IJAZ ANWAR, J.---This single judgment in Writ Petition No, 2748-P/2013 shall also dispose of the connected Writ Petition No,3067-P/2013 filed by Messrs Sadiq Flour as in both the writ petitions similar facts and law are involved.
2. Petitioners (in Writ Petitions Nos,2748/2013 and 3067/2013) are private limited companies, incorporated under the Companies Ordinance, 1984. They are manufacturing and producing flour.
The background of their cases are that the Federal Government issued S.R.O. 509(1)/2013 dated 12.6.2013, vide which extra tax was levied at the rate of five percent of the total billed amount excluding the amount of federal tax, in addition to the tax payable under subsection (1) of section 3 of the Act, on supplies of electric power and natural gas to persons having industrial or commercial connections and whose bill in any month exceeds rupees fifteen thousand, but who have either not obtained sales tax registration number or are not on the active Taxpayers List "(ATL)", maintained by the Federal Board of Revenue. Vide notification No, S.R.O. 510(1)/2013 dated 12.6.2013, a new chapter IVA was added in the Sale Tax Special Procedure Rules, 2007, vide which the PESCO started charging of extra tax and further tax from the petitioners despite the fact that as per section 3 of the Sales Tax Act, 1990, sales tax shall be paid on taxable supplies made by a registered person in the course or furtherance of any taxable activity carried on by him. They averred that after enactment of further tax under section 3(1A), a confusion arose and for the removal of confusion, the Federal Government issued notification No, S.R.O.638(I)/ 2013 dated 9.7.2013, vide which further tax shall not be charged, levied and paid on the taxable supplies made to the persons, namely, electrical energy supplied to domestic and agricultural consumers, natural gas supplied to domestic consumers, motor spirit, diesel oil, jet fuel, kerosene oil and fuel oil, goods sold by retailers to the end consumers, supply of goods directly to the end consumers including food and beverages, fertilizers and vehicles and items falling in the third schedule to the Sales Tax Act, 1990 and as the petitioners are falling under the category of "supply of goods directly to the end consumers including food and beverages, fertilizers and vehicles", therefore, further tax is not attracted to their cases besides as the extra tax is levied on the goods falling under subsections (1),
(2) and Subsection (4) of Section 3, which has now been omitted. According to them, as per Rule 4, registration of sales tax is confined to taxable supplies while the supplies of the petitioners are exempted from payment of sales tax under the Sixth schedule to the Sales Tax Act, 1990, therefore, implementation of the provisions of the impugned notifications on the petitioners and in pursuance thereof charging extra tax and further tax is illegal, without jurisdiction and unconstitutional in terms of Articles 4, 18 and 24 of the Constitution of Islamic Republic of Pakistan, 1973. The petitioners, now, through the above referred writ petitions have prayed to declare that:--
(i) notification No, S.R.O. 509(1)/2013 and S.R.O. 510(1)/2013 both dated 12.6.2013 are not applicable to the petitioners, (ii)the petitioners are not liable to pay further tax and extra tax leviable under the impugned notifications, (iii)the monthly consumption bills have been issued incorrectly and further tax and extra tax already charged is refundable to the petitioners by way of adjustment of the amount in future bills,
(iv) subjecting the petitioners to illegal levy of further tax and extra tax in the monthly consumption of electricity is illegal and without jurisdiction.
5. Learned counsel for the petitioners referred to Section 13 of the Sales Tax Act, 1990, and argued that under this section the sales tax levied under section 3 of the Act, ibid, is exempted. He also referred to the Sixth Schedule where at S. No,19, Cereals and Product of milling industries are exempted from payment of sales tax. He also referred to Federal Board Revenue letter dated 28.8.2012 whereby clarification were, issued to the effect that flour mills (not engaged in any other activity) are not required to be registered under the Sales Tax Act, 1990. He also referred to Clause
(a) of section 14 of the Act, ibid, by claiming that the petitioners are not running a cottage industry, therefore, their flour mills are exempted from payment of sales tax. He argued that despite the above provisions, sales tax are being deducted in the names of extra tax and further tax from them in the monthly consumption of electricity bills, which is illegal and without jurisdiction.
