2005 P T D 719

[Karachi High Court]

Before Sabihuddin Ahmed and Khilji Arif Hussain, JJ

I.C.I. PAKISTAN LTD.

versus

PAKISTAN. through Secretary to the Government of Pakistan, Ministry of Finance and 3 others

Constitution Petition No. 1454 of 1999, decided‑ on 7th December, 2004.

Central Excises Act (I of 1944)‑‑‑

‑‑‑‑S.7‑‑‑Indirect taxes‑‑‑Where the burden is passed on to the consumers, the assessee collects the duty as agent of the Government or defrays it on behalf of the actual consumer and only such consumer is entitled to claim refund ‑‑‑Assessee having failed to show that he had borne the burden of tax and not passed it on to the consumers, his Constitutional petition was dismissed‑‑‑Constitution of Pakistan (1973), Art. 199.

Collector of Central Excise and Sales Tax v. Rupali Polyester Ltd. 2002 SCMR 738; Sajjad Nabi Dar and Co. v. The Commissioner of Income Tax, Rawalpindi Zone, Rawalpindi PLD 1977 SC 437 and Federation of Pakistan v. Metropolitan Steel Corporation 2002 PTD 87 ref.

S.I.H. Zaidi for Petitioner.

Faisal Arab, Standing Counsel and Raja Muhammad Iqbal for Respondents.

ORDER

The petitioner appears to be aggrieved by the order for refund of sales tax (which was found not leviable) on the ground of being barred by the period of limitation prescribed under rule 11 of the Central Excise Rules. Mr: Zaidi, learned counsel for the petitioner, contended that there was no error or inadvertence involved and in fact the amount claimed by way of sales*tax was paid under compulsion, as such the provisions of the aforesaid rule are not attracted. Indeed there seems to be some force in the contention, however, Mr. Raja Muhammad Iqbal, learned counsel for the respondents, has referred to a pronouncement of the Hon'ble Supreme Court in Collector of Central Excise and Sales Tax v. Rupali Polyester Ltd. .(2002 SCMR 738), to the effect that since the petitioner had already passed on the burden of central excise duty and sales tax to the consumers, he was not entitled to claim refund.

Mr. Zaidi attempted to distinguish this judgment by contending that the same was premised upon section 3‑D of the Central Excise Act, which was enacted in 1993 and did not exist at the time when refund, was claimed. We have gone through the aforesaid judgment and found that no reference to the above provision is contained therein. On the other hand, their Lordships have relied upon an earlier judgment of the apex Court in Sajjad Nabi Dar and Co. v. The Commissioner of Income Tax, Rawalpindi Zone, Rawalpindi (PLD 1977 SC 437). In the aforesaid case it was held that in cases of indirect taxes were the burden is passed on to the consumers, the assessee collects the sales tax as agent of the Government or defrays it on behalf of the actual consumer and only such consumer is entitled to claim refund. This decision took place when the Sales Tax Act, 1951 was in force and has also been followed by a Division Bench of this Court in Federation of Pakistan v. Metropolitan Steel Corporation 2002 PTD 87.

The petitioner has not been able to show that he had borne the burden of tax and not passed it on to the consumers. The petitioner is, therefore, dismissed.

M.B.A./I‑102/K Petition dismissed.