BASFA TEXTILE (PVT.) LIMITED, LAHORE vs DEPUTY COLLECTOR (CUSTOMS), LAHORE Ss

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BASFA TEXTILE (PVT.) LIMITED, LAHORE VS DEPUTY COLLECTOR (CUSTOMS), LAHORE Ss.4(c), 3(2)(b), 3(6), 8(1)(b) & 71---Indian Raw Cotton, import of---Zero rating---Applicability of sales tax at 16% or 2%---During course of audit, observation of the Department was that importer was liable to pay sales tax @ 16%, which observation culminated in passing order-in-original, creating demand of certain defaulted amount and penalty ; importer filed appeal but the Appellate Tribunal ('the Tribunal') rejected the same---Contention of the importer (Reference Applicant) was that SRO 1125(I)/2011, having been amended by SRO 154(I)/2013, ('the amended SRO')was also applicable on import by registered manufacturers of the five sectors mentioned in condition (i); and that the imported raw cotton was an industrial input used for further manufacturing by applicant, thus sales tax @ 2% was leviable---Contention of the respondent/department was that the SRO 154(I)/2011 was applicable upon stages beyond spinning and there were two more stages in between ginning and spinning i.e. carding and combing; and that vide condition (ii) of said SRO, ginned cotton was specifically excluded from the purview of concession---Validity---By way of SRO 154(I)/2013 dated 28.02.2013 (effective from 01.03.2012), certain amendments were brought in SRO 1125(I)/2011, and amendments in conditions (i), (ii) & (iii)---It was explicit from condition (ii)(a) that SRO 154(I)/2013 duly included the spinning stage (in textile sector); thus contention of the respondent/department was totally misconceived--- Through the SRO, the concession had been given on goods useable as industrial inputs (at spinning stage in textile sector) by charging sales tax @ 2%---High Court viewed that applicant was entitled to the benefit of SRO 1125(I)/2011, as amended by SRO 154(I)/2013---Thus, the answer to the proposed question was in negative i.e. in favour of applicant and against respondent / department---Reference Application filed by the importer was allowed, in circumstances.

BASFA TEXTILE (PVT.) LIMITED, LAHORE vs DEPUTY COLLECTOR (CUSTOMS), LAHORE Ss — 2024 PTD 265 LAHORE-HIGH-COURT-LAHORE

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