PAKISTAN STATE OIL CO. LTD., KARACHI vs COLLECTOR CUSTOMS CENTRAL
This appeal before the Supreme Court of Pakistan arises from concurrent findings of the departmental fora and the Tribunal holding the appellant, Pakistan State Oil Co. Ltd., liable for the unlawful local diversion of petroleum products purportedly shipped for export to Afghanistan without payment of duties and taxes. Following show-cause notices and recovery proceedings, the appellant deposited the evaded duties and taxes, but the Tribunal further found the appellant guilty of tax fraud due to its knowledge of the diversion, justifying the imposition of additional tax and duty. The core legal question concerned the legality of imposing additional tax and additional duty under the relevant fiscal statutes based on factual findings of deliberate delay and tax fraud. The Supreme Court dismissed the appeals, holding that concurrent findings of fact regarding tax fraud and deliberate delay cannot be assailed before this Court, particularly when no proper question of law relating to the said liability was framed or raised before the High Court. The key principle laid down is that pure findings of fact establishing tax fraud and deliberate delay in payment of duties cannot be reopened in the apex court absent a properly framed question of law.
- Can a pure finding of fact recorded by the Tribunal regarding tax fraud and deliberate delay be assailed before the Supreme Court?
- Whether the imposition of additional tax and additional duty under the Central Excise Act, 1944 and Sales Tax Act, 1990 is justified when petroleum products meant for export are diverted to the local market?
- Does a reference application before the High Court constitute a valid challenge on a question of fact if no proper question of law is framed?
- Section 3-B, Central Excise Act 1944
- Section 34, Sales Tax Act 1990
ORDER
UMAR ATA BANDIAL, J.---The learned departmental fora below have decided against the appellant to hold that the clearance of petroleum products shipped from its depot(s) purportedly for export to Afghanistan without payment of duties and taxes was unjustified and unlawful because in fact the said consignments were diverted and sold locally within Pakistan. After issuance of show cause notice dated 29.11.2004 and commencement of recovery proceedings against the appellant, the amount of duties and taxes were deposited with the respondent tax authorities. The learned Tribunal has concluded in para 11 of its order dated 22.10.2007 that the commission of offence of diversion of the consignments to the local market was committed with the knowledge of the appellant thereby establishing the charge of tax fraud against the appellant. Liability to additional tax was therefore imposed in the said circumstances of the case and findings recorded thereon. Payment of the duties and tax dues on the consignments was delayed deliberately .
2. Learned counsel has sought to argue that the imposition of additional tax and additional duty under section 3-B of Central Excise Act, 1944 and section 34 of the Sales Tax Act, 1990 was uncalled for. There is, however , a clear factual finding by the learned Tribunal that provides a sound basis, for the imposit ion of such tax. A finding of fact cannot be assailed before this Court. In any event, no question of law relating to the said liability was properly framed before the High Court. Learned counsel sought to rely on one of the questions referred by the Appellant in its Tax Reference filed by it before the learned High Court, however , in our view that question does not squarely assail the said finding nor does it constitu te a question of law on the said finding of fact noted above. Accordingly , no such question can be raised before us.
3. For the foregoing reasons, these appeals are dismissed.
Cited by 1 case
- The Collector of Customs, Karachi vs M/s. Raz Textile, Karachi 2023 SHC 196, 2024 PTD 71