ATTOCK CEMENT PAKISTAN LTD. VS COLLECTOR OF CUSTOMS, COLLECTORATE OF CUSTOMS AND CENTRAL EXCISE, QUETTA
1999 P T D 1892
[Supreme Court of Pakistan]
Present: Ajmal Mian, C.J., Sh. Riaz Ahmed and Ch. Muhammad Arif, JJ
ATTOCK CEMENT PAKISTAN LTD.
Versus
COLLECTOR OF CUSTOMS, COLLECTORATE OF CUSTOMS AND CENTRAL EXCISE, QUETTA and 4 others
Civil Appeal No. 929 of 1995, decided on 04/03/1999.
(On appeal against the order, dated 16-6-1994 of the High Court of Balochistan, Quetta in C. P. No. 14 of 1994).
(a) Sales Tax Act (VII of 1990)---
----Ss.8(1)(b)(2) & 7(2)(ii)---Customs Act (IV of 1969), Ss.79 & 104-- S.R.O. No.1111(1)/90, dated 1-11-1990---Adjustment of input tax -- Accessories or spare parts for the running and maintenance of manufacturing plant having not been included within the definition of "goods" nor treated as acquisition of plant and machinery, manufacturer was entitled to claim adjustment of the input tax from the output tax---Such deduction, however, would not be permissible under S.8 of the Sales Tax Act, 1990. if the Federal Government under a notification includes the accessories and spare parts in the "goods" within the meaning of S.8(1)(b) of the said Act
Under the Notification S.R.O. 1111(1)/90, dated 1-11-1990 parts and accessories are not included. Even otherwise, by no stretch of imagination, the accessories or spare parts for the running and maintenance of the plant can be equated with the acquisition of machinery and plant. Such accessories and spare parts are imported under a bill of entry which is cleared by the Customs Department under section 79 or section 104 of the Customs Act and, therefore, not being the plant and machinery itself but being spare parts, under section 7(2)(ii) of the Sales Tax Act the assesses are entitled to deduct the input tax from the output tax. However, such deduction is not permissible under section 8 of the Sales Tax Act if the Federal Government under a notification includes the accessories and spare parts in the goods within the meaning of section 8(1)(b) of the Sales Tax Act.
The accessories and spare parts having not been included by the Federal Government under section 8(2) of the Act, the assessee was entitled to claim adjustment of the input tax and, therefore, the show-cause notice issued under section 11 of the Act to the assessee was without lawful authority and jurisdiction.
(b) Sales Tax Act (VII of 1990)--
----S.8(1)(b)(2)---S.R.O. No.1111(1)/90, dated 1-11-1990 --- S-.R.O. No.1053(1)/93, dated 30-10-1993---Term "stock in trade" as used in S.R.O. No.1053(1)/93, dated 30-10-1993 issued under S.8(1)(b) of the Salex Tax Act, 1990---Meaning---In the absence of technical definition of stock-in-trade accessories and spare parts for the maintenance and running of a plant cannot be termed as stock-in-trade.
In the absence of the technical definition of "stock-in-trade" by the Legislature in the Act or the Rules framed thereunder, one has to resort to the dictionary meanings and in view of the dictionary meaning of the term stock-in-trade given in various dictionaries, the accessories and spare parts for the maintenance and running of a plant cannot be termed as stock in trade. On the other hand, plant and machinery would be construed as stock in trade.
Black's Law Dictionary; The Shorter Oxford English Dictionary; Chambers English Dictionary; The Concise Oxford Dictionary of Current English and Webster's Third New International Dictionary ref.
(c) Sales Tax Act (VII of 1990)---
----S.11---Notice---Record showed that extraordinary zeal was being shown by the Authorities to somehow charge the assessee with the amount of deductions made alongwith the additional tax and penalty---Such demand was otherwise than in accordance with law and was being made by the impatient department with a view to achieve the target of recovery of revenue-- Demand was, therefore, mala fide in circumstances.
(d) Sales Tax Act (VII of 1990)---
----S.46---Constitution of Pakistan (1973), Arts. 199 & 185(3)-- Constitutional petition---Adequate remedy---Exercise of Constitutional jurisdiction by High Court---Principles---Constitution of Appellate Tribunal under S.46, Sales Tax Act, 1990---When the matter was being agitated before the High Court in its Constitutional jurisdiction and at leave granting stage before the Supreme Court, no such Tribunal as envisaged by S.46, Sales Tax Act, 1990 had been constituted but instead a Member of the Central Board of Revenue was performing said functions---Petitioner, in circumstances, could not be said to have other adequate remedy, thus, Constitutional petition was maintainable---Interpretation by the Member Central Board of Revenue could not be considered as the correct interpretation of law---Where action involves fiscal rights on the allegation of misapplication of law or abuse of power, superior Court can step in to examine whether or not the public functionary concerned acted in accordance with the power conferred by the statute.
