WORLDCALL TELECOM LIMITED VS FEDERATION OF PAKISTAN through Secretary, (Revenue Division) Islamabad
2011 PTD 39
[Karachi High Court]
Before Muhammad Athar Saeed and Munib Akhtar, JJ
WORLDCALL TELECOM LIMITED through Chief Operating Officer
Versus
FEDERATION OF PAKISTAN through Secretary, (Revenue Division) Islamabad and 3 others
Constitutional Petition No.D-1975 and Miscellaneous No. 7976 of 2010, decided on 25/08/2010.
Customs Act (IV of 1969)---
----S. 59---S. R. O. 575(I)/2006, dated 5-6-2006, Sr. No.16---Constitution of Pakistan (1973), Art.199---Constitutional petition--Exemption, claim for---Petitioner who was importer of communication equipment, claimed exemption on his consignment under Serial No.16 of notification dated 5-6-2006---Federal Government, under said notification had exempted plant, machinery and equipment and apparatus, including capital goods from so much of the customs duty specified in the First Schedule in Column No.4 of notification---Counsel for the petitioner had stated that communication equipment imported by the petitioner had been included in said Schedule---Serial No.16 of the impugned notification did not place any restriction on the exemption provided to machinery, equipment and other capital goods for service sectors---Letter, wherein the exemption was refused by the authorities, for the reason that it was subscriber equipment, could not be sustained which was not based on proper reading of notification, but conditions which had not been prescribed in the said notification, had been read into the said notification by the authorities---No Authority was entitled to put words in a notification, which were not there---Subject equipment imported by the petitioner, fell within the ambit of Serial No.16 of the notification---Petitioner, in circumstances fully qualified for the exemption granted under the Notification S.R.O. 575(I)/2006, dated 5-6-2006.
Mian Abdul Ghaffar for Petitioner.
Zain A. Jatoi for Respondents.
Mian Khan Malik Deputy Attorney-General for the Federation of Pakistan.
ORDER
MUHAMMAD ATHAR SAEED, J.---This petition has been filed seeking the following reliefs:
(a)Declare that the letter dated 1-4-2010 issued by the respondent No.1 is unlawful, without jurisdiction and of no legal effect.
(b)Declare that notice dated 27-5-2010 issued by respondent No.4 on the basis of letter dated 1-4-2010 aforementioned is void, illegal, without juriscfiction and of no legal effect.
(c)Declare that equipment imported by the petitioner falls within the ambit of Serial-16 of S.R.O. 575(I)/2006 dated 5-6-2006 and, thus, entitled to the exemption granted there-under by the Federal Government.
2. Brief facts of the case are that the petitioner is an importer of communication equipment which according to him is exempt under Serial No.16 of S.R.O. 575(I)/2006, dated 5-6-2006. The petitioner claimed such exemption on his consignment but the respondents vide their letter dated 1-4-2010 held that since the Wireless Indoor CPE Units imported by the petitioner were Consumer Premises Equipment (CPE), being subscriber equipment therefore it was not entitled to the benefit of serial No.16 on S.R.O. 575(I)/2006 dated 5-6-2006. It is against this' treatment that this petition has been filed.
3. We have heard Mr. Abdul Ghaffar the learned counsel for the petitioner and Mr. Zain A. Jatoi the learned counsel for the respondent and have perused the records with their assistance.
4. Mr. Abdul Ghaffar has drawn my attention to the provisions of preamble of the subject Notification to point out that it has been stated therein that the Federal Government was pleased to exempt plant machinery and equipment and apparatus, including capital goods from so much of the customs duty specified in the First Schedule in Column No.4 thereof and the whole of sales tax leviable under the Sales Tax Act 1990 subject to certain conditions.
5. He took us to Serial No.16 to show that communication equipment also has been included in this schedule and stated that it is an admitted fact that the equipment imported by him is communication equipment used for providing wireless internet services. He stated that the equipment in question is consumer premises equipment but has been installed at the consumer premises for the purpose of providing the internet services and has not been sold to the consumer but the ownership remains with the petitioner i.e. the importer. In this connection he drew our attention to the terms and conditions prescribed in the application to be made by the customers for provision of 'these services and pointed out sub-condition (a) of condition 2 in which it is categorically stated that all and any customer equipment supplied to the customer shall remain the property of WTL and all customer equipments shall be returned to WTL on termination of this contract and WTL shall return any security deposit if applicable, to the customer after making due deductions. The learned counsel also drew our attention to sub-clause (ii) of the impugned Notification wherein it has been mentioned that except for certain serial numbers including Serial No.16, in which the equipment imported by the petitioner falls, for exemption under all other serial numbers the Chief Executive or the person next in hierarchy duly authorized by the Chief Executive of the importing company shall certify in the prescribed manner and format that the imported items are for the company's bona fide requirement. He also drew our attention to the explanation to clauses (i), (ii) and (iii) wherein in sub-clause (c) the service sectors listed at Serial No.16 have been especially mentioned and it has been specified that these service sectors include the .items mentioned at Serial No. (a) above. He therefore prayed that the prayers made by him should be allowed and it should be declared that he falls within the exemption prescribed in Serial No.16 and the letter dated 1-4-2010 issued by the respondent should be declared of no legal effect.
6. The arguments of the learned counsel for the petitioner have been strongly opposed by the learned counsel for the respondent who submitted that the equipment in question is actually sold to the subscriber and tried to persuade us on the basis of his argument by quoting various charges which are being received by the petitioner.
7. We have examined the. case in the light of our above arguments of the learned counsel and perused the relevant Notifications and the terms and conditions prescribed in application form and we are of the considered opinion that Serial No.16 of the impugned Notification does not place any restriction on the exemption provided to machinery, equipment and other capital goods for service sectors mentioned below therein if any such equipment is necessary for providing the services which that particular sector provides then it is entitled to exemption without any restriction. We are also of the considered opinion that the equipment imported by the petitioner falls within the communication equipment for providing internet services to the subscriber and as per the terms and conditions of the contract the equipment though installed at the subscriber premises still belong to the petitioner and on the conclusion of the contract the petitioner that is the service provider has got the right to repossess the equipment.
8. In view of our above opinion, the letter dated 1-4-2010 wherein the exemption was refused allegedly for the reason that it was subscriber equipment cannot be sustained. This, in our view, is not based on proper reading of the Notification but conditions which have not been prescribed in the said Notification have been read into the said Notification by the respondent and the respondents or for that matter any other authority is not entitled to put words in a Notification which are not there. We are therefore of the opinion that the subject equipment imported by the petitioner falls within the ambit of Serial No.16 of S.R.O. No.575(I)/2006 dated 5-6-2006 and thus the petitioner fully qualifies for the exemption granted thereunder.
9. The above are the reasons in support of our short order which we had passed in Court after hearing the learned counsel today wherein we had allowed the petition and had declared that the equipment imported by the petitioner which is the subject-matter of the dispute falls within the ambit of Serial No.16 of S.R.O. 575(I)/2006, dated 5-6-2006.
H.B.T./W-6/KPetition allowed.