Summary: Background: The petitioner, a private limited company managing and developing the "Centaurus" project in Islamabad, challenged the compulsory registration order dated 14.12.2023 issued by the Punjab Revenue Authority (PRA) under Section 27 of the Punjab Sales Tax on Services Act, 2012 (the “Act”). The petitioner argued that it is already registered with the Federal Board of Revenue (FBR) for sales tax purposes and conducts all its business in Islamabad, not in Punjab. ----Issues: 1- Whether the petitioner is required to be registered with the PRA under the Punjab Sales Tax on Services Act, 2012, despite conducting business exclusively in Islamabad. 2- Whether the compulsory registration order issued by the PRA is valid. ----Holding/Reasoning/Outcome: The court noted that the Act is designed to levy taxes on services provided, rendered, initiated, originated, executed, received, or consumed in Punjab. Section 25(1)(a) of the Act mandates registration for those providing taxable services from their place of business in Punjab. The petitioner contended that their entire business is conducted in Islamabad, thus falling under the jurisdiction of the FBR and not the PRA. The court found merit in this argument, noting the distinct administrative control between Punjab and the Islamabad Capital Territory. The court referred the petitioner’s matter to Respondent No. 3 (the Commissioner) to be treated as a representation. The Commissioner is instructed to decide on the registration issue within four weeks, providing a speaking order after hearing all concerned parties. In the interim, the court restrained the PRA from taking any coercive measures against the petitioner under the Doctrine of Stopgap Arrangement, as cited in previous cases. ----Citations/Precedents: Shell Pakistan Limited versus Government of Punjab etc. (2020 PTD 1607) Shaheen Merchant versus Federation of Pakistan/National Tariff Commission and others (2021 PTD 2126)

Summary: (a) Sales Tax Act, 1990 ----Ss. 7, 10 & 66—Input tax adjustment—Loss of goods due to fire—Right to refund—Scope and interpretation— Respondent-taxpayer purchased raw cotton on which input tax was paid during the tax period, but the stock was subsequently destroyed in a fire—Claimed refund of unadjusted input tax—Department rejected refund on the ground that destroyed goods were not used for making taxable supplies—Held, S.7 allows input tax adjustment based on the purpose of taxable supplies “made or to be made” during the tax period—Actual consumption of inputs not mandatory if intent to use in taxable activity is established—Loss of raw material due to fire does not negate entitlement to adjustment or refund—S.10 permits refund of excess input tax not adjustable against output tax during the same tax period—S.66 not applicable as case does not involve payment by inadvertence or error—Claim held valid under S.10—Department's restrictive interpretation rejected. (b) Sales Tax Act, 1990 ----S. 8—Disallowance of input tax—Scope—Goods destroyed by accident—Applicability— Department invoked S.8(1)(a) to deny refund, arguing destroyed goods were not used in production—Held, S.8 applies only when goods are used for non-taxable supplies or other purposes—Loss by fire does not amount to “use” for non-taxable purpose—No government notification excluding such loss under S.8(1)(b)—Thus, S.8 has no application where goods were intended for taxable use but perished before consumption—Objection of tax authority dismissed. (c) Sales Tax Act, 1990 ----S. 7—Adjustment of input tax—Requirement of same tax period—Interpretation— Held, S.7 must be read in conjunction with S.6 and S.26 to understand adjustment mechanism—Input tax must be adjusted against output tax of the same tax period, as declared in monthly return—Adjustment dependent on timing and intent, not actual manufacture—Interpretation supported by Commissioner Inland Revenue v. Attock Cement Pakistan Ltd. 2023 SCMR 279. (d) Sales Tax Act, 1990 ----Ss. 7, 8 & 36—Retrospective withdrawal of sales tax on pharmaceuticals—Impact on prior input adjustments— Taxpayers in pharmaceutical sector adjusted input tax for June and July 2002—Subsequent exemption from sales tax retrospectively applied from 01.07.2002 through SROs 555(I)/2002 and 869(I)/2002—Tax authority sought reversal of earlier input adjustments—Held, adjustments made before notification date were past and closed transactions—Exemption being beneficial could not retrospectively undo vested rights—SROs being subordinate legislation could not nullify valid actions absent express legislative mandate—Al Samrez Enterprises v. Federation 1986 SCMR 1917 and Commissioner Inland Revenue v. Mekotex (Pvt.) Ltd. 2024 SCP 316 discussed—Ratio of Mekotex not attracted as it involved primary legislation and withdrawal of benefit, not extension of exemption. Disposition: Appeals dismissed—Lahore and Sindh High Court judgments upheld—Refund of input tax allowed in Mayfair Spinning Mills Ltd. case—Subsequent SROs could not invalidate earlier valid input tax adjustments in pharmaceutical cases—Past and closed transactions protected—No illegality found in High Courts’ reasoning. Cited Cases: • Commissioner Inland Revenue v. Attock Cement Pakistan Ltd. 2023 SCMR 279 • Al Samrez Enterprises v. Federation of Pakistan 1986 SCMR 1917 • Commissioner Inland Revenue v. Mekotex (Pvt.) Ltd. 2024 SCP 316

