MASTER FOAM (PVT.) LTD. VS FEDERATION OF PAKISTAN
2001 P T D 24
[Supreme Court of Pakistan]
Saiduzzaman Siddiqui, Sh. Ijaz Nisar and Kamal Mansoor Alam, JJ
MESSRS MASTER FOAM (PVT.) LTD. through Iftikhar Khan, Executive Director
versus
FEDERATION OF PAKISTAN through Secretary, Ministry of Finance and Economic Affairs, Islamabad and others
Civil petition for Leave to Appeal No. 1414 of 1998, decided on 04/05/1999.
(On Appeal from the judgment/order, dated 27‑10‑1998, of the Lahore High Court, Lahore passed in Writ Petitions Nos. 14579 and 18667 of 1998.)
Sales Tax Act (IX of 1990)‑‑‑
‑‑‑‑S.3(b)‑‑‑Constitution of Pakistan (1973), Art.185(3) & Federal Legislative List, Item 49‑‑‑Sales tax, recovery of‑‑‑Goods in transit for Azad Jammu and Kashmir‑‑‑Contention by the petitioner was that the provision of. S.3(b) of Sales Tax Act, 1990 was repugnant to Item 49 of the Federal Legislative List of the Constitution and that the provisions of Customs Act, 1969 and the Sales Tax Act, 1990 were not applicable to the territories of Azad Jammu and Kashmir and goods in transit were thus not subject to payment of taxes‑‑‑Leave to appeal was granted to consider the contention by the petitioner.
Raja Muhammad Akram, Advocate Supreme Court with Imtiaz M. Khan, Advocate‑on‑Record for Petitioner.
Mansoor Ahmed, Deputy Attorney‑General for Respondents.
Date of hearing: 4th May, 1999.
ORDER
SH. IJAZ NISAR, J.‑‑‑Leave is sought against the judgment dated 27‑10‑1998, passed by the Lahore High Court, Lahore, whereby it dismissed the Constitutional petition filed by Messrs Master Foam (Pvt.) Ltd., the petitioner herein.
2. The relevant facts are that the petitioner‑company has set up an industrial unit in the Industrial Estate, Mirpur, Azad Jammu and Kashmir and imports various items of raw material for manufacturing foam products. On arrival of the goods at Karachi Port, the petitioner‑company filed Bills of Entry showing that the imported goods were destined for its factory located in Azad Kashmir. Nevertheless, the Customs and Sales Tax Authorities levied duties and taxes thereon.
3. The petitioner‑company challenged the levy of duty and taxes by invoking the Constitutional jurisdiction of the Lahore High Court. The learned Judge in Chambers dismissed the writ petition filed by the petitioner company by means of judgment dated 27‑10‑1998. Hence this petition.
4. It is, inter alia contended that section 3(b) of ‑the Sales Tax Act, 1990, is repugnant to Item No.49 of the Federal Legislative List, and that the Customs Act; 1969, and the Sales Tax. Act, 1990, are not applicable to the territories of Azad Jammu and Kashmir. The goods in transit are not subject to payment of the taxes, it is maintained. Letter dated 30‑5-1997 issued by the Central Board of Revenue (Sales Tax Wing) is also referred to show that the sales tax is not applicable to Azad Jammu and Kashmir.
5. Leave is granted to consider the aforementioned propositions. Meanwhile, the petitioner‑company is directed to deposit the arrears of duties and taxes with the Customs Authorities, if not already done. However, goods imported in future by the petitioner shall be cleared subject to furnishing bank guarantee to the extent of the duties and taxes payable in respect of the same.
Q.M.H./M.A.K./M-196/S
Petition allowed