2002 PLP 654 (PTD)

8. It is contended that the order passed by the respondent No.3 is contrary to law null and void.

9. It is contended in the grounds of appeal that the impugned order of respondent No.3 and the impugned letter issued by the respondent No.2 has been purportedly issued in pursuance of SRO 561(1)/94 which is bad in law as it seeks to curtail vested' right of the ‑petitioner's Principals by prescribing new conditions for the entrepreneurs who acted on the open assurances held out under SRO 580(1)/91. The change of whole complexion of exemption from Sales Tax on goods manufactured/ produced at‑ Hatter under the former SRO to the exemption from Sales Tax on "supplies made only by the manufacturers/producers of the industrial units in Hattar" under the later SRO," amounts to the infringement of vested right enjoyable by the petitioner's principals and through him by the petitioner. It is further contended that granting of exemption in the hands of manufacturer and. depriving the exemption in the hands of petitioners who are merely agents for the distribution of their Principals goods is contradictory m terms and amounts to indirectly taxing the exempted goods.. The petitioners have urged that what cannot be done directly by the respondents cannot be done indirectly as well.. It is further contended that the respondent No.2 has no authority to interpret the notifications which is in the exclusive jurisdiction of the superior Courts, It is further contended that the imposition of Sales Tax through a process of interpretation by respondent No.2 amounts to levy of tax by an executive act which is not permissible under the Constitution. It is further contended that it also amounts to imposition of tax on Principals of the petitioner who admittedly enjoy the exemption because with the imposition of the Sales Tax, so to the imposed, the goods manufactured by the petitioner's Principals shall become less competitive in the market thereby reducing their receipts from sale. It is pleaded that the respondents are estopped by promissory, estoppal, as they cannot wriggle out of the assurances given in SRO 580(1)/91, as its amounts to practicing a fraud on the statute and blatant breach of the promissory estoppel. It is further maintained that the interpretation of the respondent No.2, Central Board of Revenue is destructive of the vested right of the petitioners and their Principals as it amounts to abolition of the exemption from the payment of sales tax, granted to the petitioner's Principals. It is further pleaded that the Sales Tax can be levied on the taxable supplies which had been defined under section 2 (41) of the Sales Tax Act, to mean a supply of taxable goods made in Pakistan other than a supply of goods which is exempt under section 13 and, therefore, Sales Tax could not be levied on the supplies made by the distributors, dealers, wholesalers or retailers.

10. In their para‑wise comments the respondents have raised preliminary objection to the maintainability of the petition for the reason that the petitioner has not exhausted remedies available under the sales Tax Act, 1990. It is contended that the impugned order in original is appealable before the Collector (Appeals) under section 45 of the Sales Tax Act, 1990, and the order of Collector (Appeals) is subject to appeal before the Tribunal under section 47 of the Sales Tax Act. On merits it is contended on behalf of the respondents that the principal of the petitioner obtained registration with the Central Board of Revenue under SRO 561(1)/94 whereby exemption was available exclusively for the supplies made by manufacturers or producers of industrial units which were set up in the N.W.F.P, and Balochistan and not to the taxable supplies made by the distributors/wholesalers or retailers any where in Pakistan, in terms of section 13 of the Sales Tax Act. 1990 as claimed by the petitioner, The respondents' plea is that Messrs Coronet Foods (Pvt.' Ltd., being manufacturer having Industrial unit located at Hattar, N.‑W.F.P., their supplies are not chargeable to Sales Tax when made to their buyers, but when the supplies are made by their buyers i.e. distributor, wholesaler or retailer, then the supplies enjoy no exemption as subsequent supplies do not enjoy exemption under SRO 461 which has been clarified by the C.B.R. It is further contended,} that the petitioner's claim of exemption under SRO 580(1)/91, is not justified, as sales tax was leviable at the manufacturing stage and hence all rights and duties emerging out of the said SRO, including exemption to goods manufactured or produced were restricted to the manufacturer or producer. According to respondents the distributors/wholesalers were brought into tax net in July, 1998, vide Finance Act, 1998, and therefore, the exemption provided under SRO 580(1)/91 cannot be stretched to the persons who were made liable to tax subsequently, as in the instant case. It is urged that no exemption can be availed unless the language of the SRO expressly provides so, in the light of principals laid down by the Hon'ble Supreme Court, in the case reported as 1999 SCMR 412.

