SUPER INDUSTRIES (PVT.) LTD VS CENTRAL BOARD OF REVENUE, 2002 PTD-KARACHI-HIGH-COURT-SINDH 955 (2001)

(a) Sales Tax Act (VII of 1990)---

----Ss. 3, 13(1), 33, 34 & 36---Customs Act (IV of 1969), First Sched.-- S.R.O. 555(1)/94, dated 9-6-1994---S.R.O. 672(1)/94, dated 3-7-1994--- Constitution of Pakistan (1973), Art. 199---Constitutional petition' Petitioners were engaged in manufacturing Brake Linings Sets and Brake Lining Rolls---Such goods prior to 3-7-1994 were subject to payment of sales tax, but were exempted from tax after amendment of S.R.O. 555(1)/94 vide S.R.O. 672(1)/94---Petitioners then continued to file monthly return of goods manufactured and authority allowed such exemption---Authority subsequently demanded sales tax on the ground that such goods were neither `components' nor `auto-parts' qualifying exemption under Serial Nos. 93 and 94 of S.R.O. 555(1)/94---Validity-- Dispute under consideration had arisen because of slackness on the part of legislative draftsman---Federal Government vide S.R.O. 555(1)/94 granted exemption to supplies falling under heading numbers of the First Sched. to Customs Act, 1969 and specified in the table given in S.R.O.- While inserting Serial Nos.93 and, 94 in subsequent S.R.O. 672(1)/94, heading numbers of First Sched. to Customs Act as given in original notification were not specified---If heading numbers of First Sched. to Customs Act would (lave been specified against .Serial Nos.93 and 94 under which petitioner had claimed exemption as required in- original notification under S.R.O.. 555(1)/94, then there would have been no controversy between tax-prayer and tax collector---Revenue had treated the Brake Lining in Rolls as an auto-part during the tax period i.e. before grant of exemption and after withdrawal of exemption-- -While adhering to the principle of consistency, department should have treated such product as an auto-part . during the tax exemption period as well---Constitutional petition was accepted in circumstances.

(b) Legislation---

---- Fiscal .and tax laws, drafting of---Every law particularly the law pertaining to fiscal matters and taxes are required to be unambiguous and clear--;Lacunas in drafting of such law may have far-reaching effect-- Draftsman concerned with such legislation should draft all such laws very meticulously, lacuna free and with utmost clarity and exactitude.

(c) Legislation---

---- Notifications pertaining to tax, drafting of---Central Board of Revenue/Revenue Division and Ministry of Finance must be more careful in drafting notifications containing chargeability of any tax or granting exemption from payment of any tax, as the same would certainly reduce the difference of opinion between tax-payer and tax collector.

(d) Sales tax---

---- Revenue could not be allowed shifting of versions in respect of same product with mere change in -law pertaining to taxability thereof.

(e) Sales tax---

----Revenue should be consistent in its practice and version--=Where an assessee .or a product is given a particular treatment over course of a long period, then Revenue should continue the same, even if the assessee or product is allowed any exemption/benefit or there is any enhancement or reduction In the rate of tax.

(f) Sales tax-----

-----Assessee should know his status or the character and status of his product vis-a-vis the chargeability of tax---Revenue should not be allowed to take inconsistent and changing version for indiscipline in realm of taxation is always injurious and hazardoul to the health of economy, industry and business.

Muhammad Ali Sayeed for Petitioner.

Nemo for Respondents.

Date of hearing: 31st October; 2001.

JUDGMENT

MUHAMMAD MUJEEBULLAH' SIDDIQUI, J.---In this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, the following reliefs have been sought:

"(i) Petitioners pray that this Hon'ble Court may be pleased to hold and to declare that brake lining in rolls is a component of automotive vehicles and an automotive part and that the said brake lining rolls are exempted. from Sales Tax by reason of S.R.O. 555(1)/94, dated 9-6-1994 read with S.R.O. 672(1)/94, dated 3-7-1994.

(ii) Petitioners further pray for an order directed to the respondents and each of them and all those claiming through or under them to forbear from demanding, collecting or taking any step in the demand or collection of Sales Tax on brake lining rolls..

