JUDGEMENT: MR. JUSTICE YAHYA AFRIDI.--(1). Through this single judgment, this Court propose to dispose of two writ petitions, as both have common questions of law involved therein.
The particulars of the petitions are as under:--
1. W.P. No, 753-P/2013.
(M/s. Agro Pack (Pvt) Ltd 207 Amin Mansion G.T. Road, Peshawar...vs...Federation of Pakistan through Secretary Economic Affairs, Revenue Division, Ministry of Finance, Government of Pakistan, Islamabad and two others).
2. W.P. No, 912-P/2015.
(M/s. Afifa Enterprises, Plot No, 8, Special Industrial Zone, Risalpur...vs...Federation of Pakistan through Secretary Economic Affairs, Revenue Division, Ministry of Finance, Government of Pakistan, Islamabad and four others).
2. The common relief sought in both the writ petitions is as under:--
(i) Clause (a) of the impugned notification as void ab initio and ultra vires of the Act. Therefore, letter of the respondent No, 5 and demand indicated therein is illegal and ultra vires of the law.
(ii) The impugned not as contradictory to the provisions of law therefore of no legal effect. iii) The impugned notification as discriminatory and unconstitutional being in conflict to the fundamental rights of the petitioner."
3. Brief and essential facts relevant and necessary for adjudicating the issues raised in the present petition are that the petitioners are manufacturing concerns having of Manufacturing Bond Licenses issued under the enabling provisions of Customs Rules, 2001 ("Rule"). The supply of goods manufactured by the petitioners to Afghanistan, were not charged the zero rate of sales tax permissible under Section 4 of the Sales Tax Act, 1990 ("Act") due to the restrictions provided under SRO 190 (1) 2002 dated 2.4.2002 ("SRO 190").
4. Earlier, M/s. Agro Pack (Pvt) Ltd (petitioner in W.P. No, 753-P/2010) had sought from the Revenue refund of sale tax paid from May 2005 to May 2007 on the electricity bills and locally manufactured packing materials on the ground that both were used for the products exported to Afghanistan in terms of Rule 247 (new 352) of the Rules. The refund was refused by the Revenue and the matter finally came up for consideration before the apex Court in Civil Petition No, 271-P to 295-P of 2011 ("Agro Packs case"), wherein the stance of the petitioner Company was not accepted vide judgment dated 24.1.2013.
5. Now, M/s. Agro Pack (Pvt) Ltd alongwith other Company have invoked the Constitutional jurisdiction of this Court, challenging the vires of SRO 190 through the instant petitions.
6. The worthy counsel for the petitioners contended that the authority of the Federal Government to exclude the concession of Zero Rate of sales tax is only extended to export to a notified country and not to the supply of particular goods or class of goods, as specified in SRO 190. He further contended that the judgment of the apex Court in Agro Pack's case is not relevant to the issue in hand, as in the present case, the vires of SRO 190 have been challenged, while in the said case the refund was being sought by the petitioner Company for the sale tax already paid.
7. In rebuttal, the stance of the Revenue is that SRO 190 has been issued in pursuance of the proviso to Section 4, which has been declared valid by the Apex Court in Agro Pack's case.
8. Before we proceed to consider the stance of the parties it would be appropriate to review the relevant legal provisions necessary for adjudicating the controversy involved in the present petitions, the same are reproduced below: Section 4 of the Sales Tax Act, 1990.
"4. Zero rating: Notwithstanding the provisions of section 3, the following goods shall be charged to tax at the rate of zero percent:
(a) goods exported or the goods specified in the Fifth schedule Provided that nothing in this section shall apply in respect of a supply of goods which; (i)
(ii) have been exported to a country specified by the Federal Government by Notification in the official Gazette.
Provided further that the Federal Government may, by a notification in the official Gazette, restrict the amount of credit for input tax actually paid and claimed by a person making a zero-rated supply of goods otherwise chargeable to sales tax."
