KARACHI: Justice Muhammad Shafi Siddiqui of High Court of Sindh decreed two suits in favour of plaintiffs Umer Spinning Mills and Sunrays Textile Mills declaring that the plaintiffs are entitled to the benefit of SRO 1125 (1) of 2011 dated 31-12-2011 as amended time to time. The single judge earlier on September 02 reserved the judgment after hearing hours long arguments by counsel for the plaintiff and.
Khalid Javed Khan represented the plaintiff while Masooda Siraj advocate, Kashif Nazeer and Ilyas Ahsan Principal Appraiser represented the Customs Department.
The suit was filed seeking benefit of SRO 1153 of 2011 denied to the Spinning Mills. The counsel for plaintiff referred to the SRO, 1125 of 2011 and its amended sections and new SRO 4753 of 2016 and pleaded that plaintiff being a spinning mill/manufacturers is entitled to the benefit of the SRO 1152 under all conditions. He submitted that as per law, the textile sector is a zero rated sector and spinning is the back bone of the sector. He questioned the denial of benefit of the SRO 1132/2011 and submitted that demand raised by the department for payment of duty at a rate of 5 per cent is illegal.
Masooda Siraj advocate, the leading counsel disputed the interpretation of the SRO, notification and clarification purportedly made by the FBR in terms of With Holding Tax and said denial of exemption was lawful. During the course of arguments,both the sides placed basic information about the textile sector particularly ginning and spinning. The counsel for department maintained that raw material imported by the plaintiffs excludes them from the benefit of the SRO and they are liable to pay duty at a rated of five percent.
The single judge agreeing to the arguments by the plaintiff side held that the moment cotton is ginned and converted into bales, whether or not it is carded or combed it becomes raw material for the spinners.