(On appeal from the judgment dated 16-11-2001 passed by the Lahore High Court, Lahore in Writ Petition No. 18286 of 2001).

(a) Income Tax Ordinance (XXXI of 1979)---

----S. 30(c)---Sales tax paid on imported goods---Inclusion of amount of sales tax towards income of importer---Validity---Such amount could not be deemed to be income of importer, thus, could not be subjected to payment of income tax.

Messrs Ramma Pipe and General Mills (Pvt.) Limited v. The Federation of Pakistan 1994 PTD 848 approved.

(b) Income Tax Ordinance (XXXI of 1979)---

----S. 30(c)---Constitution of Pakistan (1973), Arts. 185(3) & 199-- Imported goods---Collection of income tax by Collector of Customs after making assessment on basis of Bill of Entry including customs duty and sales tax---High Court excluded customs duty and sales tax while assessing income of importer for income-tax purposes---Petition for leave to appeal by Collector of Customs against impugned order---Maintainability---Income Tax Department though party in the Constitutional petition before High Court, had not filed petition for leave to appeal---Collector of Customs, though party in Constitutional petition, had neither contested matter nor appeared nor filed any comments before High Court---Customs Authorities were merely collectors of ,fax on behalf of Income Tax Department---Supreme Court dismissed petition and refused leave to appeal.

Messrs Ramma Pipe and General Mills (Pvt.) Limited v. The Federation of Pakistan 1994 PTD 848 approved.

Ahmer Bilal Sofi Advocate Supreme Court with Mian Ata-ur- Rehman, Advocate-on-Record for Petitioner.

M. Shahzad Shoukat, Advocate Supreme Court with Tanvir Ahmed, Advocate-on-Record for Respondents.

Date of hearing: 6th July, 2004.

JUDGMENT

SARDAR MUHAMMAD RAZA KHAN, J.---Deputy Collector of Customs, Railway Station Lahore seeks leave to appeal against the judgment dated 16-11-2001 passed by a learned Single Judge of Lahore High Court whereby the writ petition filed by the respondents was accepted, holding, the inclusion of sales tax was not valid.

2. Briefly, the respondents imported sugar and had filed bill of entry. When the consignment reaches the port, the Customs Authorities are authorized under the law to collect income tax as well. While collecting the income tax, the Collector made the assessment on the basis of the bill of entry plus the customs duty plus the sales tax. The importer was of the view that the sales tax and the customs duty could not be included towards the income of the importer and that the same be excluded while assessing the income and levying the tax thereon.

3. The writ petition aforesaid of the respondents, through the impugned order, was decided by the learned Judge on the basis of earlier judgment delivered by the High Court in Messrs Ramma Pipe and General Mills (Pvt.) Limited v. The Federation of Pakistan (1994 PTD 848).

4. The perusal of record and specifically the judgment referred to above would indicate that Mr. Muhammad Ilyas Khan, learned counsel appearing for Income Tax Department under the instructions from the Department had conceded that while charging income tax under section 30-C of the Income Tax Ordinance, 1979 the amount paid as sales tax cannot be deemed to be the income of the petitioner and thus cannot be subjected to payment of income- tax. The circumstances of such case were similar to those of the present case and hence the High Court rightly placed reliance on 1994 PTD 848.

5. In the instant case the Authorities of. Customs Department are merely collectors of tax on behalf of the Income Tax Department. The Income Tax Department has not filed any petition against the impugned judgment despite the fact that it was a party in the writ petition and was represented by the same learned counsel Mr. Muhammad Ilyas Khan, Advocate. The Collector of Customs though a party in the writ petition and never contested the matter, had never appeared and had never filed any comments.

6. In the circumstances, the petition is hereby dismissed and leave to appeal refused.

S.A.K./D-13/SC Leave refused.