Bar Room, Tax House, Nawan Shehr, Multan

admin@mtba.com.pk

COMMISSIONER OF SALES TAX VS HUNZA CENTRAL ASIAN TEXTILE AND WOOLLEN MILLS LTD., 1999 PTD-SUPREME-COURT 1135 (1999)

Jan. 11, 1999 SUPREME COURT 1999 PTD 1135

1999 PTD-SUPREME-COURT 1135

COMMISSIONER OF SALES TAX VS HUNZA CENTRAL ASIAN TEXTILE AND WOOLLEN MILLS LTD.

1999 P T D 1135

[Supreme Court of Pakistan]

Present: Nasir Aslam Zahid, Munawar Ahmed Mirza, Khalil-ur-Rehman Khan, Abdur Rehman Khan and Munir A. Sheikh, JJ

COMMISSIONER OF SALES TAX and others

Versus

HUNZA CENTRAL ASIAN TEXTILE AND WOOLLEN MILLS LTD. and others

Civil Appeals Nos.289, 290, 291, 292 of 1978, 899-K, 900-K,901-K, 902-K, 903-K, 904-K, 905-K, 906-K, 907-K, 908-K, 909-K, 910-K and 911-K of 1990, decided on 11/01/1999.

(On appeals from the judgment dated 15-5-1973 of the Lahore High Court passed in T. R. No. 7/71 and from the judgment, dated 11-11-1987 of the Sindh High Court passed in S.T.C. Nos.31, 32, 33, 34 and 42 of the 1982 and 49 to 53 of 1986, from the order, dated 31-5-1988 and from the order dated 3-11-1998).

(a) Sales Tax Act (III of 1951)---

----S. 3(6)(d)---Constitution of Pakistan (1973), Art. 185(3), Fourth Sched., Part 1, Federal Legislative List, Item No.49---Leave to appeal was granted by Supreme Court in order to examine the question as to whether on use of partly manufactured goods into manufacture of finished product, where the latter was exempt from sales tax, liability to pay sales tax was incurred on such partly manufactured goods as were used in the preparation of the finished goods---Question of Constitutional importance as to concept of We as mentioned in Item No.49 of the Federal Legislative List in Fourth Sched. of the Constitution was also raised so as to exclude from sales tax the use of such partly manufactured goods as were used in manufacture of finished goods.

(b) Sales Tax Act (III of 1951)---

----S. 3(6)(d)) [as amended by Finance Act, (XI of 1966)]---Constitution of Pakistan (1973), Fourth Sched., Part I; Federal Legislative List, Item No.49---Provision of S. 3(6)(d), Sales Tax Act, 1951 which was a deeming provision was also a charging section---Legislative competence---Provision of S.3(6)(d) created a legal fiction that in the restricted parameters, the use or consumption of independently identifiable goods would be considered to be a "sale" so as to bring such goods within the tax net---Use and consumption of intermediary goods, in restricted sense, could be treated as sales by legal fiction so as to bring such goods under the levy of sales tax where the final product was not subject to sales tax when sold and the use or consumption of intermediary goods in such circumstances had a rational nexus with sale-- Federal Legislature was, therefore, competent to enact the deeming provisions under entries of "sale of goods" in the Constitutional document-- Principles.

Deeming clause of section 3(6)(d) of the Sales Tax Act, 1951 has always been there since 1951. It created a legal fiction intended to cover actions in a very limited field. Its parameters are clearly defined. There is no ambiguity about the actions it brings within the net of sales tax.

Section 3(6)(d), Sales Tax Act, 1951 was also a charging section.

The deeming provision created a legal fiction that in the restricted parameters, the use or consumption of independently identifiable goods would be considered to be a sale so as to bring such goods within the tax net. In the restricted sense, the use and consumption of intermediary goods could be treated as sales by legal fiction so as to bring such goods under the levy of sales tax where the final product was not subject to sales tax when sold and that the use or consumption of intermediary goods, in such circumstances, have a rational nexus with sale. Federal Legislature was, therefore, competent to enact the deeming provisions under entries of "sales of goods" in the Constitutional documents.

The Federal Legislature had competently enacted the deeming provision through a legal fiction with very restricted operational field.

The deeming provisions come into operation only in a case where the final product is exempt from sales tax. If the final product, which is sold by the assessee is subject to sales tax, under the deeming provisions read with other provisions of the Sales Tax Act, 1951, no sales tax can be levied at any intermediary stage. Secondly, according to the deeming provisions, only such goods are liable to sales tax at the intermediary stage, whichare identified as separate goods and are subject to sales tax as such goods.

Legal fiction or deeming provisions are not concepts of the modern judicial system; these have always been recognized as permissible methods of legislation, but subject to recognized limitations. There is no omnibus power vested with the Legislature to make any deeming or fictional provision but with certain limitations.

The dictionary meaning of sale as also the meaning of the word in the laws relating to contracts and Sale of Goods Act, 1930 presupposes a seller, a purchaser and transfer of property from one to the other for consideration. However, by the deeming clause contained in section 3(6)(d) in the Sales Tax Act, 1951, use of the goods by the manufacturer or purchaser (and not for sale) mentioned in that clause was to be considered by fiction of law, as a sale.

The effect of a deeming provision in taxing statute is to bring within the tax net a transaction or an amount, which, ordinarily, would not come within the tax net.

The dictionary and natural meaning and the definition of "sale" in the laws of contract and the Sale of Goods Act, 1930, mean transfer of goods or property between a willing seller and willing buyer for consideration. However, the word "sale" in the legislative entries in the Constitution has to be given very liberal meaning which may not be restricted or confined within the parameters of the ordinary meaning of the word as "the allocation of the subject to the lists is not by way of scientific or logical definition but by way of mere simplex enumeration of broad categories".

Legislative entries in a Constitution are to be interpreted liberally.

Restrictive meaning cannot be applied keeping in view that the allocation of the subjects to the legislative lists is not by way of scientific or logical definition but by way of mere simplex enumeration of broad categories.

The rule of interpretation of any entry in Legislative List is that the same should be given widest possible meaning. This did not mean that the Parliament can choose to tax as income an item which in no rational sense be regarded as a citizen's income and that the item taxed should rationally be capable of being considered as the income of a citizen.

The rule of interpretation that while interpreting an entry in a legislative list it should be given the widest possible meaning, does not mean that the Legislature can choose to tax as income an item which in no rational sense can be regarded as a citizen's income. The item taxed should rationally be capable of being considered as the income of a citizen.

Legislative entries should be given liberal and very wide interpretation and that the judicial approach in this regard should be dynamic rather than rigid. The Legislature enjoys a wide latitude in the matter of selection of persons, subject-matter, and events etc. for taxation.

Noorani Cotton Corporation v. Sales Tax Officer PLD 1965 SC 161; Commissioner of Sales Tax v. Shaiq Corporation Limited PLD 1986 SC 731; Abbasi Textile Mills Ltd. v. Commissioner of Sales Tax PLD 1990 SC 422; Bank of Nova Scotia and His Majesty the King 1930 SCR 174; His Majesty the King and Fraser Companies Limited 1931 SCR 490; Shorter Constitution of India, 11th Edn. by Basu, pp. 1343-1347, 1144-1145; State of Madras v. Dunkerly AIR 1958 SC 560; S.T.O. v. Budh Prakash AIR 1954 SC 459; George Oakes v. State of Madras AIR 1962 SC 1037; Bhopal Sugar Industries v. S.T.O. AIR 1964 SC 1037; Abdul Kader v. S.T.O. AIR 1964 SC 922; New Indian Sugar Mills v. C.S.T. AIR 1963 SC 1207; Bhopal Sugar Industry v. S.T.O. (1962) SC Pet. 85 of 1961; Johan & Cu. v. Titaghar Paper AIR 1965 SC 1082; Kantilal Babulal v. HC Patel AIR 1968 SC 445; Tevimula Timber v. C.T.O. AIR 1968 SC 784; Deputy Tax Collector v. En Field AIR 1968 SC 838; Orissa Province v. Titaghar Paper AIR 1985 SC 1293; Builders Association of India v. Union of India AIR 1989 SC 1371; Muhammad Afzal v. Commissioner of Lahore PLD 1963 SC 401; Pakistan Textile Mills Owners' Association v. Administrator of Karachi PLD 1963 SC 137; Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582; Vishnu Agencies (Pvt.) Ltd. v. Commercial Tax Officer AIR 1978 SC 449; (1957) US 457; Sh. Fazal Elahi v. Federation of Pakistan = 1988 SCMR 2103; CIT v. Ayurvedle Pharmacy PLD 1970 SC 93; CIT (Agr.) v. Azizuddin Industries 1973 SCMR 445; Collector, CE&CL v. Azizuddin Industries PLD 1970 SC 439; Amin Soap Factory v. Pakistan PLD 1976 SC 277; Al-Samrez Enterprise v. Federation 1986 SCMR 1917; Muhammad Yunus v. C.B.R. PLD 1964 SC 113; CST v. Lahore Textile & General Mills PLD 1992 SC 364; C.B.R. v. Champion Clock Co. 1996 SCMR 1468; Latif Bawany Jute Mills v. STO = 1970 DLC 716; CST v. H. Muhammad Hussain & Co. 1974 PTD 20 = PLD 1974 Note 21 at p.57; CST v. Shafiq Corporation 1974 PTD 15 = PLD 1974 Note 25 at p.64; S. Muhammad Din & Sons v. STO PLD 1977 Lah. 1225; CIT v. Chemical Glass Factory (1980) 42 Tax 43; Tribal Textile Mills v. CST 1980 PTD 373; Paracha Textile Mills v. CST 1980 PTD 373; Abbasi Textile Mills v. CST 1982 PTD 17; CST. v. Haji Dossa & Sons (1982) 46 Tax 64; Phillips Electrical v. Superintendent, CE&LC 1985 PTD 777; Gul Ahmed Textile Mills v. CST 1985 PTD 211; Dada Soap Factory v. CST 1981 PTD 420; CIT v. Chemical Glass Factory (1977) 36 Tax 74 and Tribal Textile Mills v. CST 1980 PTD 383 ref.