Messrs Central Insurance Co. and others v. The Central Board of Revenue, Islamabad and others 1993 SCMR 1232; Adamjee Insurance Co. Ltd., Karachi v. The Central Board of Revenue, Islamabad and 3 others 1989 PTD 1090; A1 Akram Builders (Pvt.) Ltd. v. Income Tax Appellate Tribunal 1992 PTD 1761; Messrs Usmania Glass Sheet Factory Ltd., Chittagong v. Sales Tax Officer PLD 1971 SC 2050; Edulji Dinshaw Ltd. v. Income-tax Officer 1990 PTD 155 and Messrs Julian Hoshang Dinshaw Trust and others v. Income-tax Officer, Circle XVIII, South Zone, Karachi and others1992 PTD 1= 1992 SCMR 250 ref.
(e) Words and phrases---
---- Term "stock-in-trade"---Meaning and import.
Black's Law Dictionary; The Shorter Oxford English Dictionary; Chamber's English Dictionary and The Concise Oxford Dictionary of Current English ref.
Fatehali W. Vellani, Advocate Supreme Court and M. Shabbir Ghouri, Advocate-on-Record (absent) for Appellant.
Yawar Ali, Deputy Attorney-General for Respondents.
Date of hearing: 4th March, 1999.
JUDGMENT
SH. RIAZ AHMED, J.---This appeal through leave of this Court is directed against the judgment and order, dated 5-4-1994 delivered by a Division Bench of the Balochistan High Court whereby a writ petition filed by the appellant calling in question a show-cause notice issued to it by respondent No. l was dismissed.
2. The facts giving rise to the institution of the aforesaid writ petition and this appeal are as under:
The appellant company, incorporated in Pakistan, is engaged in the manufacture of cement by installing a plant at Hub Chowki, District Lasbela in the Province of Balochistan. The appellant being manufacturer of cement as a taxable goods and the sale thereof being a taxable supply under the Sales Tax Act, 1990 (hereinafter called the Act), got itself registered under the Act with the Collectorate of Customs, Excise and Sales Tax, Quetta, Balochistan and thus, is a registered person for the purpose of the Act. Under law the appellant being a registered person under the Act is obliged to submit monthly returns in respect of its taxable supplies including the purchases made by it in the monthly tax returns. According to the appellant, it had been fulfilling its obligation by regularly filing such returns and paying the tax faithfully without concealing anything. The appellant further claims that under section 11 of the Act, no notice was ever issued to it for filing incorrect statement or making a short payment of tax. Under section 6 of the Act, the tax in respect of the goods imported into Pakistan has to be charged and paid in the same manner and at the same time as it were a duty of customs payable under the Customs Act, 1969. Section 3 of the Act is charging section. The value of the taxable supplies made in Pakistan and goods imported-into Pakistan are chargeable. As far as supply of goods in Pakistan is concerned, the liability to pay such tax is that of a registered person like the appellant. In case of imported goods, it is the liability of the importer. The appellant claims that it has been supplying cement manufactured by it in Pakistan and as already stated above, has been faithfully paying the tax thereon. The appellant in the process of its manufacture also imports such parts and accessories for the manufacture of cement. According to the appellant, the import of such accessories and parts is essential for the efficient and smooth running of its plant. According to the appellant, it has also been making payment of such tax on import of the parts and accessories. In addition to the accessories and parts for the plant the appellant also requires bags for packing of the cement for marketing oh which sales tax is paid by the supplier. Under the scheme of the Act, the tax payments are adjustable to determine the actual amount of tax payable by the appellant in respect of supplies made by it of the cement manufactured at its factory. Section 7 of the Act provides methodology to determine the liability for the payment of tax in respect of the taxable supplies. Under this provision of law, the calculation of tax is to be made on output tax defined as the tax chargeable in respect of supply of goods made by a registered person and that of input tax defined as the tax levied on the supply of goods received by a registered person and the tax levied on imported goods for consumption by it. The expressions "output tax" and "input tax" have been defined in sections 2(15) and 2(9) respectively. The determination of the liability under section 7 of the Act is to be made by deducting the input tax on goods received or imported from the output tax on the goods supplied and by making such other adjustments as may arise under section 9 of the Act. The term "goods" is defined in section 2(8) of the Act and it means every kind of movable property other than actionable claims, money, stock, share and security. Under section 8(1)(b) of the Act, the Federal Government is empowered to specify by notification in the official gazette "goods" in respect of which input tax cannot be claimed.
