KARACHI: Justice Muhammad Shafi Sidsdiqui of High Court of Sindh (SHC) on Thursday reserved order in two identical suits filed by Umar Spinning Mills and Sunrays Textile after a detailed hearing.
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 read out the SRO, amended sections and new SRO 4753 of 2016 and said 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. After almost two hours long arguments, the bench reserved the judgment.