FEDERAL BOARD OF REVENUE vs DEWAN SALMAN FIBER LTD — 2023 PTD 1635 SUPREME-COURT

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FEDERAL BOARD OF REVENUE VS DEWAN SALMAN FIBER LTD. S. 13(1)---Protection of Economic Reforms act (XII of 1992), Ss. 3 & 6---SRO 580(I)/91 dated 27.06.1991 ('SRO 580/91')---SRO 561(I)/94 dated 09.06.1994 ('SRO 561/94')---SRO 612(I)/94 dated 14.06.1994---Manufacturer of polyester staple fiber (PSF) in North-West Frontier Province (now Khyber Pakhtunkhwa)---Exemption from sales tax, removal of---Sales tax imposed on raw materials i.e. mono-ethylene glycol (MEG) and pure terephthalic acid (PTa)---Legality---Whether SRO 580/91 came within the ambit of section 6 of the Protection of Economic Reforms act, 1992---[Per Munib akhtar, J. (Majority view): If a notification came within the scope of section 6 of the Protection of Economic Reforms act, 1992 ('the 1992 act'), it could not then be "altered to the disadvantage of the investors"---SRO 580/91 came squarely within the scope of said section; it was intended to encourage industrialization in North-West Frontier Province (now Khyber Pakhtunkhwa)---SRO 580/91 thus provided a fiscal incentive for investment, which came within the scope and meaning of "economic reforms"; it specified the period within which the industry had to be set up: 01.07.1991 to 30.06.1996---SRO 561/94 on the other hand, while covering the same ground as SRO 580/91 and even (if the provisos were taken into account) ostensibly the same period, clearly altered the benefit and incentive provided under the earlier notification to the disadvantage of the investors---It could not prevail against the provisions of section 6 of the 1992 act---In this context section 3 of the 1992 act is also relevant, which provides that the act is to have overriding effect over the various statutes mentioned therein and also "any other law for the time being in force"---Sales Tax act, 1990 was a law that clearly came within the scope of the overriding clause---Therefore, notwithstanding the issuance of SRO 561/94 and the purported supersession of SRO 580/91 thereby, the latter notification continued to remain available for its term by virtue of section 6 of the 1992 act---Benefit of the exemption from sales tax under SRO 580/91 was available for the respondent company's Unit II, and could not be defeated by SRO 561/94---Impugned judgment of High Court was affirmed]---[Per Yahya afridi, J. (Minority view): Challenge of the respondent-company to SRO 561/94 is to be upheld not only on the basis of section 6 of the act of 1992, as done by the Majority view, but also on the doctrines of vested rights and promissory estoppel]---appeal were dismissed.

FEDERAL BOARD OF REVENUE vs DEWAN SALMAN FIBER LTD — 2023 PTD 1635 SUPREME-COURT

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