2. Briefly stated the relevant facts are that the petitioners are a Private Limited Company and are engaged in the business of manufacturing auto-parts used in the motor cars, trucks, motor-cycles, tractors, scooters and all other sorts of vehicles and automotives. More precisely the petitioners are engaged in manufacturing the brake linings in sets and in rolls. Prior to 3-7-1994, the brake linings manufactured by the petitioners were subject to payment of Sales Tax. On 3-7-1994, S.R.O. No.555(I)/94, dated 9-6-1994 was amended by S.R.O. 672(1)/94 whereby serial Nos.93 and 94 were added which are as follows:

"93. Parts and components of motorcycles, scooters, auto rickshaws, motor cars and agricultural tractors:

Parts and accessories of bus and truck engines and chassis

S.R,O. 555(1)/94, dated 9th June, 1994 as amended by S.R.O. 672(1)/94, dated 3rd July, 1994 was issued by the Federal Government in exercise of the powers conferred on it under subsection (1) of section 13 of the Sales Tax Act, 1990, thereby granting exemption to supplies made by producer or manufacturer of goods produced or manufactured in Pakistan, falling under, heading numbers of the First Schedule to the Customs Act,. 1969 from the whole of the sales tax leviable thereon. Consequent to the above exemption the petitioners stopped paying sales tax on the supply of brake linings (both sets and rolls). The petitioners continued to file Monthly Return of goods manufactured in Forms R.T.I., in the office of respondent No.3 who entertained and allowed the exemption. However, on 24-7-1995 the respondent No.3 issued a show- cause notice which reads as follows:

"Whereas, it has been reported to the undersigned on an information that Messrs Super Industries (Pvt.) Limited, Hub, a unit manufacturer of Brake Linings and Roll Brake Linings are supplying the said goods without payment of sales tax in terms of serial Nos.93 and 94 of S.R.O. 555(1)/94, dated 9-6-1994 as amended vide S.R.O. 672(1)/94, dated 3-7-1994. The staff of Directorate of Intelligence and Investigation, Customs and Central Excise, Karachi visited the said unit on 6-5-1995. The Intelligence staff checked their records which revealed that the said unit had stopped the payment of sales tax on Brake Lining and Roll Brake Lining with effect from July,' 1994 on the basis of aforesaid exemption with the contention that the parts and components of motor cars and agriculture tractors and parts and accessories of Bus and Truck Engines and Chassis have been granted exemption vide aforesaid notifications. The Brake, Lining falls under PCT Heading No.87.08 whereas the Roll Brake, which is used, for the manufacture of Brake Lining shoes does not come within the scope of exemption under the said notifications. Secondly the Roll Lining which is 25 feet long in size cannot be termed as parts and components and accessories of motor cars, agriculture tractors, bus acid truck engines ind chassis. Apparently the subject Roll Brake Lining does not qualify for exemption from the payment of sales tax under the aforesaid sales tax notifications.

2. During the period from July 1994 to April 1995, they have supplied Roll Brake Lining of different width valuing Rs.48,59,448 involving sales tax amounting to Rs.7,28;917.20.

3.- They have, thus violated the provisions of section 3 of the Sales Tax Act, 1990 and. have exposed themselves liable for penal action under section 33 (ibid). The sales tax amounting to Rs.7,28,917.20 involved in the Roll Brake Lining supplied by them during the aforesaid period are recoverable from them under section 36 of the said Act alongwith the additional tax Rs.7,62,503.63 and surcharge Rs.38,612.27 under , section 34 (ibid).

4. They are, therefore, called upon to show cause within 10 days from the receipt of this show-cause notice, as to why the sales tax amounting to Rs.7,28,917.20 should not be recovered from them under section 36 of the Sales flax Act; 1990 alongwith the additional tax Rs.7,62,503.63 and surcharge Rs.38,612.27 under section 34 (ibid).

5. Hearing in the case has been fixed on 20-8-1995 at 11-00 a.m. in the office of the undersigned situated at Customs House Building Hub. If no reply is received within the stipulated period or nobody appeared for hearing, the case will be decided ex pane on the merit of case and no further hearing will be given.

(Sd.)

(Khan Sarwar),

Deputy Collector Sales Tax, Hub."