Summary: (a) Customs Act (1969) – Ss. 32(1), 32(2), 32(3A), 79, 80, 156(1)(14), 196(5); Sales Tax Act (1990) – Ss. 3, 6, 33, 34, 36; Income Tax Ordinance (2001) – S. 148 Misdeclaration of imported goods—Customs classification—Scope—Importer cleared consignments of water-based varnishers under incorrect classification, declaring them as "acrylic polymers in primary form" to avail lower customs duty—Customs authorities, after lab analysis and classification committee review, determined the correct classification under PCT heading 3209.1010, attracting a higher duty—Tribunal upheld duty recovery while remitting penalty—Held, past incorrect classification does not justify continued misclassification—Law does not permit perpetuation of erroneous benefits—Reference application dismissed—Relied upon Azam Shah (SC Judgment) regarding correction of past erroneous benefits. (b) Customs Law—Retrospective Application of Classification Rulings—Effect Customs classification—Past clearance practice—Scope—Importer contended that previous consignments were cleared under a lower duty rate, arguing against retrospective application of reclassification—Held, classification is determined on factual basis, not bound by prior erroneous practice—No vested right to incorrect classification—Tribunal's decision to uphold duty demand but remit penalty found lawful—Precedent applied: Fauji Fertilizer Co. Ltd. v. NIRC (2013 SCMR 1253). (c) Reference Jurisdiction—Scope of Review—Factual Controversies Customs adjudication—Tribunal as final fact-finding authority—Scope of judicial review—Importer failed to contest composition findings or classification correctness—Held, factual findings of tribunal not ordinarily interfered with in reference jurisdiction unless jurisdictional error or legal infirmity demonstrated—Reference application dismissed—Reliance placed on State Oil Co. Ltd. v. Bakht Siddique (2018 SCMR 1181). ---- Disposition Reference application dismissed—Tribunal’s decision to uphold duty demand affirmed—Customs classification under PCT heading 3209.1010 declared correct—Penalty remission upheld but duty evasion liability maintained.

Summary: (a) Customs Act (IV of 1969)--- ----Ss. 179(3) & 179(4)---Statutory timeframe for adjudicating a matter---Extension granted after the timeframe---Effect------Contention of the Respondent /Collectorate was that since an extension had been granted by FBR, the Customs Appellate Tribunal (‘Tribunal’) was fully justified in holding that the Order-in-Original (ONO) was not time barred---Validity---Perusal of the relevant (extension granting) letter of FBR, undisputedly, reflected that such extension was granted after the mandatory period provided under S. 179(3) of the Customs Act, 1969 (‘the Act, 1969’) had already expired---To that effect there appears to be no dispute; and even , the request for extension was also made by the Adjudicating Authority when the period for passing the ONO had already expired---Therefore, even if FBR had any jurisdiction to extend the time period it was done after the cut-off date; hence, was meaningless and was without lawful authority---Besides, said extension letter did not seem to have been issued in consonance with the powers conferred upon FBR under S.179(4) of Act, 1969 as no independent reasons of its own have been assigned by FBR; rather, the reasons stated by the Collector in his extension letter have been found to be justified, which is an incorrect approach as FBR cannot abdicate its authority so conferred under the Act, 1969 in such a manner and ought to have given its own reasoning in line with S.179(4) of the Act, 1969--Provision of reasons for granting an extension of time is necessary so as to ensure that discretion has been exercised by the FBR on valid grounds transparently and in a structured manner---Thus, the proposed question was answered in the affirmative in favour of the applicant and against the Respondent /Collectorate--- High Court set aside the impugned orders---Special Customs Reference Applications were allowed accordingly. Civil Petitions Nos.2734 and 2735 of 2020 ref. (b) Customs Act (IV of 1969)--- ----Ss.179 (3) & 179(4)---Statutory timeframe for adjudicating matter---Scope and effect---Contention of the Respondent /Collectorate was that the Customs Appellate Tribunal (‘Tribunal’) was fully justified in holding that the Order-in-Original (ONO) was not time barred as such period of limitation is directory and not mandatory---Validity---Wherever the Legislature has provided