JAVED IQBAL, J.- This petition for leave to appeal is directed against the judgment dated 4.12.2001 passed by the learned Lahore High Court, Lahore, in C.A. No. 66-S of 1999 whereby the judgment dated 20.4.1999 passed by the Customs, Excise and Sales Tax Appellate Tribunal, Lahore, has been set aside by accepting the appeal preferred on behalf of respondents.
2. Lt is to be noted that the said appeal was initially heard by a learned Division bench and due to difference of opinion it was referred to Mr. Justice Jawwad S. Khawaja who endorsed the views of Mr. Justice Nasim Sikandar while a descending judgment has been given by Mr. Justice Mansoor Ahmed.
3. Briefly stated the facts of the case are to the effect that "appellant which is a public limited company, engaged inter alia in the manufacture of cotton yarn is registered person under Sales Tax Act. The appellant purchased ginned cotton during the cotton season of 1996-97. Total numbers of cotton bales purchased by the appellant were 28899 having a value of Rs.305,512,024/- at the rate of 10%. The appellant submitted sale tax return for December, 1996 on 20.1.1007 and claimed refund of Rs.28,579,872/- as the excess amount of input tax paid by the appellant for that period, In the return the total output tax for the same period was shown as Rs.2,113,969/-. Thus, after-deducting the output tax from the total input tax of Rs.30,693,841 /- a refund for a sum of Rs.28,579,872 was claimed by the appellant under Section 10 of the Sales Tax Act. The Assistant Collector Sales Tax Refund, Lahore vide his memo, dated 2.4.1977 issued a show- cause notice to the appellant in terms of Sections 7, 9 and 10 of Sales Tax Act, 1990 read with the Sales Tax Refund Rules, 1996, on the ground that cotton bales 4102 involving Rs.244.3472/- and cotton bales 16786 valuing Rs. 175,881,240/- were completely burnt and could not be used in taxable supplies. The appellant accordingly was called upon to justify the claim of refund. Reply to the show-cause notice was submitted by appellant and Assistant Collector Refund, Lahore vide his order dated 5.4.1997 partially accepted the appeal of the appellant inter alia on the ground that they were condemned unheard. The Collector of Appeals Central Zone, Lahore vide his order dated 3.6.1997 accepted the appeal of appellant and remanded the case to adjudicating authority tor passing an order afresh after giving appellant adequate opportunity of hearing. The appellant on remand appeared before D.C. (Sale Tax Refund), Lahore who passed an Order-in-Original dated 15.9.1998 and found the appellant entitled to partial input credit against taxable supply made or to be made under the law. The sanction of Rs. 12,950,669/- after adjustment of output payable was allowed. This order was again put to challenge by the appellant and Collector (Appeals) Central Zone, Lahore vide his judgment dated 25.11.1998 upheld the Order-in-Original and rejected the appeal. The appellant lifted the matter in appeal before Custom, Excise and Sales Tax Tribunal, Lahore through an appeal which was also rejected vide order dated 1.5.1999," which was assailed before learned Lahore High Court as per details mentioned hereinabove who set aside the judgment dated 20.4.1999 passed by the learned Customs, Excise and Sales Tax Appellate Tribunal, Lahore, hence this petition.
4. Lt is, inter alia, contended by the learned ASC on behalf of petitioner that the provisions as contained in Sections 7 and 8 of the Sales Tax Act, 1990 have been misconstrued and misinterpreted which resulted m serious miscarriage of justice, It is next contended that the learned Lahore High Court erred while holding that input tax deduction can be made under Section 7 of the Sales Tax Act, 1990 in respect of goods which got destroyed by fire and were not available for making taxable supplies, It is urged with vehemence that the right to seek adjustment, reclamation or refund will be available only when the goods in question are used in furthermore of taxable activity for making another taxable supply as envisaged in the Sales Tax Act.. 1990.
5. Malik Muhammad Qayum, learned ASC entered appearance on behalf of respondents and conceded frankly that leave may be granted in order to set the controversy at naught once for all in view of the divergent views on the subject.
6. The contentions as raised and mentioned hereinabove need consideration. Leave to appeal is accordingly granted. The operation of impugned judgment shall remain suspended till disposal of this appeal which may be fixed at an early date.