IBRAHIM FIBRES LIMITED vs PROVINCE OF SINDH Fourth Sched — 2024 PTD 1360 KARACHI-HIGH-COURT-SINDH

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IBRAHIM FIBRES LIMITED VS PROVINCE OF SINDH Fourth Sched. Legislative entries---Conflict---Duty of Court---Principle---When an issue arises as to interpreting apparent conflicting legislative entries when there are distinct entries for Federal and Provincial Legislatures, even in that situation it is not that the Court would always arrive at a conclusion that either of them has the competency to do so---In such situation controversies do arise as to the competency and as to who is exceeding its own domain and encroaching upon the others---In such case it is not the name of the tax; but its real nature i.e. the "pith and substance" that determines into what category or in whose domain such legislation would fall. Citation Name: 2024 PTD 1360 KARACHI-HIGH-COURT-SINDH IBRAHIM FIBRES LIMITED VS PROVINCE OF SINDH S. 3---Sindh Finance Act (XXIV of 2017), S. 1 (3)---Constitution of Pakistan, Arts. 142(c) & 199---Sindh Finance Act (XIII of 1994)---Sindh Finance Act (XV of 1996)---Sindh Finance (Amendment) Ordinance (IX of 2001)---Sindh Finance (Second Amendment) Ordinance (XVI of 2001)---Sindh Finance (Amendment) Act (II of 2007)---Sindh Finance (Amendment) Act (III of 2009)---Constitutional petition---Vires of Infrastructure fee / Cess---Provincial Legislature, competence of---Principle---Petitioners / importers assailed levy known as Infrastructure Fee / Cess imposed by Provincial Government Sindh through Sindh Finance Act, 1994 and its subsequent versions---Levy in question was demanded and collected before release of goods from Customs jurisdiction either at sea port or airports---Plea raised by petitioners / importers was that such levy was ultra vires to the Constitution and beyond the competence of Provincial Legislature---Validity---Levy in question was neither a tax nor fee on import and export of goods though it was levied and collected in the same manner as the Customs duty under the Customs Act, 1969, including that on ad-valorem basis---Merely by providing a mechanism of collection of levy in question, it did not ipso-facto become a customs duty, falling within the domain of Federal Legislature---Levy in its existing form was a cess for maintenance and development of infrastructure on goods upon entering or before leaving the Province from or for outside the country, through air or sea for carriage by road and smooth and safer movement in the Province---Levy in question was only applicable and challenged upon goods entering the Province from outside the country and as for the remaining it had been exempted---High Court declared that first four versions of law introduced through Sindh Finance Act, 1994, amended through Sindh Finance Act, 1996, Sindh Finance (Amendment) Ordinance, 2001, and Sindh Finance (Second Amendment) Ordinance, 2001 had attained finality and was past and closed transaction---High Court further declared that notwithstanding promulgation of fifth version of levy in question vide Sindh Finance (Amendment) Ordinance, 2006, further amended by Sindh Finance (Amendment) Act, 2007 and Sindh Finance (Amendment) Act, 2009, Sindh Finance Act, 2017, promulgated retrospectively with effect from 1-7-1994 was a valid law within the competence of Provincial Legislature under the Constitution and was applicable retrospectively---All imposition and collection of levy in question with effect from 01-07-1994 pursuant to S. 1(3) of Sindh Finance Act, 2017, were retrospective in effect and were validly done and collected---All Bank Guarantees furnished by petitioners up to 27-12-2006 who had litigated earlier and were appellants in Sanofi Aventis case reported as PLD 2009 Karachi 69 stood discharged whereas bank guarantees furnished by them on or after 28-12-2006 would be en-cashed and paid to authorities---Guarantees furnished by rest of the petitioners not covered as appellants in Sanofi Aventis case reported as PLD 2009 Karachi 69 would be en-cashed and paid to authorities---Constitutional petition was disposed of accordingly. Citation Name: 2024 PTD 1360 KARACHI-HIGH-COURT-SINDH IBRAHIM FIBRES LIMITED VS PROVINCE OF SINDH Viers of law---Declaration of Court---Effect of judgment rendered by competent Court of law declaring any provision of law as ultra vires or declaring levy of a tax as illegal can be undone---This can only be done if grounds of illegality or invalidity are capable of being removed and are in fact removed.

IBRAHIM FIBRES LIMITED vs PROVINCE OF SINDH Fourth Sched — 2024 PTD 1360 KARACHI-HIGH-COURT-SINDH

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