C.M. No.570 of 2013 This is an application for re-phrasing the questions of law, filed by applicant-department. When confronted learned counsel for respondent-taxpayer has expressed no objection.
2. In view of the above, C.M. is allowed and re-phrased questions of law, annexed with this application, be made part of record.
MAIN CASE
3. Through instant Reference Application under Section 47 of the Sales Tax Act, 1990 ("the Act of 1990"), following re-phrased question of law, asserted to have arisen out of impugned order dated 26.06.2013, passed by learned Appellate Tribunal Inland Revenue, Lahore Bench, Lahore ("Appellate Tribunal"), has been pressed and argued for our opinion: "Whether SRO 1125(1)/2011 dated 31.12.2011 will be effective retrospectively by overriding the express provisions of already issued SRO 283(I) dated 01.04.2011 and SRO 1058(1)/2011 dated 23.11.2011, which have never been amended or repealed?"
4. Brief facts of the case are that vide SRO 283(1)/2011 dated 01.04.2011 shoe adhesive was declared to be charged to sales tax @ 4%. or 6% if supplied to un-registered person with the condition that no input tax adjustment or refund shall be admissible to registered person and same condition was also available in SRO 1058(1)/2011 dated 23.11.2011. However, vide SRO 1125(1)/2011 dated 31.12.2012, refund / input tax adjustment was allowed. Respondent-taxpayer requested for refund or input tax adjustment for the period of May 2011 onward but its representation was rejected vide order dated 19.03.2012, Feeling aggrieved, respondent-taxpayer filed appeal before learned Appellate Tribunal, which was accepted and impugned order was vacated vide order dated 26.06.2013. Hence, instant Reference Application.
5. Learned Legal Advisor for applicant-department subunits that SRO 1125(1)/2011 dated 31.12.2012 could not have been applied retrospectively, hence, impugned 'order is unsustainable in the eye of law.
6. Conversely, learned counsel for respondent-taxpayer defends the impugned decision and submits that a beneficial legislation can be given retrospective effect.
7. Arguments heard. Available record perused.
8. Perusal of record shows that learned Appellate Tribunal, after comparing SRO 283(1)/2011 dated 01.04.2011 and SRO 1058(1)/2011 dated 23.11.2011 with the statutory provisions came to the conclusion that aforesaid SROs, disentitling a registered person from claiming or deducting input tax paid on goods in question, were apparently in conflict with the provisions of main statute and dictum of law laid down by Hon'ble superior Courts. While relying upon the case reported as Government of Pakistan v. Messrs Village Development Organization (2005 SCMR 492),' learned Appellate Tribunal observed that as SRO 1125(1)/2011 dated 31.12.2012 has conferred benefit upon registered person, therefore, same could have been given retrospective effect.
9. Perusal of SRO 1125(1)/2011 dated 31.12.2012 reveals that aforesaid notification was specifically given effect from 01.01.2012, therefore, it could not have been given retrospective effect as before aforesaid date SRO 1058(1)/2011 dated 23.11.2011 was operative which specifically restricted the adjustment of input tax. In absence of any indication of its retrospective operation, it must not be given retrospective effect. Generally, beneficial legislation is to be given liberal interpretation, however for the said legislation to have a retrospective effect, the beneficial legislation must carry curative or remedial content. Such legislation must, therefore, either clarify an ambiguity or an omission in the existing law and must therefore be explanatory or clarificatory in nature. While beneficial legislation is to be liberally interpreted, in order to advance the beneficent object, it in no manner means that beneficial legislation or liberal interpretation necessarily includes or interchangeably means retrospective application. Unless the legislation is remedial, curative, explanatory or clarificatory, it cannot be interpreted retrospectively merely on the ground that the" legislation is generically beneficial in nature. Reference can be made to Commissioner Inland Revenue Zone-II, Regional Tax Office, Multan v. Mrs. Ambreen Fawad Co. Pak Arab Fertilizers Limited, Multan (2014 PTD 320), Commissioner Inland Revenue v. Muhammad Aslam (2019 PTD 381) and Commissioner Inland Revenue v. Messrs Three Star Rice Factory (2021 PTD 1).
10. In view of the above, our answer to the proposed question is in negative i.e. in favour of applicant-department and against respondent-taxpayer.
This reference application is decided in favour of applicant-department.
11. Office shall send a copy of this order under seal of the Court to learned Appellate Tribunal as per Section 47(5) of the Act of 1990.