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

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

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%---Scope---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 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); that the imported raw cotton is an industrial input used for further manufacturing by applicant, thussales tax @ 2% was leviable---Contention of the respondent/department was that two additional steps were available in between ginned cotton and spinning stage i.e. carding and combing, emphasizing that only after completion of said stages, the produce could be termed as raw material for the spinning stage---Validity --- Undoubtedly, carding and combing do not change the texture or form of material and only line up the fibers nicely to make them easier to spin;in these processes, neither textural form nor chemical composition is changed inasmuch as these are not essential to be performed for forming the cotton as raw material for spinning; the moment when cotton is ginned and converted into bales, whether or not it is carded and combed, it becomes raw material for spinning---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, circumstances.

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

Case information

Judgment text as reported

Other judgments reported in 2024 PTD