6. The learned counsel for the respondents Nos, 1 to 3, conceded that there is no cavil to the legal proposition that cereals and product of milling industry are exempted from the payment of sales tax, however, argued the said exemption is only on the flour, while for the other material used, the petitioners are bound to pay and similar is the case of the electricity charges. In support of his arguments, he referred to the judgments of this court reported in PTD 2013 page 1651 and the apex court 2017 PTD 138. He further argued that under section 14-A, the petitioners are the manufacturer and they are required to register themselves within the meaning of section 14 of the Sale Tax.
Learned counsel for the respondent No,4, the PESCO, adopted the same submissions as argued by learned counsel for the respondents Nos, 1 to 3. He, however, submitted that PESCO is only withholding agent of the FBR and has no other concerned with the matter.
5(sic) We have considered the submissions of learned counsel for parties and have gone through record of the case.
6(sic) This Court in the case titled Messrs Khyber Pakhtunkhwa Text Book Board, Peshawar v.
Deputy Commissioner IR (E & C) and 2 others ( 2013 PTD 1651) has dealt with exactly a similar matter, wherein the printers of newspapers, books, journals, periodicals including all sorts of material, which have been mentioned in table 1 of the sixth schedule of Sales Tax Act, 1990 as the items exempted under section 13 of the Sales Tax Act from the levy of taxes. However, this Court elaborately discussed this matter by holding that:--
5. The bare reading of the above order depicts the process of printing is not excluded from the definition as envisaged in sections 2(16)(c), 2 (33) and 2 (46) of the Sales Tax Act, 1990. It is evident from the record that Text Books Board is not only engaged in supply of text books but also engaged in procurement of text books from different printers and also deals in purchase of miscellaneous taxable items used in printing and publishing books. It is not denied by the learned counsel for the petitioner that the petitioner all most perform the role of withholding agent and withheld/deposit the due taxes on behalf other government. It is also not controverted by the learned counsel for the petitioner that the printing of book is not exempted from the tax but he tried to amalgamate the supply of books and printing services, whereas, the supply of books and printing services, are altogether two different functions. Section 3 of the Sales Tax Act, 1990 provides exemption on supply of books but never exempt to printing services providing by various printers/vendors. Any exemption to the Printers server under the garb of S. No, 32 of Table 1 of Sixth Schedule of the Sales Tax Act, would be a sort of amendment in section 13 of the Act, ibid. The Text Book Board is not vested with the power to extend the exemption to third person i,e,, the printing server. Had the Text Book Board printed the books from its own sources, it might have claimed exemption provided by S. No, 32 of the Table 1 of Sixth Schedule of the Sales Tax Act. The Punjab Text Book Board do not pay tax on printing of the books, because they have their own printing facility and publish the books from their own Printing Press, but the case of Khyber Pakhtunkhwa Printing Press, is otherwise.
Above all, the tax on Printing of the books shall be payable by the Printers while the petitioner, being withholding agent, is under legal obligation to withhold and collect tax from the Printer.
6. The argument of learned counsel for the petitioner that papers, ink, cards and certain other materials are essential ingredients of a book, therefore, these items without any printing shall not be termed as a book. In the same breath, he admitted that Text Book Board purchases the papers in the open market and supply it to the Printers. It was also admitted that the papers are also not exempted from the Sales Tax and the Board regularly use to pay the tax to the sellers. Where the Board pays tax on purchase of the papers from a third party, how the printing services, particularly, provided by private printers can be exempted from the levy of tax. It is admitted fact that the Text Book Board, every year, pay a huge amount to the Printers on account of only printing services and even the raw material, i,e,, papers used in the printing of books are also provided by the Board."
In the instant case too, though, the flour has been exempted from the levy of sales tax, however, as discussed earlier in the judgment, the electricity and suit gas required for the manufacturing process and the packing material etc, the petitioners have not only duly registered themselves, but are also paying sales tax on such material, therefore, it cannot be said that they are also exempted from the payment of sales tax on the electricity bills etc.
7. Since this issue has already been dealt with by this Court in the authoritative judgment, as such, we while relying and following the judgment of this Court, supra, are not inclined to hold another view than the one already delivered, thus, this and the connected Writ Petition No, 3067-P/2013 are dismissed.