THE FECTO CEMENT LIMITED vs THE COLLECTOR OF CUSTOMS APPRAISEMENT

' MAMOON KAZI, J.---The petitioners had entered, into a contract on 7-7-1987 with a foreign supplier for import of dump trucks to be used in their cement industries. In consequence thereof six units of Komatsu dump trucks arrived at Karachi per s.s. Chitral vide IGM No,1341/88 dated 21-5-1988. After arrival of the said goods, the petitioners, filed Bill of Entry for bond with respondent No, 1 and thereafter, the said goods were placed in a bonded warehouse. It is pertinent to point out that when the Letter of Credit was opened by the petitioners, the said goods were exempted from payment of sales tax vide Notification, S.R.O. 530(1)/86 dated 29-5-1986. The petitioners got the said goods released from the bonded warehouse on 16-1-1989 when the said Notification had been superseded by another Notification, SRO 500(1)/88 dated 26-6-1988 which had then excluded dump trucks from its purview. When the goods were released by the Customs, originally benefit under SRO 530(1)/86 was granted to the petitioners but subsequently a notice was received by the petitioners demanding payment of an additional sum of Rs,33,46,147 towards the sales tax and hence the petition.

2. Mr. Sattar Silat, learned counsel for the petitioners has relied upon the case of Al-Samreze Enterprises reported in 1986 SCM R 1917 in support of his contention that once the petitioners acting upon the earlier Notification exempting them from payment of sales tax had opened letter of credit and imported the said goods, the petitioners were entitled to avail benefit under the said Notification notwithstanding its supersession by another Notification, SRO 500(1)188 dated 26-6- 1988, as vested right had been acquired by the petitioners.

3. Parawise comments have been filed on behalf of the respondents wherein apart from invoking section 31-A of the Customs Act which was inserted in the Customs Act after the decision given by the Supreme Court in the case of Al-Samreze Enterprises an objection has also been raised that the petitioners have not resorted to remedies provided under the Customs Act before approaching this Court. So far as the first argument is concerned, it has now been made clear by different pronouncements of this Court that the provisions of section 31-A of the Customs Act cannot be pressed into service for nullifying the effect of the ratio laid down in the case of Al-Samreze Enterprises to protect any demand in respect of sales tax. Reference in this regard may be made to the judgment of this Court in the case of Muhammad Abdullah v. Government of Pakistan and others which is reported in PLD 1992 Kar.

266. In this case, reliance has been placed upon various judgments including that of this Court reported as Crescent Pak Industries (Pvt.) Limited v. Central Board of Revenue 1990 PTD 29.

4. So far as the second contention raised on behalf of the respondents is concerned, Mr. Sattar Silat has relied upon the judgment of the Supreme Court in Edulji Dinshaw Limited v. Income-tax Officer PLD 1990 SC 399. In this case, a similar objection raised on behalf of the respondents was repelled by the Hon'ble Supreme Court and it was held that in case of fiscal disputes an aggrieved party can directly approach the superior Courts by involving their writ jurisdictions. We are, therefore, not convinced with any of the objections raised on behalf of the respondents.

5. In the result, this petition is allowed and the demand made by the respondents for realization of the aforesaid amount of Rs,33,46,147 is held to be without lawful authority and of no legal effect. The parties are left to bear their down costs.