Summary: (a) Customs Act, 1969 ‑‑‑Ss. 2(s), 156(1)(8), (89) & (90), 187 & 211—Registered motor‑vehicles, already bearing verified provincial registration or sold through a Government auction, cannot be seized or confiscated merely because the present possessor is unable to produce original import documents—Once such owner shows (i) an authenticated registration book issued under the Motor Vehicles Ordinance, 1965 or (ii) genuine auction papers, a “lawful excuse” within the meaning of cl. (89) is established, shifting the burden to Customs to prove (through affirmative evidence) that the vehicle entered Pakistan via an unauthorised route or without payment of leviable duties—Failure by Customs to discharge that onus renders the seizure illegal.  Cited cases: Commissioner Inland Revenue v. Panther Sports 2022 SCMR 1135; Privy Council PLD 1955 PC 29. (b) S. 211, Customs Act—Limitation for record‑keeping—Importers and other stakeholders are bound to preserve import records only for three years (five years after Finance Act 2007)—Where more than the prescribed period has elapsed from the date of auction or first registration, no adverse inference can be drawn from non‑production of import papers, and seizure founded solely on that omission is unsustainable. (c) S. 2(s)(ii) & SRO 491(I)/85 (23‑5‑1985) as amended 14‑9‑1998—Motor‑vehicles brought into Pakistan before 14‑9‑1998 (when vehicles were first added to the notified list of goods) are not per se “smuggled goods” under cl. (ii); to attract that clause Customs must affirmatively show import through an undeclared route under S. 2(s)(iii). (d) Motor Vehicles Ordinance, 1965 ‑‑‑Ss. 23‑43 & 27—Statutory procedure for inspection and registration creates a presumption of regularity; a duly verified registration certificate is an “other document prescribed by law” for purposes of S. 187, Customs Act, and constitutes prima facie evidence of lawful title to the vehicle. (e) Tampering exception—Where the engine or chassis number has been obliterated, re‑punched or otherwise falsified to match a different vehicle, or where auction/registration documents are proved forged, the defence of lawful excuse is unavailable; such vehicles remain liable to confiscation under Ss. 156(1)(89) & (90). (f) Burden of proof—“Lawful authority” vs. “lawful excuse”—“Lawful authority” in S. 187 demands strict proof of a permit or licence, whereas “lawful excuse” in cl. (89) calls only for a plausible explanation; equating the two would impermissibly narrow the statutory defence. Once a plausible excuse is shown, Customs must prove smuggling by positive evidence—the mere absence of import documents does not suffice.  Cited cases: Privy Council PLD 1955 PC 29 (distinction affirmed). Disposition—All twenty‑three civil appeals filed by Customs dismissed; Sindh High Court judgments affirmed. Registered or auctioned vehicles to be released to respondents; only those proven to bear tampered identifiers or forged papers remain subject to confiscation in accordance with law.

Summary: (a) Taxation – Alternative Dispute Resolution for State-Owned Enterprises (SOEs): ----Income Tax Ordinance, 2001 (XLIX of 2001), S.134A---Sales Tax Act, 1990, S.47A---Federal Excise Act, 2005, S.38---Mandatory referral of tax disputes by SOEs to Alternative Dispute Resolution Committee (ADRC)---Scope and application---Petitioner, a State-Owned Enterprise (SOE), challenged coercive recovery proceedings initiated by the tax authorities despite applying for ADR under S.134A of the Income Tax Ordinance, 2001---Held, as per the amendments introduced through the Finance Act, 2024, SOEs are required to apply for ADR before FBR in case of any tax dispute, and coercive recovery measures should not be adopted by tax authorities during the pendency of ADR proceedings---FBR issued a directive on 03.09.2024, instructing all tax departments to withdraw recovery notices against SOEs, confirming that no other legal remedy was available except ADRC---Court directed that all tax authorities must comply with these instructions to prevent unnecessary litigation and delays. ----Cited Case: • Civil Aviation Authority of Pakistan v. Federation of Pakistan (Constitution Petition No.D-1513 of 2024) (b) Judicial Review – High Court’s Role in Tax Matters: ----Constitution of Pakistan, Art.199---Judicial review of tax recovery measures against SOEs---Held, courts are burdened with excessive litigation due to coercive tax recovery measures taken by the Inland Revenue Department against SOEs, despite clear statutory provisions mandating ADRC for dispute resolution---Court noted that SOEs and FBR both fall under the Federal Government, making tax disputes between them a mere financial reallocation within the same entity, leading to unnecessary litigation costs and inefficiency---Court directed Inland Revenue officials to strictly comply with ADRC provisions and warned of legal action, including contempt of court proceedings, against non-compliant officials. ----Cited Case: • Province of Punjab Case (2024 SCMR ___) (c) Withdrawal of Recovery Notices – FBR’s Directive: ----Tax Laws (Amendment) Act, 2024---FBR's Letter dated 03.09.2024 directing all tax offices to withdraw recovery notices against SOEs---Scope and application---Court acknowledged FBR’s corrective action and took its letter and newly issued SRO 1290(I)/2024 on record, confirming that SOEs must resolve tax disputes exclusively through ADRC---Court warned that future non-compliance by tax officials would invite contempt proceedings. -----Disposition: Petition disposed of in favor of the Petitioner (SOE). FBR's directive for withdrawal of tax recovery notices against SOEs to be strictly implemented. Failure to comply will result in legal action against delinquent officials.

