2005 PLP 1328 (PTD)

KHILJI ARIF HUSSAIN, J.

The petitioner seeks relief that respondent No.3, Collector of Customs (Appraisement) be directed to charge income tax on the amount of sales tax as it is against the defined term of turnover. The background of the petition is that the petitioner was engaged in the business of import and imported RBD palm oil in bulk from Kualalumpur Malaysia. The tax on the edible oil was collected under sub-clause (5) of section 50 of the Income Tax Ordinance, 1979 (hereinafter referred to as the "Ordinance") the petitioner objected the charge of income tax while calculating the value of the consignment amount should not be included in it and paid the same and impugned the said order through this petition. Heard Dr. M.R. Zia Rana, learned counsel for the petitioner, Mr. Raja Muhammad Iqbal, learned counsel for respondents Nos.2 and 3 and Mr. Aqueel Ahmed Abbasi, learned counsel for respondent No.4. Dr. M.R. Zia Rana, learned counsel for the petitioner, while relying upon the judgment of Ramma Pipe and General Mills Ltd. v. Federation of Pakistan (1994 PTD 848) contended that the amount paid as sales tax cannot be deemed to be the income of the assessee and cannot be subjected to payment of income tax. We have gone through the record and it appears that the petitioner has enjoyed exemptions under Clause 118-D of the Second Schedule of the Ordinance. Under sub-clause (5) of section 50 of the Ordinance, tax collected on the import of edible oil as raw material by an industrial undertaking is minimum amount of tax payable under section 80-DD and not a full and final discharge of the tax liability of the assessee under the Ordinance. The tax under sub-clause (5) of section 50 of the Ordinance is collected on the value determined under section 25 of the Customs Act, 1969 (hereinafter referred to as the "Act"), which provide that for the purpose of determining the value, the normal price of an imported goods shall be determined by including in the price, duties and taxes applicable in Pakistan. Sub-clause (5) of section 50 of the Ordinance provides that the Collector of the Customs shall, in the case of every import of goods, collect advance tax computed on the basis of the value of such goods as increased by the customs duty and sales tax, if any, levied thereon at the rate specified in the First Schedule and credit for the tax so collected in any financial year. As regards the case of Ramma Pipe and General Mills Ltd. (supra), we have gone through it, but failed to conceive how the proposition laid down in the said matter is applicable to the instant case. Having gone through section 25 of the Act and sub-clause (5) of section 50 of the Ordinance, at the time of collecting the income-tax on the import of the goods, value of the goods is to be taken as value of the goods determined under section 25 of the Act along with customs duties and sales tax, if any, to be paid on it. Accordingly, the petition has no merits and is dismissed as such, however, with no orders to costs. The above are the reasons of the short order, dated 14-9-2004. H.B.T./M-210/K Petition dismissed.