CBR v. Champion Cloth 1996 SCMR 1468 and Flying Kraft Paper Mills v. CBR 1977 SCMR 1874 distinguished.

(c) Interpretation of Constitution---

---- Legislative Entries in a Constitution---Principles of interpretation.

Legislative entries in a Constitution are to be interpreted liberally.

The rule of interpretation that while interpreting an entry in a Legislative List, it should be given the widest possible meaning, does not mean that the Legislature can choose to tax as income an item which in no rational sense can be regarded as a citizen's income. The item taxed should rationally be capable of being considered as the income of a citizen.

Legislative entries should be given liberal and very wide interpretation and that the judicial approach in this regard should be dynamic rather than rigid. The legislature enjoys a wide latitude in the matter of selection of persons subject-matter and events etc. for taxation.

(d) Interpretation of statutes---

---- Taxing statute---Deeming provisions---Effect.

The dictionary meaning of sale as also the meaning of the word in the laws relating to contracts and Sale of Goods Act, 1930, presupposes a seller, a purchaser and transfer of property from one to the other for consideration. However, by the deeming clause contained in section 3(6)(d) in the Sales Tax Act, 1951, use of the goods by the manufacturer or purchaser (and not for sale) mentioned in that clause was to be considered by fiction of law, as a sale. The effect of a deeming provision in taxing statute is to bring within the tax net a transaction or an amount, which, ordinarily, would not come within the tax net.

The deeming provisions come into operation only in a case where the final product is exempt from sales tax. Sales tax is a one point levy. If the final product, which is sold by the assessee is subject to sales tax, under the deeming provisions read with other provisions of the Sales Tax Act, 1951, no sales tax can be levied at any intermediary stage.

Secondly, according to the deeming provisions, only such goods are liable to sales tax at the intermediary stage, which are identifiable as separate goods and are subject to sales tax as such goods.

Syed Sharifuddin Pirzada, Senior Advocate Supreme Court and Man soor Ahmad Khan, Senior Advocate Supreme Court for Appellants (in C. As. Nos. 899-K to 911-K of 1990).

Mansoor Ahmad, Advocate Supreme Court with Ch. Akhtar Ali, Advocate-on-Record for Appellants (in C.As. Nos.289 to 292 of 1978 and for Respondents (in C. As. Nos. 899-K to 911-K of 1990).

Ejaz Muhammad Khan, Advocate-on-Record for Respondents (in C.As. Nos.289 to 292 of 1978).

Ch. Muhammad Farooq, Attorney-General on Court's Notice (in all the Appeals).

Dates of hearing: 16th, 17th and 23rd June, 1998.

JUDGMENT

NASIR ASLAM ZAHID, J.---This judgment will dispose of the following 17 appeals, all by leave of this Court, in which common questions of law, which were pressed before us, arise for consideration:--

No. of Appeal	Parties' Names
(1) Civil Appeal No.289 of 1978	Commissioner of Sales Tax v. Hunza Central Asian Textile and Woollen MillsLtd.
(2) Civil Appeal No.290 of 1978	-do-
(3) Civil Appeal No.291 of 1978	-do -
(4) Civil Appeal No.292 of 1978	-do -
(5) Civil Appeal No.899-K of 1990	Pakistan Cables Ltd. v. Commissioner of Sales Tax
(6) Civil Appeal No.900-K of 1990	-do -
(7) Civil Appeal No. 901-K of 1990	-do -
(8) Civil Appeal No.902-K of 1990	-do-
(9) Civil Appeal No.903-K of 1990	-do-
(10) Civil Appeal No.904-K of 1990	-do -
(11) Civil Appeal No.905-K of 1990	-do
(12) Civil Appeal No.906-K of 1990	-do
(13) Civil Appeal No.907-K of 1990	-do
(14) Civil Appeal No.908-K of 1990	Pakistan Cables Ltd. v. Commissioner of Sales Tax
(15) Civil Appeal No. 909-K of 1990	Exide Pakistan Ltd. v. Pakistan and others
(16) Civil Appeal No.910-K of 1990	Electric Lamp Manufac turers of Pakistan Ltd. v. Government of Pakistan and others
(17) Civil Appeal No. 911-K of 1990	-do-

In the 13 Karachi appeals (10 of Pakistan Cables Ltd., 2 of Electric Lamp Manufactures of Pakistan Ltd. and 1 of Exide Pakistan Ltd.), leave was granted by a common order dated 13-12-1990 on two points as follows:--

"Leave to appeal is granted in all these matters in order to examine the question whether on use of partly manufactured goods into manufacture of finished product, where the latter is exempt from sales tax, liability to pay sales tax is incurred on such partly manufactured goods as are used in the preparation of the finished goods. This question of law is also the subject-matter of Civil Review Petition No.2-K of 1989. (Note: This Review Petition filed by another private party was, however, later on withdrawn and dismissed by order dated 13-10-1996.)

2.Mr. Sharifuddin Pirzada, Senior Advocate, the learned counsel for some of the petitioners also wants to raise a question of Constitutional importance namely, the concept of sale as mentioned in Item No.49 of the Federal Legislative List in Fourth Schedule of the Constitution, so as to exclude from sales tax the use of such partly manufactured goods as are used in manufacture of finished goods.

3.For examining the question of Constitutional importance, notice shall separately issue to the Attorney-General. "

In the 13 Karachi cases, decisions of the Sindh High Court had gone against the assessees and in favour of the department. However, in the other 4 appeals (from Lahore), the decisions went against the department, the appellant in the said appeals. By the common leave granting order dated 19-3-1978 passed in the petitions from which the aforesaid 4 Lahore appeals arise, leave was granted on several points, but before us only the Constitutional question relating to the relevant entry in the Federal Legislative List of the 1962 Constitution was pressed and argued.

2. We have heard the arguments of Mr. S. Sharifuddin Pirzada, Senior Advocate Supreme Court and Mr. Mansoor Ahmad Khan, Senior Advocate Supreme Court for the appellants and Mr. Mansoor Ahmad, Advocate Supreme Court for the department in the Karachi appeals. In the Lahore appeals, Mr. Mansoor Ahmad, Advocate Supreme Court appeared for the department and Mr. Ejaz Muhammad Khan for the respondent. We have also heard Ch. Muhammad Farooq, learned Attorney-General, who appeared pursuant to notice and addressed arguments on the Constitutional question.

3. In the Karachi appeals, the common judgment of the Division Bench of the Sindh High Court in the 10 cases of Pakistan Cables Ltd. is dated 11-11-1987. In the opening para of the High Court judgment the relevant facts are recorded as follows:--

"By this common judgment, we intend to dispose of the above ten Sales Tax References as they involve common point of law. The brief facts leading to the filing of the above references are that the respondent assessee (hereinafter referred to as the assessee) is a manufacturer and vendor of multiple types of wires and cables. The assessee imports aluminium billets, which are put through an extrusion process, which results into aluminium rods (hereinafter in referred to as the rods), which in turn pass through Drawing Machines, and thus, breaking into aluminum wire twisted to form the shape of conductors/cables. It appears that the conductors/cables of certain specifications were exempted from the payment of sales tax (hereinafter referred to as the tax). The Assessing Officer in the assessment years 1970-71, 1971-72, 1972-73, 1973-74 and 1974-75 (which are covered by S.T.C. Nos. 31 of 1982 to 34 of 1982 and S.T.C. No.42 of 1982) 1975-76, 1976-77, 1977-78, 1978-79 and 1979-80 (which are covered by S.T.C. Nos.49 of 1986 to 53 of 1986) included the rods which were utilized in manufacturing the conductors/cables which were not subjected to tax for assessing the amount of tax. In the above first five cases upon appeals, the Appellate Assistant Commissioner of Sales Tax maintained the assessment orders of the Assessing Officer, whereas, in the above second bunch of five cases the Appellate Assistant Commissioner of Sales Tax decided the appeals in favour of the assessee. The assessee in the above first bunch of five cases, whereas the Department in the above second bunch of five cases went in appeal separately before the learned Income Tax Appellate Tribunal, which allowed the assessee's above 5 appeals by a detailed order dated 1-3-1980 by holding that the rods are not produced or manufactured by the appellant but are a semi-manufactured item for further incorporation into the aluminium conductors/cables. Whereas the learned Income Tax Appellate Tribunal dismissed the Department's above five appeals by an order, dated 28-1-1986 while following the Tribunal's earlier view. The Department's application for making reference under section 17(4) of the Sales Tax Act, 1951 (hereinafter referred to as the Act) soliciting the opinion of this Court on the following legal question:--

"Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that sales tax is not chargeable/payable on Aluminium Rods under the Sales Tax Act, 1951?"

