Exemption

The income for which exemption is sought (i) must be from "investments in securities of the Federal Government and house property"; (ii) either the said sources of income or the income itself must be "held under trust or other legal obligations wholly, or in part only, for religious or charitable purposes"; and (iii) the income must be "actually applied or finally set apart for application thereto".

The income for which exemption is sought (i) must be from "investments in securities of the Federal Government and house property"; (ii) either the said sources of income or the income itself must be "held under trust or other legal obligations wholly, or in part only, for religious or charitable purposes"; and (iii) the income must be "actually applied or finally set apart for application thereto".

Section 181 of the Customs Act is to the effect that once an order for confiscation of goods is passed under the Customs Act, the adjudicating officer may pass an order giving an option to the owner of the goods to pay such fine in lieu of the confiscated goods, as he thinks fit, however, the proviso to the said section envisages that the Federal Board of Revenue is empowered to circumscribe the discretion of the officer for passing an order for payment of fine in lieu of confiscated goods

While exercising the powers conferred under S. 181 of the Customs Act, the Federal Board of Revenue has indeed issued a notification bearing SRO 499(I)/2009 dated 13.06.2009, the preamble of the said SRO describes the goods or classes of goods from clauses (a) to (g)regarding which the officer concerned cannot exercise his discretion in terms of S.181 of the Customs Act

There are two significant recent amendments/insertions/substitutions brought about in the SRO 499(I)/2009

Initially clause (ba) was inserted vide SRO 1280(I)/2024 dated 20.08.2024

Thereafter, the said clause was substituted vide SRO 1619(I)/2024 dated 03.10.2024

Perusal of newly substituted clause (ba) of SRO 499(I)/2009 clearly concludes that a 'lawfully registered conveyance', 'if seized and found carrying smuggled goods' will fall within the exceptions of Section 181 of the Customs Act and shall not be amenable to avail the option of payment of fine in lieu of confiscation

This substitution is definite in terms and unequivocal in application

If a vehicle was found carrying smuggled goods and was being used exclusively for the transportation thereof, thus, the same will be squarely covered under clause (ba) of SRO 499(I)/2009 and the option contemplated under Section 181 of the Customs Act cannot be resorted to for its release.

Plea raised by petitioner / University was that it was a charitable institution and was exempted from deduction of Zakat

Validity

Petitioner / University was established for paramount national interest to establish a center for advancement of education and learning of internationally acknowledged standards to the talented and deserving students of Pakistan

Petitioner / University was neither alleviated institution to the category of a charity nor there existed any operative provision in Foundation University Ordinance, 2002 for its declaration to be a charitable institution

Liability to Zakat was attached to prescribed assets held by a person or institutions defined under the law, subject to only those exemptions, which were expressly provided under S.24 of Zakat and Ushr Ordinance, 1980

Nature and character of petitioner / University, whether statutory, chartered, public service or otherwise, did not by itself create immunity, unless such immunity was grounded in the statute which the petitioner / University had failed to bring on record

Under the law, where the Legislature intended exemption, it had done so explicitly

Absence of such expression must be construed as deliberate

Petitioner / University did not place on record any specific document, nor pointed out any specific provision in its parent statute or in Foundation University Ordinance, 2002 granting exemption from Zakat liability

High Court in exercise of Constitutional jurisdiction declined to interfere in the matter as the petitioner / University failed to demonstrate any illegality in the letter issued by authorities holding petitioner / University liable to deduction of Zakat

Constitutional petition was dismissed in circumstances.

Amended S.R.O. 474(I0/2016, dated 24-06-2016 itself put petitioner/importer under obligations to provide its qualification in order to fectch exemption which was only available for manufacturing or formulation of agricultural pesticides by manufacturers and formulators and that could only be recognized and approved by the Ministry of National Food Security and Research

Column (2) of S.R.O. had restricted and prescribed a condition and treatment of goods of column (3) in terms of exemption of customs duty could only be if condition prescribed in Column (2) was met

Petitioner/importer was neither recognized nor approved by the Ministry of National Food Security and Research either as manufacturer or formulator of Agricultural pesticides

If petitioner/importer had chosen to protect any such alleged right which claimed to have been violated by the S.R.O., the petitioner/importer was at liberty and if any such right was exercised, it should be dealt with in accordance with the law, and permission as such was not required

Petition for leave to appeal was dismissed and leave to appeal was refused.

Amended S.R.O. 474(I)/2016, dated 24-06-2016 itself put petitioner/importer under obligations to provide its qualification in order to fectch exemption which was only available for manufacturing or formulation of agricultural pesticides by manufacturers and formulators and that could only be recognized and approved by the Ministry of National Food Security and Research

Column (2) of S.R.O. had restricted and prescribed a condition and treatment of goods of column (3) in terms of exemption of customs duty could only be if condition prescribed in Column (2) was met

Petitioner/importer was neither recognized nor approved by the Ministry of National Food Security and Research either as manufacturer or formulator of Agricultural pesticides

If petitioner/importer had chosen to protect any such alleged right which claimed to have been violated by the S.R.O., the petitioner/importer was at liberty and if any such right was exercised, it should be dealt with in accordance with the law, and permission as such was not required

Petition for leave to appeal was dismissed and leave to appeal was refused.

Department approached the High Court against the findings of the Income Tax Appellate Tribunal declaring the income from property of the assessee (Karachi Stock Exchange, now Pakistan Stock Exchange) is exempted from tax under Clause (93) of Second Schedule to Ordinance, 1979 contending that it (respondent) was neither a religious nor a charitable institution

Stance of the respondent (Karachi Stock Exchange, now Pakistan Stock Exchange) was that the revenue-under-question was by way of premium ("Salami") for granting permission to operate from portions (cubicals) of its property in terms of the agreement, separately executed in that regard, thus, the revenue so generated formed part of the capital reserve having exemption under clause (93) of Second Schedule of Income Tax Ordinance, 1979 ('the Ordinance, 1979') as per (last component of) the definition of "charitable purpose "under S.2(14) of Ordinance, 1970 i.e. "advancement of any other object of public utility"

Validity

Second Schedule of the Ordinance, 1979, exempts certain incomes or classes of income or persons or classes of persons enumerated therein from tax subject to the conditions and to the extent specified thereunder

Respondent (Karachi Stock Exchange/Pakistan Stock Exchange) sought exemptions of revenue-in-question under Clause (93) of ibid Second Schedule claiming that it (respondent), which was a company by guarantee, meant no dividends were to be paid to its members and secondly that, as is evident from the Memorandum and Articles of Association, the property of the company was under legal obligation for utilizing its income for the object of the company

