Tag Archives: JUDGMENT

Customs Appellate Tribunal reserves judgment in appeal by clearing agent

KARACHI: The Special Customs Appellate Tribunal comprising chairman Manzoor Hussain and Zulfiqar Kazmi, Member Technical II on Wednesday reserved order in an appeal filed by a clearing agent who was penalized for alleged misuse of SRO 1125 of 2011.

Zia-ul-Hassan advocate represented the appellant Four Star Corporation before the tribunal. He said that appellant was show caused and then slapped with a penalty of rupees 100,000 on ground that manufacturing unit of the beneficiary of the SRO cited above was not in existence.

The counsel submitted that  goods were cleared and the notice was served post clearance. He further contended that benefit was not misused by the appellant as when the GD was filed, the appellant was on the list of ‘active tax payers’. The role of the clearing agent is very limited and hence penalizing him was beyond the jurisdiction, Zia-ul-Hassan advocate contended praying to the court to declare the penalty imposed upon the clearing agent in excess of powers conferred under the Customs Act 1969.

SHC decides ITRA in favor of Siemens Pak

KARACHI: An appellate bench of High Court of Sindh (SHC) headed by Justice Irfan Saadat Khan on Monday decided an Income Tax Reference Application against the applicant Inland Revenue (IR) and in favor of Siemens Pakistan Engineering Company Limited.

The applicant impugned a decision by the Income Tax Appellate Tribunal which held that IR cannot levy a charge of 1 per cent on the receipts by the respondent company on account of services rendered outside Pakistan. The IR department raised the demand under clause 3 of the part II, Second Schedule  to ITO 2001.

Kafeel Abbasi advocate represented the applicant/appellant department while the respondent company was represented by Ammar Athar Saeed. The bench announcing the judgment in open court upheld the judgment by the Income Tax Appellate Tribunal.

SHC issues notices for Nov 14 in Classification, FTA dispute

KARACHI:  A division bench of High Court of Sindh (SHC) comprising Justice Munib Akhtar and Justice Muhammad Humayun Khan issued notices to the Customs department for Nov 14 in a petition pertaining to Classification dispute and benefit of FTA.

Ghulam Hyder Shaikh advocate appearing for the petitioners/importers of mobile phone batteries etc submitted that custom valuation rejected the classification claimed by the petitioners/importers. The appellate authority of the Pakistan Customs rejected the classification by the DIT and said instead a third PCT heading applies.

The counsel further maintained that when the petitioner subscribed to opinion and judgment of the departmental appellate authority, benefit under Free trade Agreement was denied to him. The non-application of the FTA was arbitrary, submitted the counsel.

The bench after hearing initial arguments put the Custom officials (DIT) on notice for Nov 14.

Taxing lawyers: SHC adjourns hearing in identical petitions till Oct 07

KARACHI: A division bench of High Court of Sindh (SHC) comprising Justice Munib Akhtar and Justice Syed Saeed-uddin Nasir on Thursday adjourned hearing of a number of identical petitions filed by senior practicing lawyers against imposition of income tax upon lawyers.

Barrister Faroogh A. Nasim appearing for the petitioner at the out set referred to the section 18 of the Income Tax Ordinance and said that income from business and profession are well distinguished. There is no head of Income under which lawyers could be taxed, he submitted making reference to section 39 also.

The bench observed that if his argument is accepted it would mean that lawyers cannot be taxed for their income.

There are number of judgments by yourself, said Dr. Faroogh Nasim while reading out categories given in the section 39 specifying persons or activities that could be taxed.

He said that section 2, sub section 10 (definition section) cannot be read with  section 18 which is a charging section. To augment his contentions, Dr. Faroogh A. Nasim relied upon a judgment by Indian Supreme Court and also relied upon section 10 of 1922  Income Tax Act. The charging section has to stand alone on merits, he said.

He arguing when the court adjourned hearing till Oct 07 when petitioner’s counsel would continue his arguments.

SHC remands back case to Tribunal for decision on merit

KARACHI: An appellate bench of High Court of Sindh (SHC) comprising Justice Aqeel Ahmed Abbasi and Justice Abdul Maalik Gaddi on Tuesday set aside an order of the Special Customs Appellate Tribunal in a case of smuggled Mazda mini truck.

Abdul Ghaffar, owner of the vehicle moved the court through his counsel Akram Shahbaz impugning the judgment by the Customs Appellate Tribunal in customs appeal K 636.2014. The appeal was dismissed on the basis of non compliance of clause (iii) of sub section 3 of  Rule 5 of Customs, Excise and Sales Tax Appellate Tribunal (Procedure) Rules 2006.

