MESSRS SERVICE SALES CORPORATION, LAHORE (PVT.) LTD. VS GOVERNMENT OF PAKISTAN, CENTRAL BOARD OF REVENUE
1991 P T D 525
[Karachi High Court]
Before Syed Haider Ali Pirzada and Haziqul Khairi, JJ
Messrs SERVICE SALES CORPORATION, LAHORE (Pvt.) Ltd.
versus
GOVERNMENT OF PAKISTAN, CENTRAL BOARD OF REVENUE
and 2 others
Constitutional Petition No.529 of 1987, decided on 14/11/1990.
Sales Tax Act (III of 1951)---
----S. 2(11)---Constitution of Pakistan (1973), Art.199---Constitutional jurisdiction, exercise of---Statutory functionaries after holding inquiry found that goods seized, bore Trade Mark of "Service" used by Corporation for its products and that seized goods were manufactured on behalf of Corporation who held rights of sale and other rights to goods---Corporation did not disown seized goods nor it was its case that goods were not in its possession at time of seizure-- Constitutional jurisdiction could not be invoked in case of question of fact for which an inquiry under law had been made by statutory functionaries.
English Boot House Ltd. v. Collector of Central Excise and Land Customs and another 1986 PTD 247 and Khurshid Marble Industries v. Central Board of Revenue and another 1985 CLC 2.137 ref.
Ghulam Muhammad for Petitioner.
Arif Hussain Khiljee for Respondents.
Date of hearing: 4th June, 1990.
JUDGMENT
HAZIQUL KHAIRI, J.---The petitioners are a private Limited Company engaged in the business of sales and distribution of various products including shoes. During the course of their business-the-petitioners have been purchasing shoes from various shoe-makers by indicating the code numbers which are used for the purpose of identification only by the said shoe-makers/manufacturers. It is stated that the petitioners do not own, hold claim or use any patent, proprietary, sales or other rights to these goods which are being manufactured by these cottages industries manufacturers and artisans.
On or about 24-6-1984 the Deputy Superintendent Head Quarter (1) Central Excise, Karachi detained as per detention memo. 614 pairs of shoes bearing different code numbers and value lying in the godown of the petitioners Vat Federal `B' Area Block-10, Karachi. A subsequent memo. dated 24-6-1984 verifies that the godown was examined and no process of stamping, packing, embossing or any other manufacturing process was found. Through another memo dated 25-6-1984, the said Deputy Superintendent demanded from the petitioners contracts and purchase orders and detained articles enabling him to finalise the case. The petitioners provided copies of the said various purchase orders. By another letter dated 25-6-1984 the petitioners explained to the respondents 2 and 3 that the petitioners were not performing any manufacturing whatsoever and even stamping and packing were done by the cottages industries who supply the shoes to the petitioner-Company.
Thereafter the petitioners received a show-cause notice dated 20-8-1984 from respondent No.3 stating that upon checking, the value of the said 614 pairs of shoes was found to be more than Rs.125 each and that the same were manufactured by the shoe-makers on the design and pattern given by the petitioners. As such the petitioners had violated Rules 9. 52. 52-A, 53, 174, 226, 236. 237 and 238 Sales Tax Rules read with section 3(4) of Sales Tax Act, 1951 and are liable to action under Rules 52-A, 226 and 210 of Central Excise Rules, 1944 read with Section 4(3) of the Sales Tax Act, 1951. The said show-cause notice was replied by the petitioners on 28-10-1984. However, by his judgment dated 28-11-1985 despatched on 18-12-1985, the respondent No.3 held that the, goods seized in the case bearing the trade mark of "service" were manufactured on behalf of the petitioners herein and that the petitioners had held sales and other rights to the goods and as such they are manufacturers within the meaning of Section 2(11) of the Sales Tax Ac;, 1953 The petitioners were accordingly directed to pay their liability towards sales tax in the sum of Rs.13,821.25. The petitioners aggrieved by the judgment of respondent No.3 preferred an appeal before the respondent No.2 which was dismissed and then filed a revision before the respondent No.2 which was rejected.
Learned counsel for the parties have referred to us the reported case of English Boot House Ltd. v. Collector of Central Excise and Land Customs and another 1986 P T D 247 Karachi decided by a Division Bench in which similar questions were raised and it was held:--
"On the other hand section 2(11) (ii) is wide enough to cover the case of a person or company who owns, holds or claims sales or other rights to goods being manufactured. It is thus clear that if the goods manufactured by others on the order of the petitioner and in its names, and which the petitioner according to its own admission sells in its shop, then the petitioner is liable to pay tax. The petitioner in such case holds proprietary rights of the goods."
Unlike this petition, the petitioners in 1986 P T D 247 Karachi had not pursued their remedies as provided under the statute by filing appeal and revision and following the observation made in Khurshid Marble Industries v. Central Board of Revenue and another 1985 C L C 2437, had held:--
"The allegations of the petitioner have been denied, therefore, it would be proper for the petitioner to produce the material evidence before the respondents in support of its contention that it does not manufacture any shoe."
In the present case it is an admitted position that the petitioners had placed the material in support of their contentions before the statutory functionaries who after holding inquiry as to the facts of the case as well, had hold that the goods seized bore the Trade Mark of "Service" and were manufactured on behalf of the petitioners who hold rights of sale and other rights to the goods. The value of all the 614 shoes was also found to be more than Rs.125 each.
The petitioners do not disown the seized goods nor it is their case that the goods were not in their possession at the time of the seizure, nevertheless, it is urged on their behalf that the petitioners do not own the Trade Mark of "Service". Even if it be so, the goods seized bore the petitioner's name "Service" and within the meaning of Section 2(ii) of Sales Tax Act shall have "proprietary, sales or other rights to goods being manufactured by them". Even otherwise we are not inclined to exercise the Constitutional jurisdiction of this Court to question of facts for which an inquiry under law has been made by statutory functionaries.
In the result the petition is dismissed with costs.
H.B.T./S-695/K. Petition dismissed.