Summary: Background:The case involves the imposition and collection of various taxes including advance income tax, Federal Excise Duty, and sales tax on services by cellular mobile operators.Cellular mobile operators have ceased levying and collecting service/maintenance charges.The Attorney General for Pakistan (AGP) questions the jurisdiction of the court under Article 184 (3) of the Constitution.---Issues:Whether the imposition of high taxes on mobile phone usage violated fundamental rights.Whether the Supreme Court had jurisdiction to intervene in matters of taxation under Article 184(3) of the Constitution.---Holding/Reasoning/Outcome:The Supreme Court exercised its extraordinary jurisdiction under Article 184(3) of the Constitution to address the matter, emphasizing the importance of protecting the rights of all citizens, especially the marginalized. It held that while taxation is necessary for public welfare, it should not disproportionately burden the public, particularly those from lower income groups. The Court found that the imposition of advance income tax on mobile phone users without proper justification violated fundamental rights, as it amounted to undue enrichment by the government. However, it refrained from making definitive rulings on the legality of the taxes, opting to let lower courts decide the matter.---Citations/Precedents:Iqbal Zafar Jhagra v Federation of Pakistan (2013 SCMR 1337)Engineer Iqbal Zafar Jhagra and another v Federation of Pakistan and others (2013 SCMR 1337)Abdul Wahab and others v HBL and others (2013 SCMR 1383)Watan Party and another v Federation of Pakistan and others (PLD 2011 SC 997)All Pakistan Newspapers Society and others v Federation of Pakistan and others (PLD 2004 SC 600)Ch. Muhammad Siddique and two others v Government of Pakistan through Secretary, Ministry of Law and Justice Division, Islamabad and others (PLD 2005 SC 1)Pakistan Muslim League (N) through Khawaja Muhammad Asif, M.N.A. and others v Federation of Pakistan through Secretary Ministry of Interior and others (PLD 2007 SC 642)Thal Industries Corporation Limited through Legal Manager v Government of the Punjab through Chief Secretary, Punjab and 10 others (2007 SCMR 1620)Jamat-e-Islami through Amir and others v Federation of Pakistan and others (PLD 2009 SC 549)Munir Hussain Bhatti, Advocate and others v Federation of Pakistan and another (PLD 2011 SC 407)Watan Party and others v Federation of Pakistan and others (PLD 2012 SC 292)Muhammad Azhar Siddique and others v Federation of Pakistan and others (PLD 2012 SC 660)Baz Muhammad Kakar and others v Federation of Pakistan through Ministry of Law and Justice and others (PLD 2012 SC 923)Dr. Muhammad Tahir-ul-Qadri v Federation of Pakistan through Secretary M/o Law, Islamabad and others (PLD 2013 SC 413)Imran Ahmad Khan Niazi v Mian Muhammad Nawaz Sharif, Prime Minister of Pakistan/Member National Assembly, Prime Minister?s House, Islamabad and 9 others (Panama Papers Scandal) (PLD 2017 SC 265)

Summary: Background:The dispute arises from the determination of seniority among probationers of the 25th Common Group who were placed in the Customs & Excise Group. The terms and conditions of their service as probationers are governed by the Civil Servants Act, 1973, and the Occupational Groups and Services (Probation, Training, and Seniority) Rules, 1990 (1990 Rules). The 1990 Rules underwent an amendment on 28.04.2001, introducing a change in the method of reckoning seniority by including the number of attempts to clear specialized training examinations as a criterion.---Issues:Whether the 2001 amendment to the 1990 Rules, which included the number of attempts to clear examinations as a criterion for seniority, applies retrospectively to the probationers of the 25th Common Group.Whether the 1990 Rules should be applied to determine the inter se seniority of probationers, considering their legitimate expectancy and the anomalies resulting from the 2001 amendment.Holding/Reasoning/Outcome:The Court finds that the 2001 amendment, which affects the seniority position of probationers, infringes upon their legitimate expectancy and alters their accrued status. The amendment, applied retrospectively, imposes adverse consequences and is burdensome to implement on probationers who had already commenced their probationary period. Additionally, the failure to conduct one of the required examinations further complicates the application of the amendment. While the 1990 Rules remain applicable for determining the rights and ranking of probationers, the Court holds that implementing the amended Rule 6 of the 2001 amendment in its entirety would be harsh and unfair. Therefore, the Court rules that the 1990 Rules, in their unamended form as at the commencement of the probationary period in July 1998, shall govern the determination of seniority of the probationers.---Citations/Precedents:Civil Servants Act, 1973Occupational Groups and Services (Probation, Training, and Seniority) Rules, 1990Council of Civil Service Unions and Others v. Minister for the Civil Service [1984] 3 All ER 935Regarding pensionary benefits of the Judges of Superior Courts (PLD 2013 SC 29 at p.1008)Al-Jehad Trust v. Federation of Pakistan (PLD 1996 SC 324)Union of India v. Hindustan Development Corporation (AIR 1994 SC 988)

