JEHANZAIB WAHLAH, MEMBER JUDIC IAL-III . Through this order , I intend to dispose off Customs Appeal New No.69/2017 and Old No.K-2028/2016 directed against the Order-in-Appeal No.1075/2016 dated 10.10.2016 passed by Collector of Customs (Appeals ), Karachi by maintaining the assessment order dated 02.06.2016 passed by Deputy Collector of Customs, (Group IV), MCC of Appraisement W est, Karachi.
2. Briefly fact of the case are that the appellant is a commercial importer of Tarpaulin and tent and imported a consignment of 22900 kgs PE Tarpaulin Sheet under PCT Heading 6306.1210 @ US $ 1/kg C&F Karachi of Vietnam origin. Upon receipt of import documents, same were delivered to the clearing agent Messrs Allied Shippers, Karachi for transmitting Goods Declaration (GD) under the provision of Section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of the Sub-Cha pter III of Chapter XXI of Custom Rules, 2001 (Rules) while claiming the benefit of zero rating under Section 4 of the Sales Tax Act, 1990 (STA) notified vide SRO 1125(I)/201 1 dated 31.12.201 1 as amended vide SRO 491(I)/2016 dated 30.06.2016 with the MCC of Appraisement-W est, the Customs Computerized System (CCS) upon receipt of declaration to the said effect communicated amount of duty and taxes to be paid in advance to the extent of Rs.1564,491/-, which were paid on 26.08.2016 consequent to which GD was numbered KAPW -HC-39597, the Appraising Officer opted to get the goods examined first under the provision of Section 198 and Rule 435 of the Act / Rules which confirmed the declaration of the appellant and report was uploaded in the reservoir of the GD. Despite entitlement of the benefit of SRO was denied on the pretext that the goods being finished are not entitled for zero rating in terms of Serial No. IV of Table II of SRO and transmitted the GD to Principal Appraiser (PA) for his opinion which he acceded and maintained the assessment of AO. Being aggrieved with the deletion of SRO, the appellant filed 1st review under Rule 441 which was rejected on 31.08.2016 by maintaining the assessment. The said assessment was also in derogation of the expression of SRO, 2nd review was filed which was also rejected on 02.09.2016 that the goods are cut to side with eyelets and not in rolls form not benefit of SRO 1125(1)/201 1 is not granted. The formed opinion was in negation of the Table-I and Table-II of the SRO, resultant representa tion dated 06.09.2016 was submitted with the Additional Collector , the respondent no.1 and after going through the contents of SRO's opined that it is admitted fact that the goods of appellant falls within the ambit of SRO, despite that he is not entitled for zero rating with the exception of payment of Income Tax at import stage to the extent of 3% as against 6% under Serial No.3 of 1st Schedule to Income Tax Ordinance, 2001 (ITO). The consultant of the appellant negated the said opinion that how that could be allowed in the absence of benefit of SRO as both are interconnected and are fed in the CCS by the FBR, stood validated from the instruction available therein. The appellant's counsel requested for issuance of a speaking / challengeable assessment order but same has not been done although hearing notice issued to the appellant, hence the appellant opted to assail the aforementio ned assessment order dated 02-9-2016 before respondent No.2. Despite non-availability of any cause or reason for ignoring the contents of the SRO and the evidence available in the data reservoir of similar goods maintained by PRAL under Rule 110 of the period given in Rule 107(a) of the Rules, confirming that the benefit of SRO on the import of Tarpaulin has been extended to different importers by the Clearance Collectorate, Respondent No.1 modified the assessment order while endorsing his opinion that the appellant is only entitled for payment of Income Tax at reduced rate of 3% vide order dated 10.10.2016. Para 3 is relevant and is reproduced here-in-under: "I have examined the case record. The appellant have imported PE Tarpaulin Sheets of various sizes, packed in bundles classified under heading 6306.1200 of First Schedule to the Customs Act, 1969 @ unit price US $ 2.1500/kg. There is no dispute to this extent, the appellant's claimed exemption of sales tax, as well as income tax under SRO 1125(I)/201 1 and SRO 136(1)/2015 respectively . The respondent's denied those concessions ostensibly on the grounds that these were finished goods. On the other hand appe llant's based their claims on the fact that heading 6306.1210 and 6306.19 10 were specifically incorporated in SRO 1125(1)/201 1 vide amendment through SRO 491(I)/2016. It is a matter of record and plain reading of the notific ation and it's amendment. The relevant entry of SRO 1 125(1)/201 1 is reproduced here-in-under: Table I S.No Description of Goods PCT Heading No.
