MANSOOR AHMAD, J.- This sales tax appeal arises out from the judgment dated 22.12.2000 rendered by Custom Excise and Sales Tax Appellate Tribunal, Lahore.
2. Facts giving rise to the present appeal are that a contravention case was made out by the Sales Tax Department against M/s. Rehman and Rafiq Gypsum, Warcha Road, Quaidabad, District Khushab.
3. A show-cause notice was issued and it was stated in the notice that respondent supplied 3107 M.Tons of Gypsum valuing Rs. 6,67,785/- whereby sales tax of Rs. 83,473/- was chargeable but the respondent did not get itself registered under the Sales Tax Act, 1990 and evaded to pay the required sales tax. Reply to the show-cause notice was submitted by the respondent wherein it was stated that they had supplied Gypsum to M/s. Pioneer Cement Factory, Chinki, Jauharabad during the period from 1.7.1997 to 30.6.1998 and all charges and leviable taxes were paid.
4. The Adjudicating Officer did not accept the explanation of respondent and passed an order in original dated 15.7.1999 whereby the respondent was made liable to pay the sales tax. The respondent filed an appeal from the Order-in-Original which was disposed of by the Collector (Appeals), Lahore vide its order dated 29.3.2000. The appeal was partially accepted and the order in original was modified to the extent of remitting the additional tax and penalty but it was maintained so for it related to the levy of sales tax.
5. The respondent filed a second appeal before Custom Excise and Sales Tax Appellate Tribunal vide its impugned judgment accepted the appeal and held that the sales tax is not leviable in case of Gypsum which is a kind of mineral and does not fall within the legislative competence of the Federal Government.
6. The revenue has filed the present appeal from the judgment of the Tribunal.
7. We have heard the arguments of the parties. Perusal of the judgment reveals that the Tribunal has misdirected itself. Neither Punjab Minor Mineral Concession Rules, 1986 or 1990 nor the provision of Regulations of Mines and Oil Fields and Mineral Development (Government Control) Act, 1948 are relevant in the controversy.
8. The question before the Tribunal was whether under the Sales Tax Act, 1990, sales tax is chargeable on the supply of Gypsum. Sales Tax Department did not levy any tax on excavation, querying or any other activity relating to the mining. The demand made by the appellant was on the tax supplies made by the respondent. Admittedly the respondent supplied to Pioneer Cement Factory Chinki, Jauharabad 3107 M.Ton of Gypsum. The supply of Gypsum by respondent is a taxable supply as it was the supply of taxable goods made in Pakistan. The supply of Gypsum has not been exempted under Section 13 of the Sales Tax Act from the levy of sales tax, therefore, Gypsum constituted a taxable goods and respondent made supply of taxable goods to Pioneer Cement Factory. Accordingly the provision of Section 3 of the Sales Tax was attracted to which envisaged that there shall be charged, levied and paid sales tax at the rate of 15% of the value of taxable supplies made in Pakistan.
9. Another important question of law which arises out of the order of the Tribunal relate to interpretation of Entry Nos. 49 and 51 of the 4th Schedule of Constitution of Islamic Republic of Pakistan, 1973. Plain reading of Entry No. 51 of the 4th Schedule shows that it was not relevant. For facility of reference it is reproduced hereunder:-- "Taxes on mineral oil, natural ga sand minerals for use in generation of nuclear energy."
Gypsum is minor mineral which is being excavated by the respondent after obtaining a licence/lease from Government of the Punjab. Sales tax is not a kind of tax on any mineral activities. Taxes on sales are enumerated in Entry No. 49 of the 4th Schedule which is reproduced hereunder:- "Taxes on sale, purchases of goods imported, exported, produced manufactured or consumed."
10. Sales Tax Act, 1990 is enacted by the legislature to consolidate and amend the law relating to the levy of tax on sales, importation, exportation, production, manufacturer or consumption of goods. Unequivocally and without any ambiguity sales tax is a kind of tax which has been levied by the legislature within the ambit and scope of Entry No. 49 of the 4th Schedule. Under Act VII of 1990 various transactions for the purposes of sales tax have been spelled out. Besides the process of manufacturing or production, taxable goods, taxable activities and taxable supplies are also described. Taxable goods mean all goods other than those which have been exempted u/S. 13 and goods include every kind of moveable property other than actionable claim, money, stocks, shares and securities. Gypsum therefore falls within the ambit of moveable property. Further it is provided that whenever taxable goods made in Pakistan are further supplied it constitute taxable supply and Section 3 of the Sales Tax Act, 1990 contemplate that sales tax shall be charged and levied on taxable supplies made in Pakistan by a registered person in the course of furtherance of any taxable activity carried on by him.
11. In the present case, the petitioner who holds a licence from the Government of Punjab excavate Gypsum from the mine. After its excavation from the mine, it becomes a moveable property. Its further supply by the petitioner to any other buyer constitute a taxable supply and as it is not exempted u/S. 13 of the Sales Tax Act, 1990, therefore this taxable supply becomes chargeable to sales tax. Merely because the Gypsum was produced through process of excavation and queried from the mine and is defined as minor mineral, would not be of any significance when after excavation it becomes taxable goods and is made to subject of taxable supply. There is hardly any ambiguity that sales tax is a tax on supply of taxable goods. It is complete mis-conception to urge that it is a levy on any kind of mining activity. We therefore hold that the Tribunal was not correct to hold that the levy and charges of sales tax on Gypsum was ultra vires. The Gypsum was a taxable good and the petitioner made a taxable supply which was subject to the incidence of sales tax.
12. We therefore vacate the judgment dated 22.12.2000 passed^by the Customs, Excise and Sales Tax, Appellate Tribunal Lahore Bench, Lahore and send a copy of this judgment to the Chairman of the Tribunal who shapp pass orders as are necessary to dispose of the case conformably to such decision.