Summary: Background:M/s Al-Khair Gadoon Limited filed two appeals challenging the decision of the Islamabad High Court in Tax Appeals No. 7 and 8 of 2005. The appeals were related to alleged violations of provisions of the Central Excise Act, 1944, regarding the clearance of foam and foam products at prices allegedly lower than declared for the purpose of paying excise duty.---Issues:Whether the non-mentioning of the correct section of the Central Excise Act in the show cause notices served by the Revenue would vitiate the proceedings.Whether the challenge to the legality of the notices should be decided by the Supreme Court or remanded to the Appellate Tribunal.---Holding/Reasoning/Outcome:The Supreme Court examined the legislative background of Section 4 of the Central Excise Act, which provides for two distinct methods of determining excise duty: ad valorem assessment and assessment based on retail price. The notices served by the Revenue alleged evasion of excise duty under Section 4(2) of the Act, which applies when goods are declared based on retail price. However, the appellant argued that the goods were manufactured before the relevant provisions came into effect. The Court held that quoting a wrong provision in a show cause notice does not necessarily invalidate the proceedings, especially if the recipient is not prejudiced in preparing their defense. Quoting precedent cases, the Court emphasized that procedural errors should not deny relief if available under the law.The Court decided to remand the matter to the Appellate Tribunal for consideration. It reasoned that the Tribunal is better suited to adjudicate the mixed questions of law and fact raised by the appellant. Additionally, deciding the challenge at the Supreme Court stage might prejudice the appellant's right to redressal under the law. The Tribunal was instructed to expeditiously decide the appeals in accordance with the law.---Outcome: The appeals were accepted, and the decisions of the High Court and the Appellate Tribunal were set aside. The matter was remanded to the Appellate Tribunal for further consideration.

Summary: Background:A show cause notice (SCN) dated 23.05.2011 was issued to the appellant for the tax years 2006-2007, 2008-2009, and 2009-2010, raising various issues related to non-payment of Federal Excise Duty (FED) on certain transactions.After receiving replies from the appellant, the Deputy Commissioner Inland Revenue (DCIR) passed an Order-in-Original (O-in-O) on 04.10.2011 for recovery of amounts mentioned in the SCN, along with default surcharge and penalty.The appellant appealed the O-in-O before the Commissioner Inland Revenue, Appeals-II (CIRA), which partially accepted the appeal.Subsequently, the appellant filed an appeal before the Appellate Tribunal Inland Revenue (ATIR), which was dismissed.The appellant then appealed to the High Court, challenging the decision of the ATIR.---Issues:Whether the charges of Federal Excise Duty (FED) on TV license fee are valid under the relevant statutes.Whether the interpretation of the Pakistan Customs Tariff (PCT) headings by the lower authorities was correct.Whether the imposition of FED on TV license fee is consistent with the legislative intent and principles of taxation.---Holding/Reasoning/Outcome:The Islamabad High Court ruled in favor of the appellant, holding that the charges of Federal Excise Duty (FED) on TV license fee were not valid.The court reasoned that the charging of FED on TV license fee was not supported by the relevant statutes, including the Federal Excise Act and the Customs Act.The court emphasized that FED can only be levied on services specified in the First Schedule to the Federal Excise Act, and TV license fee did not fall within this category.The court also analyzed the Pakistan Customs Tariff (PCT) headings and concluded that TV license fee was not covered under any of the sub-headings of PCT Heading 98.12.Additionally, the court highlighted that the legislative intent behind the exemption provisions of the Federal Excise Act supported the appellant's position.Therefore, the court held that the imposition of FED on TV license fee was not legally valid, and the appellant was exempt from payment of FED on this transaction.---Citations/Precedents:Federal Excise Act, 2005Pakistan Customs Tariff (PCT)Wireless Telegraphy Act, 1933Television Receiving Apparatus (Possession & Licensing) Rules, 1970---Quote:Section 3 and the First Schedule to the Federal Excise Act, 2005 as well as the First Schedule to the Customs Act, 1969 are statutory provisions. Such provisions can only be amended by an Act of Parliament. Delegated legislation such as a Statutory Regulatory Order (SRO) cannot amend the same.