(1) (2) (3)
02 Textile and Articles thereof, excluding a) Finished Article of textile and textile b) Sun shading c) Monofilament of more than 67 decitex; c) Fishing nets of nylon or other material d) Rope of polyethylene or nylon and; f) Type cord fabricChapters 50, 52, 53, 54(excluding 5470.2000), 55, 56 (excluding 56,08 and 56,09) 57 excluding made ups, 58, 59 (excluding 59,05,59,10) and 60 Vide an amendment through SRO 491(1)/2016 dated 30-6-2016 against this Sr. No.in column (3), heading No.6306.1210 and 6306.1910 were added there is no change in the descriptio n of goods in column (2). The preamble of SRO extent concession to goods described in column (2) of the Table. Finished Articles of Textile and textile made ups stand excluded from the good eligible for concession, regardless of their classification, the PCT heading given in column (3) do not define the admissibility of concession. The appellant attracted attention towards another amendment under SRO 491(1)2016, whereby goods specified in column (3) of Table 1 of SRO 1125(1)/201 1 are exempted. The said amendment is reproduced here-in-under:-- Table II S.NoDescription of Goods PCT Heading No. Rate of Sales Tax
(1) (2) (3) (4)
1. Goods usable as industrial inputs, specified in Table-I, including fabric. i. Import for in-house consumption by registered manufactures of the 05 sectors mentioned in column
(1) below. ii. Commercial importsAs specified in column
(3) of Table-1 0% 0% plus 0% A plain reading of above amendment is clear enough that concession is available to industrial input (finished article not covered) and the concession is with reference to the goods specified in Table -1 it has already been examined at supra that finished article are excluded from Table 1 (S.No. 2) . Having been excluded from the plain concession the goods by virtue of there nature find place under S.No. (4) of the amendment Table-II in SRO 1125(1)/201 1. For the sake of clarity , the said provision of reproduced below: S.No Description of Goods PCT Heading No.Rate of Sales Tax
(1) (2) (3) (4)
4. Imported finished goods of 05 sectors mentioned in condition (i) below , ready for use by general public. i. Import ii. Supply thereofRespective heading 17% plus 02 value addition tax By virtue of above provision, read with condition (i) under SRO 1125(1)/201 1 and being a filer of return, the appellant who is a commercial importer is only eligible for concessionary rate of income tax @ 3% under Part --II, Serial No. 3 of the 1st Schedule to Income Tax Ordinance, 2001. The respondent have appropriately denied concession to the extent of sales tax, however , income tax is chargeable at 3% instead of 6%. The assessment order is modified to this extent only ."
3. The appellant filed the appeal on the basis of grounds enumerated therein, the consultant/advocates, on the date of hearing, argued the case strictly in accordance with those. No cross objection under subsection (4) of Section 194A of the Act were filed within the stipulated period of 30 days by the respondent No. 1 instead comments, which do not in any manner qualify as memo of cross objection, were submitted to be termed as cross appeals filed under subsection (3) by the respondent No. 1 as expressed in aforesaid section. These while considered merely an opinion, having no binding force, are placed on record of the case for perusal and consideration.
