MR. JUSTICE IJAZ ANWAR. (1). Through this single judgment, we intend to decided the instant Tax Reference and Tax References, listed below, since questions of law formulated in it are common, which allegedly arisen out of the judgment and order dated 07.02.2019 passed by the learned Appellate Tribunal Inland Revenue, Peshawar (hereinafter to be referred as "the learned Tribunal"), whereby, it, by allowing the appeals of the respondent set-aside the Order-in-Appeal dated 11.05.2017 passed by the Commissioner Inland Revenue (Appeals), Peshawar. The connected Tax Reference are:--
(1) Tax Reference No. 10-P/2019 (Commissioner Inland Revenue Corporate Zone, Regional Tax Office, Peshawar Vs. M/S Al-Khyber Tea & Food Manufacturing Company, Shop No. 146, Ashraf Road, Peshawar)
(2) Tax Reference No. 11-P/2019 (Commissioner Inland Revenue Corporate Zone, Regional Tax Office, Peshawar Vs. M/S Khyber Tea & Food Manufacturing Company, Shop No. 146, Ashraf Road, Peshawar)
1. Tax Reference No. 12-P/2019 (Commissioner Inland Revenue Corporate Zone, Regional Tax Office, Peshawar Vs. M/S Khyber Tea & Food Manufacturing Company, Shop No. 146, Ashraf Road, Peshawar)
2. The following questions of law have been formulated by the petitioner for the determination of this Court:--
1. Whether on facts and in the circumstances of the case, the learned Appellate Tribunal Inland Revenue, Peshawar was justified to hold that "any person involved in mixing is a manufacturer" whereas the conventional meaning of the word "manufacturer" is by no means simple mixing of different kinds of the same material?
2. Whether the definition of commercial undertaking provided in Section 29C of the Income Tax Ordinance, 2001 does not signify that the process of manufacturing of goods or material whereas by simple mixing of finished goods no substantial change is occurred in the original condition of the goods?
3. Whether the incorrect meaning of a word applied by any authority in one tax year cannot be corrected in the subsequent tax year?
4. Whether on the facts and in the circumstances of the case, the process of mixing two distinct Imported teas) is carried out manually or mechanically? Whether such manual activity brings about a substantial transformation in tea(s) mixed together and whether does it constitute "manufacturer" as defined in the Income Tax Ordinance, 2001?
3. Learned counsel for the petitioner in furtherance of the point of law so formulated argued that "persons engaged in packing and re-packing have been excluded from the definition of "manufacturer" for the purposes of Section 153 of the Income Tax Ordinance, 2001 (hereinafter to be referred as "the Ordinance") and that persons engaged in packing and re-packing will be subject to final taxation".
4. On the other hand, learned counsel for the respondent-company stated that this point of law has since been answered by this. Court in different References and placed reliance on the cases titled "Director Intelligence and Investigation, Peshawar Vs, M/s, Khyber Tea & Food Company, Peshawar and others(Custom Reference No. 26-P/2013 decided on 03.03.2022) and titled Collectorate of Customs, Model Customs Collectorate, Jamrud Road, Peshawar Vs. Messrs Khyber Tea and Food Company and others (2022 PTD 1447)". He further argued that earlier too, cases of the respondent-company were adjudicated and decided in reported judgment 2018 PTD page 726, wherein, it was held that "the business activities of the respondent-company falls within the scope and definition of "manufacturer" under Section 2(16) and (17) of the Sales Tax Act, 1990 as well as under Section 153(7)(iv)(b) of the Income Tax Ordinance, 2001".
5. Arguments heard and record perused.
6. It appears that earlier too, the same Circular No 03 of 2009 dated 17.07.2009 remained under discussion before the learned Tribunal in the case reported as 2018 PTD Page 726 and it was held that the respondent-company is "manufacturer" within the meaning of law as after importing the tea, the original packing is changed after mixing and blending of tea. Similarly, in the case titled "Lipton (Pakistan) Ltd. Vs. Government of Sindh through the Secretary, Ministry of Finance, Karachi and others (PLD 1977 Karachi 714)", it was held that "the process of tea mixing, blending and packing activities carried on with aid of power was held to be in "manufacturing process" and that the premises in which such activities are carried on is held to be a factory". It is pertinent to mention here that earlier too, the same issue was raised before the learned Tribunal and it was held that the respondent-company is an "Industrial Undertaking" and engaged in manufacturing of finish tea after the import of tea and subjecting them to manufacturing process. Reference can be made to the case reported as 2000 PTD 874. Similarly, in terms of Section 153 of "the Ordinance", "manufacturer" for the purpose of this Section means "a person who is engaged in production or manufacturing of goods, which includes:-- (a)...........
(b) A process of assembling, mixing, cutting or preparation of goods in any other manner".
7. Infact, it is the case of the respondent-company that the activities of the respondent-company are mixing and blending of various types and qualities of tea from various sources mixed and blending in a specified ratio and formulate a specific brand tea and that to this effect, the respondent-company has already been declared as "manufacturer"; besides, the Chief Commissioner Inland Revenue has earlier granted a clarification considering the respondent- company to be "manufacturer" under the provisions of Section 153(7)(iv)(b) of "the Ordinance" vide letter dated 07.08.2013.
8. Though, this question has repeatedly been decided in favour of the respondent-company, however, again and again this question is raised. The reliance of learned counsel for the petitioner on the reported judgment PLD 1992 SC 562 is misplaced, because, though, the principle of res- judicata cannot be applied to the cases on assessment under the Income Tax Ordinance in the same manner as they are applied in civil proceedings; albeit, in the instant case, the issue pertains to the declaration of the respondent-company as "manufacturer" which has already been adjudicated and decided in favour of the respondent-company, thus, in such circumstances, the petitioner is barred from raising this legal question again and again.
9. Apart from the above, we find that on the basis of available record, inspections so made and clarification so granted by the Chief Commissioner Inland Revenue, it appears that the learned Tribunal has resolved this question which was purely a question of fact. Thus, we are of the considered view that when such question of fact is resolved by the learned Tribunal then it cannot be made a basis for formulation of question of law before this Court in Tax Reference. Reference can be made to the cases titled "M/s. Zarghoon Zarai Corporation Vs. Collector of Customs and another (PTCL 2006 CL 375) and 2014 SCMR 907".
10. For what has been discussed above, this and the connected Tax References are answered in negative. Copy of this judgment under the seal of this Court be sent to "the learned Tribunal" for information.