Constitutional petition filed by Exide Pakistan Ltd. (appellant in C.A.909-K of 1990) was dismissed in limine by the SindhHigh Court by order dated 31-5-1988 as follows:--

"The petitioner through this petition has impugned respondent's action to levy on the lead oxide. The brief facts, leading to the filing of the above petition are that the petitioners have been manufacturing batteries and for that purpose have been importing the requisite raw material and one of such raw materials is lead which is converted by chemical process into lead oxide. The lead oxide is used for manufacturing the battery. The grievance of the petitioner is that for over two decades the petitioners have been manufacturing batteries but no point of time respondent department demanded excise on lead oxide. In this behalf we may point out that the point raised by the petitioner is covered directly by a judgment of a Division Bench of this Court namely, in the case of Commissioner of Sales Tax, Central Zone 'A', Karachi v. M/s. Pakistan Cables Limited, Karachi (1988 PTD 54) in which while construing the provision of section 3 of the Sales Tax Act, it has been held that if the manufacturer retains a manufactured item for its further use in terms of clause (d) of subsection (6) of section 3 of the Sales Tax Act (hereinafter referred to as the Act), then by virtue of the proviso to the above clause, the same will amount a sale and the liability to pay sales tax, will accrue at the point of time when the product is used for further manufacture. In the instant case it cannot be denied that lead oxide is a marketable item independently though in the present case, according to the petitioners they are using the same for their own products. "

The two other Constitutional petitions filed by Electric Lamp Manufacturers of Pakistan Limited (appellants in C.As. Nos.910-K and 911-K of 1990) were also dismissed in limine by the Sindh High Court by a common order dated 3-11-1988. Relevant facts in these cases were noted by the High Court as under:--

"By this common order we intend to dispose of the above two petitions, as they have raised common points of law. Both of the petitioners are manufacturer of electric bulbs. During the process of manufacturing they manufacture glass shells, which are used for the electric bulbs. It is an admitted position that glass shells are a marketable item independently. The electric bulbs have been exempted from the payment of the sales tax but glass shells have not been exempted. The controversy in the present two petitions is, as to whether the respondents are entitled to levy sales tax on the glass shells, which are used by the petitioners in manufacturing the electric bulbs. The contention of the petitioners is that they are not liable to pay any sales tax, whereas the contention of the department is that glass shells being an independent item in subject to sales tax as no exemption has been granted in respect thereof."

In the aforementioned order dated 3-11-1988, the Sindh High Court inter alia recorded the following contentions raised on behalf of the appellants/assessees and these are the points on which arguments have been addressed before us:

(a)Under Entry 49 of the Federal Legislative List provided in the Fourth Schedule to the Constitution, tax can be levied on the sales and purchases of goods inter alia which are consumed and not which are used.

(b)In order to impose sales tax there should be a sale an----saction between a vendor and a purchaser as the words used in Entry No.49 are 'taxes on the sales and purchases of goods' and since in these cases admittedly there is not sale transaction in relation to glass shells no sales tax can be imposed and the provisions of subsection (6) of section 3 of the Sales Tax Act,' 1951, purporting to levy sales tax on the goods which are not the subject-matter of sales transactions is ultra vires of the Constitution.

(c)Since electric bulbs have been exempted from the payment of sales tax, no tax can be levied on the glass shells, which are used in the process of manufacturing election bulbs.

4. As noted earlier in the Lahore Appeals (Nos.289 to 292 of 1978) where the appellant is the Commissioner of Income-tax, only the contention relating to Entry No.49 in the Federal Legislative List was pressed which was dealt with by the Lahore High Court as follows:--

"37. There is one more contention before us for disposal. As already observed in C.M. No.127-Com. of 1972, the petitioner questioned the very competence of the Federal Legislature of Pakistan to impose the sales tax on the woollen yarn produced by the assessee and consumed in manufacturing the hosiery goods in its own mills. In nutshell the learned counsel for the petitioner attempted to argue that this production of the hosiery yarn for its own use did not, in reality, constitute a sale. But, truly speaking, such a transaction though not a sale was, by fiction of law, deemed to be a sale chargeable to sales tax in accordance with section 3(6)(d) of the Sales Tax Act. It was asserted before us that this extension in the definition of sale was ultra vires of the powers of the Central Legislature of Pakistan. In advancing this contention before us the learned counsel for the petitioner expressly adopted the comprehensive discussion on the subject by Mr. Muhammad Amin Butt on pages (iii) to (vi) of the Introduction to his treatise on the Law of Sales Tax, 1969 Edition. But to sum up his conclusions in this behalf, the learned author has himself observed as under:-

'However, the Sales Tax Act as a piece of existing law within the meaning of Article 225(7) of the Constitution, as supported by the Taxation of Goods (Sales and Purchases) Order, 1960, and kept alive by the provisions of Article 225(1) continues to be in force. By Article 237 of the 1962 Constitution all taxes and fees levied under any law in force immediately before the commencing day shall continue to be levied until they are varied or abolished by an Act of the appropriate Legislature. In view of the aforesaid provision of the Constitution it can hardly be disputed that Sales Tax Act, 1951 continues to be a valid law.'

The learned counsel for .the petitioner did not seriously attempt to go behind these observations. In fact he fairly conceded before us that under the 1962 Constitution this existing law was 'blessed with the validity' and was continued in force.

38. In these circumstances the learned counsel for the petitioner confined his attack merely to challenge the validity of the amendment introduced in section 3(2) of the Sales Tax Act by virtue of the Finance Act, 1963 whereby the rate of tax was increased from 12 % to 15 % on the value of the goods in respect of such-like transactions as did not properly constitute 'sale' according to the ordinary and well-accepted connotation of the term. We find that the ordinary rate of tax from 1-7-1951 was 10% on the value of the goods. But the rate of sales tax was, later on, raised to 12% by section 8(1)(c) of the Finance Ordinance, 1960. Afterwards, by virtue of the amendment introduced by section 6(1) of the Finance Act, 1963, the rate was finally increased to 15 % .

39. This last-mentioned amendment in section 3(2) of the Sales Tax Act, was introduced on 1-7-1963 after the promulgation of the 1962 Constitution. According to Item 43(f) of the Third Schedule to the 1962 Constitution the Central Legislature of Pakistan could legislate on matters relating to taxes on 'sales and purchases'. In this context the term 'sales' must be interpreted in the ordinary English meanings and whatever the position and protection enjoyed by the old existing laws in the past the Central Legislature could not usurp any power of legislation by putting any artificial construction on the word. It shall not be out of place to mention here that under Article 132 of the 1962 Constitution all the residuary powers were vested in the Provincial Legislature to make laws with respect to all matters other than those enumerated in the Third Schedule. In this connection reliance was placed before us on The Sales Tax Officer Pilibhit v. Messrs Budh Parkash Jai Parkash (AIR 1954 SC 459) decided by the Supreme Court of India. In that case, under section 2(h) of the United Provinces Sales Tax Act (XV of 1948) the term 'sale' was defined to include forward contracts as well. This extension in the definition of 'sale' by the 'Provincial Legislature' was held to be in excess of its legislative powers under a similar Entry 48 in List II of the Seventh Schedule of the Government of India Act, 1935 in force in India. In that connection the Court observed that the power conferred by that entry to impose tax on the sale of goods could be exercised only when there is a sale under which there is a transfer of property in the goods, and not when- there is a mere agreement to sell. In the opinion of the Court the State Legislature could not by enlarging the definition of 'sale' arrogate to itself a power, which was not vested in it. The ratio, in that case, is quite helpful to the petitioner, and, we have already held that, in the context of Item 43(f) of our 1962 Constitution, no artificial construction could be placed on the term 'sale' and the Central Legislature of Pakistan was not competent to invade the field that did not really belong to it. In this view of the matter the amendment introduced in section 3(2) of the Sales Tax Act by section 6(1) of the Finance Act, 1963 whereby the rate in the tax was raised from 12 % to 15 % was ultra vires of the powers of the Central Legislature, in its application to the transaction in question which did not properly constitute a sale."

There is a factual error in the impugned judgment of the Lahore High Court. By Finance Act, 1963, the then existing rate of 12-1/2% (and not 12% as recorded) was increased to 15 % .

5. Reference may now be made to the provisions of the Sales Tax Act, 1951 under consideration as these stood on the statute book at the relevant time:

Preamble:

"An Act to consolidate and amend the law relating to the levy of a tax on the sale, importation exportation production manufacture or consumption of goods.

Whereas it is expedient to consolidate and amend the law relating to the levy of a tax on the sale, importation exportation production, manufacture or consumption of goods;

It is hereby enacted as follows:-

(Note: The underlined words were inserted by the Finance Ordinance, 1960 with effect from 1-4-1951.)

"2. In this Act, unless the context otherwise requires -----

---------------------------------------------------------------------------------------

"(6) 'Goods' means 'all kinds of movable, property other than actionable claims, money, stocks, shares and securities';"

"(11) 'manufacturer or producer' means a person who engages, whether exclusively or not, in the production or manufacture of goods, and includes a printer, publisher, lithographer, or engraver or a person engaged in the ginning of cotton, and also any person (not being an employee) who manufactures goods, whether or not the materials of which the goods are manufactured are owned by him:

-----------------------------------------------------------------------------------------

(Note: The' underlined words "production or" were inserted by Finance Ordinance, 1960, w.e.f. 1-7-1960.)

(12) 'partly manufactured goods' means only goods which are to be incorporated into and form a constituent or component part of an article which is subject to the tax; "

-------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------

"(15) 'Sale, with all its grammatical variations and cognate expressions, means every transfer of the property in goods from one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration and includes all such transactions and use of one's own goods as are specified in subsection (6) of section 3:"

----------------------------------------------------------------------------------------------

(Note: The underlined words were added by Finance Act, 1966.)