4. Rival parties heard and case record along with relied upon judgments have been perused. For resolving the issue at hand, one has to understand the definition of "Tarpaulin" in addition to how it is being manufactured / produced, with what components and what are its uses? The word "Tarpaulin" originated as a compound of the word "tar" and "palling " referring to the tarred canvas pal used to cover objects on ships. Whereas in the mid -- 19th century , "paulin" was used for such a cloth. Meaning thereby , it is a large sheet of strong, flexible, water resistant or waterproof material coated i.e. with polyurethane or plastic on either canvas or polyester fabric and often has reinforced grommets at the corner and along the sides to form attachment points for rope, allowing them to be tied down or suspended resulting in a multi use material such as shelter from the elements, i.e. wind, rain or sunlight, or a ground sheet. These are also often used during construction to protect brick work and masonry from weather damage, or also used for a fly in camping, a drop sheet for painting, for protecting the infield of a baseball field, cricket pitches and for protecting objects, such as unenclosed truck, semi-trailers or freight car as well as wood piles, on outdoor market stalls to provide some protection from the elements of the nature, also used for advertisement, printing, most notably for billboard etc. etc. The aforementioned adumbration is in line with the definition available in World Customs Organization (WCO) Chapter notes to Chapte r 63 of the First Schedule to the Act. Tarpaulin is never produced in sheets/rolls, but instead in square sheets without any exceptions, and fitted with the referred in above attachments or eyelets, cords or straps etc. By virtue of the said fact, the main heading of Sub-Chapter 06 of Chapter 63 of the First Schedule to the Act reads as "Tarpaulin; awnings and sun blinds, tents; sail for boats; sailboats; or land craft; camping goods" and under sub-heading 6306.1210 "Tarpaulin" falls in Chapter 63 of the First Schedule to the Act meant specifically for "Other made ups of textile articles; sets; worn clothing; and worn textile articles; rags. It specifically speaks about made ups/articles of textile, neither canvas or polyester fabric falling under this chapter , whereas, remaining articles/made ups falls under different sub-chapters of Chapter 63 of Section XI of the Schedule. Hence, it is confirmed in unequivoc al terms that only tarpaulin falls under PCT headings 6306.1210 and 6306.1910, which is obviously a distinguishable made up article of textile and can't be construed as either canvas or polyester fabric through any stretch of imagination/definition and is never produced in the form of sheets/rolls or even sold internationally/locally . Rendering the formed opinion by the Board in para 3 of the clarification issued vide C.No. 3(18)- STB/2016/22578-R dated 21.02.2017 nullity to the definition of the word "tarpaulin", hence, of no substance and legal effect and not enforceable under law, being ab-initio, null and void.
5. In order to appreciate the diverging opinion made by the parties. It is imperative to reproduce the relevant portion of sections 3 and 4 of the ST A and subsequent amended SRO on dif ferent date.
3. Scope of Tax. --- Subject to the provision of this Act , there shall be Charged, levied and paid a tax known as Sales Tax at the rate (seventeen ) percent of the value of -
(a) taxable supplies made by a registered person in the course of furtherance of any (taxable activity) carried out on by him; and
(b) goods imported into Pakistan.
4. Zero rating . --- Notwithstanding, the provisions of Section 3 the following goods shall be charged to tax at the rate of zero percent:
(c) such goods as the Federal Government may by notification, specify .
Notification No. S.R.O. 1125(1)/201 1 dated 31st December , 2011.---In exercise of the power conferred by clause (c) of Section 4 read with claus e (b) of subsection (2) and subsection (6) of Section 3, clause (b) of subsection (1) of Section 8 and Section 71 of the Sales Tax Act, 1990 and in supersession of its Notification No. SRO 1058(1)/201 1 dated The 23rd November , 2011, the Federal Government is pleased to notify the goods specified in column (2) of the Table below under the PCT Heading Numbers mentioned in column (3) of the said Table including the goods or the class of the goods mentioned in the condition stated in this notification, to be the goods on which sales tax shall, subject to the said notification be charged at zero rate or, as the case may be, at the rate of five percent, whatever applicable, to the extent and in the manner as specified in the aforesaid condition namely:- (emphasis supplied )
Table I S.NoDescription of Goods PCT Heading No.
(1) (2) (3)
02 Textile and Articles thereof, excluding Monofilament of more than 67 decitex, sun shedding, nylon fishing net, other fishing net, rope of nylon, tyre, cord fabric.Chapters 50 to 63 and other respective headings excluding 5407.2000, 5608.1100, 5608.1990, 5608.9000.
Amendment in column 3 of Serial No.2 vide SRO 682(1)/2013 dated 26-7-2013 S.No. Description of Goods PCT Heading No.
