1. SAEEDUZZAMAN SIDDIOUI, J.--The petitioner has challenged the orders of respondents 1 to 3 dated 6-6-1978, 7-11-19 78 and 14-2-1980 respectively. The following are the facts of the case in brief.
2. The petitioner is the manufacturer of Art Silk Fabrics. The petitions claims to have installed its mill in the year 1977-78 which has 130 powerlooms, 10 Piruwinders, 2 Warping machines, 20 dobbies; 6 jackaurts and one punching machine. The petitioner imported 400 MEM starters against Import Licence; No.971396 dated 28-7-1977 which was valid for import of machinery and millworks no---s and parts and accessories thereof and maintenance spares all sort excluding (i) items notified in Part 11 of Annex V. The petitioner claims that the MEM starters imported by it were meant for use in its mills's machinery an-.l equipments. It is an admitted position that at the time of issuance of import licence to the petitioner payment of Sales Tax on import of machinery, millworl and parts and accessories thereof and maintenances spares was exempted undo. S.R.O. 125(1)/70 dated 29- 6-1970. The consignment of MEM starters imports by the petitioner arrived at the Karachi Port on 16- 2-1978. However, where the petitioner submitted Bill' of Entry for clearance of the above consignment fe--home consumption, the Customs Authorities demanded Sales Tax amountng to Rs. 17,924 which the petitioner paid under protest. On 18-4-1978 the petitions applied for refund of the amount of the sales tax which according to the petitioner was illegally charged on the consignment. Respondent No.1 by his order-dated 6-6-1978 rejected the claim of the petitioner which reads as under: -- "I have gone through the records of the case and find that the imported goods have been correctly assessed by this Custom House as AC A decision in file No.SI/Miss/32/78 IX. Refund. The claim merits no consideration and is rejected inadmissible.
3. The petitioner filed an appeal against the order of respondent No.1 before respondent No.2 who also rejected the same on the ground that the quantity of starters imported by the petitioner was substantially large which gave rise to the suspicion that it was not required to be used by the petitioner for the industrial purpose. The petitioner then filed a Revision Application before the Central Board of Revenue which was disposed of by the following order "Mr. Muhammad Saeed has appeared on behalf of the applicants on 11--2-80 at Karachi. He reiterated the arguments as advanced earlier. The Federal Government agree with the grounds on which the appeal was rejected. The revision application is also rejected for the same reasons."
4. The petitioner has challenged the above orders of the respondents in this petition.
5. Mr. Abdul Majeed Khan, learned counsel for the petitioner contended before us that in none of the orders passed by the respondents the contention raised by the petitioner that the goods (MEM Starters) were imported by the petitioner for use, in its mill was considered. It is also contended, by the learned counsel that the orders passed by respondents are sketchy and do not disclose the basis or reason for rejection of the claim of the petitioner. It is urged by the learned counsel that mere fact that the number of starters imported by the petitioner was large could not be a ground for disallowing the e3temption specially when under SRO-125-(1)/70 dated 29-6-1970 no such restriction is imposed by the Government.
6. We have gone through the record of the case and find that in the parawise comments submitted by respondents in this case the rejection of the claim of the petitioner is sought to be justified on the basis of a subsequent notification of Government bearing No.SRO-697(1)/77 dated 4-8-1977, which, it is claimed, superseded earlier SR0.125(1)/70 dated 29-6-1970 relied by the petitioner.
7. However, there is nothing in the orders of respondents to show that they rejected the claim of petitioner on the basis of S.R.O. 697(1)/77 dated 4-8-1977. From the orders of respondents passed in the case it is quite clear that the claim of petitioner was rejected on the ground that the starters imported by the petitioners were in such large quantity that it could not be held for the use of petitioner. There was no dispute that the starters imported by the petitioner did qualify for exemption under S.R.0.125(1)/70 dated 29-6-1970. As the petitioner had no opportunity of meeting this new ground of rejection of its claim as disclosed m the comments filed by respondents in the case; we feel it appropriate that the petitioner is afforded an opportunity to present its tax before respondents. We accordingly allow this petition and declare the orders passed by respondents Nos.1 to 3 as without lawful authority and of no legal effect. However, keeping in view the circumstances of the case, we direct that the claim for refund of Sales Tax filed by the petitioner will lie reconsidered by respondent 2 in the light of observations made above after allowing proper opportunity of hearing to the petitioner. There will be no order as to costs.
8. H.B.T./S-403/K