' JAWAID MASOOD TAHIR BHATTI, JUDICIAL MEMBER.--The appellant through this appeal has objected against the Order-in-Appeal No,85 of 2005 dated 23-12-2005 passed by the learned Collector, Collectorate of Customs, Sales Tax and Federal Excise (Appeals), Lahore on the following grounds:--
(a) That the only activity of the appellant company is printing and publishing of daily newspaper under the name "Daily Times" like other newspaper publishers such as "Daily Jang", "Dawn" and "Nawa-e-Waqt" etc., and it has nothing to do with manufacture of paper by recovered (waste and scrap) paper or paperboard under at Item No,170 of S.R.O. 389(I)/20Q1 dated 18-6-2001 amended through S.R.O. 510(1)/2003 dated 7th June, 2003, were put under the recovery of Sales Tax at the rate of 20%.
(b) It is further contested that the amendment in the S.R.O. 389(1)/2001 cannot take a retrospective operation to withdraw an exemption from payment of sales tax which was a vested right of the appellant.
(c) That the application of amended S.R.O. 389(1)/2001 dated 18-6-2001 in case of the appellant company is unlawful. As the detection of irregularity according to the audit team, was during the course of audit for the years 2001-2002 and 2002-2003. The said amendment was not in field by any stretch of imagination. The withdrawal of exemption of payment of sales tax can only have prospective operation and cannot take away or Interfere with any of the vested right of the appellant company.
(d) That the appellant company cannot be affected by the withdrawal of the exemption of payment of sales tax by virtue of S.R.O. 389(1)/2001 in field even before the amendment. The emphasis of this S.R.O. Heading No,4707.3000 is on: "Recovered (waste and scrap) of paper and paperboard made mainly of mechanical pulp (for example newspapers, journals and similar printed matter)"
' This recovered waste and scrap is after a direct consequence of mechanical process.
(e) That is further contended that the amendment through S.R.O. 389(I)/2001 cannot withdraw an exemption to from the payment of sales tax which is the vested right of the appellant. It is very much clear that once the exemption is granted from payment of sales tax, the goods so exempted go out of the net of taxing statute (1992 SCMR (sic) and 2002 PTD 654).
(0 That it is an established principle of the Superior Judiciary that if any word, term or phrase is not defined in the text of the statute, the dictionary meaning shall be taken into consideration while interpreting the intention of legislation. The term mechanical pulp is not defined in the Sales Tax Act, 1990, according to Oxford Dictionary, the word mechanical mean, "operated by power from an engine". Whereas the word pulp is defined as, "a soft substance that is made by crushing wood, fabric or other material and then used to make paper." The activity of the appellant by any stretch of imagination cannot be conceived as the manufacturer of paper. The application of the S.R.O.
389(I)/2001 (not amended) to the appellant's case is totally illegal and without lawful authority, as there is no recovered waste or scrap made of mechanical pulp produced during any printing or publishing of newspapers.
(g) That the case of appellant falls within the ambit of the exemption from payment of Sales Tax vide Serial No,21 of 6th Schedule framed under section 13(1) of Sales Tax Act, 1990.
(h) That the respondent have erred while deciding the case of the appellant and has wrongly interpreted the extended application S.R.O. 389(1)/2001 dated 18-6-2001 with parallel application of S.R.O. 510(1)/2003 dated 7-6-2003.
2. I have heard the learned representatives from both the sides and have also perused the impugned order-in-appeal, order-in-original and the show-cause notice.
3. Learned A.R. Representing the appellant has contended that under section 13 of the Sales Tax Act, 1990, the supply of goods or import of goods specified in the Sixth Schedule shall be subjected to such condition as may be specified by the Federal Government to exempt from tax under the Sales Tax Act. He has, in this respect, referred to Item No,32 of the 6th Schedule which is regarding newsprint, newspapers, journals, periodicals, books but excluding directories. Learned A.R. Has contended that both the officers below having considered the fact that the appellant is not a manufacturer of paper or its related items. They are mainly publishers of daily newspapers in the name and style of Daily "Times" like other newspaper publishers such as "Jang," "Dawn" and "Nawa- e-Waqt" etc., as such there is no output tax on the circulation of the newspapers. It has been contended that the appellant-company sold newspapers to general public through agencies and hawkers at varying prices according to the strategies and trends as well as complementary circulation for promotional purposes. The exemption claimed by the appellant as allowed by the adjudicating authority has been declared unlawful by the learned Collector (Appeals) with the observations that the waste and scrape of paper and paperboard falls within the ambit of taxable goods without any justification. Learned A.R. In this regard has placed reliance on the decision of Indian Supreme Court reported as AIR 1991 Supreme Court 354 (From : Andhra Pradesh) in Civil Appeals Nos.1484-85 of 1981, D/-31-8-1990 in the matter of Sait Rikhaji Furtarnal and another v.
State of Andhra Pradesh. In this case the Indian Supreme Court has held in the concluding Para-6 as follows:-- "(6) In regard to old newspaper, it is the submission of counsel that even if the newspapers are not of the same date or of a current period, their contents had news value and thus they continued to be the newspapers and the mere fact that they were out of date did not take away the news element there form. This Court in a recent judgment held a law journal to come within the meaning of newspaper though not carrying news of contemporary period. On the ratio of that decision the contention of the appellant that old newspapers are also "newspaper" and would be entitled to the exemption provided under the Constitution is acceptable. We accordingly uphold the contention of the appellant and direct that old newspaper when sold as such would be covered by the exemption provided in the Constitution and sale thereof would not be liable to sales tax. The appeals are allowed so far as the sale of old newspaper is concerned and are dismissed with regard to the three other items indicated above. The appropriate modification may be carried out by the Assessing Authority. No costs."
4. On the other hand, the learned D.R. Is supporting the impugned order of the learned Collector (Appeals) but he is unable to rebut the above referred contentions made by the learned A.R. Of the appellant.
5. After considering all these facts, circumstances and the legal position. I find force in the contentions raised by the learned A.R. For the appellant as in the relevant provisions of law which is 6th Schedule, in Item No,32, the exemption under section 13 is regarding newsprint, newspapers, journals, periodicals and books but excluding the directories and to my view, these newsprint, newspapers, journals, periodicals and books etc., cannot be treated to be scrap or wastepaper and in this regard, I take strength from the above-referred decision of the Indian Supreme Court. I am of the view that even if the newspapers are not of the same date or of a current period, their contents had the academic value and they continue to be the newspapers and the mere fact that they were out of the date did not take away the news element/academic value therefrom. I am of the view that due to this reason, in this provision of law, only the directories have been excluded by the Legislature intentionally but all the other items mentioned under Entry No,32 come within the meanings of newspapers though not carrying news of contemporary period and the exemption provided under section 13 is allowable and would not be liable to sales tax. Therefore, the impugned order of the learned Collector (Appeals) is set aside and the appeal filed by the appellant is allowed.