COLLECTOR OF CUSTOMS, CUSTOMS HOUSE, NABHA ROAD, LAHORE and 2
The petitioners, Collector of Customs, sought leave to appeal against a judgment of the High Court which had ruled in favor of the respondent regarding the payment of sales tax on imported goods. The respondent had opened letters of credit for the import of various components while a notification (SRO No. 504(I) of 1994) granting exemption from sales tax was in effect. Although this exemption was subsequently withdrawn, the respondent argued that the exemption should still apply because the letters of credit were established prior to the withdrawal. The customs authorities, relying on Section 6 of the Sales Tax Act and Section 31-A of the Customs Act, insisted on the payment of sales tax upon the arrival of the goods. The Supreme Court, noting that leave to appeal had already been granted in a similar matter (M/s M.Y. Electronics Industries (Pvt.) Ltd.), granted leave in the present case to consider whether the exemption remained applicable to consignments where letters of credit were opened before the withdrawal of the exemption notification.
- Does the withdrawal of a sales tax exemption notification affect goods for which letters of credit were opened prior to the withdrawal?
- Is the demand for sales tax on imports lawful when letters of credit were established during the currency of an exemption notification?
- Does Section 31-A of the Customs Act 1969 override previous exemptions for goods imported under letters of credit?
- Section 6, Sales Tax Act 1990
- Section 31-A, Customs Act 1969
ORDER
' SALEEM AKHTAR, J.---The petitioners seek leave to appeal against the judgment passed by the learned Judge in Chambers allowing the writ petition filed by the respondent holding that demand for payment of sales tax from the respondent in respect of consignments where letters of credit have been opened before the withdrawal of the notification of exemption is without lawful authority.
2. The respondent had opened 14 letters of credit on various claws ranging between 16-2-1995 to 20-2-1996 for import of copper tubes, aluminium plane indoor/outdoor units and components. It claimed benefit of exemption from sales tax under the SRO No,504(I) of 1994 dated 9-6-1994. This exemption was withdrawn on 4-4-1996. On arrival of goods the respondent claimed exemption from sales tax, but in view of section 6 of the Sales Tax Act, the petitioners insisted that the respondent was liable to pay the sales tax as section 31-A of the Customs Act was applicable to it.
3. Leave was granted to consider similar question in M/s M.Y. Electronics Industries (Pvt.) Ltd.
Through Manager v. Government of Pakistan (Ministry of Finance), Islamabad and 5 others (1991 SCMR 2123). Accordingly leave is also granted in this case. The appeal should be heard along with the appeals arising out of the aforestated reported petitions. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.