11. It is further contended that the Sales Tax on supplies by distributors/wholesalers has been levied by the legislature vide Finance Act, 1998 and not through, the process of interpretation by the respondents Nos. 2 and

3. It is vehemently denied that the respondent No.2 (C.B.R.) has exercised any judicial function or legislative function or has imposed any tax. According to respondents, .in the Board's letter, dated, 29‑6‑1999 a query has been replied in accordance with the Sales Tax, Law, which just amounts to clarification of a legal position and not interpretation of any law. It is further contended that the tax demanded has been calculated in accordance with the provisions contained in subsection (46) of section 2 of the Sales Tax Act and in accordance with the rate specified in section '3 thereof. It is contended that taxable supply has been defined in sub section (41) of section 2 which reads as follows: "Subsection (41) of section 2. `taxable supply' means a supply of taxable goods made in Pakistan (by an importer, manufacturer, wholesaler (including dealer), distributor or retailer) other than a supply of goods which is exempt under section 13 and includes a supply of goods chargeable to tax at the rate of zero per cent. under section 4. " The words, "by an importer, manufacturer, wholesaler (including dealer), distributor or retailer were inserted by Finance Act, 1998. The respondents case is that the goods in the instant case are Biscuits and prior to 1st of July, 1998 the taxable supply was restricted to the supply of taxable goods by the manufacturer and tax was leviable at that stage but the virtue of amendments introduced by Finance Act, 1998 ‑the definition of taxable supply has been extended whereby supply of taxable goods by wholesaler, dealer, distributor and retailer has been included in the definition of taxable supply. Thus no exemption can be availed by the wholesalers, dealers, distributors and retailers if exemption is granted to manufacturer only and the notification granting exemption under section 13 does not specify specifically wholesalers, dealers, distributors and retailers as well. The respondents have taken plea that the exemption was granted to protect and encourage the industry in the under development areas. According to 'respondents the claim of petitioner for exemption of Sales Tax is not tenable as it is available to the manufacturer who has taken steps like investment, buying of land, machinery, employing labour etc. for production of his goods and thus the exemption is restricted to the manufacturer whose goods are to be sold in the market. It is further stated that the distributors or retailer of the goods hold no stake in the taxation of the goods as they have to pay tax on the value addition only.

12. We have heard Mr. Abdul Aziz Memon, learned counsel for the petitioner, Mr. Syed Ziaudddin Nasir, learned Standing Counsel for the Federation of Pakistan and Mr. Raja Muhammad Iqbal, learned counsel for respondents 2 and 3.

13. Mr. Abdul Aziz Memon has submitted that the point in‑ issue hag been considered by a Single Bench of the Peshawar High Court in the case of Messrs Khyber Plastic and. Polymer Industries (Pvt.) Ltd. v. Government of Pakistan 1997 PTD 1872. In the said case exemption way granted under SRO 529(1)/88 to all the goods produced or manufactured by such industries which hare set‑up between the 1st July, 1988 and the 30th June, 1991 from the payment of tax payable under the Sales Tax Act; 1951 (the predecessor statute of the Sales Tax Act, 1990) in‑ the Province of Balochistan except in Hub Tehsil and N.‑W.F.P: Subsequently SRO 692(1)/92 was issued levying fixed amount of tax 2% of the landed cost in case of imported goods and 2 % of the ex‑factory price in case of locally manufactured goods at source on the items given in the table, in lieu of sales tax leviable on such goods supplied by the retailer under subsection (1) of section 3 of the said Act. This fixed tax was levied in exercise of the powers, conferred by. subsection (4) of section 3 of the Sales Tax Act, 1990.

14. Several petitions were filed in the Peshawar High Court challenging the levy of 2 % fixed tax for the reason that the exemption granted under SRO No.529(I)/88 pertained to the goods produced or manufactured by the industries established in the Province of N.‑W.F.P.

