(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Constitutional jurisdiction of High Court, exercise of‑‑ Scope‑‑‑Neither any clog nor any fetter is placed on jurisdiction of High Court but the same is regulated by the Court itself by establishing proper rules for administration of justice‑‑‑Where there is jurisdiction it has to be exercised discreetly and with judicious approach.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Constitutional petition‑‑‑Maintainability‑‑‑Fiscal controversies‑‑‑Resolving of such controversies through Constitutional petitions‑‑‑Validity and propriety‑‑‑An invariably complete statutory hierarchy is made available for proper adjudication of controversies relating to fiscal matters in fiscal statutes‑‑‑Such controversies are brought before High Court through tax references on appeals arising out from the order of the Tribunal on question of law‑‑‑Various judicial forums are established under the statutes and such statutory arrangement is backed by public policy which also provides forums having requisite expertise in the domain of fiscal laws‑‑‑Filing of Constitutional petitions to seek resolution of fiscal controversies deprecated.

Messrs Noorani Cotton Corporation v. Sales Tax Officer and others PLD 1965 SC 161 ref.

(c) Sales Tax Act (VII of 1990)‑‑‑

‑‑‑‑S.45(3)‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Maintainability‑‑‑Withdrawal of appeal‑‑‑Petitioner filed appeal before the Collector of Appeals Sales Tax and subsequently withdrew the same‑‑‑Validity‑‑‑High Court did not approve such act of the petitioner whereby he opted to withdraw the appeal in the midst of the proceedings at his sweet-will and switched over to the Constitutional jurisdiction‑‑ High Court following the principle, laid down by Supreme Court in Al-Ahram Builders' case, reported as 993 SCMR 29, found the petition not maintainable.

Al‑Ahram Builders v. Federation of Pakistan 1993 SCMR 29 fol.

(d) Sales Tax Act (VII of 1990)‑‑‑

‑‑‑‑S.2(16)‑‑‑Terms "manufacture" or "produce"‑‑‑Defined‑‑‑Terms "manufacture" or "produce" include any process in which an article singly or in combination with‑'other articles, materials, components, is either converted into another distinct article or product or is so changed, transformed or reshaped that it becomes capable, of being put to use differently or distinctively and includes any process incidental or ancillary to the completion of a manufactured product‑‑‑Transformation of original produce which results into something different from the original existence capable of being sold as a material commodity having different character which is not always necessary in component and which should be adjudged from the angle of its utilization, intended for the new use which may be altogether different from previous one, amounts to manufacturing or production.

(e) Sales Tax Act (VII of 1990)‑‑‑

‑‑‑‑S.3‑‑‑Constitution of Pakistan (1973), . Art.199‑‑‑Constitutional petition‑‑‑Sales, tax, levy of‑‑‑Principles‑‑‑Petitioner's grievance was with regard to levy of sales tax on lime stone and clay which was being excavated from its leased site for manufacturing of cement‑‑‑Validity‑‑‑Lime stone and clay were taxable goods as the process of excavation involved digging and crushing of big and huge rocks into smaller and transportable goods‑‑‑Lime stone and clay were intermediary produce for the petitioner which was manufactured/produced during the process of excavation and it was in furtherance of taxable activity, therefore, it was liable to sales tax under S.3 of the Sales Tax Act, 1990‑‑‑Lime stone and clay were identifiable/marketable goods on which tax could be levied, therefore, once a taxable goods had been supplied by a person to itself, the same would fall within the definition of "taxable supply"‑‑‑Whether the sale had taken place or not between two persons but the fact remains that the excavation and bringing lime stone and clay to factory constituted a taxable supply during the process of taxable activity‑‑ Taxable activity covered any form of those taxable activities which were even carried on by one person for his own business‑‑‑ High Court declined to interfere with the demand of sales tax raised by the Authorities‑‑‑Constitutional petition was dismissed in circumstances.

Messrs Noorani Cotton Corporation v. Sales Tax Officer and others PLD 1965 SC 161; Zila Council, Jhang v. Daewoo Corporation 2002 SCMR 1012 and Sheikou Sugar Mills Limited v. Government of Pakistan 2001 SCMR 1376 ref.

Talib Haider Rizvi for Appellant.

A. Karim Malik for Respondents.

Date of hearing: 16th October, 2001.

JUDGMENT

This writ petition is directed against the order in original, dated 6‑3‑2000 passed by the Additional Collector, Sales Tax, Rawalpindi. Also the show‑cause notice, dated 14‑12‑1999 is assailed through the present petition.

