1. ' ZAHID KURBAN ALVI, J.---Several petitions have been filed whereby the imposition of one per cent and 3% further tax under section 7(ii)(a) of the Finance Act, 1998 and section 16(2) of the Finance Act, 1999 is challenged. By these Acts the new tax was incorporated as section 3 (1-A) of the Sales Tax Act. This has been challenged as unConstitutional and without jurisdiction. The petitioner has made the following prayers:---
(i) declare 1% and 3% "further tax imposed by section 7(ii)(a) of the Finance Act, 1998 and section 16(2) of the Finance Act, 1999 by introducting the same as section 3(1-A) of the Sales Tax Act, 1990 and the latter to be un-Constitutional, unlawful, without jurisdiction, mala fide, void ab initio and of no legal effect:
(ii) hold declare that the petitioner is not liable to pay the 1% and 3% "further tax" under section 3(1- A) of the Sales Tax Act, 1990:
(iii) direct the respondents to issue refunds and additional refunds alongwith mark-up till the date of payment of the amounts already recovered by the respondents from the petitioner as "further tax" under section 3(1-A) of the Sales Tax Act, 1990.
(iv) pending disposal of the main petition restrain the respondents from recovering any "further tax" under section 3(1-A) of the Sales Tax Act, 1990 for the year 1999-2000;
(v) Award costs.
(vi) Award any other relief.
2. ' It seems that by the Finance Act, 1998 and 1999 an amendment was brought about in the Sales Tax Act, Section 3(1-A) whereby, was introduced. The amended provision reads as follows:--- "(1-A) Where taxable supplies are made in Pakistan to a person other than a registered person there shall be charged, levied and paid a further tax at the rate of one per cent of the value in addition to the rate specified in subsection (1), clause (c) of subsection (2), and subsections (4) and (5): ' Provided that the aforesaid three per cent. Further tax shall not be charged, levied and paid if the said taxable supplies are made:---
(1) by a person registered as a retailer; or
(2) by any registered person a person whose income is not liable to tax under the Income Tax Ordinance, 1979 (XXXI of 1979) but has deducted, income tax at source under subsection (4) of section 50 of the said Ordinance".
3. ' At the time of arguments learned counsel at the very outset stated that he does not press the relief questioning the vires of section 3(1-A) of the Sales Tax Act, 1990. Main contentions of the petitioner was that under the section 3(1-A) the petitioners are not obliged to pay further tax, as supplies are being made to registered person only. Under section 2(25) of the Sales Tax Act the definition of registered person has been given.
4. ' Section 2(25) is reproduced as follows:---
(25) "registered person" means a person who is registered or is liable to be registered under this Act.
5. ' The learned counsel further urged that registered person means "a person who is formally registered" and so also person who is liable to be registered. According to him further tax is payable only if taxable supply is made to those persons who were neither registered nor liable to be registered. He further contended that this was very clear from the bare reading of the amendment.
6. ' The learned counsel also drew our attention to section 14, Chapter 3 which deals with registration and section 19 which makes it compulsory for all persons to be registered. According to the learned counsel even though the person to whom the taxable supply is made is not registered but he is definitely liable to be registered and therefore, section 3(1-A) would not be applicable.
7. ' We have looked at this aspect of the case and it would be worth-while to mention that the counsel for the petitioner agreed to drop the prayer whereby he had challenged the vires of the amendment. He confined himself to the prayers, 2 and 3 reproduced as above. It is settled law that in matter of fiscal nature the enactment has to be given its literal meaning and no inference can be made specially when none is required. Even if any inference is required then it should be to the benefit of the taxpayer.
8. Generally under the Act under section 14 read with section 19 registration has been made compulsory and inference, therefore, would mean that tax would be liable and payable by those persons or Companies who are registered or liable to be registered. However, by introduction of section 3(1-A) a further tax is to be recovered from those persons other than a registered person.
9. Hence the applicability of B this provision would en4ble it to persons who would fall within the definition of S.2(25) of the Act. In case if exception is to be claimed under section 3(1-A) then the petitioner has to show that the persons to whom the taxable supply is made is registered and or is liable to be registered under the Act. The details are not available with us and we are also not aware as to bow much tax has been recovered as regards the petitioner is concerned. Accordingly we cannot pass any order as regards refund is 'concerned. In case if the petitioner feels that a refund is due to him by virtue of the facts that a recovery has been made which was not payable then he may approach the authorities under the law for either seeking refund or adjustment of the tax against the future liability. The authorities shall grant adjustment in case if a wrong recovery of further tax has been made based upon our observation above. With above observations the petitions stand disposed of.