Respondent was a commercial organization engaged in business of trading securities; it formed a main commercial hub where facilities for securities trade were being provided wherein members operating therefrom assembled for their financial gains besides other support to cater their financial growth such as outlets of any financial institutions including Bank whose existence was inevitable for such operations from the subject property, on payment of consideration which was strangely called "Salami" by the respondent and sought exemption of such revenue in said regard

Entity of Karachi Stock Exchange/Pakistan Stock Exchange, now or at the relevant time, could neither be equated to have been operating for charitable purposes or for imparting relief to the poor, education or medical issues nor for the advancement of any other object of public utility

As an ancillary cause the benefit may have bubbled over to individuals having interest in security trade through entrusted members and having commercial interest in dealing with trade of securities through the members of the Stock Exchange but to apply such exemption to the revenue generated by respondent was not sufficient to categorize this event/activity of trade as advancement of any other object of public utility, let alone other phrases like for poor, education and medical relief

Primarily, from the specified portions of that building/property the individuals were looking after their own monetary interests and revenue component, so generated, either as a commission in trade of securities or as license fee for operating from a particular portion of that property or rent for occupying the cubical/portions, as in the case of Banks operating on payment of consideration

Thus in no way it can be termed to be an activity to keep the respondent under the umbrella of charitable activity or an act towards "advancement of any other object of general public utility"

Thus, the impugned findings of Income Tax Appellate Tribunal did not subscribe to Clause (93) of the Second Schedule of Income Tax Ordinance, 1979 and the relevant definitions of charitable purposes in terms of S.2(14) of the Ordinance, 1979

Answer to the question proposed was in "negative" i.e. in favour of the appellant department and against the respondent

Resultantly the orders of Commissioner/Deputy Commissioner was maintained

Income Tax Cases, filed by the Department, was allowed.

Ss.3 & 13, Sixth Sched., Table I, Sr.No.151, Sub-serials (a) & (b) [as inserted by Finance Act, 2019 vide Circular No.01 of 2019] Transporsition of exemption under SRO 1212(I)/2018 following rescindment of SROs 888, 889 and 890(I)/2018

Post Twenty-Fifth Amendment to the Constitution

Federally Administrated Tribal Area / Provincially Administrated Tribal Area (FATA/PATA)

Exemption

Sales tax on area of FATA / PATA, charging of

Supplies made from outside the territory of FATA/PATA

Argument of the Department was that since appellant /SNGPL had supplied gas from outside the territory of FATA/PATA from Pakistan, therefore, the taxpayer being based in Pakistan had no exemption on its supplies made to erstwhile FATA

Plea of the appellant / SNGPL was that it was incorrect to state that the supplies made by SNGPL were from outside territory of FATA/PATA as the appellant / SNGPL had a wide network having offices, infrastructure and pipelines and supply of gas was made within the territorial bounds of erstwhile FATA/PATA

Held, that the Serial No.151 of Table-I of Sixth Schedule of Sales Tax Act, 1990, had restored the legal position prior to enactment of the Constitution (Twenty-fifth Amendment) Act, 2018 and the appellant was fully entitled to exemption available to supplies to Swat (FATA/PATA ) under S.No.151

Appellate Tribunal Inland Revenue declared Sales Tax (including Further tax and Extra Tax along with default surcharge and penalty) charged on supplies made by the appellant / SNGPL to Swat area (FATA/PATA) as illegal, void ab-initio and without lawful authority

Impugned orders were set aside

Appeal filed by registered person (SNGPL) was allowed, in circumstances.

Department raised a tax demand against the appellant for having failed to deduct sales tax in respect of purchases made from un-registered persons

Contention of appellant was that the paper wastes had been procured from the persons falling in the cottage industry not subject to levy of sales tax as being exempted under the Sixth Schedule annexed to the Sales Tax Act, 1990

Validity

Contention put forth by the appellant needed proper scrutiny and verification as to whether such paper wastes was actually purchased from the persons falling cottage industry

Case was remanded back to the original adjudicating authority to look into the matter afresh on such account

Appeal was disposed of accordingly.

Department raised a tax demand against the appellant for having failed to deduct sales tax in respect of purchases made from un-registered persons

Validity

Purchases of wheat straw were exempt from levy of sales tax under Sr. No. 10 of Table 2 of the Sixth Schedule annexed to the Sales Tax Act, 1990

Wheat straw being an agricultural produce was not subject to levy of sales tax, as such, no deduction of withholding tax on payments was warranted under the law

Appeal was disposed of accordingly.

Withholding sales tax is always liable to be deducted on taxable goods and no such deduction is required to be made in case of payments on account of the goods exempted from sales tax.

Held, that State Bank of Pakistan being a public service organization was exempted from property tax on its building for the reasons that profit of the Bank after providing expenditures was remittable to the Government; entire capital of the Bank vested in the Federal Government; and the same was not a commercial entity rather it performed functions on behalf of the Federal Government

Properties of the same needed to be treated as owned by the Federal Government

Constitutional petition was allowed accordingly.

Petitioner (located in Federal Tribal Areas) was aggrieved of demand of authorities for collection of advance income tax and sales tax from petitioner through monthly electricity bills

Validity

Through Notification SRO No.1213(I)/2018, dated 5-10-2018, provisions in Chap. XII of Income Tax Ordinance, 2001, were not applicable to area of erstwhile Federally Administered Tribal Area

Any person located in erstwhile Federally Administered Tribal Area who exclusively carried his business there was not required to obtain exemption certificate from authorities under S.159 of Income Tax Ordinance, 2001

Federal Government through notification SRO No.1212(I)/2018, dated 5-10-2018, while exercising its power under S.13(2)(a) of Sales Tax Act, 1990, empowered supplies made by persons located in erstwhile tribal area from impost of sales tax

Supplies / consumption of electricity under Sales Tax Act, 1990 was exempted from levy of sales tax, to industrial and commercial consumer except steel and ghee/cooking oil industries

Demand in question of revenue to collect sales tax through electricity bill from petitioner, whose manufacturing unit was located at erstwhile Federally Administered Tribal Area was not justified

High Court declared that demand of authorities for collection of advance income tax and sales tax from petitioner through monthly electricity consumption bills was illegal and without lawful authority

Constitutional petition was allowed, in circumstances.

