GOVERNMENT OF PAKISTAN through Secretary (Machinery), Central Board of Revenue, Islamabad and another vs Messrs FAUJI CEMENT COMPANY LIMITED
This petition for leave to appeal challenges a judgment of the Sindh High Court, which declared the imposition of customs duty and sales tax on imported machinery and equipment by the respondent-company to be without lawful authority. The respondent-company had imported plant machinery under an import license, supported by a no-objection certificate from the Ministry of Industries stating the items were not manufactured locally. The petitioners, representing the Central Board of Revenue, contended that certain items were indeed manufactured locally, thereby disqualifying them from the duty exemptions provided under S.R.O. 484(1)/92. The petitioners argued that the High Court misapplied the relevant S.R.O.s and failed to correctly interpret the principles of locus poenitentiae under the General Clauses Act and the doctrine of promissory estoppel. The Supreme Court granted leave to appeal to examine whether the High Court correctly applied established legal principles regarding duty exemptions and the interpretation of statutory notifications, specifically to determine if the lower court's reliance on previous case law and its application of the doctrine of promissory estoppel were legally sound in the context of the specific import circumstances.
- Does the doctrine of promissory estoppel apply to the withdrawal of customs duty exemptions on imported machinery?
- How should the principle of locus poenitentiae under the General Clauses Act be applied to the revocation of import duty exemptions?
- Whether the High Court correctly interpreted S.R.O. 484(1)/92 regarding the exemption of machinery not manufactured locally?
- Section 21, General Clauses Act 1897
ORDER
' RANA BHAGWAN DAS; J.---This petition for leave to appeal arises out of a judgment dated 18-5- 2000 rendered by a learned Division Bench of the Sindh High Court, whereby Constitutional petition preferred by respondent-company was accepted and the imposition of customs duty and sales tax on the import of machinery, equipment and other items for setting up Fauji Cement Factory was declared to be without lawful authority and of no legal effect.
2. Respondent-company imported plant machinery and equipment under Import Licence No,W 403036 dated 15-7-1993 after obtaining no objection certificate vide letter dated 29-5-1993 from the Ministry of Industries, Government of Pakistan, cretifying that the items contained in the annexed list were being not manufactured locally. The stand point of the Petitioners, however, appears to be that apart from S.R.O. 484(1)/92, dated 14th May, 1992 exempting plant and machinery which was not manufactured locally and imported during period between 1st December, 1990 and 30th June, 1995, Central Board of Revenue vide letter, dated 9th March, 1996 had published a list of machinery and equipment manufactured locally addressed to the Collector of Customs (Appraisement), Karachi, advising him to recover the duty and taxes on items identified as manufactured locally. It is the case of the petitioner that the equipment imported by respondent company for which letter of credit was established on or about 6th October, 1984 included the items manufactured locally and were thus not exempt from payment of duty and 'taxes as wrongly accepted by the High Court. From the record it appears that learned High Court heavily relied upon judgment of a Division Bench passed in Writ Petition No,583 of 1995 in M/s. Lucky Cement Limited v. Central Board of Revenue and others.
3. It is vehemently contended that the judgment in Lucky Cement Limited has been impugned in a Civil Petition for Leave to Appeal before this Court at the Principal Seat; that even otherwise the High Court wrongly applied the ratio of the judgment rendered by Peshawar High Court; that the High Court misread the S.R.O. 484(1)/92, dated 14th May, 1992 and S.R.O. 286/1/84, dated 4th April, 1984 and did not correctly apply the principle of locus poenitentiae as contemplated by section 21 of the General Clauses Act and doctrine of promissory estoppel propounded in Al-Samrez Enterprise v. Federation of Pakistan (1986 SCM R 1917).
4. After hearing learned counsel for the parties, we are inclined to grant leave to appeal to examine the aforesaid contentions and related questions with a view to ensure whether the principles of law laid down by this Court on the subject have been rightly adhered to?