JUDGEMENT: MJHAMMAD AFZAL LONE, This judgement disposes of P.T.R. No. 47 of 1981, filed by the Commissioner of Sales Tax, Zone-A, Lahore, under Section 17(4) of the Sales Tax Act.
The respondent is the manufacturer of sodium silicate liquid. During the assessment year 1973-74, the product was subjected to sales tax by Sales Tax Officer. The assessee went in appeal and took up the stand that the sodium silicate in liquid form, was covered by item No. 15 of Sales Tax Notification No. 9, dated 27-6-1951 and was thus, exempted from the payment of sales tax. The Notification is reproduced below: "In exercise of the powers conferred by sub-section (1) of Section 7 of the Sales Tax Act, 1951 (III of 1951), the Central Government is pleased to the goods, or class of goods specified hereunder, being goods manufactured or produced in Pakistan, from the tax payable under the Act, but except in the case of goods specified in item 33 (a) nothing in this exemption shall affect the tax, payable on the raw materials, from which, the goods are manufactured".
The assessee's contention prevailed with the Appellate Assistant Comissioner, who relying on Income Tax Appellate Tribunal's decision reported as "(1976)34 Taxation (Trib.) 5", wherein it has been held that sodium silicate in liquid form, is definitely the product of steam, accepted the appeal and allowed the exemption. The Department challenged the order of the Appellate Assistant Commissioner before the Tribunal but their appeal was dismissed on 17-9-1978.
Dissatisfied with this order, the Commissioner of Sales Tax moved Tribunal under section 17 of the Sales Tax praying that a reference to be made to the High Court, for its decision on the following question of law, arising out of the Tribunal's order aforesaid: "Whether on the facts and . In the circumstances of the case, the Tribunal was justified in holding that sodium silicate manufactured by the assessee is covered by item No. 15 of Notification No. 9, dated 27-6-1951, being product of steam and as such exempt from levy of sales tax."
In disposing of the reference application, the Tribunal concurred with its earlier decision, referred to in the order of the Appellate Assistant Commissioner, and maintained that sodium silicate liquid is the product of steam and thus, under Notification No. 9 of 1951 is exempt from the levy. On the authority of the Supreme Court's judgement in the case of Commissioner of Sales Tax v. Suleman &.
Co. (1980 PTD 188) it further held that the question that whether for manufacturing an article one process is employed or another, is a finding of fact. Thus in the opinion of the Tribunal, the question of law suggested by the Commissioner of Sales Tax did not arise out of the Tribunal's order. The application was, therefore, dis-allowed. It is under these circumstances that the instant reference application has been brought by the Department.
2. We have heard Mr. Muhammad Ilyas Khan Advocate. He argued that in the notification the word "and" preceding the word "hammer" is conjective and that, therefore, for earning the exemption the goods must have been produced both by steam and hammer work. He went on to argue that the decision of the Tribunal goes only to the extent that the liquified sodium silicate is the product of steam but it does not take note of the fact that upon the phraseology of item No. 15 of the Notification, for qualifying for exemption, the article had to be produced by combining both steam and hammer work. Not only this, that learned counsel canvassed narrow interpretation of the Notification, on the ground that the product must be the result of the user of both steam and hammer work, he went on still further to urge that the exemption has to be confined to the product of iron foundries only. In this behalf he pointed out that when the Notification was issued, there were certain products of iron foundries which were manufactured by the process combining the use of steam and hammer work. He then drew our attention to Notification No. S.R.O. 898(0/74, dated 2nd July, 1977 whereby item 15 ibid has been replaced by the following item: "Water pumps, oil engines, sanitary fittings, and agricultural implements which are the products of iron and steel foundries."
In the submission of the learned counsel, the latter notification is indicative of the intention of the framers of the notification, that the exemption is to be restricted to the products of iron foundries.
According to him, when the original item No. 15 is construed in the light of the amended one, the exemption has got to be given only to those iron foundry products, for manufacturing whereof steam and hammer-work have been utilised resultantly, on these premises the learned counsel evolved the argument that as the interpretation of notification was involved, this gave rise to a question of law and the Tribunal fell in error in declining to refer the same for the opinion of the High Court.
3. We have given our careful consideration to the submissions made at the bar. It is discernible from the order of the Appellate Assistant Commissioner, with which the tribunal did not differ, that the assessee is the manufacturer of sodium silicate liquid. This is a finding of fact. The tenor of the Tribunal's earlier order, on which its decision, in the instant case, is founded, demonstrates that the Tribunal has taken up the view that the Notification embodies broad categories namely products of (1) iron foundries, (2) steam and (3) hammer work to which exemption from the payment of sales tax is admissible. Seemingly, before the Tribunal, the case was not argued by the department, from the angle that these three grounds in fact make out one item and the ingredients of all these categories should collectively be present in the product for earning the exemption. Rather, at the second appeal stage, their grievance was that the steam was not the main element of the sodium silicate manufactured by the assessee and thus, he was not entitled to exemption. This argument would have been tenable, had assessee been found to be the manufacturer of sodium silicate as distinguished from sodium silicate liquid. However, in the precedent followed by the Tribunal, it came to the conclusion as a matter of fact, that the steam is an integral part of sodium silicate liquid. There is no room to ignore such a finding of fact in hearing the reference application.
4. We have perused the notification, in the light of these arguments and do not feel persuaded to agree with the learned counsel. To us, the word "and" figuring twice in the notification, demarcates three distinct classes of goods. There is no sound reason to hold that the notification was designed to embrace only the products of the iron foundries, produced largely by the user of steam and hammer work. It enumerates three separate categories of products which cannot be treated as combining one class of goods.
5. The learned counsel's reliance on S.R.O 898(0/74, dated 2-7-1974 is also misconceived. It is well- settled that the intention of the framers of a statutory instrument is to be gathered from the words of the instruments and when its language is clear the Courts have to follow the same. We may observe that the words of the notification under consideration are quite unambiguous. In the face of the clear language of the notification, it is not permissible to enter upon an inquiry to ascertain the intention of the makers thereof. We, are firmly of the view that the goods having steam as an integral part thereof, qualify for exemption and in this behalf, the Tribunal's order is not open to any exception.
6. While we agree that in a given case, the interpretation of a statutory document, such as a notification can give rise to a question of law but we have no hesitation in discarding the interpretation of item 15 drawn by the learned counsel. We may add that as the meanings of the notification are quite evident, a reference on the question of law framed by the Commissioner of Sales Tax, would have been merely an exercise in futility. In exercise of its jurisdiction under Section 17 of the Sales Tax Act, which essentially is discretionary in nature, this Court is not obliged to entertain a reference when the answer to the question sought to be referred to the Court, is self- evident from the record.
For the foregoing reason we upheld the decision of the Tribunal and dismiss this reference application in limine.