3. The petitioners submitted reply to the show-cause notice denying the allegations contained in the notice. It was asserted that the Brake Linings or Roll Brake Linings do not fall under P.C.T. heading No.87-08 as alleged in the notice but they fall under P.T.C. heading Nos.6813.1000 and 6813.9000. -It was explained that P.T.C. heading No.87.08 also covers the parts of automotive vehicles in general but under rule 3(a) of the Rules of Interpretation of the Pakistan Customs Tariff, specific heading number has preference over a general heading number. In support of 'its contention a Bill of Entry filed by another importer namely, Messrs Aftab Trading Co. relating to Brake Lining Rolls & Pads for motor vehicles was produced. The said Bill of .Entry showed that the Brake Lining Rolls & Pads were for motor vehicles, meaning that they were components of the automotive vehicles. A certificate from Pakistan Automobile Spare Parts Importers and Dealers Association, Karachi, dated 17th August, 1995, was also enclosed. It was contended that although P.C.T. heading No.87.08 referred to in the show-cause notice was erroneous but still it goes to move that the goods manufactured by the petitioner were part of automotive vehicles in general. It was further maintained that-the products in question were components of automotive braking system and it was proved from the definition of the terms `component' given by the C.B.R. in Customs General Order No.8/95, dated 14th June, 1995. In the said C.G.O. the term raw materials and sub-components and component were defined by the C.B.R. in order to resolve the disputes between the-importers and Customs Authorities while applying the concessionary, notifications. The term component has been defined as follows:---

`Component' means a complete machined part of a system, not normally useful by itself and not amenable' to further disassembly."

4. It was further contended that the C.B.R. has also treated Brake Linings and Brake Lining Rolls as one and the same thing, vide Final Certificate C. No.1(93)S&R-Z/90, dated 4th August, 1991. In Annexure `A' to this Certificate issued in favour of petitioner, the type of unit was described as "Auto Parts" and the description of the articles manufactured by the unit 'was given as Automotive Brake Lining and Role Brake Linings. In this Annexure the capacity utilization was also shown in terms of pcs of Brake Lining sets and Braking Lining Roll of, 25 feet and the raw material components of each one of them was also shown. The peti4ioner took plea that the Certificate issued by the C.B.R. and more particularly Annexure `A' with the Certificate, settled the issues. As the C.B.R has not only recognized the Roll Brake Lining as an Auto Part, but has also fixed its length as 25 feet. The petitioner then explained that the brake lining for motor-vehicle is made in two forms, viz. in Sets and in Rolls. While the Brake. Linings Sets are made in specified dimensions (standard sizes), in the form of segments, blocks, discs or pads for use in specific vehicles, while the Brake Linings Roll is made in length of various width and thickness for use after cutting in desired size in vehicles like motorcycles, scooters, rickshaws, motor cars, tractors, light trucks and light buses, because these vehicles have different size brake-drums and different shapes and curvatures No further processing or treatment of the Roll is necessary before using it and, thereby, neither the characteristics is changed nor the end use. Once manufactured, Brake Lining Roll is not amenable to disassembly.

5. Finally it was contended that, since parts and components of various, automotive vehicles were allowed exemption from sales tax, with effect from 3-7=1994, vide serial Nos.93 and 94 of S.R.O. 555(1)/94, dated 9-6-1994 as amended vide S.R.O. 672(1)/94, dated 3-7-1994, therefore, the products manufactured by the respondents being Brake Linings Sets and Brake Lining Rolls enjoy sales tax exemption.

6. It was further explained that the Reporting Officer was not correct in saying that "Roll Brake" is used for the manufacture of Brake Lining Shoes. According to petitioners there was no term like "Brake Lining Shoes" in the trade or industry. There is a term "Brake Shoes" which is made of metal, but the respondents do not manufacture Brake Shoes. It was further explained that, the Reporting Officer has further fell in error in reporting that "lining which is 25 feet long in size cannot be termed as parts and components and accessories of motor cars, agriculture tractors, bus and truck engine and chassis". According to petitioners, the factual position is that it is made in length according to the requirement of the trade so that it could be used after cutting the same to desired size depending upon the size of the brake-drum of the vehicle. But it does not make any difference. The Roll is used, part by part, as component of automotive vehicles braking system. It cannot be used for any purpose other than brake lining.

7. In the end, it was informed that there is one other manufacturer of Brake Lining Rolls in Pakistan, besides the petitioners namely, Messrs Hafiz Vanqua of Kamoki in the Punjab, who is also not paying sales tax on the said product claiming the similar exemption as claimed by the petitioners.