15. A plea was taken on behalf of Revenue/Federal Government in their comments that the exemption from Sales Tax granted to the manufacturer was intact and the 2 % tax was levied on the retailers of the goods manufactured by the petitioner, collection whereof was being made at source. The learned Single Judge of the Peshawar High Court observed that the exemption granted was to the goods manufactured by the petitioners, and therefore, the concession was tied up with the goods, even when they reach the hands of the retailers. It was further held that, to interpret otherwise would negate the purpose of the concession, which is to keep the price of the goods low in order to make them competitive in the market and thus boost up the petitioners industries. The imposition on the retailer would add to the price of the goods, thus, nullifying the benefit of the exemption. It was further held that; "that which cannot be done directly cannot be allowed to be done indirectly". It was ultimately held that the exemption from the tax provided to the goods manufactured by the petitioners extended to the supply of goods in the hands of retailers, and therefore, the subsequent levy of tax was without lawful authority and of no legal effect.

16. Mr. Abdul Aziz Memon has next contended that, in the show cause notice, dated 12‑11‑1999, contradictory position has been taken by the department. On one hand it has been stated that the Principals of the petitioners. namely Messrs Coronet Foods (Pvt.) Ltd., is availing exemption facility provided under SRO 561(1)/94 and making exempted supplies to the petitioner and in the same breath it is stated that the petitioner in the misunderstanding, that the goods are exempted from Sales Tax, sold the same to different wholesalers, retailers, and other unregistered customers without charging/plying sales tax. Mr. Abdul Aziz Memon, further contended that this contradictory stand has been taken by the department on a misconception that the exemption under. SRO 561(1)/94 is restricted to the supplies made by the manufacturers or producers of industrial units which are set up in N.‑W.F.P. and Baluchistan (Except Hub Chowki) and not for the taxable supplies made by the distributors, wholesalers or retailers any where in Pakistan, in terms of section 13 of the Act.. According to Mr. Abdul Aziz Memon, the respondents have missed the point that the exemption available to the principals of the petitioners is attached to the goods and supply thereof and not to the manufacturer alone. He has vehemently argued that once the goods are exempted from payment of Sales Tax the exemption shall continue, howsoever., hands it may change. He has submitted that the Principals of, the petitioners initially made arrangement for setting up of industry in the N.‑W.F.P. in pursuance of the promises contained in SRO 580(1)/‑91 according to which all goods produced or manufactured by such industries which are set up in between the 1st July, 1991 and 30th June, 1996 shall‑ be exempted from the tax payable under the said Act for a period of five years from the date, the industry is set up. He has therefore, submitted that the SRO 561(1)/94 is to be read with SRO .580(1)/91 as the subsequent SRO cannot take 'away the vested right created in favour of the petitioners' Principals. and the Principle of Promissory Estoppel shall come into play, therefore, first, the goods manufactured by the Petitioners Principals shall enjoy exemption from the payment of Sales Tax for a period of five years from the date of setting up of the industry and secondly if SRO 561 purports to take away the exemption to which petitioners Principals were entitled under SRO 580(1)(91 it is bad to that extent. He has next contended that by insertion of section 31‑A in the Customs Act, 1969, the applicability of promissory estoppel and availability of vested right has been done away with, but no such provision has been inserted in the Sales Tax Act, 1990 and, therefore, the ratio of Al‑Samrez (1986 SCMR 1917) case is still attracted to the concessions/exemptions promised under the Sales Tax Act, 1990.

17. Mr. Abdul Aziz Memon, has submitted that the petitioner is .a distributor of the goods manufactured by its principal and is acting as Agent of the principal (manufacturer) who is admittedly enjoying exemption from the Sales Tax, and therefore, the exemption allowed to the manufacturer is to be extended to its Agent, who distributes the goods manufactured by the principal. '

18. In support of his contentions, Mr. Abdul Aziz Memon, has placed reliance on the following three judgments: (1) Khyber Plastic v. Government of Pakistan 1997 PTD 1872; (2) Messrs Wily Foods (Pvt.) Ltd., v: Government of Pakistan 1997 PTD 63 and (3) Pine Match v. C.B.R. 1999, PTD 3490.

