INDUS TRADING AND CONTRACTING COMPANY, KARACHI vs COLLECTOR OF CUSTOMS (PREVENTIVE), KARACHI and 2 others
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 a regulatory duty under Notification No. S.R.O. 1050(I)/95, dated 29-10-1995. The petitioner argues that the notification specifically categorizes goods liable for regulatory duty based on whether they are chargeable to statutory or concessionary rates of zero percent or other rates, and that goods completely exempt from duty do not fall within these categories. Relying on the principle that tax burdens must be clearly and unambiguously imposed by law, the petitioner contends that any ambiguity should be resolved in favor of the subject. The Supreme Court, finding that the contentions raised by the petitioner require deeper examination regarding the interpretation of the notification and the scope of the regulatory duty, granted leave to appeal to consider these issues.
- Whether goods that are completely exempt from customs duty can be subjected to regulatory duty under Notification No. S.R.O. 1050(I)/95?
- Does the imposition of regulatory duty under the Customs Act 1969 require that the goods be chargeable to a specific statutory or concessionary rate?
- Should ambiguities in tax statutes regarding the imposition of duties be resolved in favor of the subject?
- 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 heading under, which goods have granted exemption from charge to customs duty. He also drew our attention to Notification No,S.R.0.1050(I)195, dated 29-10-1995 whereby the Federal Government levied further regulatory duty at the rate of 5% and 10% ad velorem 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 per cent statutory duty shall be charged a regulatory duty at the rate of five per cent; and secondly, that the goods chargeable to the statutory or concessionary rate other than zero per cent of the import into Pakistan shall be charged to a regulatory duty at the rate of ten per cent ad velorem and submitted that the goods of the petitioner would not fall in any of the two categories of the notification as they were not to be subjected to any duties or any other duty. He also submitted that it is a well-settled principle of law that a person cannot be made to pay tax or charges 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 Sheikhupura 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 per cent 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 require 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.