MESSRS PAK MARBLE INDUSTRIES LTD., PESHAWAR vs CENTRAL BOARD OF REVENUE, ISLAMABAD AND 3 Other
The petitioner-company sought an exemption from the payment of Sales Tax and Rehabilitation Tax for the assessment year 1964-65 regarding the sale of marble slabs, chips, and powder. The petitioner relied on item No. 40 of the list of exempted items under Notification No. 5 issued by the Central Government on December 18, 1953, pursuant to section 7 of the Sales Tax Act, 1951, which exempts 'concrete building components'. The taxation authorities and the Income-tax Appellate Tribunal rejected this claim, citing the Supreme Court's precedent in Usmanla Glass Sheet Factory Limited v. Sales Tax Officer, Chittagong. The core legal question was whether marble products qualify as 'concrete building components' under the specified exemption. The Supreme Court held that the term 'concrete' qualifies 'components' and refers specifically to cement concrete components. Since marble slabs, chips, and powder do not contain cement as a constituent, they do not fall within the scope of the exemption. Consequently, the petition was dismissed, affirming that the matter was settled by the principle that the exemption is restricted to cement-based concrete components.
- Do marble slabs, marble chips, and marble powder qualify as 'concrete building components' for the purpose of tax exemption under the Sales Tax Act 1951?
- Does the word 'concrete' in the phrase 'concrete building components' govern the word 'components' to imply cement-based materials?
- Section 7, Sales Tax Act 1951
1. SAJJAD AHMAD, J. The petitioner-company claimed exemption from payment of Sales Tax and Rehabilitation Tax amounting to Rs. 74,193 demanded from it on account of sale of marble slabs, marble chips and marble powder, which they had manufactured and sold, during the assessment year 1964-65.
2. The exemption was claimed by the petitioner on the basis of item No. 40 entered in the list of exempted items from tax vide Notification No. 5 issued by the Central Government on the 18th of December 1953 under section 7 of the Sales Tax Act of 1951. This item is as follows:- "(40) Concrete building components (including beams, columns, roofing, cement blocks, doors, windows but excluding pipes).
3. The taxation authorities as well as the Income-tax Appellate Tribunal have found, following the decision of this Court in the case of Usmanla Glass Sheet Factory Limited, Chittagong v. Sales Tax Officer, Chittagong (PLD 1971SC205), that the petitioner's claim from exemp--petition is not admissible under the law. In the cited judgment, it was held that the word 'concrete' in item 40 governs the word components' and not the word 'building', and means cement concrete components of building.
4. Marble slabs, marble chips and marble powder are obviously not concrete components of buildings, as cement is not one of the constituents of which they are made.
5. The matter being concluded by a Full Court judgment of this Court, supporting the view adopted by the Taxation authorities, this petition must fail, and is accordingly dismissed.