Summary: Background:The State, represented by the Director, Directorate-General of Intelligence & Investigation (Customs & Excise), Karachi, appealed against this acquittal. However, the High Court of Sindh dismissed the appeal, leading to the State's appeal to the Supreme Court of Pakistan.---Issues:Whether the High Court erred in dismissing the State's appeal against the acquittal.Whether the High Court's consideration of provisions from the Customs Act and the Code of Criminal Procedure was relevant to the appeal's maintainability.Whether the right of appeal in a case involving the recovery of narcotics is governed by the provisions of the Control of Narcotic Substances Act, 1997.---Holding/Reasoning/Outcome:The Supreme Court found that the High Court's dismissal of the State's appeal was based on an erroneous understanding of the relevant legal provisions.The High Court's consideration of provisions from the Customs Act and the Code of Criminal Procedure was deemed unnecessary since the appeal's maintainability is governed solely by the Control of Narcotic Substances Act, 1997.Section 48 of the Control of Narcotic Substances Act, 1997, does not restrict the State or the complainant from filing an appeal against an acquittal. Previous judgments, including The State through Mehmood Ahmad Butt, Deputy Director, Regional Directorate, Anti-Narcotics Force, Lahore v. Mst. Fazeelat Bibi (PLD 2013 SC 361) and State through Director General, Anti-Narcotics Force v. Abdul Jabar alias Jubbara (2017 SCMR 1213), were cited to support this interpretation.The Supreme Court allowed the appeal, set aside the High Court's judgment, and remanded the matter to the High Court for reconsideration on its merits. The bail bonds and sureties of the respondents were discharged by the Supreme Court.---Citations/Precedents:The State through Mehmood Ahmad Butt, Deputy Director, Regional Directorate, Anti-Narcotics Force, Lahore v. Mst. Fazeelat Bibi (PLD 2013 SC 361)State through Director General, Anti-Narcotics Force v. Abdul Jabar alias Jubbara (2017 SCMR 1213)

Summary: Background:Dispute regarding the import of tractors at zero tariff.---Issues:Whether the appellant is entitled to the release of imported tractors on the principle of promissory estoppel?Whether the withdrawal of the petition by the Federal Government affects the appellant's case?---Holding/Reasoning/Outcome:The appellant claimed exemption from duty based on promissory estoppel due to the initial permission granted.Promissory estoppel applies when a valid offer is made by competent authority without mala fide, arbitrariness, or lack of transparency.The High Court found the grant of permission for import suffered from arbitrariness and lack of transparency, thus, promissory estoppel does not apply.The subsequent notification allowing zero-rated duty was prospective and did not apply to past transactions.The withdrawal of the petition by the Federal Government does not support the appellant's case.The appeal was dismissed, affirming the High Court's judgment.---Citations/Precedents:Collector of Central Excise and Land Customs and 3 others Vs. Azizuddin Industries Ltd., Chittagong (PLD 1970 SC 439)Al-Samrez Enterprise Vs. The Federation of Pakistan (1986 SCMR 1917)M/s Friendship Textile Mills and others Vs. Government of Balochistan and others (2004 SCMR 346)---Quote:The procedure of the grant of permission to import tractors at zero rated duty suffered from arbitrariness, excessive jurisdiction, favoritism, lack of transparency, subjectivity and was also not in accordance with the decision of Economic Coordination Committee; therefore, the principles of promissory estoppel were not attracted in the facts and circumstances of the case.

Summary: The dispute centers around the improper reduction of output tax by M/s Lucky Plastic Industries through "Credit Notes" related to certain sales returns that were not documented.The Commissioner of Inland Revenue issued a Show Cause Notice to M/s Lucky Plastic Industries in 2009, seeking explanations for the alleged evasion. Adjudication proceedings followed, leading to an Order-in-Original dated 23-7-2010, where the Adjudicating Officer found the charges against M/s Lucky Plastic Industries to be valid. However, this order was passed beyond the time limit prescribed by Section 36(3) of the Sales Tax Act, 1990.M/s Lucky Plastic Industries appealed this decision, arguing that the order was time-barred. The Commissioner (Appeals) accepted this argument, stating that the extension of the time limit by the Federal Board of Revenue (FBR) was ineffective since it occurred after the initial limitation period had expired. The Department then appealed to the Tribunal, which dismissed the case on 2-9-2013. The matter has now been referred to the Lahore High Court for further consideration.The key legal issues revolve around whether the FBR's extension of the time limit under Section 74 of the Sales Tax Act, 1990, was valid after the expiry of the initial limitation period set by Section 36(3). The Department argues that it was, citing a judgment from the Islamabad High Court in support of their position.The Lahore High Court's judgment emphasizes the importance of statutes of limitation in maintaining an orderly and organized society and acknowledges the mandatory nature of Section 36(3) as determined by the Supreme Court. However, it also clarifies that Section 74 grants the Board the authority to extend time limits and outlines specific conditions for exercising this power. Since the Court lacks the Board's letter granting the extension, it remands the case to the Commissioner (Appeals) for a fresh decision, including an examination of whether the extension met the criteria set by the Supreme Court.In conclusion, the Lahore High Court's judgment favors the Department's argument regarding the validity of the time extension but requires further examination of the extension's compliance with the Supreme Court's conditions.