19. The first judgment has already been discussed in earlier part of this judgment. In the second judgment it has been held by the Peshawar High Court that the petitioners in terms of incentive given under SRO 580(1)/91, having set up industry and the same having gone into production during the stipulated period has the effect of a binding contract, which was entered into by the party concerned who has taken necessary steps, and thus, has the effect of creating vested interest which could not be taken away on the ground that under section 21, General Clauses Act, 1897, Government has such powers. It has been further held that the exemption so granted could not be withdrawn when contractual commitment had taken, place in light of facilities given and consequently the principal of Promissory Estoppel becomes applicable. In this judgment the S.R.Os. under consideration were the same as in the petition under, consideration before us. For the sake of convenience the facts of the cited case are briefly reproduced. When the petitioner's company in the aforesaid case was incorporated the Notification SRO 580(1)/91 was in the field whereby all the goods produced or manufactured by such industries which are set up between the 1st of July, 1991 to 30th of June, 1996 were to be exempt from the payment of sales tax for a period of five years from the date, the Industry was set‑up but subsequently another Notification No.SRO 561(1)/94, dated 19‑6‑1994 was issued whereby the aforesaid' exemption granted was restricted to the Industries set up between the 1st of July, 1991 and 30th of June, 1994. This adversely affected the petitioner as the Industry had gone into trial production on 30‑5‑1995. The Revenue Authorities demanded the payment of sales, tax, hence the petitioner challenged the subsequent Notification No.SRO 561(1)/94. The contention of the petitioner was that under the incentive given through Notification No.SRO 580(1)/91, they had initiated to install an Industry at Hattar and had gone into production in between the period of 1st of July, 1991 to 30th of June, 1996 and were exempt from payment of sales tax for a period of five years. It was contended that the exemption granted vide Notification No.SRO 580(1)/91 could not be withdrawn through the subsequent Notification for the reason that a vested right had accrued to the Petitioner's Company.

20. In support of the above contentions, reliance was placed on the judgment of Hon'ble Supreme Court in the case of Collector, Central Excise v. Azizuddin Industries Chittagong (PLD 1970 Supreme Court 439(B). In the said judgment the Hon'ble Supreme Court laid down the principal that a person acquiring vested right of exemption from levy of excise duty for a given period of time could not be deprived of such right. It was further held by the Hon'ble. Supreme Court, with .reference to section 21 of the General Clauses Act that although an authority passing some order does have the authority to withdraw the same but such power cannot be exercised, once a right is accrued to someone. Ratio in the famous case of Al‑Samrez Enterprise v. Federation of Pakistan 1986 SCMR 1917 was also considered, wherein it was held that in the light of a pre‑existing Notification granting exemption a binding contract is entered into by the party concerned or steps had been taken by such party creating a vested right qua such Notification, the same could not be taken away on the ground that under section 21 of the General Clauses Act, the Government had the power. In short, an exemption could not be withdrawn when contractual commitment has taken place in the light of the facilities given.

21. Another judgment of the Hon'ble Supreme Court in the case of Army Welfare Sugar Mills v. Federation of Pakistan (1992 SCMR 1652) was also considered. In this judgment dictum was laid down that an authority competent .to make order has power to undo it, but the order cannot be withdrawn or rescinded once it has taken legal effect and certain rights are created in favour of any individual. It was held that an order cannot be rescinded, altered, withdrawn or modified to the detriment of a party concerned after, the principle of promissory estoppel comes into play. The Hon'ble Supreme Court laid down certain conditions under which the principle of promissory estoppel is not attracted, which are as follows: "(i) the doctrine, of promissory estoppel cannot be invoked against the legislature or the laws framed by it because the legislature cannot make a representation; (ii) promissory estoppel cannot be invoked for directing the doing of the thing which was against the law when the representation was made or the promise held out; (iii) no agency or authority can be held bound by a promise or representation not lawfully extended or given; (iv) the doctrine of promissory estoppel will not apply where no steps have been taken consequent to the representation or inducement so as to irrevocably commit the property or the reputation of the party invoking it; and (v) the party which has indulged in fraud or collusion for obtaining some benefits under the representation cannot be rewarded by the enforcement of the promise."

22. It was further held by the Hon'ble Supreme Court in the case of Army Welfare Sugar Mills (ibid) that representation made in a notification can be rescinded before it was acted upon or if it was acted upon, its effect could have been nullified by a statutory provision and not by an executive act. In this regard specified reference ‑was made to section 31‑A of the Customs Act. In the light of principles laid down by the Hon'ble Supreme Court, to the above cited cases, a Division Bench of Peshawar High Court examined the admitted facts in the cited case and held that prior to the issuance of SRO 561(1)/94, dated 19‑6‑1994, the petitioner had taken steps for setting up the industry, within the specified period and subsequently ‑went into trial production after the earlier notification was rescinded. The trial production fell squarely within the ambit of initial Notification No.SRO 580(1)/91. It was, therefore, held that the subsequent Notification No.SRO 561(1)/94, dated 19‑6‑1994 was hit by the principle of promissory estoppel, qua the petitioner and the exemption could not be withdrawn on grounds of powers derived from section 21 of the General Clauses Act.

