Appeals Nos.564, 565, 1374 and 1376/LB of 2000, decided on 27th June, 2006. VS Appeals Nos.564, 565, 1374 and 1376/LB of 2000, decided on 27th June, 2006., 2007 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2194 (2006)

(a) Customs Act (IV of 1969)---

----Ss.104, 97 & 86---Stamp Act (II of 1899), S. 40 & Sched.-I, Art.12-B---Punjab Finance Act (IX of 1997), Preamble---Clearance of bonded goods for home-consumption---Appellant failed to pay leviable stamp duty levied under Punjab Finance Act, 1997 on removal of high speed diesel oil from warehousing bond---Appellant was charged with violation of provisions of Ss.86, 97 & 104 of the Customs Act, 1969 read with Punjab Finance Act, 1997 and Article 12-B of Schedule-I of the Stamp Act, 1899 and was directed to pay stamp duty---Validity---Government of the Punjab issued notification dated 1-8-1997, in accordance of which the customs officer concerned was empowered to collect the stamp duty in cash---Punjab Finance Act, 1997 and 12-B of Schedule First of the Stamp Act, 1899 could not be claimed illegal so far as the stamp duty for the relevant period in each case was concerned and any amendment later on would have no retrospective effect---Appellant had to make payment of the stamp duty and fine---Orders were upheld by the Appellate Tribunal and appeals being without merits were dismissed.

(b) Stamp Act (II of 1899)---

----S.40 & Sched.-1, Art.12-B---Punjab Finance Act (IX of 1997), Preamble--When Punjab Finance Act, 1997 was passed by legislature on June 25 of 1997 and assented by the Governor of Punjab on June 27/97 Article 12-B imposing stamp duty on bill of entry was inserted, it was au amendment in the Stamp Act, 1899 which extended to the whole of the Province of Punjab.

(c) Customs Act (IV of 1969)---

----S.2(KKA)---Bill of entry---Status---Instrument or transaction---Levy of stamp duty---Stamp duty is levied on an instrument and not a bargain/transaction---`Instrument' includes every document by which any right or liability is purported to be created, transferred, limited, extended, extinguished or recorded---Bill of entry reflected on the right of a party or showing liability, therefore, it was an instrument on which the stamp duty was to be levied---Recovery of stamp duty out of a bill of entry was a subject which was under the control of i.e. the customs officer.

Hashim Ali for Appellant.

Mehmood Hasan D.R. and Mehmood Ahmad, Appraiser for Respondent.

Date of hearing: 12th June, 2006.

JUDGMENT

MIAN MUHAMMAD JAHANGIER (MEMBER JUDICIAL).---The dispute in Appeals Nas.1374 of 2000, 137G of 2000, 564 of 2000 'and 565/LB of 2000 titled as Shell Pakistan Company Ltd., Muzaffargarh v. The Collector of Customs (Adjudication), Faisalabad/Multan etc., directed against Order-in-Original No. 1-5 of 2000 dated 28-7-2000 and Order-in-Original, No.459 to 463 of 2000 dated 12-10-2000 passed by Collector (Adjudication), Faisalabad Camp at Multan is similar therefore, all these appeals are being disposed of together by this consolidated judgment.

Out of the show-cause notices issued to the appellant, the contents of show-cause notice dated 21-9-1998 excluding the details of stamp duty involved are as under:--

"Whereas it has been reported that the Inspector Customs PARCO Customs Bonded, Warehouse, Gujrat conducted an audit of the relevant records of the Customs Bonded Warehouse PARCO, Gujrat and it was detected that Messrs Shell Pakistan Company Mehmood Kot District Muzaffargarh had removed high speed diesel oil from Messrs PARCO but failed to pay leviable stamp duty levied under Punjab Finance Act, 1997, 12-B of Schedule-I of Stamp Act, 1899.

Now on the basis of above mentioned facts Messrs Shell Pakistan Company, Mehmood Kot, District Muzaffargarh are charged with violation of provisions of sections 86, 97 and 104 of the Customs Act, 1969 read with Punjab Finance Act, 1997 Article 12-B of Schedule-I of Stamp Act, 1899.

Messrs Shell Pakistan Company Mehmood Kot, District Muzaffargarh arc called upon to show cause as to why the above cited stump duty should not be recovered and penal action for violation of above cited provisions of law should not be taken against them.

Hearing in this case has been fixed on 21-10-1998 at 11-00 a.m. on which date and time they or their duly accredited counsel may appear before the undersigned at Custom House, L.M.Q. Road, Multan to defend the case. If no one appears and no written reply to the show-cause notice is received, it will be presumed that they do not want to contest the charges and the case will be decided ex parte on the basis of evidence available on record."

Meaning thereby, as a consequence of the scrutiny of the record the allegation against the appellant was that it removed high speed diesel oil from customs bonded warehouse PARCO Gujrat without payment different amounts of stamp duty as required under Punjab Finance. Act, 1997, 12-B of Schedule-I of Stamp Act 1899, resulting into volition of provision of section 86, 97 and 104 of the Customs Act, 1969.

After hearing both the sides the Adjudicating Authority arrived to this conclusion that the Board of Revenue Government of Pakistan imposed stamp .duty at the rate of 0.5% of C&F value on all bills of entry for POL products w.e.f. 1-7-1997 under section. 40 of the Stamp Act, 1899 vide Memorandum No.544-97/1437 dated 15-7-1997 but the respondent have failed to pay the stamp duty from the very beginning and when now the matter has been finally resolved and no retrospective withdrawal of stamp duty has been granted, therefore, the appellants are directed to pay the amount of stamp duty and in case of violation of the different provisions of law as mentioned above a penalty of Rs.25,000 was unposed under section 156(1) of the Customs Act, 1969 while passing Order-in-Original No. 1-5/2000, even in Order-in-Original No.459-463 of 2000 the, violation of section 156(1) of the Customs Act, 1969 on the part of the appellant was observed, hence these appeals.