Summary: Background: A group of individual and private limited companies operating in the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) challenged the Federal Board of Revenue (FBR) and the Government of Pakistan regarding tax exemptions. These companies were enjoying immunity from sales tax and income tax before the 25th amendment to the Constitution of Pakistan in 2018. Post-amendment, the exemptions continued through specific statutory regulatory orders (SROs). However, a change introduced by the Finance Act, 2024, requiring the presentation of a pay order instead of a post-dated cheque for tax exemption, created a dispute. ----Issues: 1- Whether the new requirement for a pay order instead of a post-dated cheque for tax exemption, introduced by the Finance Act, 2024, applies retrospectively. 2- Whether goods already imported and manifested before the enactment of the Finance Act, 2024, should be subject to the new requirement. ----Holding/Reasoning/Outcome: The court held that the amendment made by the Finance Act, 2024, does not apply retrospectively to goods that were already imported and had reached Pakistan’s territorial waters or were manifested before July 1, 2024. The court emphasized that, at common law, there is a presumption against retrospective application of statutes unless explicitly stated. It referred to precedents where the courts have ruled against the retrospective application of statutes unless it is clearly intended. The amendment requiring a pay order instead of a post-dated cheque is seen as a new condition that should not affect past transactions. The court cited the principle that fiscal statutes are to be construed strictly and are not to impose additional burdens retrospectively unless explicitly stated. All the writ petitions were allowed, providing relief to the petitioners by ruling that the new requirement does not apply to their previously imported goods. ----Citations/Precedents: Messrs Taj Packages Company (Pvt) Ltd vs. The Government of Pakistan (2016 PTD 203) Pakistan vs. Hazrat Hussain (2018 SCMR 939) Al-Samrez Enterprise vs. The Federation of Pakistan (1986 SCMR 1917) Gas & Oil Ltd. Pakistan vs. Collector, Model Customs Collectorate of Preventive & others (C.P No. D-1650 of 2020, decided on 29.10.2020) M/s Gadoon Textile Mills and others vs. Federation of Pakistan and others (WP No. 6127-P/2019, decided on 07.09.2023) M.Y. Electronic Industries (Pvt) Ltd. vs. Government of Pakistan (1998 SCMR 1404) Zila Council Jehlum vs. Messrs Pakistan Tobacco Company Ltd (PLD 2016 SC 398) Member (Taxes) Board of Revenue Punjab vs. Qaisar Abbas (2019 SCMR 446) Wainwright vs. Home Office [2002] QB 1334 Gustavson Drilling (1964) Ltd vs. Minister of National Revenue (1977 1 SCR 271) Collector of Central Excise and Land Customs vs. Azizuddin Industries Ltd, Chittagong (PLD 1970 SC 439) ----Quote: Legislature can legislate prospectively and retrospectively, such power is subject to certain constitutional and judicially recognised restrictions. According to the canons of construction, every statute including amendatory statutes is prima facie prospective, based on the principle of nova constitutio futuris formam imponere debet, non praeteritis (which means ‘a new law ought to regulate what is to follow, not the past’ as per Osborn: Concise Law Dictionary); unless it is given retrospective effect either expressly or by necessary implication. In other words, a statute is not to be applied retrospectively in the absence of express enactment or necessary intendment, especially where the statute is to affect vested rights, past and closed transactions or facts or events that have already occurred. This principle (s) is attracted to fiscal statutes which have to be construed strictly, for they tend to impose liability and are therefore burdensome (as opposed to beneficial legislation). Furthermore, it is not only the wording/text of the statute which is to be considered in isolation; we are not to examine simpliciter whether such law has a retrospective effect or not, rather it has to be examined holistically by considering several factors such as, the dominant intention of the legislature which is to be gathered from the language used, the object indicated or the mischief meant to be cured, the nature of rights affected, and