3. Under section 8(1)(b), Notification No. SRO (1111) (I)/90, dated 1-11-1990 was issued, which remained in force till 29-10-1993. According to the appellant, a close reading of sections 7(l) and 8(l)(b) read with the definition of "input tax" and "output tax" and the definition of term "supply" in section 2(22) of the Act and that of "goods" in section 2(8) reveals that the input tax required to be adjusted against the output tax would be the sales tax required to be paid on all immovable property acquired or received by a registered person-like the appellant. According to the appellant, the plant and machinery also fall within the definition of goods and therefore, the input tax in respect thereof is adjustable against the output tax by such adjustment of input tax is required to be made in 60 equal monthly instalments. According to the appellant, the Act allows adjustment of input tax in respect of goods other than notified under section 8(l)(b) and in the exceptional case of plant and machinery the input tax is adjustable in equal 60 monthly instalments whereas in respect of other goods other than the plant and machinery the input tax is adjustable against the output tax on monthly basis.
4. The case of the appellant was that after correct calculations and the aforesaid adjustment of the output tax and the input tax in the light of the provisions of sections 7, 8, 9 and 10 of the Act, the appellant has been regularly paying sales tax. The appellant has been making local purchases of the paper bags, granulated slag, explosive material and has been importing parts and accessories of the machinery including refractory bricks and refractory material. According to the appellant, for the efficient running of its plant it had to make such imports frequently and has also to replace certain parts and accessories, which are worn out due to the passage of time. It is the case of the appellant that imports of such parts and accessories cannot be classified as piant and machinery for the purpose of second proviso to section 10(1) of the Act. In other words according to the appellant, these accessories are goods as defined in the Act and the input tax paid in respect of such parts and accessories being goods not notified under section 8(1)(b) of the Act are adjustable against the output tax in accordance with the methodology provided by section 7 of the Act. According to the appellant, so long as Notification No. l111(I)/90, dated 1-11-1990 under section 8(l)(b) of the Act held the field, the input tax on parts and accessories was adjustable against the output tax. According to the appellant, until August 1992, the respondents never questioned the correctness of the returns filed by the appellant and the adjustment made by the appellant was also never questioned. On 22-8-1992 the appellant received a letter from the Superintendent, Customs House, Hub under which the input tax on accessories and parts was made adjustable against the output tax only in 60 equal monthly instalments. The appellant protested against this method of adjustment and stated that the parts and accessories could not be equated with the plant and machinery because the goods, such as parts and accessories and the plant and the machinery were distinguishable from each other. According to the appellant, the parts and. accessories being goods, the appellant was justified to make adjustment in its monthly returns. The controversy, thus, arising was referred to the Central Board of Revenue and vide letter, dated 10-7-1993 the Central Board of Revenue agreed that parts and accessories could not be equated with plant and machinery and, therefore, the input tax in respect thereof was not adjustable in 60 equal monthly instalments. Despite having given this opinion, the direction was issued to recover the total amount of input tax on parts and accessories adjusted in the past against output tax. In other words, the Central Board of Revenue contradicted itself by stating that the input tax paid on parts and accessories was not at all adjustable against the input tax. Vide letter, dated 1-8-1993 the Superintendent, Central Excise and Sales Tax, Hub, sought information from the appellant in respect of the recovery of arrears and the short fall alleged to have been made by the appellant. The appellant vide its letter, dated 8-8-1993 protested against the aforesaid treatment and voluntarily stopped adjusting the input tax against the output tax on accessories and parts w.e.f August, 1993 for awaiting the final outcome of the controversy.