Expression 'unless there is in force a certificate issued under subsection (1) of S.159 relating to the collection or deduction of such tax'

Exemption or lower rate certificate

Applicability

Appellants-taxpayers claimed that they were registered with Sales Tax as exporters or manufacturers, who were exempted from applicability of S.235 of Income Tax Ordinance, 2001

Validity

Expression 'unless there is in force a certificate issued under subsection (1) of S.159 relating to the collection or deduction of such tax' as used in S.159(2) of Income Tax Ordinance, 2001, conveyed that as long as certificate was in force, Distribution Companies were obliged to act comply with the mandate of the certificate

Certificate procured under S.159(1) of Income Tax Ordinance, 2001, remained valid/in force, unless factum of inactive status suspension or cancellation of registration, as the case could be, was communicated by Commissioner concerned to the relevant Distribution Company

Such mechanism could not be replaced, substituted or rendered ineffective through judicial interference

Appellants-taxpayers were exempted from operation of S.235 of Income Tax Ordinance, 2001, upon fulfillment of conditions prescribed in terms of Cl.66, Part-IV of Second Sched. of Income Tax Ordinance, 2001, provided such fulfillment was evidenced/affirmed by certificate issued in terms of S.159(1) of Income Tax Ordinance, 2001 and not otherwise

Operation of S.235 of Income Tax Ordinance, 2001, was to effectively remain in abeyance, dormant or non-operative once conditions prescribed in Cl.66, Part-IV of Second Sched. of Income Tax Ordinance, 2001, were fulfilled and which compliance was to be evidenced/affirmed in terms of certificate issued in terms of S.159(1) of Income Tax Ordinance, 2001

Where registration was inactive, suspended or cancelled, operability of S.235 of Income Tax Ordinance, 2001, would become effective, applicable and no exemption was claimable

Intra Court Appeal was dismissed in circumstances.

Petitioners were aggrieved of awarding of contract for supply of motor vehicles registration numbers with Radio Frequency Identification (RFID) technology

Validity

Petitioners failed to substantiate any mala fide intention or ulterior motives on the part of Sindh Government that exemption was granted to provide any preferential treatment or favoritism

Petitioners also could not establish that while granting exemption to enter into a contract on fulfillment and ensuring certain conditions, Sindh Government was somewhat engaged or committed any corrupt and fraudulent practices as defined under R. 2(q) of Sindh Public Procurement Rules, 2010

Under G2G contracts, monitoring task or audit exercise to ensure transparency and fairness or repressing any corrupt and fraudulent practices was more easygoing and comfortable from both the sides with sheer commitment to religiously fulfill their contractual obligations due to restraint of double check command in the affairs on Government to government level

Respondent Authority was an autonomous body but it was under the administrative control of Federal Government

Such was a government to government contract and according to decision taken in minutes of meeting, Sindh cabinet considered proposal of Excise, Taxation and Narcotics Control Department for introducing new number plates and according to the decision, case of new number plates was to be negotiated

Features of tracker integrated in RFID must be vetted by well reputed tracking service providers so that tracker features of new number plates could be more effective

High Court observed that all law enforcement agencies must be consulted for improvised and standard number plates and all legal and administrative aspects of G2G must be followed in letter and spirit

Exemption was granted by Cabinet under S.21 of Sindh Public Procurement Act, 2009 which could not be declared illegal or contrary to powers conferred by the statute

Constitutional petition was dismissed, in circumstances.

Petitioner imported a vintage vehicle but delivery of same was denied on grounds that there was ambiguity in law regarding imposition of taxes on vintage vehicles

Validity

No reference to any other restriction or prohibition existed as could be attracted in terms of Import Policy Order, 2016 in respect of other imported vehicles which showed clear intention of Federal Government not only to exempt vintage or classic cars from payment of duty and taxes in excess of cumulative amount of US $ 5000/- per unit but also to relax other prohibition or restriction, if any, in respect of other vehicles as per Import Policy Order, 2016

No ambiguity existed regarding import of vintage or classic cars and jeeps on payment of US $ 5000/- falling under PCT Code 87.03 of First Schedule to Customs Act, 1969 provided it was manufactured prior to January 01, 1968

High Court directed authorities to release vehicle of petitioner on payment of US $ 5000/- as per Notification SRO No. 833(I)/2018 dated 03-07-2018 issued by Federal Government

Customs authorities were under legal obligations to abide by all such notifications issued by Federal Government under S. 223 of the Customs Act, 1969

Constitutional petition was allowed in circumstances.

Further tax was to be levied at 3% of the value of supply made to a person who had not obtained registration number, but only in cases where supply was taxable

Appellant was a supplier of edible oils and vegetable ghee, its local supply was specifically exempt from levy of sales tax in terms of Serial No. 24 of the Sixth Schedule to Sales Tax Act, 1990 as well as exempt from levy of Federal Excise duty in terms of SRO No.24(I)/2006, dated, 07-01-2006

Supplies made by appellant did not meet the requirements stipulated in S.3(1A) of Sales Tax Act, 1990, for levy of further tax

Orders passed by assessing officer and Commissioner (Appeals) were annulled by the Tribunal

Appeal was allowed.

Petitioner was an international company having its permanent office in Pakistan and was awarded a contract for which supplies and services were sought from both foreign and domestic sources

Petitioner sought issuance of tax exemption certificate but same was concurrently denied by Commissioner Inland Revenue and Chief Commissioner Inland Revenue

Validity

Petitioner who was a non-resident entity had a permanent establishment in Pakistan, therefore, respondent/authority while making payment of contract price (whether for local supplies or for supply of equipment from abroad) shall at time of making payment, deduct tax from gross amount payable in accordance with S. 152(2A) of Income Tax Ordinance, 2001

Supply was not made between associates and it was also not made by resident person or Pakistan permanent establishment of non-resident person

Section 152(7)(a)(iii) and (iv) of Income Tax Ordinance, 2001 was not applicable in circumstances

Matter pertaining to supply of equipment from abroad by petitioner to respondent/Authority in furtherance of contract for which payment was made through letter of Credit in foreign country did not fall in any of exceptions enumerated in S.152(7)(a)(i) to (iv) of Income Tax Ordinance, 2001

Inland Revenue Authorities had rightly turned down application of petitioner for exemption from deduction of tax under S.152(5) of Income Tax Ordinance, 2001

High Court declined to interfere in concurrent orders passed against petitioner as they did not suffer from any procedural impropriety

Constitutional Petition was dismissed in circumstances.

Complainant was a Non-Resident/Overseas Pakistani who was aggrieved of deduction of tax on his remittances exceeding fifty thousand rupees

Validity

Complainant, who was Non-Resident working abroad and who had no source of income in Pakistan was exempt from filing of return in terms of S. 115(3)(d) of Income Tax Ordinance, 2001

Non-Resident who had no Pakistan-source taxable income was exempt from filing return of income under S. 114 of Income Tax Ordinance, 2001

Federal Tax Ombudsman declared that application of Ss. 231-A & 236-P of Income Tax Ordinance, 2001 on money remitted by Non-Residents expatriates through proper banking channels who were otherwise exempt from filing their returns of income, tantamount to negate benefit of S. 115(3)(b) of Income Tax Ordinance, 2001

Federal Tax Ombudsman directed Federal Board of Revenue to issue necessary clarification/explanation to bring conformity in case of non-filer Non-Resident expatriates in application of Ss. 231-A & 236-P of Income Tax Ordinance, 2001 with S.115(3)(b) of Income Tax Ordinance, 2001

Federal Tax Ombudsman further directed the authorities to facilitate complainant in getting refund of amount deducted/collected from his Bank withdrawals under S.231-A of Income Tax Ordinance, 2001

Complainant was allowed the deduction accordingly.

