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The DIRECTORATE OF POST CLEARANCE AUDIT through DG, FBR, Islamabad vs NESTLE PAKISTAN LIMITED, ISLAMABAD Ss — 2025 PTD 1634 SUPREME-COURT

Case information

Citation
2025 PTD 1634 SUPREME-COURT
Court
Supreme Court of Pakistan
Year
2025
Reporter
PTD
Parties
The DIRECTORATE OF POST CLEARANCE AUDIT through DG, FBR, Islamabad vs NESTLE PAKISTAN LIMITED, ISLAMABAD Ss
Subject matter
Tax & Customs
Provisions referred to
S. 6; S. 148; Sales Tax Act (VII of 1990); Finance Act; Income Tax Ordinance (XLIX of 2001); Customs Act

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

Judgment text as reported

The DIRECTORATE OF POST CLEARANCE AUDIT through DG, FBR, Islamabad VS NESTLE PAKISTAN LIMITED, ISLAMABAD Ss. 32, 80 & 179---Sales Tax Act (VII of 1990), S. 6(1) [as amended by Finance Act, 2015]---Income Tax Ordinance (XLIX of 2001), S. 148 (5) & (6)---Short levied tax---Recovery after clearance from port---Exemptions wrongly claimed---Show cause notices were issued by authorities to importers for recovery of sales tax and advance income tax not paid at import stage on the plea of exemption---High Court set aside show cause notices on the ground that power to recover such taxes had extinguished after clearance of goods under section 80 of Customs Act, 1969---Validity---Customs duty, sales tax, and advance income tax at import stage are all charged and collected, as part of same transactional event---Where, owing to a misapplied exemption or other lapse, full liability is not realized at that stage, it is consistent with both logic and statutory design that Customs authorities should be empowered to address and recover the deficiency---To hold otherwise would fracture statutory scheme, dispersing jurisdiction between different authorities in respect of levies that are assessed and collected together at the border, thereby defeating coherence that Parliament sought to ensure through the scheme of cross-reference---Customs authorities had jurisdiction, within statutory limitation, to recover import-stage sales tax and advance income tax that was not levied owing to a wrongly granted exemption, even if such short-levy was discovered after clearance of goods---Supreme Court restored show-cause notices issued to respondents / importers for adjudication on their merits, in accordance with law and judgment of High Court was set aside---Appeal was allowed.

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