The counsel for applicant submitted that appeal by the applicant/appellant was dismissed as it was not accompanied by the certified copy of the Order in Original along-with the memo of the appeal.

The bench perusing the record noted that the Registrar of the tribunal raised no objection while accepting the appeal. When the appeal was filed in time and was accompanied by all relevant documents except the certified copy of the Order in Original, it cannot be dismissed for a technical error.

The bench with the above observation set aside the impugned judgment restored the appeal remanding back the same with the direction to the Tribunal to decide it on “merit” within 2 months.

SHC allows petitions on basis of order passed in identical petitions

KARACHI: A divisional bench of High Court of Sindh (SHC) comprising Justice Munib Akhtar and Justice Abdul Maalik Gaddi  allowed a number of appeals on the basis of  a common order  passed earlier in identical petitions.

The bench heard petition 4338 of 2012, 1751,2191, 2192, 3187, 3859 and 5360 of 2014 besides 6840 of 2015. Anwar Kashif Mumtaz, Ammar Athar Saeed, Usman Alam advocates represented the petitioners  while respondent were represented by Altaf Mun, AAG Saifullah, Syed Zain-ul-Abdin Shah, DC, Sindh Revenue Board (SRB).

The counsel for petitioner relied on the judgment in CP-D 3184 of 2014 and said that as their petitions are identical to the above petition, their pleas may also be disposed of in same terms. The bench after detailed arguments allowed the petitions in terms of judgment in CP-D 3184 of 2014.

The issue involved was of the levy and collection of Sales Tax on Services levied under Sindh Sales Tax on Services Act 2011. The SHC in the judgment cited above has declared that after 18th Amendment to the Constitution of Pakistan 1973, levy of taxes is exclusive legislative power  or sole prerogative of the province concerned.

It however made a distinction in respect of shipping agents and held that shipping agents can be taxed only by the federal government and not by province of Sindh.

The bench has already suspended the operation of the judgment allowing time to the parties for filing an appeal. An appeal has been filed before the Supreme Court of Pakistan and pending a decision.

Customs questions judgment by Appellate tribunal disallowing application of Tariff Ruling retrospectively

KARACHI: Pakistan Customs, Valuation on Wednesday filed a Special Customs Reference Application (SCRA) against an order of Customs Appellate Tribunal, Karachi bench which through a common order decided four identical appeals holding that Tariff Ruling can not be applied retrospectively.

According to details Dhahran Gift Centre Karachi imported a consignment of Fashion Accessories to be used in high class apparels and filed a GD declaring the imported items to be Glass Bead 2500 kilograms. Cloth Accessories, Metal Stud of assorted colors and designs 9500 kilograms, Cloth Fashion Accessories 1100 kilograms and small hand pouches (Leather) 231 pieces, Hot Fix Adhesive Rolls 3000 kilograms. The clearance was sought under PCT Heading 7801.1000, 9606.2910, 9606,2100, 6217.1000, 4202.2100 and 3506.9190.

The consignment was selected for scrutiny and during inspection it was found that consignment contained other items also and thus importer is guilty of mis-declaration. A contravention report was filed and consignment was confiscated.

The importer filed four appeals before Special Customs Appellate Tribunal which ruled in favor of the appellant/importer holding that PCT headings once accepted by Customs can not be changed, It held that Tariff Ruling cannot be applied retrospectively.

The instant SCRA challenges the common judgment in appeals 147,148,149 and 150 of 2015.

Chemicals are classifiable under their respective headings

KARACHI: Chairman Classification Committee Additional Collector Haris Ansari has ruled that chemicals Polyol, Isocyanates, Catalyst & hardner viz-a-Viz Polyurethane are classifiable under their respective HS Codes according to their placement in tariff.

Classification Committee received representations from various shoe manufacturers for ascertaining the classification of Polyol, lsocyanates, Cataylst & Hardner’ viz-a-viz Polyurethane. Presently, all these tour chemicals are being classified under their respective HS Codes according to their placement in Tariff.

However, the importers are of the view that these four chemicals are pre-polymers of Polyurethane and are to be classified under the heading of Polyurethane. i.e. 3909.5000. Whereas the local manufacturers of same items contest single heading classification on the ground that these item are to classified separately in light of their chemical composition read with Explanatory Notes to the Harmonized system.

Classification Committee deliberated upon the classification of subject items and analyzed the issue of classification of ‘Polyol, lsocyanates, Cataylst & Hardner’ in the light of the test reports of the goods, the arguments of both the sides and opinion of the Deputy Chemical Examiner Shams-uz-Zaman from Customs Lab.