(1) (2) (3)
02 Textile and Articles thereof, excluding a) Finished Article of textile and textile made ups; a) Monofilament of more than 67 decitex; b) Sun shading c) Fishing nets of nylon or other material; e) Rope of polyethylene or nylon and; f) Tyre cord fabricChapters 50, 51, 52, 53, 54 (excluding 5407.2000), 55, 56 (excluding 56.08 and 56.09) 57 excluding made ups, 58, 59 (excluding excluding 59.05, 59.10) and 60 Amendment in column 3 of Serial No.2 vide SRO 491(1)/2016 dated 30-06-2016 S.No. Description of Goods PCT Heading No.
(1) (2) (3)
02 Textile and Articles thereof, excluding a) Finished Article of textile and textile made ups; b) Monofilament of more than 67 decitex; c) Sun shading d) Fishing nets of nylon or other material; e) Rope of polyethylene or f) nylon and ; g) Tyre cord fabricChapters 50, 51, 52, 53, 54 (excluding 5407.2000), 55, 56 (excluding 56.08 and56.09)
57 excluding made ups 58, 59 (excluding 59.05, 59.10) and 60, 6306.1210 and 6306.1910 (Emphasis Supplied)
6. The issue that needs determination in the instant appeal depends entirely upon the true extent and import of section 4(c) of the STA, which is required to be gathered in the light of the established principal of statutory interpretation. It is settled principal of interpretation of statute that the language implied therein must be interpreted and understood in the context of that enactment. In so far as it is possible, the courts have a duty to evaluate that the interpretation sought to be placed on a particular provision is consistent with the entire scheme of statute. The application of these rules is premised on the principal that nothing ought to be read or implied in a statute particularly a taxing statute. Upon bare reading of Section 4(c) of the STA, it is established that Federal Government is empowered to notify any goods on which sales tax shall be charged at the rate of zero percent, despite availability of Section 3, levying payment of sales tax at the rate of seventeen percent of the value of supply and on the goods imported into Pakistan. The wisdom of legislature of framing and inserting section 4 in the STA is extremely relevant and needs to be kept in mind while interpreting it. The reading of section 4 brings one to inescapable conclusion that the benefit of zero percent conferred by this provision was meant to support the local industry , which was engaged in manufacturing export oriented product, by exempting the payment of sales tax under SRO on the supply and import made by five sectors including textile, carpet leather , sports and surgical goods. The goods these sectors export earn considerable valuable foreign excha nge. The supplies and import of the goods of/by these five sectors were, therefore declared zero rated to ensure that the manufacturer/importer , exporters and wholesalers be eligible to the input tax credit, and the benefit of this notification was available to such registered persons who appears on the Active Tax Payer List (ATL) on the website of the Federal Board of Revenue. The context of Section 4 in the light of the subject matter deals with this and the purpose behind its enactment as found in its text shows that the zero rated facility granted to five sectors was absolute and they cannot be burdened with "sales tax" under section 3 either on supply or import.
7. Lest there remains any doubt that import made by five sectors under SRO were not exempt from payment of "sales tax", it may be noted that section 4 contains a non-obstante clause which makes a specific reference to section 3. A non-obstante clause is a legislative tool implied to give an over-riding effect to a certain provision over a contrary provision that may be found in the same enactment or in a different enactment in order to avoid the operation and effect of all contrary provisions. The Hon'ble Supreme Court in Messrs E.F. U. General Insurance Company Limited v. The Federation of Pakistan PLD 1997 SC 700 = 1997 PTD 1693 explain the scope of such a clause by stating as under: "Thus a non obstante clause is usually used in a provision to indicate that the provision should prevail despite anything so the contrary in the provision mention in the non obstante clause. In case there is any inconsistency between the none obstante clause and another provision, one of the object of such a clause is to indicate that it is a non obstante clause which would prevail over the other clause."