8. The respondent No.3 in his order dated 20-1-1996 made the following observations:

"(i) the contention of the respondents regarding classification of the impugned goods viz. Roll Brake Linings is factually correct and the same have wrongly been stated in the Notice to fall under P.C.T. heading 87.08. In fact the Detecting Officer in their report have specified these goods to fall out of the purview of heading 87.08 and rather classifiable under heading 68.13:

(ii) regarding qualification of the impugned , goods as `Components' in terms of the definition thereof given in the Customs General Order No.8/95, dated 14-6-1995 an examination clearly reveals that the goods in `rolls' are not `components' because of the fact that these are simply quite amenable to further disassembly;,

(iii) it is true that C.B.R. vide its Survey Certificate issued for concession of duty/tax had stated the finished goods as Brake Lining Sets and Brake Lining Sets Rolls separately as the unit quantity of raw materials required for the manufacture of each is different, even a few of the five raw-materials in each case listed therein are different. As such the respondents are patently incorrect to draw a conclusion on this account that the Board has recognized Roll Brake Lining as an Auto-part;

(iv) there is no dispute as to the usage and description of the impugned goods narrated at sub-para. V. of para. (2) above but the goods, as these are supplied by the respondents, can be and are cut to the various sizes as and when required, therefore, the same are not the Component or auto-parts qualifying exemption under items 93 and 94 of S.R.O. 555/(1)/94, dated 9-6-1994; and .

(v) the respondents are correct in stating sub-para. (vii), of para. (2) above refers; that roll brake lining is not used in the manufacture of 'brake shoes'. The show-cause notice in these many words has incorrectly stated the same but nevertheless this statement does not in any manner bestow any exemption on the Rolls of Brake Lining from the payment of sales tax."

9. On the basis of above observations the respondent No.3 concluded that the impugned goods were neither 'components' nor auto parts and were chargeable to sales tax. He directed the petitioner to pay sales tax amounting to Rs.7,28,917.20 on manufacture and supply of brake lining rolls for the period from July, 1994 to April 1995. He further held that the failure to pay the sales tax was not the result of inadvertence but was a wilful act to avoid payment of tax and therefore, the provisions of subsection (1) of section 36 of the Sales Tax Act, 1990 were attracted, therefore, the petitioner was liable to pay additional tax amounting to Rs.7,62,503.63 and surcharge in the , sum of Rs.2,51,684.41 calculated up to January, 1996 under section 34 of the Sales Tax Act. He however, observed that, taking lenient view no penalty shall be imposed and a warning was given to the petitioner to be careful in future and avoid default in payment of sales tax.

10. The petitioner, feeling aggrieved preferred appeal before the respondent No.2, agitating the same points as raised before the respondent No.3. It was contended that the Pakistan Automobile Spare Parts Dealers Imports and Exports Association, Karachi, has also certified that Brake Lining Roll was an auto-part. It was further contended that the respondent No.3 has accepted the classification of the product under P.T.C. heading 68.13., however, he has not accepted it as a part or component of motor vehicles although the Customs Authorities also regard the same as auto-parts. It was argued that the respondent No.3 has ignored the practical phenomenon of "assembly" "disassembly". It was urged that while "assembly" is the together of manufactured parts to make a complete product "disassembly" would be its reverse process i.e. taking apart assembled components. The petitioner maintained that the Brake in Roll has no components or manufactured parts assembled together. It is a homogenous article made from asbestos and other chemicals like resins etc. It can be cut into pieces but not disassembled, meaning thereby, that the raw material of which the Brake Lining Roll is made of, cannot be separated and cutting is not disassembling and thus, the Brake Lining Roll shall constitute a component of motor vehicles, in terms of C.G.O. 8/95. It was submitted that respondent No.3 after observing that there is no dispute as to the usage and description of the impugned goods narrated at sub-para. (v) of para. 2 in his order,, fell in error -in concluding that the goods under consideration are cut to the various sizes as and when required, therefore, the same are not the Component or Auto-Parts qualifying exemption under items 93 and 94 of S.R.O. 555(1)/94, dated 9-6-1994. At this stage, it would be appropriate to reproduce the contents of para.2(v) of the order of the respondent No.2 which reads as follows:

"(v) that the brake-lining for motor-vehicle is made in two forms viz. in Sets and in Rolls. While the Brake Linings Sets are made in specified dimensions (standard sizes), in the form of segments, blocks, discs or pads for use in specific vehicles, the Brake Linings Roll is made in length of various widths and thicknesses for use after cutting in desired size in vehicles like motorcycles, scooters, rickshaws motor-cars, tractors, light trucks and light buses because these vehicles have different size brake-drums and different shapes and curvatures. No further processing or treatment of the Roll is necessary before use and, thereby, neither the characteristic is changed nor the end use. Once manufactured, Brake Lining Roll is not amenable to dis-assembly."

