CENTRAL BOARD OF REVENUE And Others vs M/S MAPLE LEAF CEMENT
This matter concerns the determination of the 'wholesale cash price' for the purpose of calculating sales tax on cement production. The respondents, cement manufacturing companies, contested notices issued by the Assistant Collector, Customs and Central Excise, which sought to include additional charges—such as loading, unloading, transportation, octroi duty, and export tax—in the valuation of cement for tax purposes. While the Collector of Central Excise and Sales Tax initially ruled in favor of the respondents, the Member (Sales Tax) of the Central Board of Revenue subsequently set aside that order, restoring the Assistant Collector's position. The Lahore High Court later set aside the Member's order. The petitioners (Central Board of Revenue) sought leave to appeal to the Supreme Court, arguing that the interpretation of 'wholesale cash price' under the relevant statute remained unsettled and required authoritative judicial clarification. The Supreme Court, finding that the interpretation of the statutory provision warranted consideration, granted leave to appeal to address the scope and application of the valuation criteria under the Central Excises and Salt Act, 1944.
- What is the legal interpretation of 'wholesale cash price' for the purpose of determining duty under Section 4 of the Central Excises and Salt Act, 1944?
- Should charges such as loading, unloading, transportation, octroi duty, and export tax be included in the valuation of cement for sales tax purposes?
- Section 4, Central Excises and Salt Act, 1944
- Companies Ordinance, 1984
ORDER MIR HAZAR KHAN KHOSO, J.- Respondents, M/s Maple Leaf Cement Factory Limited (C.P.No. 157 of 1995), M/s White Cement Industries Limited (C.P. NO. 158 of 1995) and M/s Pak Cement Company Limited (C.P.No. 159 of 1995) are the companies incorporated under the Companies Ordinance, 1984 and are being run in the public sector under the control of the Ministry of Production, Government of Pakistan through State Cement Corporation of Pakistan. They manufacture cement in their plants situate at Iskanderabad. Vide Notification No. 523(1 )/88, dated 26-6-1988 their production was subjected to payment of sales tax. The respondents claimed that they have been paying sales tax properly on the cement, lt was grievance of the respondents that the Assistant Collector, Customs and Central Excise served notices upon them alleging that they had paid sales tax less than what was actually due. They claimed that the Assistant Collector, Customs and Central Excise had pointed out that while determining value of the cement for payment of sales tax charges like loading, unloading, transportation, octroi duty and export tax etc. Should be included therein. They contested the notices by pointing out that they have been selling cement at the ex-factory prices and they did not charge above taxes. However, on 17-12-1989, according to the respondents, the Assistant Collector, Central Excise and Sales Tax, Sargodha, affirmed the claim of the petitioners. They challenged the order of Assistant Collector before the Collector, Central Excise and Sales Tax, who on 3-3-1990 accepted their version, lt was grievance of the respondents that on 31-10-1990 the petitioners on suo motu jurisdiction issued notices to the respondents as to why the order of the Collector be not set aside. However, on 10-8-1991 the Member Sales Tax, Central Board of Revenue, Government of Pakistan, Islamabad, set aside the order of the Collector and restored that of the Assistant Collector. The respondents challenged the above said order in Writ Petitions Nos. 1046, 1047 and 1048 of 1991 before the Lahore High Court, Lahore. On 26-1-1995 a Judge in Chambers of the High Court set aside the order of the Member (Sales Tax), Central Board of Revenue. The petitioners, therefore, have come before this Court and sought for leave to appeal.
2. The learned counsel for the petitioners contended that for the purpose of determination of value of the duty under section 4 of the Central Excises and Salt Act, 1944 the wholesale cash price of the articles is to be considered. However, the learned counsel contended that the wholesale cash price has not been interpreted by the Superior Courts of this Country. While referring to the case reported in PLD 1993 SC 136, the learned counsel for the petitioners contended that definition of the above said word was left untouched. He contended that it is case of first impression, which needs interpretation of this Court.
3. The learned Counsel for the caveator contended that his clients have been paying taxes honestly. They do not include the charges in prices of their articles, hence their articles are not to be charged for the taxes as required by the petitioners. However, as the contentions raised by the petitioners' counsel need consideration of this Court, we are inclined to admit the petitions to consider the provisions of section 4 of the Central Excises and Salt Act, 1944. Leave to appeal is granted accordingly in all the petitions.