MESSRS MUHAMMADI INDUSTRIES VS FEDERATION OF PAKISTAN
1991 P T D 511
[Karachi High Court]
Before Saleem Akhtar and Mukhtar Ahmed Junejo, JJ
Messrs MUHAMMADI INDUSTRIES
versus
FEDERATION OF PAKISTAN through Additional Secretary, Ministry of Finance,
Central Board of Revenue, Islamabad
Constitutional Petition No.D-429 of 1988, heard on 08/11/1990.
Sales Tax Act (III of 1951)---
----S. 7---Customs Act (IV of 1969), S.31-A---Sales Tax, exemption from-- Withdrawal of exemption letter---Effect---Importer had opened letter of credit much before exemption from Sales Tax was withdrawn---All arrangements for import of goods and financial commitments including invoice were also made before such withdrawal---Though withdrawal of exemption from Customs duty could not be challenged in view of S.31-A of Customs Act, but there being no parallel section like S.31-A in Sales Tax Act, withdrawal of exemption from Sales Tax, held, could not be treated to be legal and valid.
Al-Samraz's case 1986 SCMR 1917 and Crescent Pakistan Industries Ltd. v. Government of Pakistan and others 1990 PTD 29 ref.
Amanullah Khan for Petitioner.
S.M. Sayedain Zaidi for Respondents.
Date of hearing: 8th November, 1990.
JUDGMENT
SALEEM AKHTAR, J.---The petitioner imported glass tubing s (neutral) from Germany in respect of which he opened letter of credit on 11-1-1988. The goods arrived on 18-4-1988, but advance bill of entry had been filed on 10-4-1988 which was completed on 12-4-1988. The goods were assessed under heading 70.03 of the Pakistan Customs Tariff and were exempted from customs duty under notification No. S.R.O. 505(1)/86 and so far sales tax was concerned it was exempted under S.R.O. 530(1)/86.
Respondent No.1 by notification dated 13-3-1988 withdrew the exemption granted in respect of customs duty and sales tax. The petitioner has therefore, challenged the levy of customs duty and sales tax.
So far customs duty is concerned in view of section 31-A of the Customs Act added by Ordinance II of 1988 the withdrawal of exemption cannot be challenged. Mr. Amanullah, the learned counsel for the petitioner does not dispute this position. However, so far withdrawal of exemption of sales tax is concerned the learned counsel has contended that as there is no parallel section like section 31-A of the Customs Act in the Sales Tax Act the case will be clearly hit by Al-Samraz's case 1986 S C M R 1917.
The petitioner had opened letter of credit on 11-1-1985 and the invoice is dated 11-3-1988. Much before the exemption was withdrawn all arrangements for import of goods and financial commitments had been made. Therefore, the withdrawal of exemption from Sales Tax for the purposes of this case, cannot be treated to be legal and valid. Reference has also been made to Crescent Pakistan Industries Ltd. v. Government of Pakistan etc. 1990 P T D 29.
Mr. S.M. Sayedain Zaidi, the learned counsel for the respondent has referred to Al-Samraz's case but the same does not support the stand taken by the respondent. The petition is therefore, allowed. We declare that the withdrawal of exemption from sales tax, so far the goods in this petition are concerned was without lawful authority and of no legal effect.
H.B.T./M-1335/K Petition allowed.