certain period for passing of an Order; then the said direction is mandatory and not directory and in that case non-compliance of such a mandatory provision would invalidate such act---In the present case , since adjudication was beyond time as prescribed in S.179(3) of the Customs Act, 1969, therefore, the said decision was invalid---Wherever, the Legislature has provided certain period for passing of an Order; then the said direction is mandatory and not directory and in that case non-compliance of such a mandatory provision would invalidate such act---Since adjudication was beyond time as prescribed in S.179(3) of the Act 1969, therefore, the said decision was invalid---Thus, the proposed question was answered in the affirmative in favour of the applicant and against the Respondents / Collectorate---High Court set aside the impugned orders---Special Customs Reference Applications were allowed accordingly. Mujahid Soap and Chemical Industries (Pvt.) Ltd. v Customs Appellate Tribunal 2019 SCMR 1735 and The Collector of Sales Tax v. Super Asia Mohammad Din 2017 SCMR 1427 ref. Waseem Ahmad Malik for Applicants. Ali Tahir and Khalilullah Jakhro for Respondents. Date of hearing: 22nd May, 2024. 1. Spl. Cus. Ref. A. 1640/2023. Messrs Pako Computers, Karachi v. Customs Appellate Tribunal, Karachi and others 2. Spl. Cus. Ref. A. 1641/2023. Messrs Pako Computers, Karachi v. Customs Appellate Tribunal, Karachi and others 3. Spl. Cus. Ref. A. 1669/2023. Messrs Decent Computers, Lahore and another v. Customs Appellate Tribunal, Karachi and others 4. Spl. Cus. Ref. A. 1670/2023. Messrs Decent Computers, Lahore and another v. Customs Appellate Tribunal, Karachi and others 5. Spl. Cus. Ref. A. 1671/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 6. Spl. Cus. Ref. A. 1672/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 7. Spl. Cus. Ref. A. 1673/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 8. Spl. Cus. Ref. A. 1674/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 9. Spl. Cus. Ref. A. 1675/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 10. Spl. Cus. Ref. A. 1676/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 11. Spl. Cus. Ref. A. 1677/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 12. Spl. Cus. Ref. A. 1678/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 13. Spl. Cus. Ref. A. 1679/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 14. Spl. Cus. Ref. A. 1680/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 15. Spl. Cus. Ref. A. 1681/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 16. Spl. Cus. Ref. A. 1682/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 17. Spl. Cus. Ref. A. 1683/2023. Messrs Decent Computers, Lahore and another v. Customs Appellate Tribunal, Karachi and others 18. Spl. Cus. Ref. A. 1684/2023. Messrs Decent Computers, Lahore and another v. Customs Appellate Tribunal, Karachi and others 19. Spl. Cus. Ref. A. 1685/2023. Messrs Decent Computers, Lahore and another v. Customs Appellate Tribunal, Karachi and others 20. Spl. Cus. Ref. A. 1686/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 21. Spl. Cus. Ref. A. 1687/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 22. Spl. Cus. Ref. A. 1688/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 23. Spl. Cus. Ref. A. 1689/2023. Messrs Decent Computers, Lahore v. Customs Appellate Tribunal, Karachi and others 24. Spl. Cus. Ref. A. 1711/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 25. Spl. Cus. Ref. A. 1712/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 26. Spl. Cus. Ref. A. 1713/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 27. Spl. Cus. Ref. A. 1714/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 28. Spl. Cus. Ref. A. 1715/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 29. Spl. Cus. Ref. A. 1716/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 30. Spl. Cus. Ref. A. 1717/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 31. Spl. Cus. Ref. A. 1718/2023. Messrs POP Global Distribution, Lahore v. Customs Appellate Tribunal, Karachi and others 32. Spl. Cus. Ref. A. 1719/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 33. Spl. Cus. Ref. A. 1720/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 34. Spl. Cus. Ref. A. 1721/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 35. Spl. Cus. Ref. A. 1722/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 36. Spl. Cus. Ref. A. 1723/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 37. Spl. Cus. Ref. A. 1724/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 38. Spl. Cus. Ref. A. 1725/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 39. Spl. Cus. Ref. A. 1726/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 40. Spl. Cus. Ref. A. 1727/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 41. Spl. Cus. Ref. A. 1728/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 42. Spl. Cus. Ref. A. 1729/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 