23. The learned Judges of the Peshawar High Court further observed that the incidence of sales tax is on the producer/manufacturer but the impact thereof is on the consumer. The burden is shifted to the consumer by an increase in the price. Thereafter, in a state of competition in the market with industries placed in similar situation, the prices fixed by an industry enjoying exemption shall be much lower than the prices fixed by an industry denied such exemption.

24. It was ultimately held, "that the petitioner‑Company is entitled to the exemption granted 'by SRO 580(1)/91, dated 27‑6‑1991 and, the subsequent Notification' No.SRO 561(1)/94, dated 19‑6‑1994 is ineffective upon the rights having already accrued to the petitioner". Similar point came for consideration before a Single Bench of the Peshawar High Court in the case of Pine Match (Pvt.) Ltd. v. Central Board of Revenue 1999 PTD . 3490. In this case also SROs 580(1)/91, dated 27‑6‑1991 and 561(1)/94, dated 9‑6‑1994 came for consideration. A plea was taken that where an industry was set up during the period specified in SRO 580(1)/91 after having 'taken necessary steps in pursuance of .the assurances given by the Government exemption could not be withdrawn through SRO 561(1)/94. In this case the petition was accepted by following the judgment in the case of Messrs Wily Food (Pvt.) Ltd. v, Government of Pakistan, 1997 PTD 63 with reference to the judgment of Hon'ble Supreme Court in the case of Messrs M.Y. Electronics Industries (Pvt.) v. Government of Pakistan 1998 SCMR 1404 and the judgment of High Court in the case of Crescent Pak Industries (Pvt.) Ltd. v. Government of Pakistan 1990 PTD

29. It was held, "that the provisions contained in section 31‑A of the Customs Act were not attracted to the provisions contained in the Sales Tax Act, and the Notifications issued thereunder".'

25. Mr. Abdul Aziz Memon has next contended that under section 3(1) of the Sales Tax Act, 1990 the Sales Tax has been levied on the taxable supplies made in Pakistan lay a registered person in the course or furtherance of any taxable activity carried on by him and goods imported into Pakistan. In the present case the goods under consideration are exempted one, and therefore, it is to be seen whether the case of petitioner is covered under the definition of taxable supplies given in section 2(41) .of the Sales. Tax Act, 1990 which reads as follows:‑‑ "(41) `taxable supply' means a supply of taxable goods made in Pakistan by an importer, manufacturer, wholesaler (including dealer), distributor or retailer other than a supply of goods which is exempt under section 13 and includes a supply of goods chargeable to tax at the rate of zero per cent under section 4. "

26. He has contended that supply of goods enjoying exemption under section 13 has been specifically excluded from the definition of taxable supply with the result that the sales tax authorities cannot demand any sales tax in respect of supplies pertaining to the goods enjoying exemption. He has contended that under the SRO 580(1)/91, dated 27‑6‑1991 the goods manufactured by the principals of the petitioners enjoy exemption and even under SRO 561(1)/94, dated 9‑6‑1994 the goods manufactured and supplied by the. principals and petitioners enjoy exemption with the result that such goods are excluded from the purview of "taxable supplies" and consequently they fall out side the scope of tax which can be charged and levied under section 3 (1)(a) of the Sales Tax Act. In support of his contention he has placed reliance on a Division Bench Judgment by the erstwhile West Pakistan High Court in the case of the Commissioner of Income Tax v. Messrs Agha Textile Mills, PLD 1962 Lah.

816. It has been held in this judgment that the tax under Sales Tax Act, is levied and collected on the value of goods, and if the goods are exempted from sales tax under section 7(1) of the Sales Tax Act, 1951, they cease to be chargeable to sales tax. They are excluded from the operation of charging section of the Act and cannot be considered for charging purposes. He has further placed reliance on the judgment of Hon'ble Supreme Court in the case of Commissioner of Income Tax v. Messrs Ayurvedie Pharmacy, PLD 1970 SC 93, wherein it has been held that the goods once exempted from tax under section '7 of the Sales Tax Act, 1951, go out of the purview of the Act. The ratio of the above judgment has been followed by the Supreme Court in the case of A & B Food Industries Ltd. v. Commissioner of Income‑tax, 1942 SCMR 663.