"(18) 'tax' means the tax payable under this Act;"

CHAPTER II

CHARGE OF TAX

"3.--(1) There shall be levied and collected a tax on the value of--

(a) all goods produced or manufactured in Pakistan, payable by the manufacturer or producer;

(b) all goods imported into Pakistan, payable by the importer;

(d) such goods or classes of goods as the Board may by notification in the official Gazettee, specify in this behalf which are exported from Pakistan, payable by the exporter.

(2) The tax shall be a tax of fifteen percent on the value of the goods as aforesaid except in the case of goods specified in the Schedule to this Act in which case it shall be such percentage as may be fixed by the Board by notification in the official Gazettee.

(Note:-- Underlined percentage (15%) was initially 10% which was amended by the Finance Ordinance, 1960 to 12-1/2 % and then substituted to read as 15% by Finance Act, 1963.)

-----------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------

(4) The tax in respect of the goods mentioned in clauses (a), (c) and (d) of subsection (1) and clause (d) of subsection (6) shall be payable on the occurrence of the first of the following events:--

(i) When the goods are delivered to the purchaser, or

(ii) when the property in the goods passes to the purchaser, or

(iiii) when the goods are sent, consigned or exported to any place outside . Pakistan and for the purposes of this clause the goods shall be deemed to have been sold when they are sent, consigned or exported to any such place as aforesaid, or

(iv) when the goods are actually used by the manufacturer or producer;

-----------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

(Note:-- Underlined clause (iv) was added by the Finance Act, 1966.)

---------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------

(6) Where goods are produced or manufactured in Pakistan under such circumstances or conditions as render it difficult to determine the value thereof for the tax because--

(a)------------------------------------------------------------------------------------

(b)------------------------------------------------------------------------------------

(c)...................................................................................

(d)such goods are for use by the manufacturer or producer and not for

sale;

the Sale Tax Officers may determine the value for the tax under this Act and all such transactions shall, for the purposes of this Act, be regarded as sales.

6. The contentions on which leave has been granted may now be considered. Only two points require consideration, and decision by this Court. The first question, resolution whereof is more or less free from any substantial difficulty is whether on use of partly manufactured goods into manufacture of the final finished product, where the latter is exempt from sales tax, liability to pay sales tax is incurred on such partly manufactured goods as are used in the preparation of the finished goods. It may be observed that this question is being answered here without consideration of the other question which involves the competence of the Federal Legislature to make such law on the basis of Entry No.43 (f) of the Third Schedule to the 1962 Constitution or Entry No.49 or, any other entry in the Federal or Concurrent Legislative Lists in the Fourth Schedule to the Constitution.

7. In the appeals of Pakistan Cables (Civil Appeals Nos.899-K/90 to 908-K/90), appellants are manufacturers and vendors of various types of wires and cables. Aluminium billets imported by the appellants were processed to make aluminium rods, which in turn underwent further processing resulting in the manufacture of conductors/cables, the final finished goods. During the relevant period, conductors/cables of certain specifications were exempt from the payment of sales tax. The department's stand has been that the rods, which were utilized by the assessee manufacturing the conductors/cables (which were not subject to sales tax) were subject to levy of sales tax.

As is evident from the impugned judgment dated 11-11-1987 of the Sindh High Court in Pakistan Cable case, it was an admitted position that the assessee manufactured rods from aluminium billets for other parties and charged for the same and paid sales tax thereon. To use the words of the High Court: "In other words, the rods are treated as manufactured items on which the assessee pays tax". But the controversy related to such rods, which were used for manufacture of conductors/cables, which were exempt from sales tax.

8. In Civil Appeal No.909-K of 1990, appellants are Exide Pakistan Ltd. who manufacture batteries for which they imported certain raw materials including lead, which is converted by chemical process into lead oxide which is then used in the manufacture of batteries. The department demanded sales tax on lead oxide which was used in the manufacture of batteries (exempt at the relevant times from sales tax). Sindh High Court in its order dated 31-5-1988 dismissing in limine the petition of Exide Pakistan Ltd. observed that it could not be denied that lead oxide was a marketable item independently though, according to the petitioners, they were using the same for manufacturing batteries (the final/finished product).

9. Electric Lamp Manufactures of Pakistan Ltd., appellants in Civil Appeals Nos. 910-K and 911-K of 1990, inter alia manufactured electric bulbs. The process included the manufacture of glass shells which in turn were used for making electric bulbs, the final/finished goods. Electric bulbs were exempt from sales tax during the relevant period but the Department demanded sales tax on glass shells (not exempt) manufactured and then used by the appellants for making electric bulbs. Department demanded sales tax on manufacture of glass shells. According to the impugned order dated 3-11-1988 of the Sindh High Court, it was an admitted position that glass shells were marketable items independently.

10. In Civil Appeals Nos.289 to 292 of 1978 from Lahore, only the Constitutional question was pressed and argued.

11. The law on the first point that is whether on use of partly manufactured goods (which could even be independently classified as manufactured goods) into manufacture of the final finished product, where the latter is exempt from sales tax, liability to pay sales tax is incurred on such partly manufactured goods as are used in the preparation of the finished goods, already stands settled by the judgment (Bench of 5 Judges) of this Court in the case of Noorani Cotton Corporation v. Sales Tax Officer (PLD 1965 SC 161). This judgment has been relied upon by the High Courts in all the impugned judgments/orders. In this judgment after referring to section 3 of the Sales Tax Act, 1951, it was observed as follows:--

"The sales tax by its name should be a tax on sales, but that is not quite in accord with the provisions of this section. It is a tax on goods produced or manufactured or imported or exported. However, so far as the manufactured or produced goods are concerned the tax becomes payable only when the goods are delivered to the purchaser or when the property in the goods passes to the purchaser. We are concerned in the present case with manufactured or produced goods only.

It will be proper to explain here the scheme of the Act. As the various provisions of the Act show the intention was to levy only one tax on manufactured or produced goods which are offered for sale to the consumer. A process of manufacture may involve different stages or goods manufactured by one person may be purchased by another not for the purpose of consumption, but for being incorporated into another article on which sales tax is to be paid. A stage of manufacture or the manufacture of goods which are to be incorporated in another article is not liable to sales tax. To explain the point we may take as an illustration the very case with which we are dealing. Cottonseed is at first extracted from cotton. This is a manufacturing process and if this cottonseed is sold to the consumer sales tax will have to be paid on the manufacture of cottonseed. However, the manufacturer may use this cotton seedhimself for the production of cottonseed oil. In its turn the cottonseed oil which is again a manufactured article may be sold to one who manufactures vegatable ghee for the purpose of being incorporated in the vegetable ghee. In a case where the cottonseed ail manufactured by a person from cottonseed extracted by himself from cotton goes into the vegetable ghee the intention of the law is that sale tax may be paid only on the manufacture of vegetable ghee and should not be paid either on the production of cottonseed or on the production of cottonseed oil which productions become in such a case only steps to the manufacture of vegetable ghee. Now what is the device adopted for ensuring that sales tax is paid only at one stage in spite of what is contained in the charging section making all manufactured goods when they go to the purchaser liable to the payment of tax? The device adopted, as will appear from section 4 is, that the sale of 'partly manufactured goods' to a manufacturer is not liable to the charge of tax. It may be clarified here that the Sales Tax Act does not recognise a manufacturer who has not obtained a licence under it for manufacture. The provision in section 4 is that the sale by a licensed manufacturer to another licensed manufacturer of partly manufactured goods is not liable to the incidence of tax. The definition of 'partly manufactured goods' is that they are goods which are to be incorporated into another article. So, these provisions are a sufficient guarantee that the tax will be paid only with respect to the last stage of manufacture of goods. However, there is one difficulty which had to be removed. Suppose the manufactured article into which partly manufactured goods are to be incorporated is for some-reason not liable to the payment of sales tax? In that case if no tax is paid on partly manufactured goods no tax will be paid' at all. Therefore, in the definition of 'partly manufactured goods' a limitation has been introduced that the article into which the goods are to be incorporated should be one which is liable to the payment of sales tax. If it is not liable to payment of tax then the goods which are incorporated into it are also manufactured goods on which sales tax has to be paid. One further difficulty would still remain. What is to happen if a person himself manufactures goods and then incorporates them into another article? There is no sale of the first manufactured goods because the person producing them is only using them for manufacture of other goods Tax is payable only when there is a sale. In a case where the article that is ultimately produced is liable to the payment of sales tax there would be apparently no need of a provision relating to goods that are to be incorporated in the last article. But suppose that the last article is not liable to the payment of sales tax. Unless a special provision was made that person would not be paying any tax on the production of the first article too. This situation is met by the general provision in the last part of section 3 (6) that the keeping of goods by the manufacturer for his own use would be regarded as a sale. As a matter of fact this last proposition has been contested by the appellants and is one of the points argued by them before the High Court. We are stating the ultimate conclusion and the reasoning will appear shortly.

