1. SALEEM AKHTAR, J.-By this application under section 17 (1) of the Sales Tax Act, 1951 the following question has been referred :- Whether under the facts and circumstances of the case Income-tax Appellate Tribunal was justified in finding that exemption from Sales---tax under Notification S. R. O. 51 (R) dated 1-7-1961 on Export Goods is available only to Exporters and not to Manufacturers who export the goods through agents.
2. The appellants are running a Textile Mill. The Sales Tax Officer during the assessment in respect of the Assessm ent year 1963-64 rejected the applicant's claim for exemption from sales tax in respect of the sale of cloth of the value of Rs. 4,94,258 sold to exporters on the ground that the goods were sold to exporters who were not licensed under section 8 (1) of the Sales Tax Act and further that the applicants did not produce certificate under section 16-A of the Sales Tax Act The applicants filed an appeal before the appellate assistant Commissioner, which was dismissed.
3. The appeal filed before the Income-tax Appellate Tribunal was also rejected on the ground that under the Notification exemption is only available to exporters and does not extend to the cases, where the goods have not been exported by the assessee itself. According to the learned Tribunal the goods were sold to exporters who were not licensed exporters and the Certificate of registration was also not produced by the appellant, and therefore, no exemption could be granted in respect of sales made to the unlicensed exporters. The applicants had contended that they had sold the goods to the exporters who had exported it. This fact was not controverted or denied at any stage by the Department. It was main--tained by the Department, that as the goods were not sold to registered Licence Holder Manufacturers or Exporters or wholesalers, the applicants were not entitled to the exemption.
4. Notification under which the exemption is claimed is reproduced here--under "(I) In exercise of the powers conferred by section 7 of the Sales Tax Act, 1951 (III of 1951) and in supersession of the Ministry of Finance (Revenue Division) Notification No. 1, dated the 1st May. 1953, the Central Government is pleased to exempt from the tax payable under the said Act, all such goods (other than ginned cotton) as are manufactured or produced in Pakistan (including raw material used in their manufacture or production), are sold for delivery outside Pakistan and actually so delivered.
(2) Where such tax has already been paid by a person not licensed under section 9 of the said Act to a licensed manufacturer or a licensed whole-saler, or any goods to which this notification applies, the amount of tax so paid shall be refunded to such person in accordance with the Provisions of the said Act and in such manner and to such extent as may be prescribed)."
5. The notification in clear and unambiguous language lays down three conditions necessary for claiming exemption:
(1) That the goods are manufactured or produced in Pakistan.
(2) That they are sold for delivery outside Pakistan.
(3) That they are actually so delivered.
6. The exemption is in respect of the goods and once these three condition are satisfied the goods will be exempt from sales tax. Any one claiming exemption will have to satisfy compliance with these conditions. Importing, any other condition for restricting the applicability of this notification will be doing violence to the language of the notification.
7. Similar question, as under consideration was raised by the Department, and repelled in the case of Adam Limited v. Commissioner of Income-tax ((1977) 16 Taxation 97), in the following manner "It will not be necessary to refer to some of the provisions of the Sales-tax Act. Under section 3 (1)
(a) of the Act there shall be levied and collected a tax on the value of all goods produced or manufactured in Pakistan payable by the manufacturer or producer. Gunny bags, hessian and other jute manufactures, which form item 22 of the Schedule of the Notification in question, are manufactured in Pakistan. The tax upon these goods is in terms of section 3(1) (a) payable by the manufacturer. However, when these goods are sold by a licensed manufacturer to a licensed wholesaler the tax is not payable-on such sales as provided by section (4) (d) of the Act. This is because when the wholesaler sells the goods, sales tax is charged. Section 9 provides for the grant of a wholesaler's licence. It became necessary to refer to these provisions because para (2) of the notification also mentions the licensed wholesaler.
8. Now reverting to the notification it seems to be clear that if a licensed manufacturer of a licensed wholesaler exports any of the goods mentioned are fulfilled there will be no occasion for the refund of any tax, for the simple reason that no tax would have been paid by the licensed manufacturers or wholesalers if they directly made the export. That occasion would only arise if the export is made by a person who is neither a licensed manufacturer nor a licensed wholesaler. Now, it must be remembered that the exemption of sales tax by the said notification is in relation to the goods. All that is necessary is that the three conditions mentioned in .The notification must be fulfilled. Once that is done, the goods are exempted from sales tax."
9. It is thus clear that where any Manufacturer who produces or manu--factures the goods in Pakistan, such goods are sold for delivery outside Pakistan and are actually so delivered, is entitled to the exemption, under this Notification. It is not necessary that the export should be made directly by the Manufacturer himself. If the manufacturer has sold the goods for export outside Pakistan, and it has been so delivered, he satisfies the conditions laid down in the Notification. As stated earlier the facts satisfying these ingredients alleged by the applicants have not been challenged by the Depart--ment. As the applicants have satisfied the conditions laid down in the Notification, our answer to the question is in the negative.