It was further pointed out that the C.B.R. in his final Survey Certificate has specified the Brake Lining Sets and Brake Lining Rolls as auto-parts and, therefore, the respondent No.3 was not justified in accepting Brake Lining Sets as auto-parts while refusing to accept the Brake Lining Rolls as auto-parts or component. It was further submitted that the description and characteristic of both is same, the usage of both is same, the tariff classification of both is same, the main ingredient or raw material is same, the S.R.O. for import of raw materials on concessionary rate for both is same and the C.B.R.. holds both at par and thus, the view taken by respondent No.3 was arbitrary. It was also pleaded that the petitioner was paying sales tax on both the products as auto-parts since 1987 to July, 1994 under C.E. Licence issued for auto-parts. The Sales Tax Department also allowed exemption for one and half year treating both the products as auto-parts and therefore, there was no justification in changing description and characteristic of one product merely with the change of tax status.

11. The copy of memo. of appeal was forwarded by the respondent No.2 to respondent No.3 and the parawise comments were filed. It was averred in para. 3 of comments that, basically the brake roll linings are the raw material of the components and auto-parts. The respondent No.2 in the order dated 8-4-1996 upheld the contention of department that "Brake Lining in Roll" at the time of supply from the manufacturer's premises was neither a component nor the auto-part of the automotive vehicles and thus, did not quality for exemption under S.R.O. 555(1)/94, dated 9-6-1994. He, however, held that since no other manufacturer has paid sales tax during the relevant period, therefore, the case falls within section 65 of the Sales Tax Act, 1990 and this question needs to be re examined by respondent No.3 after making necessary enquiries into the matter. He remanded the case to respondent No.2 with the direction that propriety or otherwise of the relief under section 65 may be determined on merits in accordance with law.

12. Being still feeling aggrieved, the petitioner has filed this petition contending that section 65 of the Sales Tax Act, deals with the cases in which tax ought to have been charged but had not been charged in any area or any supply or was charged to amount less than the amount that should have been actually charged, through inadvertence or as a matter of general public practice, and in such cases, the registered persons should start paying the tax from. the date when it was found that the supply was chargeable to tax. In such case, ,the Federal Government may, by a notification in the Official Gazette, direct that the tax not levied or short levied as a result of that inadvertent practice, shall not be required to be paid for the period prior to the discovery of such inadvertent practice. The petitioners have contended that their case is that no sale tax was required to be paid and the non-payment of tax was not on account of inadvertence or general practice but because of the fact that brake lining in roll is and has at all material times conclusively been considered as a component of auto-motive vehicles in different forms and that a brake lining, merely by the incident of its manufacture in the form of a roll, does not and cannot alter its basic character of being a brake

13. We have heard Mr. Muhammad Ali Sayeed, learned counsel for the petitioners: None appeared for the respondents.

14. Mr. Muhammad Ali Sayeed, has submitted that the petitioner was licensed for manufacture of auto-parts. He has contended that the petitioner is admittedly manufacturing Brake Lining Sets and Brake Lining in Rolls. The respondent No.1 has fixed the length of roll at 25 feet each. According to him the petitioner was always liable to pay sales tax on the above products as auto-motive parts. Prior to 3-7-1994, when exemption was granted to parts and components of motorcycles, scooters, auto rickshaws, motor-cars and agricultural tractors and parts and accessories of bus and truck engines, the sales tax department was charging tax on both the products as auto-motive parts. After grant of exemption under Notification No. S.R.O. 555(1)/94, dated 9-6-1994 as amended by S.R.O. No.672(I)/94, dated 3-7-1994, the petitioner stopped paying sales tax but continued to file the return claiming exemption. The exemption claimed was allowed. He has further stated that after the exemption was withdrawn, the petitioner has again started paying sales tax on Brake Lining Sets as well as Brake Lining in Rolls declaring , as auto-parts and the sales tax department is charging the sales tax accordingly. He has maintained that the exemption was granted to parts and components of motorcycle etc., and according to him the components are part of a part, while the sales tax department has not shown that Brake Lining in Rolls which is used by merely cutting it into pieces is part of any other part of any auto-motive. He has vehemently argued that it is a clear case of highhandedness and arbitrary interpretation on the part of Revenue. Elaborating his contention, he has submitted that before the grant of exemption and after withdrawal of exemption the Revenue is treating the Brake Lining in Roll as an auto part and the C.B.R. in its certificate which is not .denied by the respondents Nos.2 and 3 has described the petitioner as a unit manufacturing auto-parts and has further certified that the petitioner is manufacturing auto-motive Brake Lining and Roll Brake Lining only. According to the learned counsel, it is not comprehended as to how the nature and description of product is changed with mere change in the incident and status of chargeability of the tax. He has pointed out that when it was a question of collecting tax and no exemption was involved the Revenue was treating Brake Lining Rolls to be auto-part but when the question of exemption arose it dawned on the mind of department after one and half years and allowing exemption that the product has changed its character. Mr. Muhammad Ali Sayeed, has produced a challan bearing authorization of the third respondent's department wherein tax was paid on Brake Lining Rolls as an auto-part. He has submitted that the petitioner has large number of such challans wherein the same character of the Brake Lining has been described. He has vehemently argued that the Revenue cannot be allowed to take a somersault and change its continuous version and consistent practice with mere change in the taxability of a product.

