NAZIR AHMED VS FEDERATION OF PAKISTAN through Secretary, Finance Department Government of Pakistan, Islamabad, 2005 PTD-LAHORE-HIGH-COURT-LAHORE 2128 (2005)

Sales Tax Act (VII of 1990)---

----S. 13---S.R.O. No.555(I)/2002 dated 23-8-2002---Drugs Act (XXXI of 1976), Preamble---Constitution of Pakistan (1973), Arts. 199 & 25---Constitutional petition---Exemption from sales tax---Contention of the petitioner was that adhesive plaster excluded from the exemption, which were retailed by the petitioner, contained pharmacological ingredients applied .to adhesive plaster which ingredients in the form of creams, ointments and gels were granted exemption under S.R.O.555(I)/2002 dated 23-8-2002, and the only apparent basis of exclusion of petitioner's product was because the medicine in question had, for convenience of use been applied to an adhesive plaster which could be used without any further bandage or other cover---Petitioners in circumstances, claimed that he was being discriminated by treating like product differently---Validity---Petitioner had invited the High Court to make a factual assessment about medical properties of the petitioner's product in order to examine the allegation of discrimination---If the allegation that the medical properties of the petitioner's products were the same as other medical products that enjoyed exemption under the said S.R.O., then a case for the intervention of High Court under Article 25 of the Constitution may be made out---Petitioner's grievance could not be adjudicated without a determination about the medical properties and ingredients of its products and whether other products bearing the same properties and ingredients were enjoying the exemption as prayed by the petitioner---For that purpose the matter had to be considered, dealt with and determined in the first instance by the concerned Authorities---High Court, in circumstances, directed that the Central Board of Revenue shall consider and determine the claim of the petitioner that its product contained the ingredients and properties which had been granted exemption under S.R.O. 555(I)/2002 when sold in the form of creams, ointments and gels---If the claim of the petitioner was found to be true, Central Board of Revenue shall set out the grounds, if any for excluding. the products of the petitioner on the basis of their form of use as adhesive plaster rather than other criteria including their pharmacological substance--Central Board of Revenue was directed to grant a hearing to petitioner for determination of the question involved which shall be made by a reasoned order within a period of three months from the date of present judgment.

Muhammad Zikria Sheikh for Appellant.

Malik Pervez Akhtar, Dy. A.-G. for Federation and Syed Tahir Abbas Naqvi for Respondent No.4.

Date of hearing: 26th April, 2005.

JUDGMENT

This petition challenges the exclusion of certain medical products sold by the petitioner from the exemption of sales tax granted under S.R.O. No.555(I)/2002, dated 23-8-2002. The said notification gives exemption to all products registered under the Drugs Act, 1976 but excludes from the exemption a number of registered drugs without showing any apparent basis for their exclusion.' Learned counsel for the petitioner states that, adhesive plaster excluded from the exemption, which are retailed by the petitioner, contain pharmacological ingredients applied to adhesive plaster which ingredients in the form of creams, ointments and gels, are granted exemption under the aforesaid S.R.O. Accordingly it is stated that the only apparent basis of exclusion of petitioner's product is because the medicines in question have for convenience of use been applied to an adhesive plaster which can be used without any further bandage or other cover. On this reasoning, the learned counsel submits that the respondents have committed discrimination by treating like product differently.

2. On the other hand, learned counsel for the respondent has explained that it is medicine which enjoy the benefit of exemption and that the petitioner's products are not such medicines whatsoever description may now be attributed to them.

3. It is quite clear that his petition invites the Court to make a factual assessment about medical properties of the petitioner's product in order to examine the allegation of discrimination. If the allegation that the medical properties of the petitioner's produce are the same as other medical products that enjoy exemption under S.R.O. No.555(I)/2002 then a case for the intervention of this Court under Article 25 of the Constitution may be made out. The petitioner's grievance cannot be adjudicated without a determination about the medical properties and ingredients of its products and whether other products bearing the same properties and ingredients are enjoying the exemption prayed by the petitioner. For this purpose the matter has to be considered, dealt with and determined in the first instance by the respondent- Authorities.

4. It is accordingly directed that respondent No.2 shall consider and determine the claim of the petitioner that its products contain the ingredients and properties which have been granted exemption under S.R.O. No. 555(I)/2002 when sold in the form of creams, ointments and gels. In case such a claim is true respondent No.2 shall set out the grounds, if any for excluding the products of the petitioner on the basis of their form of use as adhesive plaster rather than other criteria including there pharmacological substance. The petitioner shall be granted a hearing in the determination of the foregoing question which shall be made by a reasoned order within a period of three months from the date of this order.

5. With the above observation, the writ petition is disposed of.

M.B.A./N-51/LOrder accordingly.