COLLECTOR, CENTRAL EXCISE AND SALES TAX, COLLECTORATE OF CENTRAL
This matter concerns a petition for leave to appeal against a judgment of the Sindh High Court, which had allowed a constitutional petition filed by a textile mill challenging a sales tax demand notice on imported steel drums. The core dispute centers on whether the respondent-mills were entitled to sales tax exemption under S.R.O. No. 500(I)/88, despite the issuance of S.R.O. No. 554(I)/94, which withdrew such exemptions, given that the consignment arrived at the port after the withdrawal date. The High Court had relied on a precedent that was subsequently set aside by the Supreme Court in review proceedings. The Supreme Court, noting the complexity and the conflicting judicial history regarding the applicability of tax exemptions upon the withdrawal of S.R.O.s, granted leave to appeal. The Court specifically identified the need to examine whether the respondent could bypass departmental remedies under the Sales Tax Act, 1990, by invoking the High Court's constitutional jurisdiction, and whether the exemption remained valid despite the supersession of the relevant S.R.O. prior to the consignment's arrival.
- Whether an importer is entitled to sales tax exemption if the consignment arrives after the withdrawal of the relevant S.R.O. but the letter of credit was opened prior to such withdrawal?
- Can a constitutional petition be maintained before the High Court when the petitioner has failed to exhaust departmental remedies provided under the Sales Tax Act, 1990?
- Sales Tax Act, 1990
ORDER
' RANA BHAGWANDAS, J.---Leave to appeal is sought against the Sind 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petitioner was that though S.R.O.No,500(I)/88, dated 26-6-1988 allowing exemption from payment of sales tax had been superseded by S.R.O. No,554(I)/94, dated 9-6-1994 withdrawing exemption, from whole of the sales tax, letter of credit was opened on 29-3-1994, the fact remains that the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 Facto Belarus Tractors Ltd. v. Federation of Pakistan Sindh Balochistan Law Reports 2001 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. Facto 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(1)/88.
(ii) 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?
Leave to accordingly.