27. Mr. Abdul Aziz Memon has submitted that in fact that Peshawar High Court has already decided the issue agitated in this petition with reference to the same SROs and has held that the principals are entitled to the concession/exemption available in SRO 580(1)/91 and the SRO 561(1)/94 is riot operative qua the petitioners' Principals. The result of 4he above decisions is that the goods manufactured by the petitioner's Principals enjoy exemption from the levy of sales tax and consequently the goods manufactured by the petitioner's Principals and distributed by the principal and/or supplied by the wholesalers and retailers are excluded from the purview of taxable supplies and thus the respondents can neither levy any sales tax on such goods nor can demand collect or recover any such sales tax and that the show‑cause notice issued in his behalf and the order, dated 27‑12‑1999 and the clarification/opinion expressed by the C.B.R. in its letter, dated 29‑6‑1998 to the effect that sales tax is not available to, the supplies made by the wholesalers, dealers, distributors or retailers, is not in consonance with law and consequently is inoperative, and having no legal effect.

28. On the other hand Syed Ziauddin Nasir, Standing Counsel appearing for respondent No. l and. Mr. Raja Muhammad Iqbal, learned counsel for respondents Nos. 2 and 3 have supported the impugned order of respondent No.3

29. Mr. Raja Muhammad Iqbal, has mainly argued on the point of maintainability of the petition. He has submitted that the impugned judgment of the respondent No.3 could be assailed in appeal before the Customs, Excise and Sales Tax Tribunal under section 46 of the Sales Tax Act, 1990, and thereafter to this Court under section 47 of the said Act. He has submitted that since the remedy provided in the Sales Tax Act, has not been availed, therefore, the petition is not maintainable. In support of his contention he has placed reliance on the following judgments: (1) The Tariq Transport Company v. The Sargodha‑Bhera Bus Service PLD 1958 SC 437; (2) Commissioner of Income Tax v. Hamdard Dawakhana (Waqf) PLD 1992 SC 847; (3) Wealth Tax Officer v. Shaukat Afzal 1993 SCMR 1810; (4) Adamjee Insurance Company v. Pakistan through the Secretary to Government of Pakistan in the Ministry of Finance 1992 SCMR 1798 and (5) Khalid Mehtnood v. Collector of Customs, 1999 SCMR 1818. Replying to the objection regarding the maintainability of the petitioner Mr. Abdul Aziz Memon, has‑ submitted that the rule is not absolute. In support of his contention he has placed reliance on the judgment of Hon'ble Supreme Court in the ease of Collector of Customs v. S.M. Ahmed & Co., 1999 SCMR 138, wherein it has, been held as follows:‑‑‑ "

9. As regards the maintainability of writ petition in the presence of alternate remedy, it is a settled proposition of law that it is no bar is such remedy is only illusory in nature, as observed in Gulistan Textile Mills Ltd. v. Pakistan (1983 CLC 1474). No useful purpose would have been served if the respondent had been required to avail of the remedy of, the appeal or revision because the highest body i.e. the C.B.R. had already expressed its opinion against the respondent. A reference may be made to Messrs Usmania Glass Sheet Factory Limited, Chittagong v. Sales Tax Officer, Chittagong (PLD 1971 SC 205) wherein it was observed that where a dispute arises between the parties in. respect of fiscal right based on a statutory instrument, it can be determined in writ ‑jurisdiction. After the decision given by the C.B.R. it would have been difficult for the Federal Government to take a contrary view about, the assessment/evaluation of the wood imported by the respondent, and in these circumstances no exception could be taken to the respondent's invoking Constitutional jurisdiction of the High Court, classification of goods is not always a pure question of fact and being a mixed question of fact and law, the High Court is possessed of jurisdiction to adjudicate upon such question in Constitutional Jurisdiction in the light of dictum of the Supreme Court in M.Y. Khan v. M.M. Aslant and 2 others (1974 SCMR‑ 1.96) and Messrs Delite House Ltd. v. Assistant Collector, Customs (1988 CLC 5)."

30. Mr. Raja Muhammad Iqbal, learned counsel for respondents Nos.2 and‑3 has supported the view taken in the impugned order of respondent No.3, to the effect that in the year 1991 when SRO 580(1)/91 was issued the sales tax was leviable at the 'manufacturing stage only but subsequently the distributors, wholesalers etc. were also included in the tax net by Finance Act, 1998 and consequently the exemption allowed to' the manufacturer cannot be extended to the distributors, wholesalers etc.