Taxing instruments and exemptions issued thereunder must contain clarity and certainty.

Whether income received by the Institution in the form of contributions was exempt from tax in terms of Cl. 62 of Part I of Second Schedule to the Income Tax Ordinance, 1979 ("the Ordinance")

Clause 62 applied in case of "voluntary" contributions

Contributions to be made by employers under S. 20 of the Ordinance were "mandatory"

Failure to make timely payment exposed the delinquent employer to the consequences laid down in S. 23, which provided that if there was non-payment of any amount due under S. 20, then what was payable stood increased by such percentage or amount as may be prescribed

Section 23 further provided that any unpaid amount could be recovered as arrears of land revenue

Contributions under S. 20 were, thus, not voluntary and therefore did not come within the scope of Cl. 62 of Part I of Second Schedule to the Ordinance.

Plea that benefit of exemption from tax provided under Cl. 142 of Part I of Second Schedule to the Income Tax Ordinance 2001 ("the 2001 Ordinance') should be given retrospective effect to apply to assessment years falling under the 1979 Ordinance

Held, that to give retrospective effect to Cl. 142 of the 2001 Ordinance would be not merely to extend its reach over a huge period of time but also to cut across two different statutes

Clause 142 found place in the 2001 Ordinance whereas the issue, in the present case, arose under the 1979 Ordinance, which was repealed by the former

Clause 142 had no retrospective effect as contended for

Appeal was allowed accordingly.

All services provided in Pakistan were exempt from Federal Excise Duty unless specified in the First Schedule to the Federal Excise Act, 2005 read with Chapter 98 of the Pakistan Customs Tariff (PCT)

First Schedule to the Federal Excise Act, 2005 was not to be read in isolation, rather had to be read with Chapter 98 of the PCT

Even an activity within the definition of "services" under S. 2(23) of the Act was exempt from Federal Excise Duty unless specified in the First Schedule

Assessee, therefore, did not have to apply under S. 16 of the Act for exemption

Services provided by the assessee were exempt if not specified in the First Schedule to the Federal Excise Act, 2005.

Telecasts, TV sets and TV license fee were not covered by the definition of "services" in S. 2(23) of the Federal Excise Act, 2005 and Item 6 of Table II of the First Schedule to the said Act read with Chapter 98 of the Pakistan Customs Tariff (PCT)

TV license fee, telecasts and TV sets not being covered by any of the subheadings of PCT Heading 98.12 were not subject to Federal Excise Duty on a reasonable interpretation of the law

Pakistan Television Corporation Ltd. (PTV) was exempt from payment of Federal Excise Duty on TV license fee

Moreover the Wireless Telegraphy Act, 1933 and the Television Receiving Apparatus (Possession and Licensing) Rules, 1970, made the Parliamentary intention clear, i.e. the license fee was paid not for any service provided by PTV but by the holder of the TV set for its possession

Taxable event was not the provision of any service by PTV; it was the possession of a television set by the holder

TV license fee not being the product of any service provided by PTV, Federal Excise Duty could not be levied on it

Appeal was allowed accordingly.

Taxing instruments and exemptions issued thereunder must contain clarity and certainty.

Whether income received by the Institution in the form of contributions was exempt from tax in terms of Cl. 62 of Part I of Second Schedule to the Income Tax Ordinance, 1979 ("the Ordinance")

Clause 62 applied in case of "voluntary" contributions

Contributions to be made by employers under S. 20 of the Ordinance were "mandatory"

Failure to make timely payment exposed the delinquent employer to the consequences laid down in S. 23, which provided that if there was non-payment of any amount due under S. 20, then what was payable stood increased by such percentage or amount as may be prescribed

Section 23 further provided that any unpaid amount could be recovered as arrears of land revenue

Contributions under S. 20 were, thus, not voluntary and therefore did not come within the scope of Cl. 62 of Part I of Second Schedule to the Ordinance.

Plea that benefit of exemption from tax provided under Cl. 142 of Part I of Second Schedule to the Income Tax Ordinance 2001 ("the 2001 Ordinance') should be given retrospective effect to apply to assessment years falling under the 1979 Ordinance

Held, that to give retrospective effect to Cl. 142 of the 2001 Ordinance would be not merely to extend its reach over a huge period of time but also to cut across two different statutes

Clause 142 found place in the 2001 Ordinance whereas the issue, in the present case, arose under the 1979 Ordinance, which was repealed by the former

Clause 142 had no retrospective effect as contended for

Appeal was allowed accordingly.

Telecasts, TV sets and TV license fee were not covered by the definition of "services" in S. 2(23) of the Federal Excise Act, 2005 and Item 6 of Table II of the First Schedule to the said Act read with Chapter 98 of the Pakistan Customs Tariff (PCT)

TV license fee, telecasts and TV sets not being covered by any of the subheadings of PCT Heading 98.12 were not subject to Federal Excise Duty on a reasonable interpretation of the law

Pakistan Television Corporation Ltd. (PTV) was exempt from payment of Federal Excise Duty on TV license fee

Moreover the Wireless Telegraphy Act, 1933 and the Television Receiving Apparatus (Possession and Licensing) Rules, 1970, made the Parliamentary intention clear, i.e. the license fee was paid not for any service provided by PTV but by the holder of the TV set for its possession

Taxable event was not the provision of any service by PTV; it was the possession of a television set by the holder

TV license fee not being the product of any service provided by PTV, Federal Excise Duty could not be levied on it

Appeal was allowed accordingly.