To take up the first contention raised before the High Court namely that subsection (6) of section 3 could not be. the basis of the imposition of sales tax in a case where the article was kept for use by the manufacturer, it will be observed that according to subsection (6)(d) the Sales Tax Officer may determine the value for the tax in a case where the goods are kept for use by the manufacturer and such a transaction is to be regarded as a sale. The contention put forward on behalf of the appellants was that in the definition of 'sale' there was no extension of its meaning so as to include a case where the manufacturer keeps the goods for himself, that subsection (6) related only to assessment of value for the purpose of charge of tax, and that as long as the definition of 'sale' did not include such a transaction there would be no liability to pay sales tax. While it has to be accepted that the correct way of bringing a transaction within the definition of 'sale' was to make a provision in the definition, there can be no doubt at all as to the intention of the Legislature in subsection (6).' It has clearly been provided that all such transactions are to be regarded as sales for the purpose of this Act. At the same time if we do not regard this transaction as a sale subsection (6)(d) becomes wholly redundant for then no need will ever arise of assessing the value in a case where manufactured goods are kept by the manufacturer. The need for such assessment arises only if tax is payable on goods which are kept by the manufacturer for his own use. There is one point which needs explanation here. According to section 3(4) tax on manufactured goods is to be paid when goods are delivered to the purchaser or property in the goods pas3es to the purchaser. It does not say that tax is payable when there is a sale. Section 3(6) on the other hand does not use the word 'purchaser' anywhere. It does not say that the keeping of goods for use by a manufacturer will amount to a delivery of goods to the purchaser or to the passing of property to the purchaser. However, it used the word 'sale' and according to the definition of sale in the Sales Tax Act a sale occurs when property passes from one person to another. If the effect of subsection (d) be that keeping of goods by the manufacturer becomes a sale then property does pass to the purchaser. Even otherwise as we have stated the fact that value is to be computed in such a case necessarily involves that the keeping of goods by the manufacturer has become liable to the payment of sales tax."

12. On behalf of the assessee, however, it had been argued that the above view of this Court in Noorani Cotton Case had undergone some change and reference was made to a later decision (5 Member Bench) of this Court in the case of Commissioner of Sales Tax v. Shaiq Corporation Limited (PLD 1986 SC 731).

But then came the judgment of this Court (Four Member Bench) in Abbasi Textile Mills Ltd. v. Commissioner of Sales Tax (PLD 1990 SC 422) in which case leave to appeal was granted to resolve the conflict and give an authoritative decision on the interpretation of section 3(6)(d) read with section 2(12) of the Sales Tax Act, 1951. This judgment disposed of appeals of two assessees. In one appeal, appellant was Philips Electrical Industries of Pakistan Ltd. and in another set of appeals it was Abbasi Textile Mills Ltd. Philips had challenged the Sindh High Court Judgment dismissing their Constitutional petition wherein demands of the department of sales tax on the full quantity of bulb shells and tubes used internally in the manufacture of bulbs and fluorescent tubes in their factory were challenged. Philips' case was that glass shells and tubes were not independent goods but were in the shape and form in which molten mixture of raw material was drawn from the furance in the process of manufacturing electric bulbs and fluorescent tubes, and therefore, they were not covered by the meaning of the word "use" in section 3(b)(d) of the Sales Tax Act, 1951, which refers to independent use and not to the intermediate goods utilized in the manufacture of finished goods. Philips' appeal was dismissed as follows:--

"Civil Appeal No.82-K of 1986 is also covered by the decision in Noorani Cotton Corporation case. Here the partly manufactured goods are glass shells and glass. tubes which are incorporated into or form a constituent component part of articles, namely, electric bulbs and flourescent tubes, which are liable to the levy of sales tax as the `end products are themselves exempt from sales tax.

It was contended that the word 'use' is correlated to independent use and not consumption or assimilation of the partly manufactured goods into a finished product.

The answer to this submission will be found in the following observations in Noorani Cotton Corporation's case:--

'This situation is met by the genera: provision in the last part of section 3(6) that the keeping of goods by the manufacturer for his own use would be regarded as a sale.'

There is, therefore, no getting out from the levy of sales tax merely because the goods were assimilated into the end-product. "

In the set of appeals of Abbasi Textile Mills, who were manufacturers and sellers of yarn and cloth, the following questions of law, which were referred to the Sindh High Court under section 17(1) of the set came up for decision:--

"(i) Whether the Tribunal was right in holding that the raw material consumed in the manufacture of yarn exported is liable to sales tax under the Sales Tax Act, 1951?

(ii) Whether in the circumstances of the case the Tribunal was right in holding thatthe raw material for the manufacture of cloth exportedis yarn and not cotton?"

High Court answered both the questions in the affirmative. This Court dismissed the appeals of Abbasi Textile Mills as under:--

"Before us the learned counsel contended that the yarn incorporated was assimilated in the manufacture of cloth and not retained for independent use, therefore, it would not be covered by the word 'use' within its meaning in section 3(6)(d) of the Act, and would not be leviable to duty as an independent article. It was in this context that reliance was placed on the case reported as Commissioner of Sales Tax v. Shaiq Corporation Ltd. (PLD 1986 SC 731) which had its own distinguishing features, namely, that the assessee was exempt from the payment of tax on partly manufactured goods imported for being incorporated into end-product under section 4(b) of the Act which were in the normal course leviable to charge under section 3(l)(b) of the Act at the stage at which they were imported but before the clearance by the Customs Authorities under section 5(1)(b) of the Act; and as the partly manufactured goods had been assimilated and lost their original shape on the critical date on which they were sought to be assessed for payment of tax, that they were held not to be liveable to duty under section 4(1)(a) and (b) of the Act at the time of their subsequent assessment. Further, on the critical date of notification was issued under section 7 of the Act granting exemption to the fans produced or manufactured by the assessee without any condition. There was, therefore, a wholesale exemption in which event the raw material which had been incorporated could not be regarded as having a separate identity for the purpose of payment of tax. It was to distinguish this case from Noorani Cotton Corporation v. Sales Tax Officer (PLD 1965 5C 161)' that the distinguishing features of the latter case were brought out in the judgment. However, what is noticeable is that in the definition of the expression 'partly manufactured goods' in section 2(12) the end-product is subject to tax which, according to Noorani Cotton Corporation's case, is a sufficient guarantee that the tax will be paid only with respect to the last stage of manufactured goods. In this connection it will be relevant to refer to the observations of Kaikaus, J., in that case:

"The definition of 'partly manufactured goods' is that they are goods which are to be incorporated into another article. So, these provisions are a sufficient guarantee that the tax will be paid only with respect to the last stage of manufacture of goods. However, there is one difficultly which had to be removed. Suppose the manufactured article into which partly manufactured goods are to be incorporated is for some reason not liable to the payment of sales tax?'

In that case if no tax is paid on partly manufactured goods no tax will be paid at all. Therefore, in the definition of 'partly manufactured goods' a limitation has been introduced that the article into which the goods are to be incorporated should be one which is liable to the payment of sales tax. If it is not liable to payment of taxthen the goods which are incorporated into it are also manufactured goods on which sales tax has to be paid.'

But where the end-product is not leviable to the sales tax then the situation is met by the provisions of last part of section 3(6)(d), that is, the keeping of goods by the manufacturer for his own use would be regarded as sale as the scheme of the Act appears to, be to ensure that sales tax is paid only at one stage. There can also be no doubt that section 3(6)(d) is a charging section according to its tenor. Here again it will be of relevance to reproduce the observations of Kaikaus, J., in regard to the connotation of this subsection.

"While it has to be accepted that the correct way of bringing a transaction within the definition of 'sale' was to make a provision in the definition, there can be no doubt at all as to the intention of the Legislature in subsection (6). It has clearly been provided that all such transactions are to be regarded as sales for the purpose of this Act. At the same time if we do not regard this transaction as a sale subsection 6(d) becomes wholly redundant for then no need will ever arise of assessing the value in a case where manufactured goods are kept by the manufacturer. The need for such assessment arises only if tax is payable on goods which are kept by the manufacturer for his own use. There is one point which needs explanation here. According to section 3(4) tax on manufactured goods is to be paid when goods are delivered to the purchaser of property in the goods passes to the purchaser. It does not say that tax is payable when there is a sale. Section 3(6) on the other hand does not use the word 'purchaser' anywhere. It does not say that the keeping of goods for use by a manufacturer will amount to a delivery of goods to the purchaser or to the passing of property to " the purchaser. However, it used the word 'sale' and according to the definition of sale in the Sales Tax Act, a sale occurs when propertypasses from one person to another. If the effect of subsection (d) be that keeping of goods by the manufacturer becomes a sale then property does pass to the purchaser. Even otherwise as we have stated the fact that value is to be computed in such a case necessarily involves that the keeping of goods by the manufacturer has become liable to the payment of sales tax.'

Therefore, the case is covered by the observations of this Court in Noorani Cotton Corporation's case. The Full Bench of the High Court of Sindh in M/s. Gul Ahmed Textile Mills' s case on an identical question followed the decision in Noorani Cotton 'Corporation's case, and held the 'partly manufactured goods leviable to sales tax. "

13. In Abbasi Textile Mills case (supra) judgment of this Court in Shaiq Corporation (PLD 1986 SC 731) relied upon on behalf of the assessees has been distinguished and the principles enunciated in Noorani Cotton Corporation's case (supra) were reaffirmed in very clear and positive terms No judgment of this Court has been cited before us which has reviewed the opinion of this Court in Noorani Cotton Corporation case and affirmed in Abbasi Textile Mills on the interpretation of sections 2(12), 3(4) and 3(6) of the Sales Tax Act as they stood on the statute book during the relevant period. We find no error in the impugned judgments of the Lahore High Court and the Sindh High Court on the interpretation of the aforesaid provisions.

14. We may now take up the question of Constitutional interpretation on which leave has been granted in these appeals. The question is whether the Federal Legislature was competent to amend section 3(2) of the Sales Tax Act, 1951, by the Finance Act, 1963, increasing the then existing rate of sales tax from 12-1 /2 % to 15 % on the use or consumption of goods where no sale takes place. Relevant entry under the 1962 Constitution was Entry No.43(f) of the Third Schedule (Central Legislative List) which read as follows:--

"43. Duties and taxes Ls follows:--

(a)

(b) ..

