1. ANWARUL HAQ, J.-This order will dispose of petitions bearing Nos. 212 and 214 of 1973, which concern the same subject-matter, viz., the imposition of sales tax on metallic chains and bracelets manufactured by the petitioner --company for being worn with watches. The first petition concerns the assessm ent year 1961-65 and the second petition relates to the succeeding year 1965-66.
2. The petitioner had claimed exemption from the payment of sales tax on these articles on the ground that they were commonly and commercially known as ornaments and jewellery and, therefore, fell within the ambit of item 16 of the Government of Pakistan, Ministry of Finance (Revenue Division) Notification (Sales Tax) No. 9 dated 29th of June 1951, as amended on the 1st of July 1959, issued under section 7 of the Sales Tax Act. However, the claim was rejected by the Sales Tax Officer, Lahore, by his order dated the 19th of Julie 1970. This order was affirmed by the Appel-- late Assistant Commissioner, Sales Tax, Lahore, as well as by the Income tax Appellate Tribunal.
3. Exemption was also claimed, in the alternative under item No. 15 of the said Notification by contending that, at any rate, the articles in dispute were products of hammer work. This contention does not find any mention in the order of the Appellate Tribunal relating to the assessment year 1964-65, but it was specifically repelled by the Tribunal while dealing with the assessment for the subsequent year.
4. Aggrieved by these orders of the Sales Tax Authorities, the assessee made an application to the Lahore High Court under section 17 of the Sales Tax Act, as amended, praying that the questions of law arising in the case be decided, viz., whether the watches and bracelets manufactured by the assessee fell within the classification of item 15 or 16 of the Notification;' aforesaid, and were thus exempt from the levy of sales tax.
5. The High Court has held that the concurrent finding, recorded by all the Sales Tax Authorities to the effect that the chains and bracelets fn question were not commonly and commercially known as ornaments and jewellery, and were not worn for personal adornment, is a finding of fact, and could not be questioned in the High Court by being described as a question of law. The High Court has further taken note of the finding recorded by these authorities that these articles were made of a base metal, as against silver or gold, that the process of their manufacture was highly mechanised and had no similarity with the one employed by goldsmiths and silversmiths for making jewellery or ornaments, and, finally, that the petitioner-firm could not in any sense be described as a firm of goldsmiths or silversmiths. The High Court has also repelled an argument advanced on the basis of the definition of the word "jewellery" occurring in item No. 71.1 ?, section 14, Chapter 71 of the Pakistan Customs Tariff, published by the Central Board of Revenue, Ministry of Finance, Government of Pakistan, and has observed that this definition given in that Tariff must be construed as applying to cases arising under the Tariff, and not under other statutes in which the term "jewellery" is not so defined, and has to be interpreted in its ordinary meaning. On this view of the matter, the High Court has upheld the finding recorded by the Sales Tax Authorities that the articles manufactured by the petitioner are not covered under item 16rof the Notification concerned.
6. With regard to the contention that the articles would be exempt under item No. 15, the High Court has observed that this claim does not appear to have been put forward before the statutory authorities, and, therefore, it could not be entertained for the first time in the High Court.
7. Leave to appeal is sought on the following grounds :-
(a) That the High Court as well as the Sales Tax Authorities have erred in coming to the conclusion that the watch chains and bracelets manufactured by the petitioner-company did not fall within the purview of item No. 16 of the Central Board Government's Notifica--petition No. 9, dated the 27th of June 1951 ; and
(b) That in any case the orders passed by all the Courts below are vitiated for the reason that the petitioner's ;plea for exemption under item No. 15 of the said Notification has not been adjudicated upon.
8. We see no merit in these submissions. Section 3(1)(1) of the Sales Tax Act prescribes that there shall be levied and collected a tax on the value of all goods produced and manufactured in Pakistan, and the tax shall be payable by the manufacturer or producer. However, section 7(PLD1966SC828) of the Act confers power on the Central Government to exempt any goods or class of goods from the payment of Sales Tax Act. In order, therefore, to succeed in its claim for exemption, the assessee has to show that the goods manufactured by it fell within the categories enumerated in any of the various items of the Notification issued under the aforesaid section. As observed by this Court in Muhammadi Steamship Co. Ltd. v. Commissioner of Income-tax (1), the provisions granting exemption or privileges have to be strictly construed.
9. Now, item No. 16 of the Notification, relied upon by the petitioner, runs as under :- "Articles commonly or commercially known as ornaments and jewellery, whether real or imitation, being goldsmiths and silversmiths products for personal use or for adornment of persons."
10. We are in agreement with the learned Judges of the High Court that it is pre-eminently a question of fact whether certain articles are commonly or commercially known as ornament and jewellery, and whether they are worn for personal adornment. The Sales Tax Authorities have answered this question in the negative on the basis of their inspection of the articles, as well as on a consideration of the evidence and information furnished by the assessee. These findings could not, therefore, be disturbed by the High Court in a reference under section 17 of the Sales Tax Act.
11. We also find that the Notification clearly contemplates that not only should the articles be commonly or commercially known as ornament and jewellery and used for personal use or adornment, but they should also be products of goldsmiths and silversmiths. The operative words in this respect in the Notification are "being goldsmiths and silversmiths products". The use of the word "being" leaves no doubt that the only goods included in this item are those which are manufactured by goldsmiths and silver--smiths, and this phrase cannot be extended to include articles which are such as are generally manufactured by goldsmiths and silversmiths. Having correctly enunciated the principle that an exemption clause is to be strictly construed, the learned Judges fell into an error in thinking that the scope of the relevant item could be extended to include articles which are, in fact, not manufactured by goldsmits and silversmiths, but are only such as are generally manufactured by these persons.
12. For the foregoing reasons we have no hesitation in upholding the view taken by the Courts below that the articles manufactured by the petitioner-company did not qualify for exemption under item 16 of the Notification.
13. As regards the claim for exemption under item No. 15 of the Notifica--petition, we find this plea was raised for the first time before the Appellate Tribunal, but it is not discussed in the order passed by the Tribunal for the assessm ent year 1964-65. The High Court appears to us to be right. In observing that apparently the plea was not pressed before the Tribunal. This being the case it could not be entertained for the first time in proceedings before the High Court.
14. For the assessm ent year 1965-66, the Tribunal has observed in its order dated the 29th of November 1971, that even if were to allow this new plea to be raised, it would require further factual investigation, and could not be adjudicated upon on the basis of the material already available on the record. The learned counsel for the petitioner is not able to show that the view taken by the Appellate Tribunal suffered from any error or legal infirmity.
15. On this view of the matter, these petitions fail and are hereby dismissed. It would, however, be open to the petitioner to urge its claim of exemption under item 15 of the Notification in proceedings relating to the assessm ents which are still pending with the Sales Tax Authorities.