' M/s. Hayat Industries (Pvt.) Ltd., the petitioner herein, is running a steel furnace in Godoon Amazai Industrial Estate in the North-West Frontier Province. The petitioner imports iron scrap which is cleared from the Customs at Dry Port Chaklala whereafter it is taken by it to its mill at Godoon Amazai. These goods while in transit pass through Zila Rawalpindi and are subjected to levy of export tax by respondent No, 2 which is the Zila Council, Rawalpindi. In this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, the grievance of the petitioner is that charge of the export tax is without any lawful authority.
2. The petition has been resisted by respondent No, 2 alone as respondent No, 1 had failed to appeal despite service and was proceeded against ex parte. In the written statement filed by respondent No, 2, it has been asserted that the District Council is authorised to levy and collect export tax on export of goods produced within its limits or which during their transit in the limits of Zila Council beyond the time allowed for the purpose.
3. Mr. Ejaz Hussain Batalvi, learned counsel for the petitioner has contended that as the goods are taken to the factory of the petitioner. from the Dry Port and remain in transit while passing through Zila Rawalpindi, there is no 'export' attracting the levy of tax on exports from the Zila. In support of this contention, reliance has been placed on M/s. Rupali Polyester Limited v. Government of the Punjab through Secretary, Local Government and Rural Development and two others 1992 CLC 796.
The second contention raised by the learned counsel is that under instructions of Government of Punjab, the Taxation Officer, Zila Council, Rawalpindi had allowed the goods of the petitioner to remain in transit for 30 days and as such, no export tax could be charged on, the goods taken out of Zila within the extended period.
4. Learned counsel for the respondents has, on the other hand, maintained that according to the rule 5 (5) of the Export Tax Rules, the goods, which are not removed from the district within 24 hours, are liable to taxation.
5. The question as to whether any export tax is payable on the goods which remain in transit through the area controlled by a Zila Council was examined by this Court in M/s. Rupali Polyester Limited (supra). Reiterating the view taken in Multan Chemicals Ltd. v. District Council, Lahore through Chief Officer, Lahore and two others 1991 M LD 910, it was held that the goods in transit cannot be said to have been exported and, no export tax could be charged on these goods.
6. The other contention of the learned counsel for the petitioner is equally well-founded. Under rule 5 of the Export Tax Rules, 1990, no expor tax can be charged on the goods which remain in transit for 24 hours or less. The Taxation Officer is however empowered to extend that period. On representation made by the petitioner, the Government of Punjab, on 6t February, 1991, directed the Zila Council, Rawalpindi not to charge any tax o the goods belonging to the petitioner if they remain in transit for a period of 3 days. On the receipt of these directions, the Taxation Officer on 24-2-199 extended time limit to 30 days. That being so, recovery of the export tax from the petitioner on goods which remain in the Zila for 30 days was clearly illegal ' In view of what has been stated above, this petition is allowed are action of the respondents in recovering export tax on the goods in transit declared to be unlawful and of no legal effect.
Respondents are directed to refund the amount recovered by them from the petitioner forthwith.
No order as to costs.