SECRETARY, CENTRAL BOARD OF REVENUE vs DEWAN TEXTILE MILLS LTD., KARACHI
This petition by the Federal Government is directed against a short order of the High Court of Sind and Baluchistan dated 18-11-1976, which held that excise duty on the manufacture of man-made fibre yarn cannot be imposed on machinery already assessed to production capacity tax for manufacturing cotton yarn, as it amounts to double taxation. The core legal question concerns the validity of such imposition of excise duty under the relevant entries and notifications. The Supreme Court granted leave to appeal to examine the matter, noting that the question raised needs detailed examination, and suspended the operation of the impugned order pending final disposal.
- Whether excise duty can be imposed on the manufacture of man-made fibre yarn by machinery already assessed to production capacity tax in respect of cotton yarn?
- Does the simultaneous imposition of production capacity tax and excise duty on the same plant or machinery amount to double taxation?
ORDER
ANWARUL HAQ, C. J.-This petition by the Federal Government, directed against a short order made by a Division Bench of the High Court of Sind and Baluchistan, on 18-11-1976, raises a substantial question of law of public importance regarding the validity of the imposition of excise duty on the manufacture of man-made fibre yarn, by machinery or plant already assessed to production capacity tax in respect of the manufacture of cotton yarn. In A the short order placed on the file the learned Judges have observed that both cannot be imposed even according to the formula devised by the Central Board of Revenue, as it would amount to double taxation on the same plant or machinery, It is submitted by the learned Deputy Attorney-General that this view is not sustainable on a proper construction of the relevant entries and Notifications.
2. Although we have not had the benefit of seeing the detailed reasons recorded by the High Court in support of this order, we consider that the question raised by the learned Deputy Attorney- General needs examination and we would, accordingly grant leave to appeal.
3. As the short order was made by the Division Bench of the High Court as long ago as the 18th of November, 1976, the detailed reasons must have been recorded in the meantime, although Mr. Shah Jamil Alam has not been able to obtain a copy thereof. Let a request be made to the High Court for furnishing a copy of the detailed reasons, so as to enable this appeal to be fixed for final disposal during the next session of the Court at Karachi in March, 1978. Operation of impugned order is suspended.