KARACHI: Justice Muhammad Junaid Ghaffar of High Court of Sindh (SHC) on Tuesday reserved order in a suit filed by Popular Spinning Mills against Director, Assistant Director of Directorate of Input Output Co-Efficient Organization, Collector Customs (Model Custom Collectorate) east and West.
Dr. Farogh Naseem advocate appearing for the plaintiff maintained that petitioner was in the textile business when in 2006, Government of Pakistan issued a SRO 565(I) 2006 on 5-6-2006 where in Clay Coated Board and Aluminum Foil if used in industry was allowed to be released at a concessionary rate of 5 per cent custom duty. The plaintiff changed the business and installed plant, machinery etc for packaging industry and this change of business was also allowed by the regulator i.e. Securities and Exchange Commission of Pakistan. The conversion was completed in 2012 and plaintiff imported many consignments. However, in 2014, SRO was amended and rate of duty was raised from 5 per cent to 10 per cent. The plaintiff challenged the said amendment in suit 89/2015 in which the SHC passing interim orders, allowed release of consignments on payment of duty under SRO 565/2006. In the mean time, another amendment was brought in, in defiance of orders of high court; SRO 606/ 2015 was issued raising the duty from 10 per cent to 15 per cent.
Barrister Farogh Naseem in his arguments today submitted that with increased rate of duty, plaintiff was unable to run his business anymore and new rate of custom duty (15 per cent) amounts to throttle local industry. The raise has made the imported finished goods from China compatible, he submitted. He prayed to the court to declare the new rate and SRO 565 0f 2014 and 606/2015 as to be without jurisdiction, restrain the defendants from collecting customs duty beyond 5 per cent and to direct the respondents to refund custom duty already paid by the plaintiff totaling rupees 64,486,696.
Earlier counsel for FBR defending the issuance of SRO’s said that government has the powers to withdraw any legislation or notification any time even if it is less favorable to a party and if such amendments are necessitated by collecting funds to run affairs of the federation.
Kashif Nazeer advocate appearing for the customs department adopted the arguments advanced by the leading counsel adding that as per dictum laid by the superior courts “profit and loss is a part of business. The bench permitted him to submit case laws in support of his contentions.
The bench after hearing the sides in detail reserved the orders to be announced later extending interim orders until final disposal.