31. We have very carefully considered the contentions raised by the learned Advocates for the parties and the entire material placed on record. We have gone through the rulings on which the learned Advocates for the parties have placed reliance. First,' we would like to dispose of the objection pertaining to the maintainability of the petition. No doubt it is the general rule that before invoking writ jurisdiction of the High Court under Article 199 of the Constitution, the other remedies available in law should be explored arid availed. Normally if an obligation is created under a statute and remedies A are also provided under the said statute by way of appeals/revisions, al person should avail the remedy and forums provided in the statute. In the, ordinary course no person should be allowed bypass the alternatives remedy available in law. However, the rule is not absolute. In similar circumstances as in the present case the Hon'ble Supreme Court held in the case of Messrs Julian Hoshang Dinshaw Trust v. Income Tax Officer 1992 SCMR 250 as follows:‑‑ "

9. It is not understandable that in the presence of the directions embodies in the Circular how can Income Tax Officer would lend any weight to the appellants claim of immunity from taxability of the receipts in dispute. Indeed, it would be very difficult for the Assessing Officer to render an independent adjudication. To quote an instance of lack of objectivity, the attention of the High Court was invited to an order passed by the Income Tax Officer, imposing tax on similar receipt in the hands of another shareholder of the Company, namely Russie M. Dinshaw. It was in this context that the appellants ‑instead of throwing themselves at the mercy of the Income Tax Officer, chose to approach the ‑High Court under Article 499 of the Constitution. It is correct that the Income Tax Appellate Tribunal is not under any compulsion to follow the Circular, but there are indications on the record before us that in an identical case the chargeability of the receipt was endorsed by the Tribunal. The superior Courts have repeatedly exercised the writ jurisdiction in appropriate cases, involving fiscal rights and on the allegation of misapplication of law or abuse of power stepped in to examine whether or not public functionary concerned acted in accordance with the powers conferred on him by the Statute. In Messrs Usmania Glass Sheet Factory Ltd., Chittagong v..Sales Tax Officer; Chittagong (PLD 1971 SC 205) this Court examined in detail whether the glass sheets manufactured by the assessee were covered by exemption from payability of tax granted through a notification issued under the Sales ,Tax Act, and repelled the argument against the reviewability of the orders of the Sales Tax Authorities by the High Court. In a recent case Edu1jee Dinshaw v. Income‑tax Officer 1990 PTD 155: this Court discussed at some length the case‑law on the subject and notice that the High Courts have made frequent interventions, in the fiscal disputes, in exercise of writ jurisdiction. Upon careful consideration of the facts of the case before us, we are of view that it was not necessary for the appellants to have travelled through grooves of the procedure laid down in the Statutes to approach the High Court. In our opinion, the writ petitions were competent, and a decision on merit of the issues raised therein was fully warranted." Similar view has been taken in the case of Collector of Customs v. S.M Ahmed & Co. on which Mr. Abdul Aziz Memon has placed reliance Even in the case of Khalid Mahmood v . Collector of Customs 1999 SCMR 1881, it has been observed by the Hon'ble Supreme Court as under:‑‑‑ "As to bar of jurisdiction, it is to be noted that Article 199 of the Constitution opens with word to the effect that the High Court may exercise its powers under such Article only `if it is satisfied that no other adequate remedy is provided by law'. Adequacy of the alternative remedy, therefore, if there is another remedy available, should alwa s attract the attention of the High Court. Of such alternative remedies also there are some, which would still leave the jurisdiction of the High Court virtually unaffected, if the order, complained of, is so patently illegal, void or wanting in jurisdiction that any further course to or prolongation of the. alternative remedy may only be counter‑productive and, by invocation of Article 199 the mischief can forthwith the nipped in the bud. In such matters, of course, neither the alternative remedy would be adequate nor bar of jurisdiction in the Sub‑Constitutional Legislation may cone in the way of the High Court in exercising its Constitutional jurisdiction.