2. Brief facts of the case are that the petitioner company is running a Cement Factory and has also been granted mining lease for excavation of lime stone and clay for utilizing the same for manufacturing of Cement at its plant. The Additional Collector Sales Tax, Rawalpindi observed that the petitioner has failed to pay sales tax during the years 1998 and 1999 on self‑consumed (self‑produced) lime stone weighing 775882 metric ton and clay weighing 181878 metric tons valuing at Rs.3,37,81,902 and Rs.20,58,859 and thus committed a violation of the provisions of sections 2(33), 2(41), 3,6,22,23,24 and 34 of the Sales Tax Act, 1990. Accordingly a show‑cause notice, dated 14‑12‑1999. was served upon the petitioner by the Additional Collector, Sales Tax, Rawalpindi to explain as why not penalty prescribed under the relevant provisions be imposed upon the petitioner and the sale tax/additional tax be recovered from the petitioner.

3. The petitioner submitted a reply to the show‑cause notice and inter alia pleaded that the sales tax is leviable on taxable supplies made by a registered person and not on the consumption of raw material by the manufacturer. It was further contended in the reply that the lime stone consumed by the petitioner does not fall in the definition of the term `manufacture' or `produce' under section 2(16) of the Sales Tax Act, 1990 and the consumption of the lime stone and clay for the production of cement is not a supply or taxable supply as defined in sections 2(33) and 2(41) of the Act. It was contended that the petitioner is not a registered person and that the C.B.R. in 1954 through their Letter No.9(54)/S‑T/51, dated 17‑2‑1954 had already decided that the excavation of lime stone and clay or gypsum is not to be treated as manufacturing, therefore, according to the petitioner it was not subject to sales tax.

4. The Additional Collector Sales Tax, Rawalpindi respondent No. l after hearing the petitioner and the department passed a detailed order in original, dated 6‑3‑2000 and held that the demand raised against the petitioner is in accordance with law and was ordered to be enforced under sections 2(17), 2(33), 2(41), 3, 6, 22,.23, 26 and 34 of the Sales Tax Act, 1990 and directed the petitioner to pay evaded amount of sales tax of Rs.44,80,095 alongwith additional tax under section 34 of the Act within fifteen days of the issuance of the order..

5. On receipt of order in original the petitioner filed an appeal before the Collector (Appeals) Sales Tax Rawalpindi on 25‑3‑2000. The petitioner received notice, dated 24‑4‑2000 from the Collector of Appeals to deposit the adjudged liability first otherwise the appeal of the petitioner was liable to rejection in terms of section 45(3) of the Sales Tax Act, 1990. The petitioner instead of depositing the adjudged amount withdrew the appeal and filed the present writ petition assailing the show‑cause notice as well as the order in original, dated 6‑3‑2000.

6. The learned counsel appearing for' the parties argued at length at the limine stage as such, this writ petition is admitted to regular hearing and decided accordingly.

7. It is argued by the learned counsel for the petitioner that in the special circumstances as given in the petition and re‑capitulated herein before, the petitioner is left with no remedy except to invoke the Constitutional jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973.' Advancing his argument, the learned counsel maintained that the show‑cause notice as well as the order in original was patently without jurisdiction for the reasons that the excavation of lime stone and clay consumed by the petitioner does not fall within the definition of manufacture of produce under section 2(16) of the Sales Tax Act, 1990 and consumption of the same is neither a supply for a taxable supply.

8. The learned counsel appearing for the respondent Revenue at the outset challenged the maintainability of the writ petition. Further, it was argued on behalf of the respondent excavation of lime stone and clay constitute a taxable activity and the Additional Collector Sales Tax while passing the order, dated 6‑3‑2000 dealt with in detail with all pleas of the petitioner and decided according to law. '

9. Firstly I would deal with the question of maintainability of the writ petition. I The learned counsel relying on the judgment in case titled Messrs Noorani Cotton Corporation v. Sales Tax Officer and others PLD 1965 SC 161 argued that if the order is palpably without jurisdiction and against the law the jurisdiction of this Court under Article 199 is always available. No doubt regarding the jurisdiction of this Court. under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, neither there is any clog nor there is any fetter placed on it but the jurisdiction is regulated by the Court itself in establishing proper rules for administration of justice. Although there may be jurisdiction but it is exercised discreetly and with judicious approach. In this behalf principles enunciated by the apex Court are also illuminating. In fiscal statutes invariably a complete statutory hierarchy is made available for proper adjudication of controversy relating to fiscal matters. Controversies pertaining to the disputes under fiscal statutes are brought before the High Court through tax references or appeals arising out from the order of the Tribunal on question of law. Various judicial forums are established under these statutes including the Sales Tax Act. This statutory arrangement is backed by the public policy and also to provide forums having requisite expertise in the domain of fiscal laws. Filing of writ petitions to seek the resolution of fiscal controversies was not approved by the Supreme Court and deprecated this practice. Journey in time led to evolving principles to exercise jurisdiction under Article 199 in fiscal matters. In case of Al‑Ahrarn Builders v. Federation of Pakistan .reported as 1993 SCMR 29, the Supreme Court enunciated the principle that once a party opts to invoke the 'remedy provided for under the relevant statute, he could not at this sweet‑will switch over to the Constitutional jurisdiction of the High Court in the midst of the proceedings in the absence of any compelling and justifiably reasons. In the same judgment the tendency to by‑pass the statutory forum provided under the relevant statute and approach directly to the High Court invoking the Constitutional jurisdiction was deprecated. In the instant case the petitioner filed an appeal from the order in original before the Collector of Appeals Sales Tax, Rawalpindi and subsequently he withdrew the same. I do not approve this act of the petitioner whereby he opted to withdraw the petition in the midst of the proceedings at his sweet‑will to switch over to the. Constitutional jurisdiction.