(c)

(d)

(e)........................ ..

(f) taxes on sales and purchases;

Original entry in Part I of the Federal Legislative List (Fourth Schedule) of 1973 Constitution was as follows:--

"49. Taxes on sales and purchases."

However, the above Entry No.49 was substituted by the following by Constitution (Fifth Amendment) Act, 1976:--

"49. Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed. "

15. Mr. S. Sharifuddin Prizada, learned Senior Advocate Supreme Court, appearing for the appellants in the Karachi cases traced the history of the Constitutional legislation commencing from the Government of India Act, 1935. Relevant entry there was No. 48 of the Provincial Legislative List II in the Seventh Schedule and it read as:

"Taxes on the sale of goods and on advertisements."

However, by the Government of India (Amendment) Act, 1948, passed by the Constituent Assembly of Pakistan on 19-3-1948, section 140-A was added in the Government of India Act, which provided that taxes on sale of goods shall be levied and collected by the Federation; the amendment was made for two years and to cease to have effect after 31-3-1950. Life of section 140-A was extended for another two years i.e. till 31-3-1952 by the Government of India (Amendment) Act, 1952.

Then, by Government of India (Amendment) Act, 1952, enacted on 25-3-1952, an amendment was made in the Seventh Schedule in the Federal Legislative List introducing Entry 54-B which read as "taxes on sale of goods" and Entry No.48 was deleted from the Provincial Legislative List.

It was argued by Mr. S. Sharifuddin Prizada that the power which was conferred by the 1935 Act initially upon the Provinces and then upon the Federation was for levy and charge of tax on sale of goods and, therefore, "sale" constituted the basic concept and essential ingredient for the charge and levy of this tax.

Government of India Act, 1935, was replaced by the Constitution of 1956; Entry No.26 in the Fifth Schedule (Federal Legislative List) of this Constitution read as "Taxes on sales and purchases". Then came the Constitution of 1962 and again Entry No.43 (f) of the Federal Legislative list read as "Taxes on sales and purchases". In the 1973 Constitution, Entry No.49 in the Federal Legislative List was originally the same i.e. "Taxes on sales and purchases" but, as noted earlier, by the Fifth Constitution Amendment Act, 1976, the original Entry No.49 was substituted by the following:--

"Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed."

Pointing out the similarity in all the aforesaid Entries in the various Constitutional documents (except the last one), it was contended that the Legislature could not possibly have intended or expressed the tax, subject matter of the said Entries, to be anything else but on sale of goods. It was argued on behalf of the assessees that the word "sale" is defined in the Sale of Goods Act, 1930; the word had been judicially understood for a long time and it has always been interpreted and accepted as transfer of property or goods from one party to another, i.e. the seller to the purchaser, for consideration and this concept could not visualize a sale by a person to himself. It was contended that the word "sale", not having been defined in the Constitutional documents but judicially and otherwise interpreted as aforesaid, could not, by fiction of a deeming definition, be given a meaning it never bore that is a sale by a person to himself.

Reference was made to Articles 131 and 132 of the 1962 Constitution and Article 142 of the 1973 Constitution. Articles 131 and 132 of the 1962 Constitution read as follows: --

"131.---(l) The Central Legislature shall have exclusive power to make laws (including laws having extra-territorial operation) for the whole or any part of Pakistan with respect to any matter enumerated in the Third Schedule.

(2)

(3). ..

(4)... ..

(5)........................

132. A Provincial Legislature shall have power to make laws for the Province, or any part of the Province, with respect to any matter other than a matter enumerated in the Third Schedule. "

Article 142 of the 1973 Constitution is as follows:--

"142. Subject to the Constitution---

(a) Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to any matter in the Federal Legislative List;

(b) Majlis-e-Shoora (Parliament), and a Provincial Assembly also, shall have power to make laws with respect to any matter in the Concurrent Legislative List;

(c) A provincial Assembly shall, and Majlis-e-Shoora (Parliament) shall not, have power to make laws with respect to any matter not enumerated in either the Federal Legislative List or the Concurrent Legislative List; and

(d) Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to matters not enumerated in either of the Lists for such areas in the Federation as are not included in any Province."

It was argued on behalf of the assessees that sales tax could not be levied on the use or consumption of "goods" in the manufacture of the final product as such use or consumption is not sale by any interpretation, and, in view of the Entries in the Federal Legislative List of the 1962 Constitution and the 1973 Constitution, as Federal Legislature could levy tax on sale of goods, tax on use or consumption could not be levied by such Legislature.

It was contended that the fiction created by stretching or extending the meaning of "sale" in the definition section 2(15) and in sections 3(4) (iv) and 3(6)(d) of the Sales Tax Act, 1951, is ultra vires the Constitution and beyond the legislative competence of the Federal Legislature. For this contention, the following reasons were advanced:--

(i) The word 'sale' in the aforesaid Entries in the Legislative Lists has been. used in the same sense as defined in the Sale of Goods Act, 1930 and as per the judicially recognized meaning and as also according to its ordinary dictionary meaning;

(ii) No sale can be envisaged by creating a fiction to change the meaning of "sale" used in the Entries;

(iii) No sale can be made by a person to himself in view of the ordinarymeaning of the word and also according to its judicially recognized meaning or as per its definition in the Sale of Goods Act, -1930. Such meaning presupposes a seller, a buyer and consideration. It is in this sense that 'sale' in the Entries is to be interpreted.

It was submitted by Mr. Pirzada that the words "such goods are for use by the manufacturer or producer and not for sale" in section 3(6)(d) were perhaps borrowed from the Canadian Law. Reference was made to two judgments of the Supreme Court of Canada. First is the case of Bank of Nova Scotia and His Majesty the King (1930 SCR 174) and the other is His Majesty the King and Fraser Companies Limited (1931 SCR 490).

It was pointed out that in the relevant Canadian Statute, Special War Revenue Act, section 87(d) read as follows:--

"87. Wherever goods are manufactured or produced in Canada under such circumstances or conditions as render it difficult to determine the value thereof for the consumption or sale tax because ... ... ...

(d) such goods are for use by the manufacturer or producer and not for sale; the Minister may determine the value for the tax under this Act, and all such transactions shall for purposes of this Act be regarded as sales. "

According to Mr. Prizada, however, the Constitutional provisions in the Canadian Constitutional document at that time i.e. the Canada Act, 1867, was different; reference was made to section 91 thereof, and, according to Entry No.3 therein, the Legislative Authority of Parliament of Canada extended to "The raising of Money by any Mode or system of Taxation". But here, according to learned counsel, the relevant entries in the Federal Legislative Lists are restricted to taxes on sales and purchases.

Reliance was placed on several decisions from the Indian Jurisdiction for the proposition that where the relevant legislative entry gave power to tax on sales, the same could be availed of only where there, had, in fact, been a sale with transfer of property as recognized by the general law, as otherwise the tax would be ultra vires and that the concerned Legislature could not enlarge the definition of sale according to the established concept of a 'sale' in the laws of contracts or the Sale of Goods Act, 1930. Reference was made to the Shorter Constitution of India, 11th Edition by Basu, pages 1343-1347 and also pages 1144-1145.

Following cases from Indian Jurisdiction were also relied upon:--

(i) State of Madras v. Dunkerly AIR 1958 SC 560;

(ii) S.T.O. v. Budh Prakash AIR 1954 SC 459;

(iii) George Oakes v. State of Madras AIR 1962 SC 1037;

(iv) Bhopal Sugar Industries v. S.T.O. AIR 1964 SC 1037;

(v) Abdul Kader v. S.T.O. AIR 1964 SC 922;

(vi) New Indian Sugar Mills v. C.S.T. AIR 1963 SC 1207;

(vii) Bhopal Sugar Industry v. S.T.O. (1962) SC (Pet 85 of 1961);

(viii) Johan & Co. v. Titaghar Paper AIR 1965 SC 1082;

(ix) Kantilal Babulal v. HC Patel AIR 1968 SC 445;

(x) Tevimula Timber v. C.T.O. AIR 1968 SC 784;

(xi) Deputy Tax Collector v. En Field AIR 1968 SC 838;

(xii) Orissa Province v. Titaghar Paper AIR 1985 SC 1293; and

(xiii) Builders Association of India v. Union of India AIR 1989 SC 1371.

16. On the use of the deeming clause, Mr. S. Shrifuddin Prizada argued that this concept is a part of every legal system but it is also an established principle that such clause should never be over-stretched. He referred to the case of Muhammad Afzal v. Commissioner of Lahore (PLD 1963 SC 401) and also indirectly relied upon Pakistan Textile Mills Owners' Association v. Administrator of Karachi (PLD 1963 SC 137) for the proposition that words in a statute are to be given first their ordinary and natural meaning and other appropriate meaning is to be given only when ordinary meaning does not make sense. It was contended that by extending the tax on sales to use or consumption of goods or partly manufactured goods, Federal Legislature resorted to illegal over-stretching of the deeming clause and, by such illegal process, use or consumption of goods by the assessee itself could not be converted to sale to bring it within the legislative competence of the Federal Legislature to tax such use or consumption of goods under the Legislative entries in question.