Similarly , the Indian Supreme Court in Chandavarkar S.R. Rao v. Asha Lata S. Guram 1986 4 SCC 447 held as under; "A clause beginning with the expression 'notwithstanding anything contained in this Act or in some particular provision in the Act or in some particular Act or in any law for the time being in force, or in any contract' is more often then not appended to a section in the beginning with a view to give the enacting part of the section in a case of conflict an over-riding effect over the provision of the Act or the contract mention ed in the non-obstante clause. It is equivalent to saying that inspite of the provision of the Act or any other Act mentioned in the non-obstante clause or any contract or document mentioned in the enactment following it will have its full operation or that the provisions embraced in the non-obstante clause would not be an Impediment for an operation of the enactment"
8. In view of the non obstante clause and section 4, the incident of making payment of tax at the rate of zero percent on the supplies/import made by a registered person will not attract levy of sales tax under Section 3. It is therefore, axiomatic that the import made by a registered person being zero rated under Section 4 cannot be subjected to levy/payment of sales tax under section 3. There yet another aspect of the mater which pertains to reconciling the provision of Section 3 with section 4. A conjoint reading of sections 3 and 4 shows that the former provision in fact compliments the interpretation that the tax payer falling within the zero rated regime envisaged by section 4 is not required to pay sales tax at the rate of seventeen percent as contemplated in section 3. Section 4(c) quite clearly lays down that the Fede ral Government may notify goods on which sales tax be charged at the rate of zero present, the legislature consciously framed the said section through which Federal Government was empowered to notified certain goods or class of goods, which shall not be charged, levied and paid sales tax as per the contemplation of section 3. This is obviously with reference to section 4(c) of the STA. Another established rule applicable to all statute is the rule of construction "ex-visceribus actus ", which helps in avoiding any inconsistency either with a section or between 2 different provision of same statute. The Indian Supreme Court in Sultana Begum v. Prem Chand AIR 1997 SC 1006 while resolving inconsistency between section 47 and Order XXI, Rule 2, C.P .C. made the following observation on the Rule of " ex-visceribus actus ".
"On the conspectus of the case law indicated above, the following principal are clearly discernable:
(1) It is the duty of the court to avoid a head on clash between two sections of the Act and to construe the provision which appears to be in conflict with each other in such a manner as to harmonized them. (2) the provision of one section of statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, find it impossible to effect re-conciliation between them. (3) It has to be borne in mind by all the courts all the time that when there are two conflicting provision in an Act, which cannot be reconciled with each other , they should be so interpreted that, if possible, effect should be given to both. This is the essence of Rule of "harmonious construction"
(4) The courts have also to keep in mind that an interpretation which reduces one of the provisions as a "dead letter" or useless lumber" is not harmonious construction. (5) To harmonized is not to destroy any statutory provision or to render it otiose.'"
9. Ergo, it is incumbent upon me to ensure while construing the provision of section 3 that it is circumscribed and harmonized with reference to the context of the STA and with section 4(c) to ensur e that no violence is done to the context in which section 4 was inserted. Be that as it may, there appears to be no reason why same consequence is not implied by section 3 as it said to be arise under section 4(c) as these provision have interaction on one another . There also appears to be no reason to stick to the condition of applicabili ty of exemption under SRO only to section 4(c) where the said provision also contains the non obstante clause. Analyzing even from this angle, there does not appear to be any inconsistency between the two provisions. Hence, I conclude that the sectors mentioned in the SRO are entitled to zero rating without any exception and not required to pay sales tax at the rate of seventeen percent. Neither , is it permissible to me or the respondents to read into the provision something for making it smaller than what is expressed by the scope, even in the light of Principal for interpretation of statute that "the term of exemption ought to be reasonably construed and if a tax payer is entitled to an exemption on a reasonable construction of law it ought not to be denied to him by a stained, strict or convoluted interpretation of law (2019 SCMR 282 PTV Ltd. v. CIR (Legal) LTU, Islamaba d and others )". The objective of section 4 and the consideration grounded in scheme of SRO requires that section 3 must, as far as possible, be read so as to harmonize it with section 4, which I