the circumstances under which the statute is passed. The law laid down in Zila Council’s case ibid was reaffirmed by the Apex Court in the case of Qaisar Abbas and others[1] , further elucidating the matter that retrospectivity can only be attributed to a statute where it is made explicit or can be inferred by necessary implications; it cannot be presumed. The close perusal of the Finance Act, 2024 does not give any impression that it applies to any transaction which has taken place prior to 1st July, 2024 nevertheless judgment of the Apex Court in the Al-Samrez Enterprise’s case (supra), in our humble view, is attracted to the present cases wherein it was held that “we are therefore, clearly of the opinion that if a binding contract was concluded between the appellants and the foreign exporter or steps were taken by the appellants created a vested right to the then existing notification granting exemption, the same could not be taken away and destroyed in modification of the earlier one, on the ground that under section 21 of the General Clauses Act, the government could exercise the power of modification”. ----------------------------------------------------------------------------------- Member (Taxes) Board of Revenue Punjab, Lahore and others Vs Qaisar Abbas and others (2019 SCMR 446)

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: Background:This case arose from a series of petitions filed in the Supreme Court of Pakistan, challenging the jurisdictional assignments made by the Inland Revenue Service. The petitions contested the validity of a notification issued under Section 209 of the Income Tax Ordinance, 2001, which transferred jurisdiction over Large Taxpayer Units (LTUs) in Quetta and Peshawar to Karachi and Islamabad respectively. The notification was seen as problematic because it effectively centralized control and oversight, potentially complicating tax administration for entities in the affected regions.----Issues:Whether the notification assigning jurisdiction of LTU cases in Quetta and Peshawar to Karachi and Islamabad was lawful under the Income Tax Ordinance, 2001.The appropriateness of the delegation of powers by the Federal Board of Revenue (FBR) under Section 8 of the Federal Board of Revenue Act, 2007, particularly whether such delegation was beyond the statutory mandate.---Holding/Reasoning/Outcome:The Supreme Court of Pakistan found that the contested notification had already been withdrawn by the Board on 12th and 13th March 2024, thus rendering the primary issue moot. However, during the proceedings, the court identified significant concerns regarding the broader powers and functions of the FBR. Specifically, it noted issues with the delegation of powers under Section 8 of the Federal Board of Revenue Act, 2007, which were deemed to potentially exceed the legal limits. The Court also highlighted the failure to establish a Policy Board as envisaged under the Act, and the inadequate maintenance of a data bank that could assist in managing appeals and ongoing cases efficiently.The petitions were disposed of since the original grievance concerning the notification had been addressed by its withdrawal. Nonetheless, the court directed that the systemic issues identified be addressed in the upcoming Finance Act and ordered the establishment of the Policy Board to proceed promptly.----Citations/Precedents:Section 209 of the Income Tax Ordinance, 2001Section 8 of the Federal Board of Revenue Act, 2007Section 6 of the Federal Board of Revenue Act, 2007Section 14 of the Federal Board of Revenue Act, 2007

Summary: Background:This judgment addresses a series of writ petitions challenging the retrospective applicability of Division II B of Part I of the First Schedule to the Income Tax Ordinance, 2001, as amended by the Finance Act, 2023. The amendment, which took effect on July 1, 2023, revised and increased the super tax rates for certain income slabs for the tax year 2023 retrospectively. Petitioners sought to strike down the amendment on the grounds of imposing increased tax liability retrospectively, relying on precedent set in the case titled "Fauji Fertiliser Company Limited vs Federation of Pakistan and others" in Writ Petition No. 4027 of 2022.