15. We have very carefully considered the contentions raised by Mr. Muhammad Ali Sayeed and have examined the entire material placed on record.

16. We are persuaded to agree with the contentions of Mr. Muhammad Ali Sayeed, that the Revenue cannot be allowed the A shifting of versions in respect of the same product with mere change in the law pertaining to the taxability of a product. One of the cardinal principle of tax law is that the Revenue should be consistent in its practice and version. If an assessee or a product is given a particular treatment over course of along period then the Revenue should continue the same even if the assessee or the product is allowed any exemption/benefit or there is any enhancement or reduction in the rate of tax. There is another cardinal principle of the law of taxation that an assessee should know his status or tile character and status of his product, viz-a-viz, the charge-ability of the tax. The Revenue should not be allowed to take inconsistent and changing version, as, such indiscipline in realm of taxation is always injurious and hazardous to the health of economy, industry and business. We are, therefore, persuaded to agree with the contentions of Mr. Muhammad Ali Sayeed that the Revenue cannot be allowed to resort to inconsistent practices merely with. the change in the chargeability or exemption of a tax.

17. After a very careful examination of entire material placed on record, we would further like to make a very pertinent observation. Every law and particularly the law pertaining to the fiscal maters and' taxes are required to be unambiguous and clear. The lacunas in the drafting of fiscal and tax laws may have for-reaching effect, and therefore, the draftsman concerned with such legislation, should draft all such laws very meticulously, lacuna free and with utmost clarity and exactitude. We have found that the dispute under consideration in this petition has arisen because of slackness on the part of draftsman. p perusal of Notification No.S.R.O. 555(1)/94, dated 9-6-1994 shows that the Federal Government granted exemption to supplies made by the producer or manufacturer of goods produced or manufactured in Pakistan, falling under the heading numbers of the First Schedule to the Customs Act, 1969, specified in the table given in the S.R.O. A perusai of the table shows that the heading numbers of the First Schedule to the Customs Act, (Pakistan Customs Tariff) have been specified against each item to which exemption was granted by the original notification. However, in some of the subsequent notifications the heading numbers of the First Schedule to the Customs Act were not specified. For example Serial Nos.78(a) to 78(c) were inserted by S.R.O. 1107(1)/94, dated 14th November, 1994, 'and against all these serial numbers the heading numbers of the First Schedule to the Customs Act were not specified. Likewise, Serial Nos.93 and 94 which have given rise to the present petition were inserted by S.R.O. 672(1)/94, dated 3rd July, 1994 and the heading numbers of the First Schedule to the Customs Act have not been specified. If the heading numbers of the First Schedule to the Customs Act, 1969 would have been specified against serial Nos.93 and 94 under which the petitioner has claimed exemption, as required in the original Notification under S.R.O. 555(1)/94, dated 9-6-1994, there would have been no controversy between the tax payer and the tax collectors. We can only hope that the C.B.R./Revenue Division and the Ministry of Finance shall be more careful in drafting the notifications, containing chargeability of any tax or granting exemption from payment of any tax. This would certainly reduce the difference of opinion between the taxpayer and the tax collector.

18. Consequence to the discussion as above, we are of the firm view that the Revenue has treated the Brake Lining in Rolls as an auto-part during the tax period i.e. before the grant of exemption and after the withdrawal of exemption. Adhering to the principle of consistency the respondents should treat the said product as an auto-part during the tax exemption period as well. Consequent to the above finding the petitioner is allowed as prayed.

After hearing the petition on 31-10-2001, it was allowed by short order. These are the detailed reasons in support thereof.

S.A.K./S-173/K Petition allowed