32. We are persuaded to agree with the submission of Mr. Abdul Aziz Memon, that the impugned order in this case is so patently illegal and perverse, that this Court should exercise its jurisdiction under Article 199 of the Constitution. He has particularly pointed out to the finding of respondent No.3 that, "with all due respect to the arguments made by the learned counsel for the respondents and the judgment of the Peshawar High Court, I am of the humble opinion that the respondents have tried to claim rights under SRO 580(I)/91 dated 27‑6‑1991 which they are not remotely connected". Mr. Abdul Aziz Memon has submitted that the respondents have flouted the judgments of the Peshawar High Court which makes the impugned order patently illegal, void and wanting in jurisdiction and therefore, the petitioner cannot be compelled to for re‑course to or prolongation of the alternative remedy. He has submitted that as observed by the Hon'ble Supreme Court in the case of Khalid Mahmood in such matters the mischief should be nipped in the bud and neither the alternative remedy or any other adequate remedy come in the way of High Court in exercising its Constitutional jurisdiction. There is great force in the contents of Mr. Abdul Aziz Memon. We deprecate the tendency of ignoring or by‑passing, the decisions by the superior Courts on the part of Revenue Authorities. This tendency needs to be curbed for' better administration of justice, observing of discipline and maintaining the rule of consistency. The respondent No.3 with very scanty knowledge of the dispensation of justice, and interpretation of statutes has attempted to demonstrate, that the Peshawar High Court in the judgments cited before him has not taken into notice relevant provisions of law and has fallen in error, which was being corrected by the respondents No.3. It appears that the respondent No.3 has gone to that extent in order to justify the opinion of C.B.R. contained in the letter, dated 29‑6‑1998 issued by the C.B.R. Any such attempt on the part of Revenue Authorities is always' to be viewed very seriously and may entail into an appropriate action, which, however, we do not propose to, take in this case. We would, however, like to ‑give stern warning that nol such attempt should be made in future.

33. In the above facts and circumstances and looking to the nature of impugned order, it is held that the petition is maintainable and the petitioner cannot directed to go through the remedies available in sub -Constitutional legislation. The objection in this regard is hereby repelled.

34. Coming to the merits of the petition, we find that the issue under consideration is covered by the judgments of the Peshawar High Court which are based on the authoritative pronouncement made by the Hon'ble Supreme Court in various judgments on the point of creation of vested right and principles of promissory estoppel under which the Government is restrained from withdrawing the exemptions/ concession given under the SROs when a citizen has acted upon on the incentives/assurances.

35. Since the issues involved in this petition and the relief sought is fully covered with the judgments of the Peshawar High Court to the effect that the principals of the petitioners are still entitled to the concessions/exemptions granted in Notification SRO 580(1)/91 and the subsequent SRO 561(1)/94 is not operative so for the petitioners principals are concerned therefore, we hold accordingly. The consequence of holding that the Notification SOR 580(1)/91, is still applicable to the principals of the petitioners, during the period of five years of setting up of the industry by them, we hold by following the judgments of the Hon'ble Supreme Court cited above that the goods I enjoying exemption as in this case under section 13(1) of the Sales Taxi Act, 1990 go out. of the purview of the Sales Tax Act. The goods manufactured by the principals of the petitioners admittedly enjoy exemption from the payment of sales tax under section 13 of the Sales Tax Act, 1990. The result of such exemption enjoyed by the manufacturers under section 13 of the Sales Tax is that the supply of such goods by the manufacturers,, dealers, wholesalers and retailers shall not fall within the purview of taxable supply, being supply of goods which are exempt from payment of sale tax under' section 13 and consequently such goods go out of the scope of section 3(1) of the Sales Tax Act, 1990.

36. For the foregoing reasons, it is held that the opinion of C.B.R contained in the letter, dated 29th of June, 1998 is not applicable to the petitioners and the show‑cause notice, dated 12‑11‑1999 and the order in, original by the respondent No.3, dated 27‑12‑1999 are not in consonance with the law. The impugned order of respondent No.3, is not valid in law and is hereby quashed. It is declared that the petitioners are not liable to pay Sales Tax on supplies/products/biscuits/goods mentioned in the impugned order of respondent No.3. The respondents are further restrained from levying, demanding, collecting or recovering any amount by way of sales tax from the petitioners on their supplies in the market in respect of goods manufactured by the petitioners principals namely Messrs Coronet Foods (Pvt.) Limited, during the period of exemption granted under SRO 580(1)/91 read with SRO 56(1)/94. The petition is allowed as above. S.A.K./P‑33/K Petition allowed.