5. According to the appellant the recovery of short fall and the arrears was referred to by the respondents to the Direct-General, Intelligence and Investigation, Customs and Excise and a direction was issued to the appellant to provide documents and record for audit and inspection. The said demand was complied with. It is contended that the Directorate of Intelligence and Investigation, Customs and Excise Department also treated the accessories and spare parts in the category of plant and machinery. In the, mean while, in supersession of the earlier Notification NO.SRO.I111(1)/90, dated 1-11-1990, another Notification No.SRO. 1053(1)/93, dated 30-10-1993 was issued by the Central Board of Revenue. Under the new notification the input tax was made adjustable in respect of such goods only as are required by a registered person as stock-in-trade. The term "stock-in-trade" was, thus, treated as goods and commodities, which are purchased for sale and conversion into finished products. On 16-12-1993. The Assistant Collector, Central Excise and Sales Tax, Hub addressed a letter to the appellant sating therein that although in the past there had been a widespread practice for adjusting the input tax on parts and accessories adjustable against the output tax, but the correct legal position was otherwise and the matter now has to be dealt with in the light of the latest notification, dated 30-10-1993 under which such accessories and parts are to be treated as stock-in-trade. Vide the aforesaid letter the appellant was called upon to-convey the details of input tax adjusted in respect of parts and accessories since 1-11-1990. The letter also indicated that additional tax under section 34 and penalty under section 33 would be recovered in addition to any other action available under the Act in the event the appellant fail to comply with the direction contained in the said letter. Before the expiry of 7 days allowed to communicate the details, the respondent No. 1 issued a show-cause notice, dated 21-12-1993 to the appellant to deposit input tax in respect of parts and accessories w.e.f November 1990 to July 1993 amounting to Rs.79,22,594 end additional tax in the sum of Rs.2,17,60,076 calculated up to 30-11-1993 under section 34 along with the penalty twice the amount of the tax was imposed upon the appellant. Aggrieved by the issuance of the said show-cause notice, the appellant invoked the Constitutional jurisdiction' of the Balochistan High Court and vide judgment, dated 16-6-1994, the Constitution Petition was dismissed. The said order was assailed then through a petition seeking leave to filed in this Court and vide order, dated 7-3-1995 leave was granted to the appellant.
6. On behalf of the appellant, it was vehemently contended that then were entitled to the benefit of the notification issued under the provisions of section 8(1)(b) of the Act and they were also eligible and entitled to adjust the input tax under Notification NO.SRO.1111(1)/90, dated 1-11-1990. y
7. Before proceeding further towards the determination of this controversy, it will be useful to reproduce the definition of the "goods". "input tax", "output tax" and the meaning of the word "supply". The term "goods" has been defined in section 2(12) of the Act, which reads as under:
"Goods includes every kind of movable property other than actionable claim, money, stock, share and security."
Under section 2(14), "input tax" is defined as under:
"Input tax in relation to registered person means the tax---
(a) levied under this Act on the supply of goods received by that person;
(b) levied under this Act on the goods imported, entered and cleared under section 79 or section 104 of the Customs Act by that person;
"Output tax" has been defined in section 2(20) as under
'Output tax', in relation to any registered person, means the tax charged under this Act in respect of a supply of goods made by that person."
In this behalf reference to sections 7 and 8 of the Act would not he out of place, which read as under:
"7. Guidance to Income Tax Officer.---In the course of am' proceedings under this Ordinance, the Income Tax Officer may he assisted, guided or instructed by any other income tax authority W whom he is subordinate or any other person authorised in this behalf by the Central Board of Revenue.
8. Notwithstanding anything contained in this Act, a registered person shall not be entitled to re-claim or deduct the input tax:
(a) the goods used or to be used for any purpose other than for taxable supplies made or to be made by him;
(b) any other goods, which the Federal Government may, by a notification in the official gazette, specify."
8. At this juncture, a reference to Notification No. SRO.II11(1)/90, dated 1-11-1990 will be necessary as it has bearing upon the issue. The said notification reads as under:
"NO.SRO.1111(I)/90.---In exercise of the powers conferred by clause (b) of subsection (1) of section 8 of the Sales Tax (Amendment) Act, 1990, the Federal Government is pleased -to specify that the following goods acquired otherwise than any stock in-trade by a registered person to be the goods in respect of which input tax shall not be claimed, namely,
(i) vehicles;
(ii) building material;
(iii) stationery;
(iv) office equipment, furniture, fixture and furnishing;
(v) electricity and gas pipe appliances."