Person who enjoys exemption in terms of S. 13 read with Sixth Schedule of Sales Tax Act, 1990 and does not make any taxable supply in terms of S. 2(41), Sales Tax Act, 1990 is not required to be charged further tax and extra sales tax in terms of S. 3(1A) and S.R.O. No. 509(I)/2013 dated 12-06-2013

Purpose of levying extra tax, in addition to the tax under subsection (1) of S. 3 of Sales Tax Act, 1990 is to charge the said tax from those persons who are liable to be registered under Sales Tax Act, 1990 but have chosen not to get themselves registered to avoid payment of sales tax in accordance with law

Legislature in its wisdom has chosen to exempt the supplies from payment of sales tax

Manufacturer cannot be made liable to pay any further tax or extra tax only on account of his non-registration under Sales Tax Act, 1990

Words used in S. 13(2)(a) of Sales Tax Act, 1990 are very specific and provide for exemption of any taxable import or supply of any goods from the whole or any part of the sales tax chargeable under the Sales Tax Act, 1990 and not merely under S. 3(1) of Sales Tax Act, 1990

Section 13 of Sales Tax Act, 1990 has an overriding effect on the chargeability of sales tax in terms of S. 3(1) as well as S. 3(1)(a) of Sales Tax Act, 1990

Section 3 of Sales Tax Act, 1990 can only be invoked in respect of goods which are being charged sales tax.

Once the goods imported into the country for home consumption and issued a sales tax invoice under S.23 of the Sales Tax Act, 1990 in respect of the said goods; the provisions of Customs Act, 1969 were not applicable, because the importer had already paid customs duty, sales tax, income tax, regulatory duty, federal excise duty, as well as additional customs duty at import stage.

Appellant imported cheese in bulk packing of 2.3 kgs and claimed exemption from payment of sales tax under Sr.79 of Sixth Schedule to the Sales Tax Act, 1990

Principal Appraiser of Customs refused to grant exemption of sales tax by holding that goods were packed under brand name

Validity

Directorate General of Valuation had determined valuation of cheese in packing of 1kg or above as imported in bulk packing

Goods imported by appellant weighing 2.3 kgs, therefore, stood exempted from payment of sales tax

Appellate Tribunal set aside the orders passed by Customs Authorities and allowed the appeal.

Appellant imported bottled and canned fruits and sought exemption from payment of sales tax under Serial No.15 of Table 1 of Schedule VI of Sales Tax Act, 1990

Software of PaCCS and WeBOC accepted the goods declarations for exemption

Director Project of software WeBOC, later on, restricted the software to the extent of PCTs mentioned in column No. 3 of Table 1

Appellant filed representation against the said act of Director Project of software WeBOC

Appellant was then advised to claim exemption under Serial No.61 of Table 1 which was to be amended by the Assessing Officer at the time of passing orders under S.80, Customs Act, 1969

Appellant started transmitting goods declarations under Serial No. 61 and Assessing Officer upon review allowed the exemption under Serial No. 15

Deputy Collector (Assessment), after release of goods, passed reassessment order and Directorate General Intelligence and Investigations (FBR) forwarded the contravention report to Collector of Customs (Adjudication), who issued show cause notice and thereafter directed appellant to pay sales tax, additional sales tax, income tax and imposed penalty

Plea of department was that exemption of sales tax claimed by appellant under Serial No. 61 only covered re-import of Pakistan goods and there was no exemption available to imported goods/fruits (except imported from Afghanistan)

Validity

Table No.1 is for import and supply and had to be read in conjunction with Note 1, which stipulated that exemption would be admissible on the basis of description of the goods as mentioned in column No. 2 of the Schedule

Pakistan Customs Tarrif (PCT) classification of heading was provided for ease of reference and commodity classification purpose only, meaning thereby that if any PCT was not incorporated in column No.3 and the goods so imported answered the description of the goods as mentioned in column No. 2 of the Schedule, exemption was available to those under respective serial number of Table 1 of Sixth Schedule to the Sales Tax Act, 1990 without any exception

Legislature, through Serial No. 15 had denied exemption on the imported fruit whether fresh, frozen or preserved with the exception of bottled or canned meaning thereby that imported canned or bottled fruits were exempt from the payment of sales tax

Even if it was presumed for sake of arguments that there existed anomaly or ambiguity in Serial No. 15 same would lead to two or more interpretations, even then it had to be resolved in favour of the appellant

Appellate Tribunal set aside the orders passed by customs authorities and allowed the appeal.

While the power of granting exemptions was discretionary, it was equally true that the said power could not be exercised in a discriminatory manner

Exemptions were to be granted and regulated in terms of consistent policies for sound reasons

Exemptions should not be granted or refused arbitrarily or on the ipse dixit of the concerned officials

Power to grant an exemption or to decline to grant an exemption, must be exercised in accordance with the general principles relating to good governance.

While the power of granting exemptions was discretionary, it was equally true that the said power could not be exercised in a discriminatory manner

Exemptions were to be granted and regulated in terms of consistent policies for sound reasons

Exemptions should not be granted or refused arbitrarily or on the ipse dixit of the concerned officials

Power to grant an exemption or to decline to grant an exemption, must be exercised in accordance with the general principles relating to good governance.

Plea raised by authorities was that judicial allowance was not covered under Item-39, Part-II of Second Schedule of Income Tax Ordinance, 2001

Validity

Income chargeable to income tax could only be exempted from taxation if same fell within purview of entries provided in Second Schedule of Income Tax Ordinance, 2001

Scope of allowances or benefit mentioned therein supplemented clear exclusion provided under S. 12(2)(c) of Income Tax Ordinance, 2001

Such were allowances and were solely granted for better performance of duties of officers

Plea raised by authorities was not relevant and issue of exemption was crucial and relevant only if special judicial allowance granted to petitioners was part of their salary

High Court declared that special judicial allowance granted to judicial officers was not liable to deduction of income tax at source within contemplation of S. 148 of Income Tax Ordinance, 2001

High Court directed that petitioners could seek appropriate remedy under enabling provisions of Income Tax Ordinance, 2001 with regards to deductions already made

Constitutional petition was allowed accordingly.

Grant of exemption is a delegated power on Federal Government and Federal Government may prescribe conditions subject to which exemptions are granted

Primary purpose of grant of exemptions is in respect of supply of goods or import of goods specified in Sixth Schedule of Sales Tax Act, 1990 by the Legislature.

Petitioner, a statutory organization, claimed exemption from toll tax charged by the National Highway Authority for use of highway

Validity

National Highway Authority was responsible for development, up-keeping, operation and maintenance of highway network throughout the country

Petitioner could not claim exemption from payment of toll in any category unless not specifically exempted by the authorities and was liable to pay toll tax according to the Scheduled rates of each category of vehicles which could be increased or decreased by the Authority at its discretion from time to time

Petitioner could not controvert the stance taken by the Authority and nothing was placed on record to show that the toll was not levied according to law

Constitutional petition was dismissed in circumstances.

