MUNIB AKHT AR, J.---These appeals were disposed of by means of a short order , which was in the following terms: "For reasons to be recorded later, listed appeals are dismissed. The C.Ps. Nos. 4687 of 2017 and 4688 of 2017 involve a somewhat dif ferent point. Accordingly , the same shall be fixed for hearing separately ."
The following are our reasons for the short order .
2. These appeals arise under the Sales Tax Act, 1990. The appellants are electricity distribution supply companies (commonly referred to as DISCOs) which, at the relevant time, purchased electricity from WAPDA and the Pakistan Electric Power Company Ltd. (PEPCO) and supplied the same to their consum ers. The sales tax paid by the appellants on the purchase of electric power was their input tax and that charged by them from the consumers was the output tax. The applicable rate of tax at the relevant time, both on the input tax and the output tax was 17%.
The sales tax charged by the appellants appears on the (monthly) electricity bills generated for each consumer and is part of the amount payable by the latter . These appeals are concerned with that class of consumers who are steel-melters, steel re-rollers and composite units of steel melting and re-rolling (herein after the "consumers"). As to the sales tax charged by the appellant s from these consumers for the supply of electricity , i.e., 17% there is no dispute that this constituted their output tax. The dispute is regarding another amount charged by the appellants from the consumers, which amount also appeared on the electricity bills and was so paid by the latter , and was claimed by the appellants to be part of the output tax. The department's case, accepted by all the forums below including the learned High Court, was that this amount could not, and did not, form part of the output tax of the appellants as it had nothing to do with them. They were simply acting as collecting, agents and nothing more for a wholly distinct and separate tax liability .
3. He amount just referred to was required to be charged by the appellants from the consumers in terms of Rule 58H of the Sales Tax Special Procedure Rules, 2007 ("2007 Rules"), which is to be found in Chapter XI thereof.
These appeals are concerned with the tax periods from July, 2008 to December , 2010. At the relevant time, Rule 58H, as relevant for present purposes was as follows: "58H. Payment of tax.---( 1) Every steel-melter , steel re-roller .and composite unit of steel melting and re-rolling (having a single electricity meter), shall pay sales tax at the rate of six rupees per unit of electricity consumed for the production of steel billets, ingots and mild steel (MS) products which will be considered as their final discharge of sales tax liability .
(2) Payment of tax by steel melters, re-ro llers and composite units of melting and re-rolling shall be made through electricity bills along with electricity charges: Provided that in case the due amount of sales tax mentioned in sub-rule (1) is not mentioned in the electricity bill issued to any steel melter or re-roller or composite unit of melting and re-rolling , the said melter or re-roller or composite unit shall deposit the due amount of tax for the relevant tax period at the rate of six rupees per unit of electricity consumed excluding the amount of sales tax already paid on the electricity bill related to the said tax period through his monthly sales tax return.
(3) In case of default in payment of sales tax by the due date mentioned on the electricity bill, besides other legal action by the concerned Sales Tax Collectorate, the concerned electric supply company shall disconnect the electricity connection of the unit.
(6) Steel melters and re-rollers, except Pakistan Steel Mills and Peoples Steel Mills, paying sales tax on fixed rates through electricity bills shall not he entitled to any input tax adjustment."
The department's case was that the additional amount charged by the appellants in terms of sub-rule (2) was in fact a discharge of the consumers' sales tax liability , which was separate and distinct from the tax liability of the appellants. The one could not be merged into or added to the other and hence the addition made by the appellants to their output tax, as shown in their returns, was erroneous. Show cause notices were issued to them in this regard and, as noted, the appellants lost before all the forums below .
4. Learned counsel for the appellants sought to place reliance on Rules 14 and 16 of the 2007 Rules, and in particular on sub-Rules (3) and (4) of the former . These appear in Chapter III there of, which provides for a special procedure for the collection and payment of sales tax on electric power . We went through these provisions with the assistance of learned counsel. With respe ct, they have no relevance for present purposes. In our view, the learned High Court has dealt with the matter correctly and the reasoning which led it to dismiss the tax references filed by the appellants, as contained in paras 11 and 12 of the impugned judgment, is unexceptionable. It has been rightly held that the appellants have conflated their own tax payment/liability (insofar as the output tax is concerned) with the tax liability of the consumers. The two are separate and distinct and the mere fact that, for purposes of administrative convenience, the Federal Government has considered it expedient to utilize the mechanisms of, and available through, the appellants (i.e., the electricity bills issued by them) to charge and collect the tax payable by the consumers does not, and cannot, alter the position in law. The tax liabilities of the appellants and the consumers are separate and distinct. The only meeting point, i.e., the output tax of 17% paid by the latter to the former is obviously not in dispute. The other amount is not part of that tax liability . No interference was therefore called for and the appeals were dismissed at the conclusion of the hearing.
5. These are the reasons for the short order set out above.