While submitting arguments in connection with these appeals the learned counsel for the appellant mainly argued that the Order-in-Original as well as Item No.12-B of the First Schedule of the Stamp Act, 1969 are Illegal and. without lawful authority because under the Constitution of Islamic Republic of Pakistan, 1973 no tax is to be levied for the purposes of the Federation except under Article 22 or under the authority of Act of Majlis-e-Shoora (Parliament) and it is Majlis-e-Shoora, which has to make laws for whole or any part of Pakistan while Provincial Assembly has to make the laws for Province and the Constitution also snakes it clear the Majlis-e-Shoora has exclusive powers to make respect to matters in the Federal legislative list and the Provincial Assembly has power to make laws with respect to any matters in the concurrent legislative list while S. No.49 of the Federal legislative list gives exclusive domains and jurisdiction to the Majlis-e-Shaora to make any law with respect to taxes on sales, purchase and sale of goods imported exported, produced, manufactured or consume, therefore, levy of stamp duty on bill of entry by the Provincial Government through addition Item No.12-B in the First Schedule of Stamp Act, 1899. Further Finance Act, 1997 is illegal and ultra vires the Constitution, meaning thereby the Provincial Government cannot directly or indirectly deal with any matter whether ancillary or incidental to Federal subject, in other words the Provincial Assembly have no authority to levy stamp duty in respect of goods that are importers in Pakistan; that the demand raised under the impugned notice is illegal simply for the reason that the appellant has to pay the stamp duty in cash whereas under the Stamp Act the stamps have to be purchased to be used as and when the occasion arises, therefore, the provincial law being contrary to the federal law is liable to be struck down on this account also; that such-like stamp duty is not payable in other Province, therefore, the direction to pay the stamp duty on bill of entry is an act of discrimination, therefore, the demand of stamp duty in each case is illegal and he addition at Article 12-B in the First Schedule of a Stamp Act, 1899 vide the Punjab Finance Act, 1997 is liable co be declared to be ultra vires the Constitution as well as the Stamp Act, 1899 and the Customs Act, 1969, in other words liable to be struck down as illegal.

On the other hand, the learned D.R. while opposing the arguments submitted by the learned counsel for the appellant, argued that at the relevant time the demand of stamp duty was strictly in accordance with law, therefore, the orders passed by the Adjudicating authorities are in accordance with the law and facts on the record as such call for no interference.

The arguments advanced by both the sides have been taken into consideration very carefully and it appears to us that there is no need of any analysis in detail of the arguments advanced by the learned counsel for the appellant simply for the reason that the Stamp Act, 1899 extends to the whole of Pakistan including its applicability to the Provincially Administered Tribal Area of Chitral, Deer, Kallam, Swat and Malakand or protected area. The Stamp Act, 1899 was amended by the West Pakistan Finance Ordinance, 1969 and later on due to the existing of the four Provinces in Pakistan the amendments in Stamp Act, 1899 were brought, so far as its application to the extent of the Provinces therefore, the amendments made by the Provincial Assembly became part of the Act, however its applicability was to the extent of the Provinces concerned or the tribal area concerned. Since these amendments are brought in the Stamp Act, 1899 which is a central statute, therefore, the shelter under the Islamic Republic Constitution is provided to these amendments, therefore, for this reason when, vide Punjab Finance Act, 1997 passed by Provincial Assembly of Punjab on June 25 of 1997 and assented by the Governor of Punjab on June 27/97 Article 12-B imposing stamp duty on bill of entry was inserted, it was an amendment in the Stamp Act of 1899 which extended to the whole of the Punjab.

The point for determination is as to what is the status of bill of entry either it is an instrument or it is transaction, it is obvious that the stamp duty is levied on an instrument and not on a bargain transaction. The instrument includes every document by which any right or liability is purported to be created, transferred, limited, extended, extinguished or recorded. So far as bill of entry is concerned, it is reelecting on the right of a party or showing liability, therefore, perfectly it is an instrument on which the stamp duty is to be levied. The recovery of stamp duty out of a bill of entry is a subject which is under the control of the officer of the federation i.e. the customs officer. Therefore, the question would arise to how such officer can be directed for recovery of stamp duty in a Province either it is Punjab or any Province.

Section 75 of the Stamp Act of 1899 empowers the Provincial Government to make rules to carry out generally the purposes of this Act i.e. collection of stamp duty. It may be mentioned here that this stamp duty may differ in each Province which cannot be treated as an act of discrimination as the circumstances differ in each Province such as exemptions provided in the tribal areas or backward areas perhaps for this reasons, keeping in view the; provisions of section 75 of the Stamp Act the Government of the Punjab issued notification dated 1-8-1997, in accordance with the customs officer concerned in case of bill of entry is empowered to collect the stamp duty in cash, therefore, so far as the Punjab Finance Act, 1997,. Article 12-B of Schedule First of Stamp Act, 1899 cannot be claimed illegal so far as the stamp duty or the relevant period in each case was concerned and any amendment later on had no retrospective effect. Consequently, the appellants have to make payment of the stamp duty and fine as well as demanded vide orders impugned. The arguments advanced by the learned counsel for the appellant carry no force and the orders impugned call for no interference.

In view of this orders dated 28-7-2000 and 12-10-2000 are upheld and these appeals being without merits are hereby dismissed.

C.M.A./78/Tax (Trib.)Appeals dismissed.