INDUS TRADING AND CONTACTING CO., KARACHI vs COLLECTOR OF CUSTOMS
This petition for leave to appeal challenges a judgment of the Sindh High Court concerning the imposition of regulatory duty on imported goods. The core legal question is whether goods that are entirely exempt from customs duty or imported duty-free can be subjected to regulatory duty under Notification No. S.R.O. 1050(I)/95, which specifically levies regulatory duty on goods chargeable to statutory or concessionary rates of zero percent or other rates. The petitioner contends that the notification does not apply to goods that are totally exempt from duty, arguing that the law must clearly and unambiguously place a tax burden on a subject, and any ambiguity must be resolved in favor of the taxpayer. The Supreme Court, finding that the contentions raised by the petitioner require deeper examination regarding the interpretation of the notification and the scope of regulatory duty imposition on duty-free goods, granted leave to appeal. The Court acknowledged the principle that tax liability cannot be imposed unless clearly provided by law, necessitating a detailed review of the statutory framework and the specific notification in question.
- Whether goods that are totally exempt from customs duty fall within the scope of Notification No. S.R.O. 1050(I)/95 for the imposition of regulatory duty?
- Does the distinction between zero percent duty and duty-free status affect the applicability of regulatory duty under the Customs Act 1969?
- Is a taxpayer liable for regulatory duty if the charging notification does not clearly and unambiguously include their specific category of goods?
- Chapter VII, Customs Act 1969
ORDER
' SAIYED SAEED ASHHAD, J.---This petition for leave to appeal has been filed against the judgment of Sindh High Court, dated 8-3-2006 in Constitutional Petition No, D-226 of 2003.
2. Mr. Aziz A. Sheikh learned counsel for the petitioner states that High Court has erred in holding that no difference or distinction could be made between the goods subjected to zero per cent duty and free of duty. He referred to Chapter VII of the Schedule to the Customs Act and the, leading under which goods have granted exemption from charge to customs duty. He also drew our attention to Notification No, S.R.O. L050(1)/95, dated 29-10-1995 whereby the Federal Government levied further regulatory duty at the rate of 5% and 10% ad velour on import of certain goods and according to him the essential requirement for imposition/levy of regulatory duty was that the goods would be chargeable to statutory or concessionary rate of zero per cent or sixty parent statutory duty shall be charged a regulatory duty at the rate of five cent; and secondly, that the goods chargeable to the statutory or concessionary rate other than zero per cent of the import into Pakistan hall be charged to a regulatory duty at the rate of ten per cent ad eloped and submitted that the goods of the petitioner would not fall in ny of the two categories of the notification as they were not to be objected to any duties or any other duty. He also submitted that it is a 'ell-settled principle of law that a person cannot be made to pay tax or barges unless the law clearly and unambiguously places a burden on the subject and in case of doubt the same is to be. Resolved in favour of the subject for which he placed reliance on the case of Messrs Bisvil Spinners Ltd. v.
Superintendent, Central Excise and Land Customs Circle Shcikhupura and another (PLD 1988 SC 370). He concluded that the wording of the Notification is very clear that a person cannot be subjected to levy of regulatory duty unless the goods imported by him fall in the category of goods which were liable to be charged to customs duty either at zero per cent or sixty percent and such goods would not include goods which have been totally exempted from charge to duty or are to be imported duty free.
3. Contentions advanced by Mr. Aziz A. Sheikh, Advocate Supreme Court required deeper examination and for this purpose it is deemed proper to grant leave, inter alia, to examine and consider the above questions. Accordingly leave is granted.