COLLECTOR OF SALES TAX AND CENTRAL EXCISE, LAHORE VS PATTOKI SUGAR MILLS LTD, 2008 PTD-LAHORE-HIGH-COURT-LAHORE 1289 (2006)

Sales Tax Act (VII of 1990)---

---Ss. 2(46) & 47---S.R.O. 751(I) 2000, dated 21-10-2000---Conferring retrospective benefit of fixed value of locally produced sugar---Notification in question had expressly conferred on assessee retrospective benefit of fixed value of locally produced sugar through a lawful and valid exercise of delegated legislative power---Such retrospective conferment of a benefit had created vested rights in the assessees, which were rightly acknowledged and affirmed.

Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652 rel.

Ijaz Ahmad Awan for Appellant.

Sh. Izhar-ul-Haq for Respondent.

ORDER

UMAR ATA BANDIAL, J.---These connected appeals bearing Nos.332, 333, 342 and 360 of 2001 were decided by this Court vide judgment, dated 3-12-2003. Against the judgment, the respondents in these appeals, Collector of Sales Tax and Central Excise, Lahore and others filed C.Ps. Nos.558-L to 560-L and 1011-L to 1013-L of 2004 wherein the Honourable Supreme Court of Pakistan passed judgment, dated 4-8-2004 sending the matter for our re-consideration in the following terms:---

"After hearing learned counsel for the parties and having gone through the impugned judgment as well as the judgment relied upon by the learned counsel for the petitioner, we are of the opinion that in view of the facts and circumstances of the case, it was incumbent upon the learned High Court to dispose of the matter by interpreting S.R.Os. Nos.751 and, 752(I)/2000 for the purpose of granting relief, by delivering a speaking judgment as it has been held in the case of Mollah Ejahar Ali (ibid.).

Thus for the foregoing reasons, with the consent of both the parties impugned judgment, dated 3rd December, 2003 is set aside and cases are remanded to the learned High Court for disposal of Civil Appeals, which have been filed by the respondents in view of the observation made herein above."

2. Learned counsel for the respondent customs authorities was invited to explain his case in the light of the observations made by the Honourable Supreme Court. These observations envisage in principle the correct legal interpretation of S.R.O. 751(I)/2000 and S.R.O. 752(I)/2000 to be made through a speaking order in order to decide the relief if any to be granted in the case. He has raised only one point for our consideration. This is to the effect that S.R.O. 751(I)/2000, dated 20-10-2000eand S.R.O. 752(I)/2000 also, dated 21-10-2000 are not liable to be given retrospective effect. For facility of reference, these two S.R.Os. are reproduced bellow:---

"S.R.O. 751(I)/2000, dated 21st October, 2000.---In exercise of the powers conferred by the first proviso to clause (46) of section 2 of the Sales Tax Act, 1990, the Central Board of Revenue is pleased to direct that the following further amendment shall be made in its Notification No.S.R.O. 207(I)/98, dated the 31st March, 1998, namely:---

In the aforesaid Notification, after the word "January" the commas 'and words, "February, March, April, May, June, July, August, September and October" shall be inserted."

"S.R.O. 752(I)/2000, dated 21st October, 2000.---In exercise of the powers conferred by the first proviso to clause (46) of section 2 of the Sales Tax Act, 1990, the Central Board of Revenue is pleased to rescind its Notification No. S.R.O. 207(I)/98, dated the 31st March, 1998, with effect from, the Ist day of November, 2000."

3. To appreciate the effect of the foregoing notifications it is appropriate that the parent S.R.O. 207(I)/98 in which the said changes have been incorporated is also reproduced for consideration:---

"S.R.O. 207(I)/98, dated 31st March, 1998.---In exercise of the powers conferred by the first proviso to subsection (46) of section 2 of the Sales Tax Act, 1990, the Central Board of Revenue is pleased to fix the value of the taxable supply of locally produced sugar, falling under headings Nos.1701.1100 and 1701.1200 of the First Schedule to the Customs Act, 1969 (No. IV of 1969), at Rs.13 per Kilogram for the supplies made during the month of April, 1998."

4. From a reading of the foregoing notification, it is immediately apparent that these fix the value of taxable supplies of locally produced sugar made during specific periods. Accordingly, S.R.O. 751(I)/2000, dated 21-10-2000 extends the value fixed under S.R.O.207(I)/1998 to taxable supplies made the period from February till October, 2000. For the intervening period between May, 1998 until January, 2000 there are other S.R.O's. that extend the application of the S.R.O. 207(I)/98 fixed values to such period. Simultaneously with S.R.O.751(I)/2000, another notification bearing S.R.O. 752(I)/2000, dated 21-10-2000 has rescinded S.R.O. 207(I)/1998, dated 31-3-1998 with effect from 1-11-2000. Consequently, the joint effect of the two S.R.Os. issued on 21-10-2000 is to extend the benefit of fixed value of taxable supplies of sugar under S.R.O. 207(I)/1998 until October, 2000 but thereafter to terminate such benefit expressly with effect from 1-11-2000.

5. The objection by the learned counsel for the respondent revenue authorities is that notwithstanding its express terms S.R.O. 751(I)/2000 cannot be given effect for a period prior to the date of its enforcement namely 21-10-2000. In other words, the said S.R.O. is prospective in effect. The position taken by the learned counsel for the department would be valid if S.R.O. 751(I)/2000 purported to impair vested rights. That is not the case here. This notification expressly confers beneficial rights on assessees for a past period and the questions only whether the respondents are competent to do so. This question was examined and answered by the Honourable Supreme Court in the case of Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652 wherein it was observed that there is nothing to prevent the revenue from conferring an advantage/or benefit retrospectively on its assessee. Therefore, a beneficial notification can lawfully, have retrospective effect.

6. In the present case the notification bearing S.R.O. 751(I)/2000, dated 21,-10-2000 expressly confers on the appellants the retrospective benefit of fixed value of locally produced sugar through a lawful and valid exercise of delegated legislative power. Consequently, such retrospective conferment of a benefit creates vested rights in the appellants, which were rightly acknowledged and affirmed by this Court in its judgment of 4-12-2003 earlier passed in these appeals.

7. As no other question has been raised before us, therefore, we affirm the view taken in the earlier judgment, dated 4-12-2003 in these appeals and allow them in the same terms as expressed in the said judgment.

H.B.T./C-29/LOrder accordingly.