While the determination of classification was under consideration of the Committee, representative of local manufacturer submitted a judgment of the Sindh High Court, wherein the Court has held that these items do not fall under PCT Heading 3909.5000 and are classifiable under their respective headings.

The representatives of the importers were enquired whether any appeal was filed against the order of High Court, to which they confirmed in negative.

Since the issue of classification of these items has already been settled by the High Court, Karachi and this order has attained finality, as it was never assailed by the importers at any legal forum, Classification Committee is of considered opinion that in the presence of said judgment of the Court, the matter is beyond the ambit of the Classification Committee and, as such, these items are to be classified under their respective headings as decided by the Court.

SHC adjourns petition seeking provisional release of Primary Silicon

KARACHI: A divisional bench of High Court of Sindh (SHC) comprising Justice Munib Akhtar and Justice Anwar Hussain on Friday ordered counsel for Pakistan Customs, Model Customs Collectorate, East and West to seek instruction regarding provisional release of a consignment of primary Silicon.

The bench was hearing a constitution petition filed by Parvez Sons. The petitioner’s counsel submitted that Customs Valuation and Collector Customs both are denying the provisional release of the consignment without assigning any reason. He submitted that dispute arised as he challenged the assessment of his consignment under old VR 779 of 2015 dated 5-12-2015 saying that said VR outlived as it is more than 90 days old.

The counsel for Customs Valuation citing a judgment passed by the Supreme Court of Pakistan submitted that as per judgment in Danish Jehangir case, Valuation department has no powers to allow release of the consignment under section 81 of the Customs Act 1969 and that this power rests with the Collectorate of the Customs concerned.

The counsel for petitioner said that Collector Customs is not exercising his powers and denied release of the consignment.

The bench then asked Masooda Siraj, counsel for Customs Valuation and Ilyas Ahsan, Principal Appraiser, Law to seek instructions from the respondents that why provisional release was not allowed to the petitioner. The bench then adjourned further proceedings till Sept 07.

Judgment reserved in suits filed by Umar Spining Mills, Sunrays Textile

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.

SHC dismiss three appeals by Collectorate of Customs (Appraisement) against Pak Suzuki Motors, Indus Motors

KARACHI: A divisional bench of High Court of Sindh (SHC) comprising Justice Aqeel Ahmed Abbasi and Justice Abdul Malik Gaddi on Wednesday dismissed three identical Special Customs Reference Applications filed by the Collector of Customs through Additional Collector, Customs.

Kashif Nazeer advocate appearing for the applicant challenged the judgment by the tribunal which dismissed the appeal by the Customs on ground that appeal was filed byu delay of 123 days and further no more reason for delay is raised.

The appeals arose out of a notice for short recovery of Value Addition Tax asking the Pak Suzuki Motor Company limited to pay rupees 41,322,116 in each of two cases and rupees 45,921,116 in case of Indus Motor Company Limited as against import of CBU (Completely Built Units).

The SHC bench perusing the record and judgment dismissed all the three appeals holding the order of the tribunal which held that appeal by the department were hopelessly time barred.

SHC affords opportunity to the petitioners, adjourns hearing for a week

KARACHI: An appellate bench of High Court of Sindh (SHC) comprising Justice Aqeel Ahmed Abbasi and Justice Abdul Malik Gaddi on Monday allowed an opportunity to two applicants/importers gave them a week time to filed necessary documents and comply with the objections raised by the office of the court.

The bench earlier heard Miss Dil Khurram Shaheen advocate appearing for applicant who claimed to have imported cloth while Abdul Waris claimed ownership of tyres of Iranian origin.

The Special Custom Reference Applications (SCRA) questioned the judgment by the appellate tribunal which upheld the orders by the Customs Hierarchy including Anti-Smuggling Organization (ASO) which confiscated the goods in dispute allegedly smuggled into Pakistan from Iranian border.

The bench asked the applicant’s counsel that whether the applicants want to proceed with the application. As the answer was in affirmative, the bench asked the counsel to submit relevant documents she wants to rely upon to prove that goods in disputed were imported lawfully.

SHC directs appellant to submit court fee in 161 appeals

KARACHI: An appellate bench of High Court of Sindh (SHC) comprising Justice Aqeel Ahmed Abbasi and Justice Abdul Malik Gaddi on Tuesday adjourned hearing of identical 162 appeals filed by Sui Southern Gas Company Limited (SSGCL) ordered the appellant to file court fee in remaining 161 appeals.

