2003 PLP (Trib (PTD)

"(11) The aforesaid facts when judged on these principles of interpretation there appears no reason to hold that the petitioners are making a taxable supply to "general public". Holding otherwise would amount to restrict general words and to make them fit in a moulder wished and prepared by the Revenue. The customers of the petitioners, the permit holders with the conditionalities attending to the permits and to their own class as such, by no imagination are "general public." No finding favourable to the Revenue can be made without doing unnecessary violence to the language of statute. The customers 'of the petitioners or the recipients of the taxable supply are so limited in number and so specific in nature that holding them to be general public or public simplicitor is not possible. That will simply be stretching the meaning for the benefit of the Revenue to rope in the petitioners. Such like approach as observed above would not be in consonance with the above stated settled rules of interpretation. (12) Accordingly this petition is accepted. It is held that petitioners are not "retailer" as defined in section 2(28) of the Act. Therefore, the arrears created against them since 1-7-1998 are declared to be of no legal effect: Further that the provisions of section 3-B of the Act shall take care of the retail tax already collected by them and passed on to the national exchequer during the pendency of these petitions.".

4. During the hearing proceedings, it was intimated to us that Honourable Supreme Court of Pakistan has announced on 15-4-2002, its judgment in Civil Appeal No.1587 of 1999 and C.P. No.2564-L of 2000 in Collector of Sales Tax, Lahore v. Avari Hotel Ltd. Lahore and others (2002 PTD 1912) which allowed the appeals and concluded as follows:

"(12) This brings us to the main plea relating to the term "General Public" appearing in section 2(28). Term "General Public" has been defined in Words and Phrases Permanent Edition Volume 18, Gabardine Gondola. It is as follows:

"General Public. The `general public' is not confined to citizens of a municipality but embraces all the people and is represented by legislature, Rayor v. City of. Cheyenne, 178 P.2d115, 116, 63 Wyo. 72". (13) The spirit of above term is not to limit its scope, but to enhance it. There was no legal justification for a narrow construction of the said term, as has been done by High Court. In the case reported as Goalundo lee Association Ltd. v. Commissioners of the Rajabari Municipality (PLD 1952 Dacca 12). the word "public" as used in section 125(1)(b) of the Bengal Municipal Act was defined as "including every member of the public in "general". In Chambers English Dictionary, the word General" means "relating a genus or whole class; including various species; not special" not restrict or specialized: relating to the whole or to all or most." (14) The construction placed by High Court on the terms "General Public" saying that the customers of the respondents do not fall within its scope, is incorrect. We are of the view that the general public as such, are fully covered by said term. There exclusion is neither logical nor legally, justified. The word "includes" is used as a word of enlargement as has been used in the dictionary meaning of word "General". Under the circumstances, the notices issued by the appellant petitioners to the respondents for "sales tax registration of wine shops" were according to law and no exception could be taken. (15) Inconsequence, Civil Appeal No.1587 of 1999 is allowed. Civil Petition No.2564-L of 2000 is converted into appeal and the same is also allowed. The impugned judgments of High Court are set aside with no order as to costs.".

5. The learned counsel for the appellant did not dispute that the aforesaid judgment of the Honourable Supreme Court of Pakistan equally applies to the appellant's case. He, however, stated the appellant hold L-2 Licence No.L-2 (Hotel) 18/86, dated 1-2-1986 and No.L-2 (Restt) 2/86, dated 1-2-1986 (both renewed up-to-date) for providing or rendering excisable services of hotels and restaurants. He claimed that the appellant has already paid an amount of Rs.1,557,870 as central excise duty on supplying these alcoholic liquor as exciable services during the period from 9/98 to 9/99 and, therefore, either sales tax should riot be levied or the central excise duty, paid as above, should be refunded. He stated that the appellant has been duly licensed by the Excise & Taxation Department of Government of N.W.F.P. to possess liquor for sale and supply to authozied persons and that they sell and supply liquor under strict control of the Provincial Excise Commissioner. He prayed that either the demand of sales tax be vacated or the said demand of sales tax be adjusted against the amount of central excise duty already paid by them on such services during the said period from 9/98 to 9/99.

7. Having heard the parties and on perusal of record of the case, we find that the Honourable Supreme Court's judgment, dated 15-4-2002 in C.A. No.1587 of 1999 and C.P. No.2564-L of 2000 (PTCL 2002 C1. 322) is very clear and unambiguously applies to the appellant's case. The appellants do not contest the demand, as adjudged in the impugned order and accept the verdict of the Honourable Supreme Court as cited above. However, they want that the demand of sales tax be adjusted against the amounts of Central Excise duty that they paid during the relevant period on its services of such supply of liquors. The appellant's request is riot admissible under the law. Central Excise duty and sales tax, are two distinct taxes, levied under item No.44 and 49, respectively, of the Fourth Schedule (Federal Legislature List Part-1) of the Constitution of Islamic Republic of Pakistan. The said too duty and tax neither are substitutive of each other nor are leviedi in lieu of one another. Notwithstanding the fact that the appellant paid Central Excise duty on its services of provision of liquors (including alcoholic liquor), they are liable to pay sales tax on the taxable supply of alcoholic liquors during the period involved: The demand for payment of sales tax has been made correctly and lawfully and has to be paid as such. We accordingly confirm the impugned order except that we remit the penalty imposed in this case on the ground that the period involved was, the initial days of levy of sales tax at retail stage and the appellant's delay/default might not have been intentional or deliberate till it was pointed out to them in July, 2000 through the Audit observation. The impugned order is modified to the aforesaid extent of remission of penalty only and the appeal stands disposed of accordingly.

8. Inform all concerned accordingly.

9. Announced. C.M.A./636/Tax (Trib.) Order accordingly.