COLLECTOR OF CENTRAL EXCISE AND SALES TAX, LAHORE VS ABDULLAH SUGAR MILLS LTD, 2008 PTD-LAHORE-HIGH-COURT-LAHORE 894 (2006)

Sales Tax Act (VII of 1990)---

---Ss.7, 11 & 47---Reference to High Court---Determination of tax liability---Issues raised in the appeals, were recently considered by a Division Bench of the High Court---High Court on consideration of different S.R.Os. issued by the Central Board of Revenue fixing price of sugar, had concluded that notification had expressly conferred beneficial rights on assessee for a past period and the only question involved was whether the department was competent to do so---Such question was examined and answered by the Supreme Court in the case 1992 SCMR 1632 wherein it was observed that nothing being to prevent the Revenue from conferring an advantage or benefit retrospectively on its assessee, a beneficial notification could lawfully have a retrospective effect---Appeal filed by registered person/the taxpayer was allowed and dismissed the departmental appeal.

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

Ijaz Ahmad Awan for Appellant.

A. Karim Malik for Respondent.

Date of hearing: 14th December, 2006.

JUDGMENT

NASIM SIKANDAR, J.---These cross appeals under section 47 of the Sales Tax Act, 1990 seek to challenge an order of the Customs, Excise Sales Tax Appellate Tribunal Bench-II, Lahore, dated 9-2-2002.

2. Heard the learned counsel for the parties. It is not disputed that the issues raised in these appeals were recently considered by a Division Bench of this Court comprising our brothers Umar Ata Bandial and Sh. Azmat Saeed, JJ. Their Lordships on consideration of the different S.R.Os. issued by the Central Board of Revenue fixing price of sugar for the purpose of assessment to Sales Tax concluded as under:---

"Para-4. From a reading of the foregoing notifications 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 in the period from February till October, 2000. For the intervening period between May, 1998 until January, 2000 there are other S.R.Os. that extend the application of 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 Simultaneously with S.R.O. 751(I)/2000, another notification bearing S.R.O. 752(I)/2000, dated 21-10-2000 has rescinded S.R.O. 207(I)/1998, dated 31-3-1998 with effect from 1-11-2000.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.

Para-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 question is 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.

Para-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 in these appeals.

3. Being in respectful agreement with the reasons as well the conclusion arrived at by their Lordships we will allow the appeal filed by the registered person/the taxpayer and dismiss the departmental appeal c (C.A. No.189/2002).

Assessee's appeal accepted/Department's appeal dismissed.

H.B.T./C-26/LOrder accordingly.