2001 PLP 2640 (PTD)

RASHID AZIZ KHAN, J.‑‑‑‑Facts leading to the filing of this petition by the petitioner are that respondent, a limited company engaged in the manufacturing and export of Cotton Yarn, filed a Constitutional petition in the High Court of Sindh, Karachi, with the prayer that the case of the petitioner fell for purpose of recovery of withholding tax under Part‑II of Eighth Schedule of the Income Tax .Ordinance, 1979, and not under Par‑III of the said Schedule. A Division Bench of the High Court of Sindh vide its order, dated 18‑04‑2000 allowed the writ petition with the clarification that the case of the petitioner fell in Part‑II of the Eighth Schedule and was to be taxed accordingly. Department has impugned the said judgment.

2. It was contended by the learned counsel for the petitioner that manufacturing and export of Cotton Yarn was neither mentioned in Part‑I nor in Part‑II, therefore, it was covered under Part‑III item No. 1, which reads as "all other goods not covered under Part‑I and Part‑II of this Schedule". It was further argued that the respondent‑company should have approached the Income‑tax Officer at the first instance and, thereafter, could go in writ jurisdiction.

3. The contentions were vehemently opposed by the learned counsel for the respondent.

4. We have heard both sides at length and gone through the tile with their assistance. By virtue of insertion of section 80CC in the Income Tax Ordinance, certain tax was to be deducted on the goods exported, accordingly Schedule Eighth was issued indicating the items to be exported and the tax to be deducted in Part‑I of the Schedule. Both the counsel agreed that export of Cotton Yarn does not fall in this part, therefore, need not be discussed. Sole contention of the learned counsel for the respondent is that his case falls under Part‑II, item No. 1, which reads "export of goods manufactured in Pakistan, subject to other provisions of this Schedule". His case was that he was in the business of manufacturing of Cotton Yarn in Pakistan and was exporting the same. Learned counsel for the petitioners on the other side contended that the case falls under Part‑III of Eighth Schedule, item No.1 , which reads" all other goods not covered under Part‑I and Part‑11 of the Schedule". According to him, since manufacturing and export of Cotton Yarn was not specifically mentioned either under Part‑I or Part‑II, therefore, item No. l covered it. It may be clarified here that difference of tax between Part‑Il and III, as in Part‑11 0.75 % will be deducted from the income but in Part‑III 1 % of the income shall be deducted as tax. The learned Division Bench of the High Court of Sindh has rightly came to the conclusion that case fell in Part‑II of the Eighth Schedule because Item No. 1 of the said part deals with export of goods manufactured in Pakistan. The respondent who manufactures Cotton Yarn and is in the business of the exporting the same. His case, consequently, falls within this provision. After having gone through the judgment impugned, we find that cogent reasons have been given by the High Court to which exception can not be taken. Petition fails, which is dismissed and leave to appeal is refused. Q.M.H./M.A.K.//F‑39/SC Petition dismissed.