10. The petitioner defending is act sought support from the provisions of section 45(3) of the Sales Tax Act, 1990 and argued that compelling reasons for withdrawal of appeal from the Collector of Appeals were that the petitioner was required to deposit the adjudged amount. Under sub‑clause (3) of section 45 as it existed at the relevant time the appeal of petitioner could only be adjudicated after the deposit of adjudged amount. I am afraid that this plea of the petitioner has no substance for the reason that neither he has challenged the provisions of section 45(3) of the Sales Tax Act as those existed at the relevant time nor in the grounds of appeal any such plea was raised nor the notice, dated 24‑4‑2000 asking the, petitioner to deposit the adjudged liability was challenged.

11. Following the principle laid down by the Supreme Court in Al- Ahram Builders's case, I maintain and hold that the writ petition filed by the petitioner is not maintainable. As the learned counsel for the petitioner argued at length on merits I am, therefore, inclined to decide the issues raised by the petitioner on merits also.

12. Section 3 of the Sales Tax Act, 1990 provides that sales tax shall be charged, levied and paid at the rate of fifteen per cent. (15 %) of the value of‑‑‑‑

(a) taxable supplies made in Pakistan by a registered person in the course or furtherance of any taxably activity carried on by him; and

(b) goods imported into Pakistan.

Under sub‑clause (1‑A) of section 3 it is further provided that if taxable supplies are made in Pakistan other than the registered person a further tax at the rate of 3% of the value shall be levied. Section 2(41) of the Sales Tax Act, defines taxable supplies means a supply of taxable good's made in Pakistan by an importer, manufacturer, wholesaler (including dealer), distributor or retailer other than a supply of goods which is exempt under section 13 and includes a supply of goods chargeable to tax at the rate of zero per cent under section 4. Under sub‑clause (39) taxable goods means all goods other than those which have been exempted under section 13. ,

13. Sub‑clause (35) provides that taxable activity means any activity which is carried on by any person, whether or not for a pecuniary profit and involves in whole or in part, the supply of goods to any other person, whether for any consideration or otherwise, and includes any activity carried on in the form of a business, trade or manufacture.

14. Two reasons were advanced by the petitioner .in support of his case. According to the petitioner the lime stone and clay was excavated from the leased area and it was transported to plant of the factory where it was used as component raw material, for production of cement. The petitioner plea is that mere excavation of lime stone and clay was neither production or manufacturing, therefore, the provisions of Sales Tax Act were not attracted to. The argument of the petitioner is not well‑founded because sub‑clause (16) of section 2 defines manufacture or produce which includes any process in which an article singly or in combination with other articles, materials, components, is either converted into another distinct article or product or is so changed, transformed or reshaped that it becomes capable of being put to use differently or distinctly and includes any process incidental or ancillary to the completion of a manufactured product. Transformation in original produce which results into something different from the original existence capable of being sold as a material commodity having different character which is not always necessary in component and which should be adjudged from the angle of its utilization, intended to new use which may be altogether different from previous one amounts .to manufacturing of production. ‑In interpreting different provisions of sales tax referred to hereinbefore, I seek guidance from two illuminating judgments of the Supreme Court of Pakistan in case titled Zila Council Jhang v. Daewoo Corporation reported as 2001 SCMR 1012 and Sheikoo Sugar Mills Limited v. Government of Pakistan reported as 2001 SCMR 1376.

15. The lime stone and clay which is excavated by the petitioner from its leased site is taxable goods 'by itself and the process of excavation involved digging and crushing of big ,and huge rocks into smaller and transportable goods. For the petitioner the lime stone and clay is an intermediary produce which is manufactured/produced during the process of excavation and it is in furtherance of taxable activity, therefore, it is liable to sale tax under section 3 of the Act. Lime stone and clay is an identifiable/marketable goods on which tax can be levied, therefore, once a taxable goods has been supplied by a person to itself same would fall within the definition of taxable supply. Notwithstanding the fact whether the sale has taken place or not between two persons but the fact remains that the excavation and bringing the lime stone and clay to the factory constitute a taxable supply during the process of taxable activity. Taxable activity covers any form of those taxable activity which is even carried on by one person for his own business. Accordingly there raised by the petitioner. Resultantly the writ petition is dismissed.

Q.M.H./M.A.K./F-85/L Petition dismissed.