax Act, 1990?
(d) Whether Tribunal and the High Court in view of the material and evidence available were justified in holding that the vendee did not have the invoice of payment of sale tax so as to adjust the input tax against the out put tax.
7. Heard Mr. Aziz A. Shaikh, Advocate Supreme Court for the appellant and Raja M. Iqbal, Advocate Supreme Court for the respondents.
' Mr. Aziz A. Shaikh, also raised the question of the jurisdiction of the adjudicating authority to issue show cause notice under section 36 of the Sales Tax Act for want of the pecuniary jurisdiction of the adjudicating authority/Deputy Collector Sales Tax, limited to rupees one million whereas; the money involved in the present appeal is exceeding Rupees four million. He, further vehemently argued that the show-causenotice and the order in original passed by the Deputy Collector Sales Tax for lack of pecuniary jurisdiction as above contended, consequently render the subsequent orders passed in the matter liable to be struck down in view of the original order being void for having been passed by an authority having no pecuniary jurisdiction. In support of his contention reliance has been placed in the case of Executive District Officer (Education), Rawalpindi v.
Muhammad Younis, (2007 SCM R 1835) and Evacuee Trust Property Board and others v. Mst. Sakina Bibi and others, (2007 SCM R 262).
' It was also argued by the learned counsel that section 36 of the Sale Tax Act on the facts of the case is not attracted which provides that any tax or charges not levied or made or has been short levied or has been erroneously refunded; notice can be served upon the person within five years of the relevant date for payment of amount as may be specified in the notice. The learned counsel contended that appellant's case is not that tax has not been levied or erroneously refunded to him but the appellant's claim is of adjustment of input tax paid by him.
8. On the other hand, Raja M. Iqbal, Advocate Supreme Court for the respondents argued that the pecuniary jurisdiction of the Deputy Collector Customs under section 45 of the Sales Tax Act extended to rupees two and half million and not one million as it stood on the relevant date when the show-cause notice was served upon the appellant. According to the learned counsel the question lack of pecuniary jurisdiction did not arise from the order in original and the High Court has rightly dismissed the appeal. To substantiate the contentions reliance has been placed on the reported judgments i,e, Messrs Thatta Cement Company, Thatta v. Customs, Central Excise and Sales Tax Appellate Tribunal Karachi and 2 others, (2003 PTD 1899) and Collector of Customs, E. & S.T. And Sales Tax v. Pakistan State Oil Company Ltd, (2005 PTD 2446).
9. We have considered the arguments advanced by the learned counsel for the parties and have carefully perused the record in the light of the relevant provisions of the Sales Tax Act.
' From the perusal of the record it appears that the appellant hired and involved machineries and services of staff of the mentioned party for the purpose of part processing of the raw material which was to be processed by it for manufacturing the goods.
10. Subsections (12) and (14) of section 2 of Sales Tax Act 1990 defines 'goods' and 'input tax'. Input tax in relation to registered person has been defined as 'tax' levied under the Act on supply of goods received by that person.
11. Admittedly the appellant is clamming adjustment of input-tax not on the supply of the goods but for adjustment of the same paid on hiring of machineries and services of staff of the other party which is not permissible.
12. We would like to mention here that before the eruption of fire in the factory of the appellant, the mixing process of the given raw materials was being carried out through their own unit of the machinery its own staff thus never before the company claimed adjustment of the input tax on account of use of such machinery and thus the appellant company on such factual plain advanced claim for adjustment of the input-tax not backed by any provision of the Sales Tax Act and those referred to herein-fore.
13. As regards the objection that the Deputy Collector had no pecuniary jurisdiction to issue the show-cause notice culminated into the issuance of the Order in original, by virtue of Finance Ordinance 2000 (Ordinance XXI of 2000), section 45 was substituted and pecuniary jurisdiction of Deputy Collector was enhanced up to rupees two and half million which was inforce at the relevant time.
14. Since the appellant has not supplied any goods as defined in subsection (12) of section (2) of the Sales Tax Act therefore, the respondents have rightly refused to adjust the input-tax claimed by the appellant.
' In the light of the foregoing reasons, we do not find any valid ground for interference in the impugned judgment of the High Court of Sindh. Consequently, this appeal is dismissed with no order as to costs.