-----Issues:Whether the petitions challenging the retrospective applicability of the super tax rates under the amended Income Tax Ordinance are maintainable.Whether the retrospective application of the amended tax rates is legal and valid.---Holding/Reasoning:The court held that the petitions were maintainable and decided against the retrospective application of the amended super tax rates. The court relied on precedent from the "Fauji Fertiliser" case, which had already addressed the issue of retrospective taxation. It was affirmed that the amended provisions could not apply retrospectively for the tax year 2023 or any period prior to the promulgation of the amendment. The court directed the Federal Board of Revenue (FBR) to apply the amendment prospectively only and to follow the interpretation of Section 4C of the Ordinance as established in the "Fauji Fertiliser" judgment.----Citations/Precedents:Fauji Fertiliser Company Limited vs Federation of Pakistan and others in Writ Petition No. 4027 of 2022: Established the principle that the court could strike down amendments imposing retrospective tax liabilities.Mono Engineering (Pvt.) Ltd vs Karachi Development Authority (1999 YLR 1340) and Muhammad Muzzafar Khan vs M. Yusuf Khan (PLD 1959 SC 9): Reiterated that a Single Judge is bound by their own judgment.Various other cited cases and legal principles discussed in the judgment were used to determine the maintainability of the petitions and the validity of retrospective taxation under Pakistani law.

Summary: Background: The appellant, the Additional Collector of Customs, filed an appeal against the judgment of the High Court of Sindh, Karachi, which favored the respondent, M/s K. S. Sulemanji Esmailji & Sons Pvt. Ltd. The dispute arose over the classification of goods imported by the respondent, specifically “BOPP” Printed Laminated Packaging Film (Metalized). The respondent sought a refund on customs duties, claiming that an incorrect classification had led to an overpayment of customs duty at 25% instead of 20%. After referring the matter to the Classification Committee of the Federal Board of Revenue (FBR), the committee classified the goods under a heading that maintained the 25% duty rate. Both the Tribunal and the High Court rejected the committee's ruling, favoring the respondent's classification, which attracted a 20% duty rate. The appellant challenged this decision in the Supreme Court. ----Issues: 1- Whether the classification ruling of the Classification Committee under PCT Heading 3920.2040 was correct. 2- Whether the Tribunal and the High Court erred in substituting their own classification of the goods without considering the ruling of the Classification Committee. 3- Whether the High Court and the Tribunal failed to properly interpret Rule 3(c) of the General Rules for Interpretation of the First Schedule to the Customs Act, 1969. ----Holding/Reasoning/Outcome: The Supreme Court allowed the appeal and set aside the judgments of the Tribunal and the High Court. The Court held that the Classification Committee’s determination under PCT Heading 3920.2040, which attracted a 25% customs duty, was correct and in accordance with the applicable rules. The Committee had relied on the Customs House Laboratory’s analysis and the Explanatory Notes to the Harmonised Commodity Description and Coding System, issued by the World Customs Organisation. The Court emphasized that the Classification Committee, established by the FBR, has technical expertise in determining the correct classification of imported goods. It further ruled that the Tribunal and the High Court had overstepped their bounds by disregarding the Committee's ruling without demonstrating that the Committee’s decision was arbitrary or in violation of the relevant rules and guidelines. The Supreme Court noted that Rule 3(c) of the Rules of Interpretation had been correctly applied by the Committee, and the classification under the heading "Others" was inappropriate as it pertained to films other than BOPP. Thus, the rejection of the respondent’s refund application was restored, and the Supreme Court ruled in favor of the appellant. ----Citations/Precedents: Rule 3(c) of the General Rules for Interpretation of the First Schedule to the Customs Act, 1969. Explanatory Notes of the Harmonised Commodity Description and Coding System (World Customs Organisation).