Taxpayer, an employees Trust, had been filing its Tax returns since its inception, claimed exemption being an 'Approved Pension Fund' under Sixth Schedule to Income Tax Ordinance, 2001

Commissioner Inland Revenue, rejected said request of taxpayer by holding that, taxpayer was a separate entity from the "Pension Fund"

Taxpayer contested amended assessments before the Commissioner (Appeals) which were dismissed

Validity

In terms of S.2(4) of the Income Tax Ordinance, 2001, an approved 'Superannuation Funds' would mean a fund or part thereof which had been approved by Commissioner Inland Revenue, under Part-II of Second Schedule to Income Tax Ordinance, 2001; whereas in terms of S.239(10) of the said Ordinance, the approval granted by the Commissioner Inland Revenue to the Employees Trust, was to continue unless revoked, cancelled or repealed by Income Tax Ordinance, 2001

Commissioner Inland Revenue for over 14 years consistently granted exemption certificates and department continued to treat the income exempt under Cl.(57)(3)(ii) of Second Schedule applicable to Approved Pension Fund

Appeals were allowed holding that appellant trust was exempt from tax under Cl.(57)(3)(ii) of Part-I of Second Schedule to Income Tax Ordinance, 2001 on income of assets vested therein and contributions received from Employer Company for the Trust.

Importer imported an Endosurgery and Endoscopy equipment and claimed the clearance thereof under PCT Heading 9939 vide goods declaration

Consignment was physically examined and documents/particulars were 100% confirmed, but the items did not fall in the list of items admissible for benefit under PCT Heading 9938

Such benefit was denied to the importer and the review filed by the importer was also rejected

Appeal filed by the importer was dismissed by Collector of Customs (Appeals)

Validity

Collector of Customs (Appeals) had extended a blanket exemption to "other equipments" relatable to fields of Neurovascular, Endosurgery, Endoscopy, Oncology, Urology and Gynecology under the garb of rescuing those components of PCT Heading 9938 from redundancy

PCT Heading 9938 (Entries A to K) related solely to disposables and equipments relating to cardiology/cardiac surgery, but it was deemed necessary that PCT Heading 9938 (Entry "L") thereof relating to "Peripheral Interventions Equipments" be further probed juxtaposed with preface of impugned Tariff Heading so that a correct conclusion could be reached

General overview of schematics of PCT Heading 9938 would reveal that the equipment and disposables mentioned thereunder, were used or deployed in the most advanced field of surgery known as minimally invasive surgery

Entry of "L" to PCT Heading 9938 clearly covered the disposables and equipments used in various peripheral interventions procedures in all the field of medical sciences mentioned in Preamble of PCT Heading 9938

Interpretation of the departmental officers, restricting items mentioned under entries "A" to "L" of PCT 9938 to the fields of cardiology and cardiac surgery and resultantly declaring other specified fields of medical science superfluous, was ill-conceived, which could not be sustained

One therefore, could not advent to the reasoning that the term "other equipment" was to be read in isolation

Finding of the forum below that same was disjunctive in nature to rest of the Tariff Heading 9938, could not be subscribed

Forum below had erred in interpreting that the narration "and other equipment" carried the impute of providing a blanket exemption to sundry "disposables and equipment", meant for cardiology/cardiac surgery, neurovascular, Electrophysiology, Endoscopy, Endosurgery, Oncology, Urology and Gynecology

Only those disposable and equipment would merit extension of exemption under the PCT Heading 9938 which qualified the specifics mentioned in item "A" to "L" thereunder

Impugned "cervical cup", not only failed the test of contemporaneousness with items specifically listed under PCT Heading 9938, but also did not fall within the precincts of peripheral interventions equipment used in conjunction with the various branches of medical science mentioned in the impugned Tariff Heading

Impugned instrument did not qualify for exemption of customs duty and taxes under PCT Heading 9938, benefit thereof, was correctly denied by the Deputy Collector, Model Customs Collectorate

Grossly errant impugned order was set aside and appeal was accepted, in circumstances.

Notification No.No.AEA-III 3-3/03 (VOL-III) dated 6.12.2006 [issued under section 11 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963]

Restrictions on establishment/enlargement of industrial undertakings

Exemption

Public interest considerations

Relocation of existing sugar mills to a new location Nexus between ban on establishment of new sugar mills and relocation of existing sugar mills

Question before the High Court was whether relocation of existing sugar mills to a new area required permission in terms of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 and whether such relocation/shifting of sugar mills fell outside the purview of the Government of Punjab Notification No.AEA-III-3-3/03 (VOL-III) dated 6.12.2006, whereby ban was imposed on setting up of new sugar mills

Validity

Purposive interpretation of Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 showed that the same was geared to protect social, environmental, ecological, civic and economic interests of local residents while achieving planned and organized growth of industry and such Legislative policy synchronized with the Constitutional values, of social and economic justice and provided safeguards to the legitimate interests of backward and depressed classes and furthermore, also promoted the Fundamental Rights and the Principles of Policy, in particular, the promotion of social and economic well-being of the people

Permission required under section 3 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 was for the establishment of an industrial undertaking in a local area and therefore, when an existing sugar mill was shifted or relocated to another local area, it was no different from a sugar mill being established for the first time in such local area

Word "new" sugar mill, under the Notification meant new in the context of the local area and its residents, but not for the owners or proprietors of an industrial undertaking

High Court held that the appellant sugar mills, even though they were relocating or shifting, but for the purposes of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963, they were being established anew and required prior permission in terms of section 3 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963

Intra-court appeals were dismissed, in circumstances.

Petitioner impugned notice for sealing of his premises as well demand notice for property tax issued under the Punjab Urban Immovable Property Tax Rules, 1958, on the ground that the same were issued without following the process prescribed under the law and without associating petitioner in the assessment proceedings and the valuation of the property was done without confronting the petitioner about the same

Validity

Form P.T.1 was an assessment order containing all the assessed information regarding property to be taxed and duly authenticated by the assessing authority and R. 11 of Punjab Urban Immovable Property Tax Rules, 1958 was silent about communication of said form to taxpayer and if S.10 of the Punjab Urban Immovable Property Tax Act, 1958 was examined, it provided a right of appeal and revision to a taxpayer

Person aggrieved by an order of appropriate authority upon which objections made before that authority under Ss. 8, 9, 14 or 15 Punjab Urban Immovable Property Tax Act, 1958 may file appeal against such order within thirty days, however, procedure for communication of the reasons for rejection of the objections was not provided under the Punjab Urban Immovable Property Tax Rules, 1958 and R.10(4) envisaged that the reasons for the disposed of objections shall be recorded in register and through said register, as well as, P.T.1 is open to inspection, yet order in this regard was never communicated to the taxpayer

High Court observed that such practice or procedure could not be allowed to be continued and directed that the Provincial Government revise the Punjab Urban Immovable Property Tax Rules, 1958 accordingly and till such revision the Authorities shall communicate the reasons for rejection of the objections in writing to the taxpayer and shall also communicate a copy of Form P.T.1 to the taxpayer on taxpayers' address, enabling him to seek his right of appeal or revision and limitation for same shall commence from the date of such communication

High Court held that impugned notices for sealing of property in the present case, the valuation list and assessment was completed without following mandatory provisions/procedure and were declared without lawful authority and set aside

Constitutional petition was allowed, accordingly.