43. Spl. Cus. Ref. A. 1730/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 44. Spl. Cus. Ref. A. 1731/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 45. Spl. Cus. Ref. A. 1732/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 46. Spl. Cus. Ref. A. 1733/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 47. Spl. Cus. Ref. A. 1734/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 48. Spl. Cus. Ref. A. 1735/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 49. Spl. Cus. Ref. A. 1736/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 50. Spl. Cus. Ref. A. 1737/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 51. Spl. Cus. Ref. A. 1738/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 52. Spl. Cus. Ref. A. 1739/2023. Messrs POP Global Distribution, Lahore v. Customs Appellate Tribunal, Karachi and others 53. Spl. Cus. Ref. A. 1740/2023. Messrs POP Global Distribution, Lahore v. Customs Appellate Tribunal, Karachi and others 54. Spl. Cus. Ref. A. 1741/2023. Messrs POP Global Distribution, Lahore v. Customs Appellate Tribunal, Karachi and others 55. Spl. Cus. Ref. A. 1742/2023. Messrs POP Global Distribution, Lahore v. Customs Appellate Tribunal, Karachi and others 56. Spl. Cus. Ref. A. 1743/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 57. Spl. Cus. Ref. A. 1744/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 58. Spl. Cus. Ref. A. 1745/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others 59. Spl. Cus. Ref. A. 1746/2023. Messrs POP Global Distribution, Lahore and another v. Customs Appellate Tribunal, Karachi and others

Summary: Background:M/s Taj Wood Board Mills (Pvt) Ltd, M/s Al-Mashood Oil & Ghee Industries (Pvt) Ltd, and M/s Bara Ghee Mills (Pvt) Ltd ("Petitioners"), private companies operating in the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA), challenged the judgment of the Peshawar High Court dated 09.02.2022. The grievance arose from the change in the constitutional status of FATA and PATA following the Twenty-Fifth Amendment, leading to the extension of fiscal and tax laws to these areas, and the subsequent issuance of various orders and circulars by the Federal Board of Revenue (FBR) regulating imports and transhipment procedures.----Issues:1. Whether the Peshawar High Court correctly upheld the legality of Circular No. 1 of 2021 and its conditions, excluding condition v.2. Whether the preferential treatment provided under CGO No. 8 of 2021 to bulk-importing edible oil manufacturers is justifiable and non-discriminatory.-----Holding/Reasoning/Outcome:Legality of Circular No. 1 of 2021:The Supreme Court reviewed the Peshawar High Court's judgment, which upheld the legality of Circular No. 1 of 2021, excluding condition v, which was deemed ultra vires Sections 177 of the Income Tax Ordinance, 2001, and Section 25 of the Sales Tax Act, 1990. The Court concurred that the audit provision in condition V was illegal as it introduced a parallel system not envisioned by the existing legislative framework.2. Preferential Treatment Under CGO No. 8 of 2021:The petitioners contended that the preferential treatment for bulk-importing edible oil manufacturers under CGO No. 8 of 2021 was discriminatory. The Supreme Court referred to its earlier judgment in M/s AK Tariq Foundry Etc. v. Government of Pakistan, which struck down similar discriminatory classifications under the Sales Tax Act, 1990. The Court held that the preferential treatment in CGO No. 8 of 2021 lacked a rational basis and violated the equality clause of Article 25 of the Constitution. Therefore, the discriminatory provisions of CGO No. 8 of 2021 were also struck down.The Supreme Court converted the petitions into appeals and allowed them, setting aside the discriminatory provisions of CGO No. 8 of 2021 and upholding the legality of Circular No. 1 of 2021, excluding condition v.----Citations/Precedents:Hyderabad Development Authority v Karam Khan Shoro (1985 SCMR 45)Established the importance of compliance with procedural requirements under Section 9 of the Land Acquisition Act, 1894.Land Acquisition Collector, National Highway Authority, Lahore v Javed Malik (2009 SCMR 634)Affirmed that provisions limiting compensation cannot be invoked without strict compliance with procedural requirements.Malik Nasim Ahmad Aheer v WAPDA (PLD 2004 SC 897)Highlighted the necessity for courts to adhere to claimed compensation if procedural notices are served.Land Acquisition Officer, Hyderabad v Gul Muhammad (PLD 2005 SC 311)Reinforced the principle that compensation cannot exceed the claimed amount when procedural notices are duly served.M/s AK Tariq Foundry Etc. v. Government of Pakistan (Civil Petitions No. 159 to 178 of 2023)Struck down discriminatory classifications under the Sales Tax Act, 1990, violating Article 25 of the Constitution. This precedent was pivotal in the present case for addressing the issue of discriminatory treatment in CGO No. 8 of 2021.

