FLYING KRAFT PAPER MILLS (PVT.) LTD. vs CENTRAL BAORD OF REVENUE and others
This matter arises from a petition for leave to appeal against the judgment of the Lahore High Court dismissing the petitioner Mill's writ petition, which sought duty exemption under S.R.O. No. 484(1)/92 dated 14th May, 1992, and the release of consignments. The High Court had held that the Letters of Credit were opened after the expiry of the said S.R.O., no formal contract was signed, and alternate remedies were not availed. The core legal question concerns the entitlement of the petitioner to duty exemption and the scope of section 31-A of the Customs Act 1969 regarding legitimate expectations arising from decisive steps taken by a juristic person to import machinery and establish an industry based on an exemption-granting S.R.O. The Supreme Court granted leave to appeal to examine these contentions and the scope of the statutory provision in relation to legitimate expectations.
- Whether an importer is entitled to duty exemption under S.R.O. No. 484(1)/92 when Letters of Credit are opened after its expiry?
- What is the scope of section 31-A of the Customs Act 1969 in catering to legitimate expectations arising from decisive steps taken to set up an industry?
- Do expenditures and endeavors to import machinery in pursuance of an exemption-granting S.R.O. create enforceable legitimate expectations?
- Section 31-A, Customs Act 1969
ORDER
' CH. MUHAMMAD ARIF, J.---Leave to appeal is claimed against judgment, dated 14-9-1998 passed by the learned Chief Justice of Lahore High Court, Lahore dismissing petitioner Mill's Writ Petition No,3229 of 1996 with the- observation that they were not entitled to the exemption on duty under S.R.O. No,484(1)/92, dated 14th May, 1992. The learned Chief Justice was also of the view that Letters of Credit were opened by the petitioner Mills after the expiry of S.R.O. No, 484(1)/92, dated 14-5-1992, no formal contract was ever signed between the parties and that they did not avail of the remedies before the respondents.
2. Mr. Irfan Qadir, learned Advocate Supreme Court appearing in support of the petition, has reiterated the stand taken by his clients in the High Court that as many as 10 Letters of Credit were opened between 15-6-1994 and 18-2-1996 in terms of contract, dated 6-6-1995. The assertion was that (i) the learned Chief Justice was in error in observing that no formal contract was ever signed between the parties, (ii) the writs prayed for should have been issued, (iii) action of the respondents in declining to allow exemption in duty be declared to be without lawful authority and
(iv) the consignment in question should have been released in terms of S.R.O. 484(1)/92, dated the 14th May, 1992 subject to furnishing the indemnity bond.
3. After hearing the learned counsel for the parties we are inclined to grant leave to consider the above pleas raised on behalf of the petitioner--Mills as also the scope of section 31-A of the Customs Act (No IV of) 1969 to cater to the legitimate expectations which arise consequent upon taking of decisive steps by a juristic person similarly placed as the petitioner Mills by incurring expenditure and making endeavours to import machinery and set up an industry in pursuance of exemption granting S.R.O .
4. The appeal shall be listed for hearing within six months.