Summary: Background: The petitioners (Collector of Customs and others) sought leave to appeal against a decision by the High Court of Sindh, Karachi, where the court had ruled that the imposition of mobile handset levy on phones other than smartphones was unlawful and without jurisdiction. The respondents, various mobile phone importers, challenged the imposition of the mobile handset levy under section 10 of the Finance Act, 2018, which specified that the levy applied only to smartphones. The dispute arose when the Federal Board of Revenue (FBR) attempted to expand the scope of the levy to include feature phones through an amendment in the table attached to section 10 in the Finance Act, 2022. ----Issues: 1- Whether the imposition of the mobile handset levy on phones other than smartphones was lawful under section 10 of the Finance Act, 2018. 2- Whether the amendment of the table in the Finance Act, 2022, could lawfully extend the scope of the levy beyond smartphones without amending the charging section. ----Holding/Reasoning/Outcome: The Supreme Court dismissed the petitions, upholding the decision of the High Court. The court ruled that the power to impose a levy must originate from the charging section of the statute, not from the table that merely specifies rates. Since section 10 of the Finance Act, 2018, specifically mentioned smartphones, the levy could not be extended to other types of phones through a mere amendment to the table. The court found that the charging section remained unaltered, and the legislature's intent to limit the levy to smartphones was clear. Any attempt to recover the levy on feature phones was therefore without lawful authority. The court reiterated the settled legal principle that a table or schedule in fiscal statutes is subordinate to the charging section and cannot independently create new liabilities or expand the scope of a tax without proper legislative amendments to the charging provision itself. ----Citations/Precedents: Settled principles of law on interpretation of fiscal statutes and tax laws.

Summary: Issue(s):Whether the FBR was justified in withdrawing the tax exemptions initially granted to the company through various SROs.The applicability of SRO 561/94 in light of SRO 580/91 and the Protection of Economic Reforms Act, 1992.Whether subsequent SROs (482/92, 477/95, 515/95) were validly applied to the company, affecting its vested rights and tax exemptions.---Holding:The appeal regarding SRO 561/94 is dismissed, upholding the company's entitlement to tax exemptions under SRO 580/91 based on the Protection of Economic Reforms Act, 1992.The appeals regarding SRO 477/95 and 515/95 are allowed, with the Court finding no vested rights or promissory estoppel preventing the FBR from withdrawing the excise duty exemption or adjusting the sales tax for competitors.By a majority, the appeal regarding SRO 482/92 is allowed, with the Court finding no impediment to its applicability to the company, despite dissenting opinions regarding indirect withdrawal of tax benefits.---Reasoning:The Court applied the Protection of Economic Reforms Act, 1992, to uphold the company's entitlement to tax exemptions under SRO 580/91, asserting that vested rights could not be negated by subsequent SROs.For SRO 477/95 and 515/95, the Court found no basis in the doctrines of vested rights or promissory estoppel to prevent the FBR from altering the tax exemptions.The majority opinion held that SRO 482/92's applicability to the company did not unlawfully negate its tax benefits, with a dissenting view emphasizing the preservation of vested rights and the principle against indirect revocation of benefits.---Judgment:The Supreme Court partly allowed the appeals, affirming the company's right to tax exemptions under SRO 580/91 while allowing the FBR to apply subsequent SROs altering other exemptions.

Summary: Background: The Directorate General of Intelligence and Investigation, Federal Board of Revenue (FBR), filed a reference application challenging the Appellate Tribunal’s acceptance of an appeal by the taxpayer. The taxpayer had argued that the original assessment order was invalid as it was passed beyond the mandatory time limit prescribed under the Customs Act, 1969. The Department, however, failed to provide any records of an authorized extension for this delay. -----Issues: 1- Whether the reference was maintainable given that the assessment order was passed beyond the legally prescribed time limit. -----2- Whether the authorization for filing the reference complied with Section 196(1) of the Customs Act, 1969. -----Holding/Reasoning/Outcome: --Limitation and Validity of Order: The court held that it was the Department's responsibility to prove the original assessment order was passed within the prescribed 120-day period. Since the order was issued 41 days late and there was no documentation of an authorized extension, the assessment order could not be sustained in law. The Supreme Court has previously established that orders passed beyond mandatory time limits are invalid, and this objection could be raised at any stage. --Authorization: The respondent also questioned the lack of written authorization for the Additional Director to file the reference. The Department failed to meet the requirements of Section 196(1) of the Customs Act, as no valid authorization was produced. The court dismissed the reference as it was based on an unsustainable and unauthorized order.