Summary: (a) Customs Act (IV of 1969)--- ----Ss. 2(s), 16, 156 (1)(89), 187 & 211---Smuggling, allegation of---Documentary proof produced by importer---Burden of proof, shifting of---Scope---Customs Appellate Tribunal (‘Tribunal’) concurred with adjudication proceedings that the subject vehicle was a non-duty paid smuggled vehicle liable to confiscation in view of the fact that the PRAL data base did not reflect any import data of the subject vehicle---Validity---Tribunal failed to take into consideration that the subject vehicle was a 1999 model whereas the PRAL database was set up in the year 2000---As such the Tribunal erred in basing its decision on the finding that the PRAL data did not reflect any import data of subject vehicle---Applicant produced the registration documents of the subject vehicle ; and the Custom Authorities sought verification of such registration documents but the concerned Motor Registration Authority was unable to provide the relevant record as their documentation was destroyed in the year 2007---However, in such circumstances, the conclusion that the subject vehicle was a smuggled vehicle was mere conjecture and a presumption---Applicant discharged his burden of proof under S. 187 of the Customs Act, 1969, by producing the registration documents, who could not be penalized for the failure of the concerned Motor Registration Authority for their failure to verify the registration document on account of loss of their record---Since the applicant met its initial burden, the burden to prove (that the subject vehicle was a smuggled one) shifted upon the Custom Authorities which they failed to discharge, as not a shred of evidence was available on the record to prove the charge of smuggling against the applicant---Resultantly, the questions proposed by the applicant were answered in his favour---High Court set-aside the impugned judgments---Customs Reference was allowed. Collector Customs, Sales Tax and Central Excise v. Professor Muhammad Khan 2007 SCMR 10; Additional Collector of Customs (Adjudication) at Model Customs Collectorate, Ardara Road, Peshawar v. Hidayat Ullah 2024 PTD 226; Collector of Customs (Prevention), Karachi v. Ghulam Muhammad 2008 PTD 525 and Additional Director, Directorate General of Intelligence and Investigation-FBR, Regional Office, Karachi v. Imran 2021 PTD 1683 ref. Director General of Intelligence and Investigation, Federal Board of Revenue v. Malik Muhammad Ajmal Khan and another Custom Reference No.05/2013 and Director General of Intelligence and Investigation Custom, Islamabad v. Ghulam Ali Noon and another Custom Reference No.28/2020 distinguished. (b) Customs Act (IV of 1969)--- ----Ss. 2(s), 16, 156(1) (89) & 179(3)---Smuggling, matter of---Adjudication proceedings---Limitation---Order-in-Original was clearly time barred as it was passed two months and twenty four days after the Show-Cause Notice---Decision given beyond the prescribed limitation under S. 179(3) of the Customs Act was invalid---Resultantly, the questions proposed by the Applicant were answered in his favour---High Court set-aside the impugned judgments---Customs Reference was allowed. Collector of Customs (Appraisement), Peshawar v. Messrs Allied Associates, Peshawar 2024 PTD 374; Messrs Mujahid Soap and Chemical Industries (Pvt.) Ltd. v. Customs Appellate Tribunal, Bench-I, Islamabad 2019 SCMR 1735 and Messrs Khyber Tea and Food Company, Peshawar v. Collector Customs, Model Customs Collectorate, Islamabad 2021 PTD 879 ref. M. Ikram Shah and Raja Iftikhar Ahmed for Appellant. M. Amin Feroz Khan and Ch. Talib for Respondents Nos.2, 4 and 5. Date of hearing: 22nd April, 2024.