Summary: The petitioner through the present constitutional petition sought declaration that the petitioner is engaged in the manufacturing process through Toll Manufacturer and thus eligible to be registered as Manufacturer with the Tax Authorities.It was considered that the petitioner being manufacturer of its products owns the proprietary rights over its brand name and fixes the retail price and sell the finished product, hence the petitioner is engaged in the taxable supply being manufacturer. Provisions and definition clauses of the Sales Tax Act 1990, Federal Excise Act 2005 & Sales Tax Registration Rules 2006 were examined.Section 2 (17) was examined and it was considered that manufacturer is a person who engages, whether exclusively or not, in the production or manufacture of goods whether or not the raw material of which the goods are produced or manufactured are owned by him and shall include a person any person, firm or company which owns, holds, claims or uses any patent, proprietary, or other right to goods being manufactured, whether in his or its name, or on his or its behalf, as the case may be, whether or not such person, firm or company sells, distributes, consigns or otherwise disposes of the goods. It was also observed that there appears no provision in sales tax act, which could exclude a person who does not possess its own facility of manufacturing and get his products manufactured from toll manufacturing from claiming himself as manufacturer. The Federal Excise General Order No.2 of 2008 dated 06.10.2008, was taken into consideration and it was observed that both vendor and the principal fall in purview of the definition of manufacturer.Hence, it was decided that the petitioner is engaged in the manufacturing of its products through Toll manufacturing arrangement and thus eligible to be registered as Manufacturer with Tax authority. The Petition was allowed.

Summary: The dispute revolves around the seizure of certain goods, including cloth and black tea of foreign origin, by customs authorities under various sections of the Customs Act, 1969, and the Imports and Exports (Control) Act, 1950. The authorities confiscated the goods and imposed penalties on the owners after due process. The owners appealed the decision, leading to a series of legal proceedings. Initially, the Additional Collector Customs ordered outright confiscation, but the Collector Customs (Appeals) modified the order, allowing redemption of the goods upon payment of a fine and imposition of a personal penalty. The Customs, Federal Excise & Sales Tax Appellate Tribunal further altered the penalties imposed. The central legal issues revolve around the interpretation and application of Section 2(s) of the Customs Act, which defines "smuggled goods," and Section 181, which allows for the option to pay a fine in lieu of confiscation. The appeal questions whether the goods in question qualify as smuggled goods and whether the redemption fines imposed were lawful. The court examined the definitions and legal provisions related to smuggling and the imposition of fines. It determined that the confiscated goods, including cloth and black tea, fell within the definition of smuggled goods as per Section 2(s) of the Customs Act. Additionally, it found that the redemption fines imposed were in violation of Section 181 and relevant statutory orders. Ultimately, the court allowed the appeal, overturning the judgments of the lower courts and authorities involved in the case.

Summary: The central issue in this legal matter was whether the advertising and marketing expenses incurred by the Bottlers should be included in the valuation of the Concentrate for the calculation of excise duty and sales tax. Pepsi argued that these expenses are not part of the consideration for the Concentrate and should not be included in its value for tax purposes. The document outlined various show cause notices issued by tax authorities, alleging evasion of excise duty and taxes by Pepsi based on the inclusion of advertising expenses in the Concentrate's value. Pepsi challenged the validity of these notices, asserting that they are beyond the jurisdiction of the tax authorities and that the advertising expenses should not be included in the valuation. Furthermore, the document discussed the relevant legal provisions, including section 12 of the Federal Excise Act, 2005, and section 2(46) of the Sales Tax Act, 1990. It also addressed the jurisdictional challenges raised by Pepsi and the maintainability of these legal petitions. This document provided an overview of a legal dispute between Pepsi and tax authorities regarding the inclusion of advertising expenses in the valuation of Concentrate for tax purposes. Pepsi challenged the show cause notices and raises jurisdictional issues, while the tax authorities contend that the notices are valid and necessary to recover unpaid duties and taxes.It emphasized the importance of correctly determining the value for duty purposes, particularly as outlined in subsection (46) of section 2 of the Act, 1990. The author suggested that this provision serves as a guideline for suppliers to assess the value of supply and mentions the establishment of a Valuation Committee by the Commissioner, Inland Revenue, to ensure accurate value determination. The author emphasized that assessment must precede recovery, and Section 2(46)(e) of the Act, 1990 is crucial in cases where the value of supply has not been correctly declared. The author cited the importance of purposive interpretation in legal matters and quotes various legal authorities to support this approach. They argued that the legislative intent is clear in this case ñ assessment should precede recovery, and the Valuation Committee should be involved when necessary. Finally, the text touches on income tax matters, explaining that the show cause notices under the Income Tax Ordinance, 2001 are linked to the First and Second Show Cause Notices in the text.