Petitioner impugned notice for sealing of his premises as well demand notice for property tax issued under the Punjab Urban Immovable Property Tax Rules, 1958, on the ground that the same were issued without following the process prescribed under the law and without associating petitioner in the assessment proceedings and the valuation of the property was done without confronting the petitioner about the same

Validity

Form P.T.1 was an assessment order containing all the assessed information regarding property to be taxed and duly authenticated by the assessing authority and R. 11 of Punjab Urban Immovable Property Tax Rules, 1958 was silent about communication of said form to taxpayer and if S.10 of the Punjab Urban Immovable Property Tax Act, 1958 was examined, it provided a right of appeal and revision to a taxpayer

Person aggrieved by an order of appropriate authority upon which objections made before that authority under S. 8, 9, 14 or 15 Punjab Urban Immovable Property Tax Act, 1958 may file appeal against such order within thirty days, however, procedure for communication of the reasons for rejection of the objections was not provided under the Punjab Urban Immovable Property Tax Rules, 1958 and R.10(4) envisaged that the reasons for the disposed of objections shall be recorded in register and through said register, as well as, P.T.1 is open to inspection, yet order in this regard was never communicated to the taxpayer

High Court observed that such practice or procedure could not be allowed to be continued and directed that the Provincial Government revise the Punjab Urban Immovable Property Tax Rules, 1958 accordingly and till such revision the Authorities shall communicate the reasons for rejection of the objections in writing to the taxpayer and shall also communicate a copy of Form P.T.1 to the taxpayer on taxpayers' address, enabling him to seek his right of appeal or revision and limitation for same shall commence from the date of such communication

High Court held that impugned notices for sealing of property in the present case, the valuation list and assessment was completed without following mandatory provisions/procedure and were declared without lawful authority and set aside

Constitutional petition was allowed, accordingly.

Such provisions of law are in consonance with the mandate of the Constitution.

Such provisions of law are in consonance with the mandate of the Constitution.

Department impugned order of Appellate Tribunal whereby it was held that the taxpayer was entitled to exemption from sales tax on sales of assets other than those falling under Sixth Schedule of the Sales Tax Act, 1990

Perusal of record revealed that the Commissioner without examining the nature of assets of taxpayer or ascertainment as to whether any input adjustment was claimed by the taxpayer on such assets during the relevant period, charged sales tax on sale of fixed assets on the pretext that disposal of assets attracted the imposition of sales tax under Ss. 11(2) & 11(3) of the Sales Tax Act, 1990

Recovery proceedings against taxpayer, in the present case, were also time-barred for the reason that assets were sold during the financial year 2008-2009 whereas under S.11(5) of the Sales Tax Act, 1990, limitation period was five years from the relevant date, which period of limitation in the present case expired on 30.6.2013

No illegality existed in the order of the Appellate Tribunal

Reference was answered, accordingly.

Plaintiffs were engaged in business of manufacturing and or export of textile and other products and all of them imported generating sets for power generation, which were being used by them in-house for running their industries

Plea raised by plaintiffs was that they were entitled for exemption from duties and taxes on the import of generating sets in terms of Sched. V of Customs Act, 1969, and Sched. VI of Sales Tax Act, 1990

Plaintiffs further raised the plea that clarification dated 5-12-2014 to Notification No. SRO 567(I)/2006, dated 5-6-2006, was illegal

Validity

No restriction or condition was attached to the effect that such exemption would only be available to those power generation projects which exclusively produced power as an independent entity and was not available to power generating machinery (gas/diesel generating sets) to be imported by units for producing power whose final product was not electricity

Neither there was any ambiguity in transportation of Notification S.R.O. 567(I)/2006, dated 5-6-2006, to Sched. V of Customs Act, 1969, and to Sched. VI to Sales Tax Act, 1990, nor it appeared to be any case of 'Policy' matter as contended on behalf of Federal Board of Revenue in clarification in question

Schedule and its Entry No. 11 of Customs Act, 1969, were clear and express in terms and did not require any further dilation in such regard and as a consequence clarification dated 5-12-2014 was set aside

Plaintiffs were entitled for exemption of duty and sales tax in terms of Entry No.11 of Sched. V of Customs Act, 1969, and Serial No. 6 of Sched. VI of Sales Tax Act, 1990, as a consequence thereof

High Court set aside the demands of duties raised after release of consignments

Suit was decreed in circumstances.

Collector of Customs was charging three per cent minimum value addition tax on import of cellular mobile phones from importers under R. 58-B of Sales Tax Special Procedure Rules, 2007 read with S.R.O. 482(I), 2011, dated 03.06.2011

Contention raised by importers was that they were already paying tax under S. 3 of Sales Tax Act, 1990 on imports and taxable supplies, and that levy of said value addition tax did not trigger at import stage, and that the same was, therefore, against scheme of Sales Tax Act, 1990

Validity

Arrangement of Sales Tax Act, 1990 provided that tax was to be charged and collected on added value of goods at each supply

Section 7-A of Sales Tax Act, 1990 empowered Federal Government to specify, charge and collect sales tax on the difference between values of supply, for which, goods were acquired, and value of supply, for which, goods, either in the same state or on further manufacture, were sold or supplied

Under S. 7-A (2) of Sales Tax Act, 1990, if certain persons or class of persons, so required, declared minimum value addition for supply of goods of such description or class as might be prescribed, Federal Government was authorized to waive the requirement of audit or scrutiny of records on such declaration

Levy of value addition tax was interrelated and subject to event of supply of goods

Each supply was supposed to signify value addition to goods, which had been made a taxable activity under Sales Tax Act, 1990 in form of input tax and output tax

If input tax exceeded output tax, difference was refundable or adjustable in next tax year; vice versa, supplier had to pay differential amount

Reason behind charging sales tax at every stage of supply was an admitted increase in value that Legislature had made taxable

"Importer", as defined under S. 2(13) of Sales Tax Act, 1990, was any person who imported any goods into Pakistan, and whose status was palpably distinguishable from that of supplier, who supplied goods after adding some value to the same

Under S. 3 of Sales Tax Act, 1990, 'import' had been distinctively mentioned from "taxable supplies", which suggested dissimilarity between the two events

"Import" and "supplies", by implication and connotation, had to be considered as two different areas for tax purpose