am able to read after giving the words of the sections their proper legal meaning warranted in context to STA. The respondent No. 1, his subordinate and superiors completely misread the essence and spirit of the SRO, which is unambiguous and allows zero rating to the manufacturer , importer , exporter and whole seller as evident from the adumbration made in para supra and Table-I of the SRO, for denying the benefit of zero rating to the appellant they attributed redundancy to the legislature, which is not permitted under law and have read columns 2 and 3 in isolation instead of in conjunction, evident from the fact that through SRO dated 31.12.201 1, zero rating was allowed to tarpaulin by virtue of insertion of Chapter 63 in entirety in column 3, meaning thereby all goods or class of the goods falling under the said chapter were entitled for zero rating with the exception of exclusion of PCT Heading 5407.2000, 5608.1 100, 5608.1900 and 5608.9000, under which exclusion given in column 2 of serial No. 2 of Table-I falls. This was done for lending clarity that not only exclusion given in column 2, not only by way of description rather under PCT heading appearing in column 3. The said SRO was subsequently amended through S.R.O. 682(1)/2013 dated 26.07.2013, wherein Chapters 56, 57, 58, 59 and 60 to 63 of the First Schedule to the Act were omitted sans PCT Headings excluded in the SRO, forthwith G no zero rating to the goods or class of goods falling under Chapters 55 to 63 if imported by manufacturer , importer or exporter was permissible. The S.R.O. 682(1)/2013 dated 26.07.2013 remains in field till 29.06.2016 and a fresh SRO. No.491(I)/2016 dated 30.06.2016 was issued through which two specific PCT Headings 6306.1210 and 6306.1910, under which "tarpaulin" falls, were inserted in column 3 of Serial No. 2 of the SRO as against complete chapter 63 available in the SRO dated 31.12.201 1. This insertion was made consciously and intentionally for allowing zero rating by the legislature. Despite entitlement of zero rating to the appellant on his imported tarpaulin, the respondent No. 1 and his subordinate/even superior denied zero rating to the appellant on the pretext that since tarpaulin is a made up, he has to pay sales tax at standard rate of 17% as per the expression of section 3 despite being entitled for zero rating under section 4 of the STA and SRO and exemption available to him is only to the extent of 3% advance income tax as against 6% to be paid by a non-filer . The appellant disputed from the interpretation adopted by the respondent No. 1 /even superiors and abreast them that if the intention of the legislature was so, then why did the CCS entitled him for zero rating under serial No.2 of Table -I or even under serial No. 4 of Table II, it is due to the fact that SRO was fed by the Board for implementation /entitlement, ergo they lack the authority to dispute the same, instead they opined that a fault has been committed by the Board in feeding the SRO, tarpaulin being made up are not entitled for zero rating despite insertion of their PCT heading in column 3 of SRO 491(1)/2016 dated 30.06.2016, instead payment of advance tax at reduced rates of 3%.
10. Upon assailing the assessment order before respondent No. 2, he modified that while adopting unique/novel interpretation of the preamble of the SRO and that also intentionally omitting the word "under the PCT Heading Numbers mentioned in column (3) of the said Table including the goods or the class of the goods by observing in para 3 of the order that the preamble of SRO extent concession to the goods described in column (2). The said opinion was formed by him by ignoring established principals of interpretation of statute, commonly known as principal of 'Ejusdem' Geneies' that the word and phrases occurring in provision of law are not to be taken in an isolated or detached manner , dissociated from the context, but these are to be read together and construed in the light of overall context of the provision of law. The wording of the preamble is to be read as it has been inserted not by subtracting words available therein, the actual context of the portion of the preamble read as "goods specified in column (2) of the Table below under the PCT Heading Numbers mentioned in column (3) of the said Table including the goods or the class of the goods" Nothing as to the described goods is available in the said portion of preamble of SRO , rather it states with clarity that zero rating is available to the goods described in column 2 falling under the PCT headings mentioned in column 3 with the exception of exclusion of the description and PCT headings in columns (2) and (3). Meaning thereby , zero rating is available to those goods and class of goods, whose description and PCT heading are notified in columns (2) and (3) of SRO. The question now needs to be answered is that although the PCT heading of tarpaulin is existing in column (3), where does the description? It is to be noted that the column (2) of serial No. 2 of the SRO starts with the word "Textile and Article thereof". In the word "Article ", all type of articles of textile falls, tarpaulin is one of those, the word article is