17. Mr. Mansoor Ahmad Khan, learned Senior Advocate Supreme Court, also appearing for the assessee/appellants in the Karachi Appeals, referred to the various provisions of the Sales Tax Act, 1951, and amendments made therein from time to time. It was emphasized that sales tax is a single-point tax and it could not be levied at the intermediate stage on materials or goods which are in the process of manufacturing the final product and that it was only when the sale takes place of any product that sales tax can be levied. In the case of the Karachi assessees, it was pointed out that sales tax was leviable only on the final products when sold but, at the relevant time, such products had been exempted and, in these circumstances, sales tax could not be levied at any intermediary stage, where, in any case, no sale has took place.

18. Ch. Muhammad Farooq, learned Attorney-General for Pakistan, who appeared pursuant to notice on the Constitutional question, submitted that the following principles of interpretation are attracted while ascertaining the meaning and scope of the relevant entries in the Legislative List:--

(i) Entries in the Legislative Lists are to be interpreted liberally and in their widest amplitude.

(ii) Courts interpreting laws involving economic activities interpret the same with greater latitude, keeping in view the complexity of economic problems which do not admit of solution through any doctrinaire or straight jacket formula.

(iii) There are good reasons for judicial restraint in utilities, tax and economic regulation cases if not judicial deference to legislative judgment.

(iv) Power of taxation rests on necessity, being an essential and inherent attribute of sovereignty, and is not dependent upon any grant by the Constitution or the consent of the owner of the property subject to taxation, and, in fact, Constitutional provisions with regard to taxation constitute a limitation on the legislative power and not a grant of power.

(v) The law should be saved rather than destroyed and the Courts should lean in favour of upholding the constitutionality of a legislation keeping in view that there is a presumption in favour of the constitutionality of legislative enactment.

Reliance was placed by the learned Attorney-General on a recent decision of a Full Bench (five Judges) of this Court in the case of Elahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582). In the reported judgment, Entry No.47 (and some other entries also) in Part I of the Federal Legislative List were examined in great detail. Relying upon the aforesaid principles and Elahi Cotton Mills' case (supra), it was contended that the concerned provisions of sections 2(15), 3(4)(iv) and 3(6)(d) of the Sales Tax Act, 1951, were competently legislated by the Federal Legislature. Learned Attorney-General also argued that the judgments from the Indian Jurisdiction are distinguishable.

19. The learned Attorney-General is correct in his submission that Legislative entries in a Constitution are to be interpreted liberally. This principle is well recognized and was recently confirmed by this Court in its judgment (Full Bench of 5 Judges) in the case of Elahi Cotton Mills Ltd. (PLD 1997 SC 582). While considering the term "income-tax" in Entry Vo.49 in Part I of the Federal Legislative List (Fourth Schedule) of the 1973 Constitution, it was observed that, from the case-law and treatises considered in the judgment, one of the principles deducible there from is that while construing the said word -"income" used in the entry in the Legislative List, restrictive meaning cannot be applied keeping in view that the allocation of the subjects to the legislative lists is not by way of scientific or logical definition but by way of mere simplex enumeration of broad categories. It was observed after having noted that as per dictionary the word "income" means a thing that comes in, that its natural meaning embraces any profit or gain which is actually received. While interpreting the word, it was recognized that the rule of interpretation of any entry in Legislative List is that the same should be given widest possible meaning. However, it was also observed that this did not mean that the Legislature can choose to tax as income an item which in no rational sense be regarded as a citizen's income and that the item taxed should rationally be capable of being considered as the income of a citizen.

20. In Elahi Cotton Mills' case (supra) the main question which was under consideration was whether sections 80-C, 80-CC and 80-D added in the Income Tax Ordinance, 1979, were competently enacted by the Federal Legislature under Entry No.47 (and/or any other entry) of Part I of the Federal Legislative List (Fourth Schedule) of 1973 Constitution which reads as follows:--

"47. Taxes on income other than agricultural income."

The aforesaid amendment m the income Tax Ordinance, introduced presumptive and minimum taxes and the same were held to be competently enacted by the Federal Legislature. Noting the various principles of interpretation in this regard it was inter alia observed as follows:--

(a) While interpreting Constitutional provisions Court should keep in mind, social setting of the country, growing requirements of the society/nation, burning problems of the day and the complex issues facing the people,, which the Legislature in its wisdom through legislation seeks to solve: The judicial approach should be dynamic rather than static, pragmatic and not pedantic and elastic rather than rigid.

(b) The law should be saved rather than be destroyed and the Court must lean in favour of upholding the constitutionality of a legislation keeping in view that the rule of Constitutional interpretation is that there is a presumption in favour of the constitutionality of the legislative enactments unless ex facie it is violative of a Constitutional provision.

(c) In view of wide variety of diverse economic criteria, which are to be considered for the formulation of a fiscal policy. Legislature enjoys a wide latitude in the matter of selection of persons, subject-matter, events, etc. for taxation.

(d) Courts while interpreting laws relating to economic activities view the same with greater latitude than the laws relating to civil rights such as freedom of speech, religion etc., keeping in view the complexity of economic problems which do not admit of solution through any doctrinaire or strait jacket formula as pointed out by the Holmes. J. in one of his judgments.

(e) Frankfurter, J. in Morey v. Doud (1957) U.S. 457 has remarked that "in the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to the legislative judgment.

21. The dictionary meaning of sale as also the meaning of the word in the laws relating to contracts and Sale of Goods Act, 1930, presupposes a seller, a purchaser and transfer of property from one to the other for consideration. However, by the deeming clause contained in section 3(6)(d) in the Sales Tax Act, 1951, use of the goods by the manufacturer or E purchaser (and not for sale) mentioned in that clause was to be

considered by fiction of law, as a sale.

Generally the effect of a deeming provision in taxing statute is to bring within the tax net a transaction or an amount, which ordinarily would not come within the tax net. In the judgment in Elahi Cotton Mills' case (supra) certain principles regarding deeming provisions were also recognized. These principles were recited as follows:--

(1) Generally the effect of a deeming provision in a taxing stature is that it brings within the tax net an amount, which ordinarily would not have been treated as an income. In other words, it brings within the net of chargeability income not actually accrued but which 'supposedly to have accrued notionally.

(2) When a statute enacts that something shall be deemed to have been done which in fact and in truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to.

(3) Where a person is deemed to be something the only meaning possible is that whereas he is not in reality that something, the Act required him to be treated as he were with all inevitable corollaries of that state of affairs.

(4) The legal fictions are limited for a definite purpose, they cannot beextended beyond the purpose for which they are created.

In Elahi Cotton Mills' case (supra), a large number of deeming provisions in the Income Tax Ordinance, 1979, were noted, which were already part of the said Ordinance prior to the incorporation of the impugned provisions in that case i.e. sections 80-C, 80-CC and 80-DD. These deeming provisions were noted in paragraph 38 of the judgment of Ajmal Mian, J. (as he then was) as follows:--

Section		Subject
1.	2(20)	Deemed dividend
2.	2(24)	Bonus shares---not to be considered as income in certain cases.
3.	12(8)	A discontinued business shall be deemed to have continued for the purpose of Income Tax Ordinance.
4.	12(12)	Assets other than stocks and shares purchased from a Company at less than market value---difference deemed to be income of the purchased.
5.	12(13)	Un-adjustable advance rent deemed to be income-to be taxed in ten years (1/10th each year).
6.	12(18)	Bonus exceeding Rs.1,00,000 received otherwise than through cross cheque deemed to be income of the recipient of loan.
7.	12(19)	Payment received by "lessor" against leased assets to be income of certain persons.
8.	13(1)(a)	Unexplained credits in books to be income of the assessee.
9.	13(1)(aa)	Unexplained investment etc., to be income.
10.	13(1)(b)	Unexplained/ unrecorded invest ment etc., to be income.
11.	13(1)(c)	Money or valuable article, the sources of which remains unexplained -- is deemed income.
12.	13(1)(e)	Unexplained expenditure deemed income.
13.	19	The charge is on ALV rather than the actual rent received.
14.	25(c)	Trading liability remaining unpaid for more than three years deemed to be income.
15.	29	Clandestine transactions deemed to be transaction of beneficiary.
16.	50(3)	Any sum (chargeable to tax) when paid out to a non-resident such sum is deemed to be income and tax is to be withheld at normal rates.
17.	78	Every agent who is declared to be or is treated as an agent is deemed to be an assessee.
18.	79	When business transaction as arranged between a resident and a non-resident where no profit or loss arises to a resident reasonable profits be determined by I.T.O. to be income of resident.
19.	80	Shipping business of non -residents. Aggregated receipts to be deemed to be income and tax at 8 % is collected.
20.	80(A)	Air-line business of a non- resident.
21.	80(AA)	Aggregate of technical fees received is deemed to be income and tax is collected at 20% of such income.
22.	88	All income arising to any person by virtue of a receivable transfer of assets is deemed to be income of the transferor.
23.	99(5)	Where department takes no action upon the refund application of the assessee till 30th June, the amount of refund is deemed to be due to the assessee.
24.	132	Where appeal is not decided within three months, the relief claimed shall be deemed to have been given.
25.	156	If the mistake pointed cut by the assessee is not rectified by the department within a given period, the mistake is deemed to have been rectified.

22. Keeping in view the aforesaid principles of interpretation, we may now test the validity of the challenged deeming parts of the relevant provisions i.e. sections 2(15); 3(4)(iv) and 3(6)(d) of the Sales Tax Act, 1951 on the basis of the competence of Federal Legislature under Entry No.49 of Part I of the Federal Legislative List (Fourth Schedule) of the 1973 Constitution and the corresponding Entry No.43(f) of the Third Schedule to the 1962 Constitution.

