' AJMAL MIAN, J.-- This is a reference made under section 17(1) of the Sales Tax Act, 1951, hereinafter referred to as the Act, for soliciting the opinion of this Court on the following legal question:- "Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in directing the Sales Tax Officer to allow the refund of sales-tax paid to Customs stage on prescription chemicals treating the same as exempt from the payment of sles tax under Item No, 35/35B of Notification No,7, dated 27th June, 1951 as amended from time to time."
2. The brief facts leading to the making of the above reference are that the respondent-assessee is a company registered in U.K. But it has an office in Pakistan and manufactures pharmaceutical products. It seems that the respondent-assessee imported certain prescription chemicals in the assessm ent years 1967-68, 1968-69 and 1969-70 and paid inter alia sales-tax on the aforesaid import. The respondent-assessee filed an application before the Sales Tax Officer for the refund of Rs,4,041, Rs,12,418 and Rs,11,011 being the amount of sales-tax paid in the above 3 assessment years.
The Sale.; Tax Officer by an order dated 10- 10-1973 dismissed the above application. Against which, the respondent-assessee filed 3 direct appeals before the learned Income Tax Appellate Tribunal, which were allowed by a common order dated 24-12-1974 and it was held that the prescription chemicals imported by the respondent-assessee were covered by Item No, 35 of S.R.O No,7, dated 27-6-1951. Thereupon, the applicant department filed an application before the Darned Income Tax Appellate Tribunal for making the reference to this Court whereupon, the above reference has been made.
3. In support of the above reference Mr. Nasrullah Awan, learned counsel for the applicant department, has contended that first time the exemptions to the pharmaceutical products were granted by the SRO No,51(1)/1972 dated 13-51972 and, therefore, the learned Income Tax Appellate Tribunal was not justified in holding that the prescription chemicals were covered by earlier SRO dated 276-1951.
' On the other hand Mr. Zamiruddin, learned counsel for the respondentassessee, has supported the order of the learned Income Tax Appellate Tribunal and has submitted that S.R.O. Of 1951 clearly covered the drugs and other chemical products.
4. In order to appreciate the respective contentions of the learned counsel for the parties, it may be advantageous to refer the above S.R.Os. In this behalf it may be pointed out that under the S.R.O.
Dated 27-6-1951 under Item No,35, the following items were exempted:- "Drugs and Medicines including Unani and Ayurvedic medicines and drugs."
' It may further be stated that under the S.R.O. Of 13th May, 1972, the following P.C.T. Items relating to pharmaceutical products namely, 30.01, 30.02, 30.03 and 34.04 were exempted.
5. Mr. Nasrullah Awan on the basis of the S.R.O. Of 1972 has vehemently contended that under the above S.R.O. First time exemption from the payment of sales-tax was granted in relation to pharmaceutical products and not under the S.R.O. Of 1951.
6. In our view, the basic question is, as to whether under the SRO of 1951,1A the prescription chemicals were exempted from the payment of sales-tax or not. It may be noted that Mr. Nasrullah Awan has not been able to point out any subsequent SRO upto the expiry of the last assessment year in question whereby the aforesaid SRO of 1951 was superseded. As a matter of fact, he was unable to point out any SRO superseding the above 1951 S.R.O. Upto the date of issuance of the S.R.O. Of 1972 in May. If we were to hold that the S.R.O. Of 1951 had granted exemption from payment of sales-tax for drugs and medicines included prescription chemicals, in our view, the issuance of the subsequent SRO of 1972 specifying the relevant items from the Pakistan Customs Traffic specifically while granting the exemption from the payment of sales-tax would not make any difference.
7. The learned Income Tax Appellate Tribunal has referred to the definition of drugs given in section 3(b) of the Drugs Act, 1940 and also its dictionary meaning given in the Shorter Oxford English Dictionary, which clearly indicate that prescription chemicals would be covered by the items mentioned in Item No,35 of the SRO of 1951. It is an admitted fact that the prescription chemicals which were imported by the respondent-assessee were used for manufacturing pharmaceutical products. In our view, the conclusion arrived at by the learned Income Tax Appellate Tribunal on the above-quoted question seems to be in consonance with law. Accordingly our answer of the above quoted question is in the affirmative.
' The reference is disposed of in the above terms with no order as to costs.