defined in Black Law Dictionary "a particular item or thing " In Chambers Dictionary "a separate element, member , particular item or commodity , in item", in New Lexicon Webster's Dictionary "a particular thing of a distinct class " and Oxford Advanced Learner Dictionary "a particular item or a separate thing ". It is for that reason that the word tarpaulin or allied goods or class of goods falling under Chapters 53 to 63 were not by name described in the SRO dated 31.12.201 1, the word article was deems to be sufficient for the non incorporated description of the goods and class of goods, which were entitled for zero rating under Section 4 of STA and for the benefit of the SRO. I am indebted to analyze the formed opinion of respondent No.2 from yet another angle, if it is considered for a while for the sake of argument that column (2) speaks about described goods, on which no influence is being cast by the availability of Chapter of First Schedule to the Act or specific PCT Heading, in that case the benefit was available to all the manufacturers, importers and exporter on the import of textile and its article thereof. Despite omission of Chapters 55, 56, 58 59 and 60 to 63 excluding the notified PCT Headings of these Chapters in column (3) of serial No. 2 of SRO, through SRO 682(1)/2013 dated 26.07.2013 and there exist no cause or reason for inserting PCT Headings 6306.1210 and 6306.1910 in the SRO through SRO 491(1)/2016 dated 30.06.2016 . The fact of matter is that under law zero rating under section 4 and benefit of SRO on the goods and class of goods, whose Chapters and PCT Headings were omitted through SRO 682(1)/2013 dated 26.07.2013 were not entitl ed under law despite availability of the word article thereof in column 2 of serial No. 2 of SRO w.e.f. from the date of SRO 682(I)/2013 dated 26.07.2013, obviously no zero rating or exemption under section 4 and SRO was available to tarpaulin, falling under PCT Headings 6306.1210 and 6306.1910 w.e.f. 26.07.2013 till 29.06. 2016, but stand entitled w.e.f.
30.06.2016 upon issuance of SRO 491(1 )/2016 dated 30.06.2016 as insertion of these PCT Heading were made by the legislature through money bill consciously and intentionally , validated from S.R.O. 110(1)/2019 dated 31.01.2019 containing the PCT heading 6306.1210 and 6306.1910 under which tarpaulin falls, negating formed absurd opinion of no substance of the respondents, otherwise the legislature would have omitted the PCT heading through money bill through an Act of Parliament. Thus by denying zero rating and benefit of SRO to the appellant, the respondents renders the provision of section 4 of the STA and context of SRO redundant. It is settled law that redundancy cannot be attributed to the legislature; every word used in the statute must be given its true meaning and the provision construed together in the harmonious manner moreover , it is not legal or proper to K apply one provision of the law in isolation from other provision as surplus ages or redundancy cannot be attributed as held by Superior Judicial Fora in PLD 2005 SC 373, PLD 1997 SC 32 , PLD 1962 SC 90, 2015 SCMR 1303 , PLD 2015 SC 401, 2005 SCMR 1 166 and 2016 PTD 1675 (Emphasis supplied )
11. Notwithstanding to the above deliberation, I am unable to digest the rationale of the respondents representative on placing reliance on the clarification of the Board dated 21-02-2017 in support of stance that zero rating under section 4 of the STA as notified through SRO is not admissible to the appellant, while ignoring the provision of Section 24 of the General Clauses Act, 1897 that any fresh notification amending the existing notification, has to be run prospectively unless expressed L specifically and the law laid down by the superior judicial fora in reported judgments PLD 1974 Supreme Court 180, 2004 PTD 2524 , S. T. Appeal No.K-271/2008, 2009 PTD 1, 2005 SCMR 492, 2009 PTD 16, 2009 PTD 1392, 2009 PTD 1112, 2010 PTD (Trib) 1675 , 2010 PTD (Trib.) 2406, 2010 PTD (Trib.) 1631, 2010 PTD (Trib.) 1636 and PTCL 2017 CL 75 (sic). Clarification in no manlier overrule the expression of the notification by virtue of the fact that it is deems to be an instruction/order and as such has no legal sanction if it is presumed that it has to be applied, even then it shall be from the date of issuance not beyond as it is not beneficial, evident from the fact that it adversely effect or invade upon its vested right and as such cannot be applied retrospectively as held by the Apex Court in 2005 SCMR 492 GOP v. Messrs Village Development Organization . Even otherwise, Board has no mandate to either interpret a provision of statute or expression of notification due to non availability of such powers in the FBR Act and Constitution of Islamic Republic of Pakistan. An Act enacted by the Parliament could only be amended or rescinde d by the parliament itself and by none else. In the absence of amendment of the Notification the clarification issued by Board, denying zero rating to the appellant on its imported goods under section 4 of the STA and SRO on the basis of opinion is void. It is sole prerogative of the Supreme/High Court as held in 1993 SCMR 1232 in the case of Central Insurance Co., v.