Summary: Federal Excise Act (VII of 2005)--- ----S. 11---Customs Act (IV of 1969), Ss.19A & 33, 'proviso'---Excess paid Federal Excise Duty (FED)---Refund, claim for---Entitlement---Excess paid duty passing onto the consumer, incidence of---Effect---Refund of excess duty not admissible if incidence has passed on to consumer---Scope---Refund justified where the excess duty was not passed on to the consumer---Collector Customs challenged the decision of the Customs Appellate Tribunal, which had upheld the refund of 1% excess Federal Excise Duty (FED) to respondent---The respondent imported edible oil and was charged 17% FED during a period when the applicable rate was 16%---The collector had denied the refund, arguing the burden had been passed to the consumer---However, the respondent proved through sales records that product prices remained unchanged, hence the burden was not transferred---Validity---Only controversy between the parties was as to "whether the excess recovered FED was refundable to respondent or not?"---Held: Careful perusal of S. 11 of Federal Excise Act, 2005 (the Act, 2005) revealed that the refund claim for excess payable/paid duty was not admissible if the incidence of such excess paid duty had passed on to the consumer---The petitioners took the stance that under S. 19A of the Customs Act, 1969, it would be presumed that the incidence had been shifted to consumer---Presumption under S. 19A ibid only prevailed when the person paying duty had failed to prove that the incidence of excess paid duty was not passed on to buyer---In the present case, the situation was, however, different---The Collectorate of Customs (Appeals), Islamabad, during hearing of appeal, required the respondents to produce their Sales Tax Register for the month of relevant period wherein it was found that the sale price of the final product was not enhanced by them---Accordingly, it was rightly held by the Collectorate of Customs (Appeals) that the respondent had not passed on the excess paid duty to consumer---In the present case, there was no proof that the excess paid duty was passed on to the buyer, rather it was proved that the duty was recovered on raw material before manufacturing of final product and it was paid by the manufacturer himself and the rates were not enhanced as a consequence of payment of such excess duty---Secondly the proviso to S. 33 of the Customs Act, 1969 would become redundant when the refunds becomes due in consequence of any decision by the appropriate officer of Customs or Board, or the Appellate Tribunal or the Court---Refund in question became due upon order passed by the Collectorate of Customs (Appeals), Islamabad, as such benefit could not be claimed by the petitioners under Proviso to S. 33 of the Customs Act, 1969---Excess duty recovered by the petitioners from respondents was refundable because its burden was not passed on to intermediary or end consumer---Present tax reference was dismissed, in circumstances. Collector of Customs Appraisement, Collectorate, Customs House Karachi v. Messrs Gul Rehman, Proprietor Messrs G.Kin Enterprises, Ghazali Street, Nasir Road, Sialkot 2017 SCMR 339 rel. Syed Waqas Naqvi for Petitioners. Hassan Idrees Mufti for Respondent. Date of hearing: 3rd April, 2024.

Summary: The petitioners challenged the validity of the show cause notices issued to them under Section 24(2) of the Punjab Sales Tax on Services Act, 2012. The notices were claimed to be issued based on assumptions contrary to the data provided by the taxpayers in their returns.-----Issues:Whether the show cause notices issued under Section 24(2) of the Punjab Sales Tax on Services Act, 2012 were valid and in accordance with the legal requirements of the Act.Whether the petitioners were afforded an adequate opportunity to respond to the notices and whether the process conformed to the principles of natural justice.-----Holding/Reasoning/Outcome:The Lahore High Court, Rawalpindi Bench, allowed the writ petitions and set aside the impugned show cause notices. The court found that:The notices were issued based on inadequate inquiries and failed to consider the objections raised by the taxpayers in their responses.The issuing authority did not provide the taxpayers with the opportunity for a hearing as mandated by the Act, nor did they adequately address the objections raised in the taxpayers' responses.The procedure stipulated under Section 52 of the Act, which requires serving a notice for the recovery of tax not levied or short-levied, was not followed.The court directed that the matter be remitted back to the respondent authority to conduct a thorough inquiry in accordance with the Act, ensuring that all procedural requirements, including the opportunity for hearing and consideration of taxpayers' objections, are fulfilled.-----Citations/Precedents:Mian Umar Ikram-Ul-Haque vs. Dr. Shahida Hasnain and another [2016 SCMR 2186]Mirza Daud Baig vs. Additional District Judge, Gujranwala and others [1987 SCMR 1161]Piao Gul vs. The State [PLD 1960 Supreme Court (Pak.) 307]Mst. Razia Begum vs. Mst. Sardar Begum and others [PLD 1978 Lahore 696]Allah Jiwaya vs. Judge Family Court, Ahmadpur Sharquia and another [1990 MLD 239]Syed Mukhtar Hussain Shah vs. Mst. Saba Imtiaz and others [PLD 2011 Supreme Court 260]