9. The crucial question arising for determination is whether the accessories and parts, which are required by the appellant for efficient and smooth running of its plant or its upkeep and maintenance fall within the definition of goods or can they be treated as acquisition of plant and machinery. The answer to this question is very simple. Under the notification referred to above, parts and accessories are not included. Even otherwise, by no stretch of imagination, the accessories or spare parts for the running and maintenance of the plant can be equated with the acquisition of machinery and plant. Such accessories and spare parts are imported under a bill of entry, which is cleared by the Customs Department under section 79 or section 104 of the Customs Act and, therefore, not being the plant and machinery itself but being spare parts, under section 7(2)(ii) of the Act the appellants are entitled to deduct the input tax from the output tax. However, as already discussed above, such deduction is not permissible under section 8 if the Federal Government under a notification includes the accessories and spare parts in the goods within the meaning of section 8(1)(b) of the Act.
10. The next important question is what is meant by "stock-in-trade", the term which was used in notification, dated 10-7-1993 issued in suppression of the notification, dated 1-11-1990. The learned counsel for the appellant drew our attention to the dictionary meaning of stock-in-trade:
Black's Law Dictionary:
"The inventory carried by a retail business for sale in the ordinary course of business. Also, the tools and equipment owned and used by a tradesman. "
The Shorter Oxford English Dictionary:
"The goods kept on sale by a dealer, shopkeeper, pedlar. Also, a workman's tools, appliances, or apparatus."
Chambers English Dictionary:
"All the goods a shopkeeper has for sale: standard equipment or devices necessary for a particular trade or profession: a person's basic intellectual and emotional resources (often implying inadequately or triteness."
The Concise Oxford Dictionary of Current English:
" 1. All the requisites of a trade or profession. 2. A ready supply of characteristic phrases, attitudes, etc. "
Webster's Third New International Dictionary:
" 1. The equipment necessary to or used in the conduct of a trade or business: as a: the goods kept for sale by a shopkeeper B: the fittings and appliances of a workman C: the aggregate of things necessary to carry on a business 2. Something held to resemble the standard equipment of a tradesman or business. "
In the absence of the technical definition of "stock-in-trade" by the Legislature in the Act or the Rules framed thereunder, one has to resort to the dictionary meanings and in view of the dictionary meaning referred to above, the accessories and spare parts for the maintenance and running of a plant cannot be termed as stock-in-trade. On the other hand plant and machinery would be construed as stock-in-trade.
11. The perusal of these facts and circumstances also leads us to believe that the extraordinary zeal was being shown by the respondents to somehow charge the appellant company with the amount of deductions made alongwith the additional tax and penalty. In our view, such demand is otherwise than in accordance with law and we cannot also help to observe that such demand', was being made by an impatient department with a view to achieving the target of recovery of revenue and, therefore, in our view the demand was mala fide as well.
12. It was argued on behalf of the respondents that the appellant ought to have recourse to the other remedy provided by law. It was urged that the remedy with the appellant was to invoke the jurisdiction of the Tribunal to be constituted under section 46 of the Act. We have noticed that when this controversy was being agitated in the Balochistan High Court and at the leave granting stage, no such Tribunal had been constituted as envisaged by section 46 of the Act. On the other hand, instead of a Tribunal, a Member of the Central Board of Revenue was performing these functions. In the background of these circumstances, it cannot be said that the appellant had the other adequate remedy. The view point of the Central Board of Revenue had become crystal clear when having opined that the accessories and spare parts were not the goods and the deduction of input tax could be made, yet the Central Board of Revenue in the same breath observed that in the past, such deduction had been made, but that was illegal. In these circumstances, how could a Member in the Central Board of Revenue adjudicate upon the controversy. Thus, we are of the view that remedy by way of an appeal before the Member, Central Board of Revenue was not an adequate remedy as envisaged under Article 199 of the Constitution and, therefore, in our view the writ petition was maintainable. We are fortified in this view by a judgment of this Court reported as M/s. Central Insurance Co. and others v. The Central Board of Revenue, Islamabad and others 1993 SCMR 1232. In this illuminating Judgment Ajma1 Mian, J., as he then was, had observed as under:
"Though the Central Board of Revenue has administrative control over the functionaries discharging their function under the Ordinance, but it does not figure in the hierarchy of the forums provided for adjudication of assessee's liability as to the tax. Any interpretation placed by the Central Board of Revenue, on a statutory provision cannot be treated as a pronouncement by a forum competent to adjudicate upon such a question judicially or quasi judicially. The Central Board of Revenue cannot' issue any administrative direction of the nature, which may interfere with the judicial or quasi judicial functions entrusted to the various functionaries under a statute. The instructions and directions of the Central Board of Revenue are binding on the functionaries discharging their functions under the Ordinance in view of section 8 so long as they are confined to the administrative matter. The interpretation of any provision of the, Ordinance can be rendered judicially by the hierarchy of the forums provided for under the above provisions of the Ordinance, namely, the Income-tax Officer, Appellate Assistant Commissioner, Appellate Tribunal, the High Court and the Supreme Court and not by the Central Board of Revenue. In this view of the matter, the interpretation placed by the Central Board of Revenue on the relevant provisions of the Ordinance in the Circular, can be treated as administrative interpretation and not judicial interpretation.