Central Board of Revenue. The Hon'ble Supreme Court of Pakistan held that "Board's view as to the interpretation of law do not have the force of law and the exception would be, where a fiscal statute is involved, that should be implemented with strict impartiality" and in 2005 PTD 2462 Messrs Lever Brother Pakistan Ltd. v.
Customs Sales Tax and Central Excise Appellate Tribunal, Karachi that "CBR has no place in the scheme of law, conferred with the jurisdiction to interpret any law, statutory or in exercise of any delegated authority i.e. subordinate legislation" whereas, in 2016 PTD (Trib.) 107 Qazi CNG Station, Gujrat and another v. Directorate General and Intelligence of Investigation FBR, Karachi and 2 others , this Tribunal held that "statute can be amended by the Parliament and a notification through a notification not through any communication. In the absence of amendment of notification, clarification issued by the Board could only be termed as opinion and it would not at all amend the notification". Hence, reliance on the letter of the Board dated 21-2-20 17 by the respondents is based on misconception, having no warrant of law and as such lend no support.
12. Lastly , it is of paramount importance to inscribe that I am at loss to digest the formed opinion of the respondent that the appellant imported goods indeed are textile article and falls within the ambit of SRO, but not entitled for zero rating under section 4 of the STA or benefit of SRO with the exception of payment of advance income tax at reduced rates of 3% as against 6%, when it is not possible to do so, unless zero rating under Section 4 of STA and the benefit of SRO is granted. No logic or rationale have been supplied to the Tribunal in support of the said stance.
The payment of 3% advance income tax is interconnected with the benefit of SRO , as evident from Serial No.3 of Part II of First Schedule to the Income Tax Ordinance, 2001 verbatim of which is reproduced here-in-under: 3 Commercial importers covered under Notification No. SRO 1125(1)/2011 dated 31st December, 2011 and importing items covered under SRO 1125(1)/2011 dated the 31 December, 2011.3% of the import value as increased by customs duty, sales tax and federal excise duty.
According to the well established principal of interpretation and construction of statute laid down by the superior courts, harmonious construction is to be made keeping in view the different provisions of the statute after fully understanding the intention with which the same had been made and the object which was intended to be achieve.
The intention behind insertion of PCT heading 6306.1210 and 6306.1910 in colum n (2) of Serial No.2 of Table-I of SRO , through SRO 491(1)/2016 dated 30-6-2016 as reproduced above is clearly manifest that zero rating under section 4 of the STA and benefit of SRO was granted to the tarpaulin falling under PCT heading 6306.1210 and 6306.1910, only upon grant of that payment of advance income tax at the reduced rate of 3% is possible.
13. In view of what has been discussed and observed hereinabove, particularly the interpretation of law and legal preposition discussed in the light of prescribed law and observations made thereon and to follow the ratio decidendi , I hold in unequivocal terms that tarpaulin imported by the appellant is entitled for zero rating under section 4 of STA and the benefit of SRO without any exception/condition, hence, I hold that the assessment order dated 2-9-2016 passed by respondent No.1 as well as order-in-appeal dated 10-10-2016 of respondent No.2st suffers from grave legal infirmities, there fore, are declared to be illegal, null and void and hereby set-aside and appeal is allowed as prayed
14. Judgment passed and announced accordingly .