1993 PLP 2316 (MLD)

2. The petition has been resisted by respondent No. 2 alone as respondent No. 1 had failed to appeal despite service and was proceeded against ex Par respondent. In the written statement filed by respondent No. 2, it has been asserted that the District Council is authorised to levy and collect export tax on export of goods produced within its limits or which during their transit in the limits of Zila Council beyond the time allowed for the purpose.

3. Mr. Ejaz Hussain Batalvi, learned counsel for the petitioner has contended that as the goods are taken to the factory of the petitioner from the Dry Port and remain in transit while passing through Zila Rawalpindi, there is no `export' attracting the levy of tax on exports from the Zila. In support of this contention, reliance has been placed on M/s. Rupali Polyester Limited v. Government of the Punjab through Secretary, Local Government and Rural Development and two others 1992 CLC

796. The second contention raised by the learned counsel is that under instructions of Government of Punjab, the Taxati 2335 interviewing candidates from this Agency would not mearules. There shall be no order as to costs. AA./M‑855/L Petition allowed. 2339 Karachi, under section 399/402, P.P.C., in which the 5 arrn Officer, Zila Council, Rawalpindi had allowed the goods of the petitioner to remain in transit for .30 days and as such, no export tax could be charged on, the goods taken out of Zila within the extended period.

4. Learned counsel for the respondents has, on the other hand, maintained that according to the rule 5 (5) of the Export Tax Rules, the goods, which are not removed from the district within 24 hours, are liable to taxation.

5. The quest ion as to whether any export tax is payable on the goods which remain in transit through the area controlled by a Zila Council was examined by this Court in M/s. Rupali Polyester Limited (supra). Reiterating the view taken in Multan Chemicals Ltd. v. District Council, Lahore through Chief Officer, Lahore and two others 1991 MLD 910, it was held that the goods in transit cannot be said to have been exported and, no export tax could be charged on these goods.

6. The other contention of the learned counsel for the petitioner is equally well‑founded. Under rule 5 of the Export Tax Rules, 1990, no export tax can be charged on the goods which remain in transit for 24 hours or less. The Taxation Officer is however empowered to extend that period. On a representation made by the petitioner, the Government of Punjab, on 6th February, 1991, directed the Zila Council, Rawalpindi not to charge any tax on the goods belonging to the petitioner if they remain in transit for a period of 30 ‑A days. On the receipt of these directions, the Taxation Officer on 24‑2‑1991 extended time limit to 30 days. That being so, recovery of the export tax from the petitioner on goods which remain in the Zila for 30 days was clearly illegal. In view of what has been stated above, this petition is allowed and action of the respondents in recovering export tax on the goods in transit is declared to be unlawful and of no legal effect. Respondents are directed to refund the amount recovered by them from the petitioner forthwith. No order as to costs. H.B.T./H‑64/L Petition allowed.