The DIRECTORATE OF POST CLEARANCE AUDIT through DG, FBR, Islamabad vs NESTLE PAKISTAN LIMITED, ISLAMABAD Ss

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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---Exemptions wrongly claimed---Phrase “Including recovery”---Object, purpose and scope---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 ground that the power to recover such taxes had extinguished after clearance of goods under section 80 of Customs Act, 1969---Validity---Phrase “Including recovery” which has been inserted by Finance Act, 2015 in section 6 of Sales Tax Act, 1990 is not meaningless---If on scrutiny, upon post clearance security of goods any error surfaces, it must immediately be referred to Officer of Inland Revenue, who may then exercise powers under relevant statute, which has its own machinery to assess and adjudicate---In case the short paid is assessed and adjudicated by officers of Inland Revenue, it can be entrusted to customs for “recovery” from consignments being imported, based on assessment and adjudication made by concerned Officer of Inland Revenue under relevant statutes---Once goods in question obtain clearance from relevant authorities and exit the port, import stage stands concluded and with it jurisdiction of the Customs authorities for subject taxes---Jurisdiction to conduct any assessment/adjudication of short levy of said taxes thereafter on imports vests back with officers of Inland Revenue, who have been duly empowered by Sales Tax Act, 1990 and/or Income Tax Ordinance, 2001 and statutory notifications passed thereunder---Although any short levy/short payment of “customs duty” could be adjudicated by Customs department in line with provisions of Customs Act, 1969 yet the same could not be done for Sales Tax Act, 1990 /Income Tax Ordinance, 2001---Provisions of Customs Act, 1969 in respect of calculation, payment and recovery of sales tax would only be applicable if no specific provisions were provided for the same in relevant statutes---Recent amendments were not made to overcome such understanding of law hence intention was obvious that no shifting of jurisdiction post clearance of goods since similar provisions were available in the relevant laws---Such amendments could not be interpreted to have taken over special jurisdiction under relevant provisions of law post clearance of goods and the parallel jurisdiction conferred upon Customs department was only to the extent of import stage which was contemplated in the special laws---Petition for leave to appeal was dismissed and leave to appeal was refused.

The DIRECTORATE OF POST CLEARANCE AUDIT through DG, FBR, Islamabad vs NESTLE PAKISTAN LIMITED, ISLAMABAD Ss — 2025 SCMR 1974 SUPREME-COURT

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