(emphasis provided)
SRO. 190(1)/2002, dated April 2, 2002.
"In exercise of the powers conferred by clause (iii) of the first proviso to section 4 of the Sales Tax Act, 1990, and in supersession of its Notification No, S.R.0.751(1)199, dated the 15th June, 1999, the Federal Government is pleased to direct that the provisions of the said section shall not apply in respect of supply of the following categories of roods, exported by air or via land route to Afghanistan and through Afghanistan to Central Estatt Republics;
(a) manufactured in the Export Processing Zones or in manufacturing bonds."
(emphasis provided)
9. The bare reading of the above provisions clearly provides that section 4 of the Act, being the parent law, provides for Zero rate of sale tax on, inter alia, goods exported from Pakistan. However, this concession of Zero Rate of sale tax is not to be extended in respect of supply of goods to a country notified by the Federal Government through delegated legislation. Thus, the Parent Law, mandates the Federal Government to only specify a country through notification to which supply of goods are not to be rendered the concession of zero rate of sale tax. The mandate is for the Federal Government to specify the country and not any good or class of goods. Moreover, any restriction on the concession or facility provided in the Parent Act through Subordinate Legislation has to be viewed strictly and not liberally.
10.Accordingly, this Court is of the considered opinion that the Federal Government has exceeded it powers in issuance of SRO 190 by excluding selected supply of goods, including those manufactured by companies, such as the petitioners having Bonded Licenses being exported to Afghanistan.
11. Having opined that the Federal Government has exceeded its jurisdiction and authority in issuance of SRO 190, yet this Court cannot render any finding in this regard, when faced that the findings already recorded by the apex Court in Agro Pack (Pvt) Limited's case (Civil Petition Nos, 271-P to 295-F of 2011) decided on 24.1.2013, wherein the SRO 190 issued under section 4 of the Sales Tax Act, was commented upon in terms that:-- "SRO 190(1) of 2002 was issued by the Federal Government expressly in exercise of its powers under clause (iii) of the first proviso of Section 4 of the Sales Tax Act. The exemption on exported goods under clause (e) of Section 4 is subject to the powers of the Federal Government under clause (iii) of the first proviso of Section 4, allowing the Government to withdraw the exemption from payment of sales tax on goods exported The learned counsel was not in a position to dispute conferment of such statutory powers of the Federal Government or its exercise in terms of SRO 190(1) of 2002."
12. No doubt, the above findings of the apex Court are obiter dicta, yet this Court is bound by the same under the command of Article 189 of Islamic Republic of Pakistan, 1973. The legal position of a findings recorded by the apex Court, even if obiter dicta has been adjudged to have binding effect upon all Courts including this Constitutional jurisdiction, in various pronouncement including Justice Khurshid Anwar Bhinder's case (PLD 2010 S. C 483), wherein it was held that:-- "Where the Supreme Court deliberutely and with the intention of settling the law, pronounces upon a question, such pronouncement is the law declared by the Supreme Court within the meaning of this Article and is binding on all Courts in Pakistan. It cannot be treated as mere obiter dictum.
Even obiter dictam of the Supreme Court, due to the high place which the Court holds in the hierarchy of courts in the country, eniov a highly respected position as if it contains a definite 'expression of the Court's view on a legal principle, or the meaning of a law."
(emphasis provided)
The above principle has been adhered to consistently by the superior Courts of our jurisdiction in cases including Syed Shabbir Hussain Kazmi's case (PLD 2006 Federal Shariat Court), Mian Manzoor Ahmad Wattoo's case (2002 YLR 3433 Lahore), Faiz Bakhsh's case 1986 CLC 507 Lahore), Aziz Ahmed's case (1975 P.Cr.L.J 105 Karachi), and Zafar Ahmad Khan's case (2009 PLC (CS) 415 Karachi).
13. For the reasons stated hereinabove, the prayer sought in the present petitions, cannot be granted by this Court in its Constitutional jurisdiction, hence the petitions are dismissed, accordingly.