1. ' SAEEDUEZZAMAN SIDDIQUI, J.--The petitioner has challenged in this petition the order of Deputy Collector II, Central Excise and Land Customs, Karachi dated 9-4-1982 passed in Case No,9 of 1982.
2. The facts as alleged in the petition are as follows: The petitioner is engaged in the manufacture of wire gauze which is produced on power looms since 1963. The case of the petitioner is that under S.R.O. No, 666 (1)/ 81 dated 25th June 1981, wire gauze produced by them is exempted from payment of sales tax. It appears that on a report of the Staff of Headquarters, Intelligence of the Collect orate, 20 roles of 50 feet each of wire gauze produced by the petitioner in their factory were seized on the allegation that the petitioner has contravened the provisions of rules 174, 52-A, 236, 237, 241, 244 and 246 of Central Excise Rules, 1944 read with section 3 (4) of Sales Tax Act, 1951, and accordingly respondent No,3 issued a show- cause notice dated 13-2-1982 to the petitioner, calling upon him to pay sales tax on the value of 'Jali' cleared between the period from 24-2-1981 to 25-6-1981 and 26-6-1981 to 17-11982. The petitioner contested the above notice but his contentions were overruled by respondent No,3 who by his order dated 9-4-1982 held that the wire gauze produced by the petitioner was not exempted from payment of sales tax under Item No,48 of S.R.O. No,666 (1)/81 and further directed realization of sales tax at the rate of 20% and 12 1/2% on wire gauze (Jali) cleared between the period from 24- 4-1981 to 25-6-1981 and 26-6-1981 to 17-1-1982 respectively.
3. ' The learned counsel for the petitioner contends before us that the show-cause notice dated 13-2- 1982 as well as the order of respondent No,3 dated 9-41981 were wholly without jurisdiction in so far as they related to demand of Sales Tax on the 'Jali' cleared between the period from 24-4-1981 to 17-6-1981. It is urged that according to Item No,48 of SRO 666 (1)/81 the exemption granted from payment of Sales Tax in respect of products of power loom units equipped with not more than twenty power looms, was unqualified until 26-5-1982 when by virtue of S.R.O. 510 (1)/82 dated 26-5- 1982 entry No,48 of S.R.O. No,666 (1)/ 81 was amended. The learned counsel for the respondents on the other hand contended that the exemption from payment of Sales Tax granted on products of power loom units having less than 20 powerlooms under S.R.O. No, 666 (1)/ 81 was applicable only in respect of cotton power loom factory and did not extend to factories which were engaged in production of wire gauze (Jali). The learned counsel for the respondents also invited our attention to S.R.O. No,510 (1)/ 82 dated 26th May, 1982, issued by the Federal Government under subsections
(1) and (2) and Sections 7 and 8 of the Sales Tax Act which reads as follows:- "Government of Pakistan Ministry of Finance and Economic Affairs.
4. Islamabad, the 26th May, 1982.
5. MOTIFICATION.
6. (SALES TAX)
7. ' S.R.O.510 (I)/82.--In exercise of the powers conferred by subsections (1) and (2) of Section 7 of the Sales Tax Act, 1951 (III of 1951), the Federal Government is pleased to direct that the following further amendment shall be made in this Ministry's Notification No, S.R.O. 66(I)/81 dated the 25th June, 1981, namely: ' In the aforesaid Notification, in the table, for serial No,48 and the entry relating thereto in column
(2) the following shall be substituted, namely:- "48. Products of cotton powerloom factories equipped with not more than twenty powerlooms. Sd/ (Zafar Hussain) Additional Secretary.
8. ' Entry No,48 of S.R.O. 666 (1)/81 dated 25th June, 1981, relied by the petitioner reads as follows:- "48 Products of power looms units equipped with not more than twenty powerlooms."
9. ' The petitioner has specifically alleged in para 3 of his petition that they are manufacturing wire gauze/netting (Jali) on the power looms which are installed in his factory and that the number of powerlooms installed in his factory is only 5. It is not disputed by the learned counsel for the respondents that under Item No,48 of S.R.O. No,666 (I)/81 dated 25th June, 1981 product of power loom units having less than 20 power looms is exempted from payment of Sales Tax but it is contended that the Jali/Wire Gauze produced by the petitioner does not qualify for exemption as Item No,48 of the above Notification only covers the products of Textile Factory. We have already reproduced above. Item No,48 of S.R.O. No,666 (1) 181 and a reading thereof will make it clear that it extended to all products of power looms units which are not equipped with more than 20 power looms. The exemption granted under Item No,48 of S.R.O. 666 (I) 181 is unqualified and is not restricted to products of Cotton or Textile Factories only as contended by the respondents. Our above conclusion is also supported by the issuance of Notification No,510 (1)/82 dated 26-5-1982 by Federal Government which amended item No,48 of S.R.O. 666 (1)/81 so that after amendment.
10. Item No,48 is only applicable to products of cotton power loom factories. We are accordingly of the view that until issuance of subsequent Notification No,51 (1) 182 by the Federal Government dated 26th May, 1982, under Section 7 of the Sales Tax Act, the 'wire gauze' produced by the petitioner in their factory on power looms continued to enjoy exemption from payment of Sales Tax under S.R.O.
11. No,666 (1)/81. We accordingly declare the order dated 9-4-1982 passed by respondent No,2 demanding Sales Tax from the Petitioner for the period from 24-4-1981 to 17-6-1981 as without lawful authority and of no legal effect. There will be no order as to costs.