As already observed, the dictionary and natural meaning and the definition of 'sale' in the laws of contract and the Sale of Goods Act, 1930, mean transfer of goods or property between a willing seller and willing buyer for consideration. However, the word 'sale' in the legislative entries in the Constitution has to be given very liberal meaning which may not be restricted or confined within the parameters of the ordinary meaning of the word as "the allocation of the subjects to the lists is not by way of scientific or logical definition but by way of mere simplex enumeration of broad categories" ---Ref: Elahi Cotton Mills' case (supra) illustration, reference can be made to a forced sale on a notified price under a statutory fiat, where there is no contract between a willing seller and a wiling buyer and the so- called "consideration" is also fixed under the law, and yet such transaction has been considered to fall within the taxing power of the Legislature under the legislative entry of "sale or purchase of goods" (See Vishnu Agencies (Pvt.) Ltd. v. Commercial Tax Officer AIR 1978 SC 449).

However, in Elahi Cotton case (supra), while considering the meaning and scope of the entry "taxes on income", it was observed that the rule of interpretation that while interpreting an entry in a Legislative List it should be given the widest possible meaning, does not mean that the Legislature can choose to tax as income an item which in no rational sense can be regarded as a citizen's income. It was further observed that the item taxed should rationally be capable of being considered as the income of a citizen. It had been argued on behalf of the assessees that the deeming provisions purport to convert the process of use or consumption of partly manufactured goods into a sale. It was argued that how could there be sale by a person to himself; where there is no question of payment of consideration; where the item sought to be taxed remains with the assessee. Reliance had been placed on a number of judgments of the Indian Supreme Court for the proposition that 'sale' in the legislative entry must be given its ordinary natural meaning; that the expression "sale of goods" was a term of well recognized legal import and that sale of goods meant sale of goods where a consensual transfer takes place between a seller and buyer for consideration.

23. It has been noticed that though the challenged deeming provisions in section 2(15) and section 3(4)(iv) were introduced through the Finance Act, 1966, section 3(6)(d) has been a part of the Sales Tax Act, 1951, since it was originally enacted. The deeming clause has always been there since 1951. It created a legal fiction intended to cover actions in a very limited field. Its parameters are clearly defined. There is no ambiguity about the actions it brings within the net of sales tax.

First of all it may be observed that the deeming provisions come into operation only in a case where the final product is exempt from sales tax. It is admitted on all sides that sales tax is a one point levy. This was the stand taken on behalf of the assessees as well as by learned counsel appearing for the Department, as observed earlier in this judgment. If the final product which is sold by the assessee is subject to sales tax, under the deeming provisions read with other provisions of the Sales Tax Act, 1951, no sales tax can be levied at any intermediary stage. This position is also clear from the judgment of this Court in the case of Noorani Cotton Mills (supra).

Secondly, according to the deeming provisions, only such goods are liable to sales tax at the intermediary stage, which are identifiable as separate goods and are subject to sales tax as such goods.

In the case of Pakistan Cables Ltd. (Karachi assessees) during the process of manufacture of cables, which were exempt from sales tax at the relevant time, at the intermediary stage, the raw material is converted into aluminium rods. As observed in the relevant impugned judgment of the High Court, such aluminium rods were independently sold in the market and were subject to levy of sales tax. In the case of Electric Lamp Manufacturers of Pakistan Limited, also a Karachi assessee, in the process of manufacture of electric bulbs, which were exempt from levy of sales tax at the relevant time, from the raw materials, first glass shells are produced which glass shells, admittedly were identifiable goods and marketable items independently and subject to sales tax. In the case of Exide Pakistan Limited (another Karachi assessee), during the manufacture of batteries (the final product) which were exempt from levy of sales tax at the relevant time, one of the raw materials used is lead which is converted by chemical process into led oxide and, according to the impugned judgment of the High Court, it could not be denied that lead oxide was an independent marketable item. At the relevant time oxide was subject to levy of sales tax. In the four Lahore appeals, the assessees, while producing hosiery goods, exempt from levy of sales tax at the relevant time, first raw material is converted into woollen yarn, an independent marketable item subject to sales tax at the relevant time.

It is also an accepted position that the aforesaid goods at the intermediary stage, which were independently identifiable and marketable goods, were subject to sales tax at the relevant time in case they had been sold, and, in the case of some assessees, such goods at the intermediary stage were in fact sold and, therefore, sales tax was leviable and was paid by the assessees. But other similar goods were not sold and were used or consumed in the manufacture of final products which were exempt from sales tax; the assessees claimed that as no sale in the ordinary sense of the word took place, they were not liable to pay sales tax, whereas according to the Department, these were subject to levy of sales tax in view of the deeming provisions.

24. As observed, legislative entries should be given liberal and very wide interpretation and that the judicial approach in, this regard should be dynamic rather than rigid. Another principle that has been noted in the earlier part of this judgment is that the Legislature enjoys a wide latitude in the matter of selection of persons subject-matter, events etc. for taxation. Reference has already been made to (1957) U.S. 457 where Frankfurter, J. has observed that, in the utilities tax and economic regulation cases, there are reasons for judicial self-restraint if not judicial deference to the legislative judgment.

25. The deeming provision created a legal fiction that in the aforesaid restricted parameters, the use or consumption of independently identifiable goods would be considered to be a sale so as to bring such goods within the tax net. For the reasons mentioned above, we are of the view that, in the aforesaid restricted sense, the use and consumption of intermediary goods could be treated as sales by legal fiction so as to bring such goods under the levy of sales tax where the final product was not subject to sales tax when sold and that the use or consumption of intermediary goods in such circumstances have a rational nexus with sale. Federal Legislature was, therefore, competent to enact the deeming provisions under entries of "sales of goods" in the Constitutional documents.

26. As observed, on behalf of the assessees, reliance had been placed on a number of decisions from the Indian jurisdiction. All the said decisions are based on the ordinary or natural meaning of the word 'sale'. However, we have given our reasons for coming to the conclusion that the Federal Legislature had competently enacted the deeming provision through a legal fiction with very restricted operational field. Cases relied upon are therefore, of no help to the case of the assessees.

A large number of decisions of this Court as also of the various High Courts were also cited before us but in none of these decisions the question of competence of the Federal Legislature was directly in issue as in the present cases. The following decisions were cited before us:--

DECISIONS. OF SUPREME COURT OF PAKISTAN:

1. Sh. Fazal Elahi v. Federation of Pakistan 1988 SCMR 2103;

2. CIT v. Ayurvedle Pharmacy PLD 1970 SC 93;

3. CIT (Agr.) v. Azizuddin Industries 1973 SCMR 445;

4. Collector, CE&CL v. Azizuddin Industries PLD 1970 SC 439;

5. Amin Soap Factory v. Pakistan PLD 1976 SC 277;

6. Al-Samrez Enterprise v. Federation 1986 SCMR 1917;

7. Muhammad Yunus v. CBR PLD 1964 SC 113;

8. CST v. Lahore Textile & General Mills. PLD 1992 SC 364; and

9. CBR v. Champion Clock Co. 1996 SCMR 1468.

DECISIONS OF THE VARIOUS HIGH COURTS OF THE COUNTRY:

1. Latif Company Jute Mills v. STO (1971) 23 Tax 302;

2. CST v. H. Muhammad Hussain & Co. 1974 PTD 20 = PLD 1974 Note 21 at p.57;

3. CST v. Shafiq Corporation 1974 PTD 15 = PLD 1974 Note 25 at p.64;

4. S. Muhammad Din & Sons v. STO PLD 1977 Lab. 1225;

5. CIT v. Chemical Glass Factory (1980) 42 Tax 43;

6. Tribal Textile Mills v. CST 1980 PTD 373;

7. Paracha Textile Mills v. CST 1980 PTD 373;

8. Abbasi Textile Mills v. CST 1982 PTD 17;

9. CST v. Haji E. Dossa & Sons (1982) 46 Tax 64;

10. Phillips Electrical v. Superintendent, C$&LC 1985 PTD 777;

11. Gul Ahmed Textile Mills v. CST 1985 PTD 211 (FB);

12. Dada Soap Factory v. CST 1987 PTD 420;

13. S. Muhammad Din & Sons Ltd. v. Sales Tax Officer Special Circle I, Lahore PLD 1977 Lah. 1225 and

14. Tribal Textile Mills v. CST 1980 PTD 383.

Reliance had also been placed on behalf of the assessees on the judgments in the case of C.B.R. v. Champion Cloth 1996 SCMR 1468 and in the case of Flying Kraft Paper Mills v. C.B.R. 1977 SCMR 1874. It was rightly pointed out by Mr. Mansoor Ahmad, learned counsel for the department, that, in the first case, section 3(6)(d) was not taken into consideration and taxable event was also not considered, and the second case related to exemption and is not relevant to the first case.

27. As regards the question of charge ability, it may be observed that in Noorani Cotton case (supra) it was held that section 3(6)(d) was also a charging section and this view is reiterated.

28. As a result Civil Appeals Nos.289, 290, 291 and 292 of 1978 are allowed and Civil Appeals Nos.899-K of 1990 to 911-K of 1990 are dismissed. There is no order as to costs.

M.B.A./C-27/SOrder accordingly

/script>

COMMISSIONER OF SALES TAX VS HUNZA CENTRAL ASIAN TEXTILE AND WOOLLEN MILLS LTD., 1999 PTD-SUPREME-COURT 1135 (1999)

Subject

Requisition against illegal voters MTBA

Comdemn Resolution against attack on Azhar Siddique ASC