Under Ss. 3(2) & 3(3) of Sales Tax Act, 1990, tax on import had to be paid by person importing goods; specification of manner, mode and fixation of rates, at which such tax had to be charged and collected, had been made prerogative of the Government

No question over authority of Federal Government, as to charging of sales tax at specified rate and mode of recovering such tax, could be legally raised

As soon as importer on arrival of his goods at port was charged with sales tax, event to the extent of import got completed, and then next event relating to supply of goods started, that, under the law, was independently taxable and could not be intertwined or mingled with the imports

Under S. 3 (3) of Sales Tax Act, 1990, person making the supply would pay the tax

Any person supplying goods, under said provisions of Sales Tax Act, 1990, could not be equated with importer

Imposing tax on any activity in manner not provided under any statute is illegal and unlawful

Rules framed by Federal Government by exercising powers under Sales Tax Act, 1990, had to be necessarily in consonance with the Act to achieve its aims and objects

Rule 58-B of Sales Tax Special Procedure Rules, 2007 levying value added sales tax on import of goods was inconsistent with provisions of Sales Tax Act, 1990 and the same, therefore, could not be permitted to hold (the ground)

Petitioners were paying tax in terms of S. 3 of Sales Tax Act, 1990, and value addition tax under R. 58-B of Sales Tax Special Procedure Rules, 2007 could not be charged from them

Constitutional petitions were allowed accordingly.

Tax payers/petitioners were approved Gratuity/Provident Funds under Income Tax Ordinance, 2001, and their income was exempted from tax under clause 57(3) of Part-1 of Schedule-II to Income Tax Ordinance, 2001

Taxpayers were aggrieved of circular Letter dated 12-5-2015, directing the authorities to apply S. 159 of Income Tax Ordinance, 2001, to petitioners

Validity

Application of Ss. 150 & 151 of Income Tax Ordinance, 2001, in case of Trusts and Pension Funds, was not excluded under clause 47-B of Part-IV of Second Schedule to Income Tax Ordinance, 2001

Where Commissioner was satisfied under S. 159(1) of Income Tax Ordinance, 2001, that income falling in Division II or III (which included Ss.150 & 151 of Income Tax Ordinance, 2001, as those fell in Division III) was exempted from payment of tax, he could grant a certificate to such effect

Legislature by laying down the requirement of obtaining exemption certificate where income was exempted had not taken away the exemption but rather had provided a mechanism to ensure that exemption was not misused in any way

Any person under S. 159(2) of Income Tax Ordinance, 2001, who was required to deduct advance tax under Division II or III would do so while making payment to the person entitled to receive the same unless the payee produced exemption certificate duly issued under S. 159(1) of Income Tax Ordinance, 2001

Payee had to provide a certificate specifically covering exemption deduction of advance tax and could not claim immunity from deduction on the basis of clause 47-B of Part-IV of Second Schedule to Income Tax Ordinance, 2001 or any other provision by asserting exemption due to operation of law

High Court declined to interfere in the matter

Constitutional petition was dismissed in circumstances.

Crux of the present case revolved around the admissibility of exemption of sales tax on sales of permitted admissible process waste which accrued out of manufacturing process under Duty and Tax Remissions for Export Scheme (D.T.R.E.)

'D.T.R.E.' Scheme, enabled import or local procurement of duty and tax from inputs for export purpose

Objective of D.T.R.E. scheme was to neutralize the incidence of duty and taxes on the imported or locally procured content of the export product

Neutralization was provided by way of duty and tax remission against the exporter product

Term 'remission' had a special connotation in legal terms

When 'D.T.R.E.', was universally seen as a Duty Remission Scheme, it must be understood as a duty waiver by the Government

Tax or duty which the Government was otherwise entitled to collect and retain, was being waived or being given remission of by way of a policy to encourage exports

Such benefit must be considered to be a temporary duty waiver by the Government

Supplies envisaged under the Sales Tax Act, 1990, were classified under three general categories e.g., exempt, zero rated or standard rated for the purposes of imposition of tax

Supplies that were standard rated or zero-rated, were considered to be 'taxable supplies'

All export supplies were zero-rated under S.4 of the Sales Tax Act, 1990 and under the law, a zero-rated supply was a taxable supply on which sales tax was levied at the rate of 0%

No output tax would be payable in respect of zero-rated supplies

Entities registered under the Sales Tax Act, 1990, effectuating zero-rated supplies, were entitled to claim their input tax deductions on goods in services acquired in the course of making such taxable supplies

By virtue of exclusion from the ambit of subsection (41) of S.2 of the Sales Tax Act, 1990, sales tax was not chargeable on exempt supplies, which fell within the folds of S.13 of the Sales Tax Act, 1990

Gulf of difference existed between zero-rated and export supplies

Any remission under 'D.T.R.E. Scheme', could not be associated with an exemption under the Sales Tax Law

'D.T.R.E.' Scheme, specifically dealt with zero-rated supplies

Only benefit which 'D.T.R.E. Scheme' extended was that it pushed back the matter of export or zero-rating one step behind in the supply chain

Exemption of sales tax availed by the appellant on the sale of admissible bona fide waste accrued out of manufacturing process under 'D.T.R.E. Scheme', could not be termed as a double exemption

Exemption of sales tax under S.R.O. No. 555(I)/2008, date 11-6-2008, could not be denied on the ground of double exemption in circumstances.

Record available with State Bank of Pakistan, having shown, that appellant/Insurance company had Nil balance against the statutory deposit, show-cause notice was issued to the appellant under Ss.11(1)(b), 29, 63 & 157 of Insurance Ordinance, 2000, calling upon the appellant to show-cause as to why action should not be initiated against appellant for violation of said sections

Contention of appellant was that Executive Director (Insurance) of the Commission, had failed to take into account that upon fulfilment of all statutory requirements the appellant accrued a vested right to be granted exemption from the requirement of maintaining minimum statutory deposit under S.29 of Insurance Ordinance, 2000; as it was incumbent upon Executive Director (Insurance) of Commission, to set the minimum requirement as zero

When application for granting exemption was made, Executive Director (Insurance) of the Commission, should have responded the request of appellant and if such request was to be refused, reasons should have been communicated to the appellant

Contention of the appellant that, their application requesting exemption from minimum statutory deposit under S.29 of the Insurance Ordinance, 2000, should have been properly dealt with by the authorities, was accepted

Executive Director (Insurance) of the Commission must exercise his discretion to grant exemption to the appellant, when criterion for minimum solvency as well as maintenance of a statutory deposit had been fulfilled

Impugned order, was set aside

Authorities were directed to review the matter and appropriate amendments in law were desired to be made, so that in future same issue was not faced by other Insurance Companies.