The bench earlier heard Asim Iqbal advocate, counsel for appellant  who maintained that the appeal have arisen out of a consolidated judgment rendered by single judge of SHC, Justice Shafi Siddiqui. The single judge allowing the suits filed by defendants/plaintiff including Ministry of Petroleum and Natural Resources, Oil and Gas Regulatory Authority, Cement, Fertilizer, Textile industry, CNG stations and other commercial users numbering 1418 held that OGRA is required to issue notification regarding gar prices within a reasonable time. The court also held that no time limit is given in law for issuance of such notification. SSGCL impugned this judgment in the instant appeal.

When the appeal came up for hearing the counsel for defendants opposed the hearing of an interim application raising technical grounds. They said that it was a single appeal while there must have been 161 appeals. They also raised the issue of non-payment of court fee in each and every suit. Some of the defendants also raised the issue of limitation that appeals would be time barred.

The counsel for SSGCL citing an order passed by the Chief Justice of the SHC deciding the objections raised by the office against single consolidated appeal and said that single appeal is enough while he conceded to submit court fee of rupees 15000 in each appeal amounts to rupees 3.6 million. He prayed to the court to hear and pass an interim order on ground that plaintiff is purchasing gas at higher rate and supplying at lower rates sustaining huge losses due to inability of OGRA is issuing price notification on time.

The bench however declined any interim relief and adjourned hearing till Sept 21 while plaintiff was given a chance to submit the court fee as required under CPC (Civil Procedure Code). According to the plaintiff the issue involve mixing of imported gas attracting taxes which increases price of gas purchased by the plaintiff.

SHC adjourns identical petitions till Aug 22 against Custom valuation

KARACHI: A divisional bench of High Court of Sindh (SHC) comprising Justice Munib Akhtar and Justice Anwar Hussain on Friday adjourned hearing of two identical petitions challenging assessment of consignments under Valuation Guide Lines instead of Valuation Rulings.

One of the petitions was filed by R.H Enterprise, importers of mobile chargers through their counsel Ghulamullah Sheikh. The petitioner relying upon a judgment by the SHC maintained that SHC has already declared “Valuation Guidelines” illegal and hence his consignment be assessed and cleared as per Valuation Ruling. He maintained that by assessing the consignment on Valuation Guidelines, respondent Pakistan Custom Valuation is demanding customs duty 600 per cent more.

He prayed to the court to order that his consignment be assessed on the basis of 90 days data. R.H. Enterprises petitioner maintains that it imports mobile phone chargers from China and Customs was clearing the consignment at a rate of US $ 12 cents per piece but suddenly they issued a Valuation Guideline and raised custom duty, taxes to 70 cents per piece which translate into 500-600 per cent raise.

Hearing another but identical petition filed by Yahoo Computers which imported HDML cable, the bench after hearing identical arguments were advanced by the counsel for the petitioner adjourned hearing till Aug 22 asking both the sides to seek instructions from the respective clients.

The petitioner Yahoo Corporation, importer of HDML cable  maintains that previously Customs was taking a duty of US  $ 2 per cable but suddenly started charging US $ 9 per cable which again is 400-500 per cent raise.

The counsel maintains that Customs Valuation is bound to issue a Valuation Ruling after exhausting procedure according to section 25 of the Customs Act 1969. The superior court has already declared Valuation Guidelines illegal, it was maintained while praying to the court to declare the valuation guideline as illegal and also increased rate of custom duty and taxes as illegal being issued in violation of section 25 of Customs Act 1969.

SHC remands issue of short paid duty to Customs Appellate Tribunal

KARACHI: A divisional bench of High Court of Sindh (SHC) comprising Justice Aqeelahmed Abbasi and Justice Abdul Malik Gaddi on Monday disposing of a Special Customs Reference Application (SCRA) remanding back the same to the customs appellate tribunal.

The bench was hearing a SCRA filed by Pak Suzuki Motor Company Limited against Assistant Collector and Deputy Collector, Port Muhammad Bin Qasim, Collector of Appeals (Customs) and Customs Appellate Tribunal, Bench III.

The petitioner impugning a judgment dated 26-9-2014 maintained that company is the manufacturer and assembler of Suzuki brand models in CKD kits.

The petitioner maintained that respondents raised a demand of rupees 120.12 million but they have paid the same to the supplier as royalty.

The petitioner filed the appeal before the appellate tribunal which dismissed the same for want of a resolution by the board of petitioner authorizing a person to appear/represent it before the authorities and court.

The petitioner assailed the said judgment . Today the bench after hearing the counsel for respective sides disposed of the SCRA remanding the case to the tribunal after perusing a resolution of authorization.