Summary: (a) Sales Tax Act (VII of 1990)---- ----S. 36 (now S. 11), S. 74, & S. 7---Adjudication period---Limitation and jurisdiction---Effect of delay in adjudication---Show-cause notice under S. 36 issued to Peshawar Electric Supply Company (PESCO) resulted in adjudication exceeding statutory limits of 180 days (120 days + 60 days extension) without sufficient justification. Held, under Super Asia Muhammad Din and Sons v. Collector of Sales Tax (2017 SCMR 1427), such proceedings are void if adjudication exceeds time limits without lawful extension. However, WAK Ltd. Multan Road v. Collector Central Excise (2018 SCMR 1474) clarified that such time limitations are not mandatory but directory, aimed at expeditious disposal, not extinguishment of liability. Time extension granted under S. 74 must not exceed six months beyond statutory limits, per Super Asia Muhammad Din's case. (b) Sales Tax Act (VII of 1990)---- ----S. 7 & S. 8---Input tax adjustment---Taxable activities and losses---PESCO claimed input adjustment for transmission and distribution losses, including theft, contending these fall within taxable activities. Held, losses incurred during distribution are natural and inevitable; therefore, input adjustment is permissible as such losses are part of taxable activities. Reliance placed on Mayfair Spinning Mills Ltd. v. Secretary Revenue Division (PTCL 2002 CL 115) and Attock Cement Pakistan Ltd. v. Commissioner Inland Revenue (2023 SCMR 279). (c) Sales Tax Act (VII of 1990)---- ----S. 3 & S. 7---Supplies to erstwhile tribal areas---Non-applicability of charging and machinery provisions---At the relevant time, the Sales Tax Act, 1990, was not extended to Federally and Provincially Administered Tribal Areas (FATA/PATA). Held, as per M/s. Gul Cooking Oil v. Collector of Customs (2008 PTD 169) and Hazrat Hussain v. Pakistan through Chairman FBR (2018 SCMR 939), supplies to FATA/PATA were exempt, and input tax adjustment could not be claimed for such supplies. (d) Tax Administration---- ----Judicial consistency---Consolidated judgment disposing of multiple sales tax references involving common questions of law and facts to ensure uniformity in legal interpretation and application. -----Cited Cases: Super Asia Muhammad Din and Sons v. Collector of Sales Tax (2017 SCMR 1427) WAK Ltd. Multan Road v. Collector Central Excise (2018 SCMR 1474) Attock Cement Pakistan Ltd. v. Commissioner Inland Revenue (2023 SCMR 279) Mayfair Spinning Mills Ltd. v. Secretary Revenue Division (PTCL 2002 CL 115) Hazrat Hussain v. Pakistan through Chairman FBR (2018 SCMR 939) -----Disposition: References answered in terms of findings. Input adjustment allowed for transmission losses; disallowed for supplies to exempt areas.

Summary: Refund Claim --- i) What is the scope of Section 10 of the Act andwhether the elapse of time stipulated thereunder ipsofacto renders the refund claim admissible and due? --- ii) What are the consequences of delay in deciding therefund claim? --- iii) Whether in the facts and circumstances of the caseand the scope of Section 10 of the Act, the presentpetition having been filed against a show-causenotice issued, premised on pre-refund audit --- The court emphasized that tax authorities could not indefinitely delay the processing of refund claims. Instead, they had to adhere to the specified time limits outlined in Section 10(3) of the Act. The court highlighted the absence of consequences for non-compliance with these time limits and recommended legislative action by the Federal Government to address this policy gap --- Applicability of Section 67: The court examined Section 67 of the Sales Tax Act, which provided for additional payment to the taxpayer in case of delayed refunds. It clarified that this provision was applicable only after the investigation of the claim and for the amount determined to be due. The court thus interpreted the conditions under which Section 67 became operative, highlighting its role in compensating taxpayers for delayed refunds.proceedings against the petitioner, is maintainable? --- The court went beyond the specific case at hand and directed the Federal Government to consider enacting legislation to address the consequences of non-compliance with the time limits specified in Section 10(3).