1. This judgment shall also decide connected Writ Petition Nos.27267 of 2012 and 32842 of 2013, as same legal issue under similar facts is involved. Petitioner has challenged show cause notices and consequential orders-in-original for having been passed as consequence of interpretation by Federal Board of Revenue (“FBR”) vide letter dated 06.08.2011, operative part of which is reproduced hereunder:
“I am directed to refer to your letter No.NS/ED/GI/01/187 dated 18.07.2011 (copy enclosed) on the subject cited above and to say that prior to 04th June, 2011, sales tax @ 8% on the actual transactional value was chargeable on White Crystalline Sugar and w.e.f. 04th June, 2011 FED @ 8% in sales tax mode is chargeable on White Crystalline Sugar. It is clarified that the mode and manner of payment and collection of duty/tax on Sugar has not been changed. The FED @ 8% is, therefore, chargeable on the stocks lying with sugar mills on 04th June, 2011, as and when supply is made.
2. Learned counsel for petitioner submits that this letter was circulated to all the Chief Commissioners with the interpretation contained therein and there is no chance of decision in favour of petitioner by any of the authorities under FBR, hence this petition. In support, he has referred to impugned order-in-original dated 23.10.2012 passed by respondent No.5, who has followed the interpretation given in the impugned letter.
3. Mr. Sarfraz Ahmad Cheema, Advocate for respondents, submits that appeal is provided against the order-in-original, therefore, this petition is not maintainable. He has placed reliance on judgments in Deputy Commissioner of Income Tax/Wealth Tax, Faisalabad and others v. Messrs Punjab Beverage Company (Pvt.) Ltd. (2007 PTD 1347), Mughal-e-Azam Banquet Complex through Managing Partner v. Federation of Pakistan through Secretary and 4 others (2011 PTD 2260) and Northern Power Generation Company Limited v. Federation of Pakistan and others (2015 PTD 2052).
Replying to objection on maintainability, learned counsel for petitioner has placed reliance on judgment in Attock Cement Pakistan Ltd. v. Collector of Customs, Collectorate of Customs and Central Excise, Quetta and 4 others (PTCL 2001 CL 509), to contend that statutory authorities would follow the interpretation already given by FBR, therefore, this petition is maintainable.
4. On merits, learned counsel for petitioner submits that Sales Tax @ 8%, on the actual transaction value, was payable before 04.06.2011, however, w.e.f. said date Federal Excise Duty (“FED”) @ 8% in Sales Tax mode was made chargeable on White Crystalline Sugar. Argues that Federal Excise Duty is leviable on goods produced or manufactured in Pakistan under charging Section 3 of Federal Excise Act, 2005 (“Act of 2005”). Since, FED was levied w.e.f. 04.06.2011, therefore, production of sugar already made till this date was not chargeable retrospectively. He contends that interpretation made by FBR through letter dated 06.08.2011, ibid, is against the express provision of law.
5. Heard, record perused.
6. There is force in arguments by learned counsel for petitioner that interpretation by FBR should not and could not be followed by Quasi-Judicial Authorities, under the Act of 2005. His assertion finds support from record that respondent No.5 had followed the interpretation given by FBR.
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