If there is a departure for the law involved in the provision for relaxation contained in the Circular, then that Circular is to the extent of the deviation, invalid and ineffective, and power thereunder is illegally exercised'."
Reference may also be made to Adamjee Insurance Co. Ltd., Karachi v. The Central Board of Revenue, Islamabad and 3 others 1989 PTD 1090. In this case, the following observations were made:
"Normally a petition under Article 199 of the Constitution will not be entertained by High Court against mere issuance of a notice b5 the authority which is competent under the law to issue the same, if the aggrieved person has a remedy available to him under the relevant statute which is equally efficacious and speedy. However, where it is alleged that the authority which issued the notice lacked ,jurisdiction or where remedy against the order of the authority which issued the notice, is provided under the statute in the hierarchy of department before the authority at whose instruction or behest the proceedings were initiated or where the appellate or revisional authority under the statute has already expressed its views on the controversy which is subject-matter of proceedings, in such cases existence of remedy by way of appeal or revision under the relevant statute will not be considered as a bar for filing of a petition under Article 199 of the Constitution. "
Similar views were expressed in the case decided by this Court reported as A1 Akram Builders (Pvt.) Ltd.. v. Income Tax Appellate Tribunal 1992 PTD 1761, which are as follows:
"The tendency to by-pass the remedy provided under the relevant statute to press into service Constitutional jurisdiction of the High Court has developed lately, which is to be discouraged. However, in certain cases invoking of Constitutional jurisdiction of the High Court instead of availing of remedy provided for under the relevant Statute may be justified, for example when the impugned order/action is palpably without jurisdiction and/or mala fide. To force an aggrieved person in such a case to approach the forum provided under the relevant statute may not be just and proper. "
In M/s. Usmania Glass Sheet Factory Ltd. Chittagong v. Sales Tax Officer PLD 1971 SC 2050, the following observation was made:
"In my opinion, on the facts of the present case, the appellant was entitled to protect itself from the threat of the Department to realise the arrears of sales tax. It is not disputed that the sales tax for the period from March, 1961 to 20th of March 1965, was about Rs.4,00,000, out of it the appellant has failed to pay about Rs.2,00,000. It cannot, therefore, be said that the writ petition was premature to ventilate its grievance against him. The objection of the respondent that the appellant had alternative remedies by departmental means is also not of much substance. It has been held by this Court that in a case where the dispute arises between the parties in respect of a fiscal right based upon a statutory instrument, the same can be easily determined in writ jurisdiction. "
The same view was expressed in the judgment reported as Edulji Dinshaw Ltd. v. Income-tax Officer 1990 PTD 155. Where the action involves fiscal rights on the allegation of misapplication of law or abuse of the power, the Superior Court can step in to examine whether or not the public functionary concerned acted in accordance with the power conferred on him by the statute. In this behalf reliance can be placed upon a judgment of this Court reported as M/s. Julian Hoshang Dinshaw Trust and others v. Income Tax Officer, Circle XVIII South Zone, Karachi and others PTCL 1992 CL. 181. In this judgment reference was also made to the adequate remedy under Article 199 of the Constitution and it was held that in the circumstances of the said case, it was not necessary for the appellants to have travelled through the grooves of the procedure as laid down in the statutes to approach the High Court. Similar is the case in hand. The interpretation made by the Member, Central Board of Revenue cannot be considered as the correct interpretation of law and, therefore, the appellant was justified to invoke the Constitutional jurisdiction.
13. Having come to the conclusion that the accessories and spare parts having not been included by the Federal Government under section 8(2) of the Act, the appellant was entitled to claim adjustment of the input tax and therefore, the impugned show-cause notice issued to the appellant is without lawful authority and jurisdiction. Resultantly, this appeal is allowed and the impugned show-cause notice is hereby declared to have been issued without lawful authority and jurisdiction. The costs to be borne out by the parties.
M.B.A./A-154/SC Appeal allowed.