KARACHI: The Sindh High Court has quashed the FIR lodged against M/s Reliable Associates by R&D Appraisement West for taking undue advantage of SRO 670(I)/2013 and evading sales tax on import of plastic molding compound (PMC).

The Court has quashed the FIR No. 03/2014 and the proceedings emanating thereon. The Court also vacated the order passed by Commissioner Inland Revenue Zone-II RTO Sukkur of retrospective cancellation of provisional certificate issued under SRO 670(I)/2013 in respect of M/s Reliable Associates.

The R&D Appraisement West had lodged FIR against certain importers who were taking undue advantage of SRO 670 (I)/2013 and evading the entire sales tax of 17 percent on the import of plastic molding compound (PMC).

Deputy Collector Nayyar Shafiq, Principal Appraiser Tahir Hussain and Shahid hussain Dasti acting on the directives of Collector Appraisement West Mohammad Saleem visited the addresses provided by M/s Reliable Associates and others for physical verification.

But the above mentioned officers and officials found that either the factories of the above mentioned companies did not exist at all at the given addresses or they were not manufacturers. However, these are registered as manufacturer importers with Input Ouput, and IRS.

The misuse of this SRO has been causing huge revenue loss to the exchequer as a large number of commercial importers have registered them as manufacturers to take benefit of SRO 670.

It is interesting to note that R&D Appraisement East also visited the facilities of the above mentioned importers and confirmed the existence of manufacturing facilities.

The Sindh High Court maintained that the GDs filed by Reliable Associates claiming the benefit of aforesaid SRO before expiry date i.e. June 30, 2014 shall be processed by the Customs Department in accordance with law.

Sources said that the Customs is all set to challenge the order of Sindh High Court before the Supreme Court of Pakistan. Sources said that Collector Appraisement West, Mohammad Saleem has issued directives to make preparations for contesting the case before the apex court.