Collector, Central Excise And Sales Tax, Collectorate Of Central Excise And Land Custom, Karachi And Another vs Dewan Textile Mills Limited And Other
This matter arises from a petition for leave to appeal filed against the judgment of the Sindh High Court, which allowed a constitutional petition impugning a notice of demand for sales tax on the import of steel drums by the respondent textile mills. The core legal questions involve whether the respondent mills were entitled to sales tax exemption despite its withdrawal when the consignment landed after supersession of the relevant S.R.O., and whether the constitutional petition was maintainable without exhausting alternative departmental remedies under the Sales Tax Act, 1990. The Supreme Court granted leave to appeal to examine these questions, noting that the precedent relied upon by the High Court had been set aside in review, and that related proceedings and legislative measures were ongoing. The court held that leave to appeal should be granted to thoroughly examine the tax exemption and alternative remedy issues.
- Whether the respondent-Mills were entitled to the exemption of sales tax on the import of consignment, despite the withdrawal of the exemption, in view of the fact that the consignment landed at the port of Karachi after the supersession of S.R.O. 500(I)/88?
- Whether the respondent-Mills could maintain Constitutional petition before the High Court without exhausting departmental remedies before the sales tax hierarchy under the provisions of Sales Tax Act, 1990?
- Sales Tax Act, 1990
ORDER
MR. JUSTICE RANA BHAGWANDAS.-(1). Leave to appeal is sought against the Sindh High Court, judgment, dated 13-2-2002 allowing Constitutional petition filed by the respondent No. 1 impugning the vires of notice of demand of sales tax on the import of steel drums for respondent-Textile Mills.
2. Case of the writ petitioner was that though S.R.O. 500(I)/88, dated 26-6-1988 allowing exemption from payment of sales tax had been superseded by S.R.O. 554(I)/94, dated 9-6-1994 withdrawing exemption, from whole of the sales tax,, letter of credit was opened on 29-3-1994, the fact remains that the consignment landed at the port of Karachi on 26-6-1994 i.e. After the withdrawal of the exemption from payment of sales tax. It appears that the High Court was impressed by the judgment of this Court in Fecto Belarus Tractors Ltd. v. Federation of Pakistan (Sindh Baluchistan Law Reports 200I SC 109). This judgment was the subject matter of review petition before this Court and has been set aside vide precedent reported as Pakistan v. Fecto Belarus Tractors Ltd. (PLD 2000 SC 208). It is stated at the Bar that the judgment in the review case is again sub judice before this Court in another proceeding and Legislature has taken steps to undo the effect of this judgment.
3. In the peculiar facts and circumstances of the case, we are inclined to grant leave to examine, inter alia, the following questions:-
(i) Whether the respondent-Mills were entitled to the exemption of sales tax on the import of consignment, despite the withdrawal of the exemption, in view of the fact that the consignment landed at the port of Karachi after the supersession of S.R.O. 500(I)/88?
Whether the respondent-Mills could maintain Constitutional petition before the High Court without exhausting departmental remedies before the sales tax hierarchy under the provisions of Sales Tax Act, 1990?