S.M. KAZIMI, MEMBER (TECHNICAL).- This judgment disposes of the appeal field by Messrs Kaleem Customs Clearing Agency (Attorney of Messrs Abbas and Sons, Haji Muhammad Gul, Haji Kabal Khan and Sons and Haji Sher Meo Said Gul), Peshawar, against the Order-in-Original No. Nil, dated 22.6.1999 (dispatched on 20.7.1999 vide C. No. CUS-207/98/7130) passed by the Assistant Collector of Customs (Headquarters), Customs House, Peshawar.
2. Briefly, the facts of the case are that Messrs Kaleem Customs Clearing Agency (attorney of Messrs Abbas and Sons, Haji Muhammad Gul, Haji Kabal Khan and Sons and Haji Sher Meo Said Gul), Peshawar, applied for refund of Rs. 1,321,643 on the ground that import of fresh fruit was exempt from sales tax under the Sixth Schedule to the Sales Tax Act, 1990, since 1st July, 1996. Since Section 3-B of the Sales Tax Act, 1990, operated as a bar, the Assistant Collector of Customs, issued a notice C. No. CUS/12/98/3713, dated 27.5.19987 requiring Messrs Kaleem Clearing Agency, Peshawar, to show-cause why the said refund claim should not be rejected. Having heard Mr. Kaleem Abbas Sherazi, the learned Assistant Collector passed the impugned order and rejected the refund claim as inadmissible. Being aggrieved of the order, Messrs Kaleem Customs Clearing Agency field appeal to the Collector (Appeals), Northern Zone, Rawalpindi, which has since been transferred to this Tribunal in view of the provisions of Section 194-A(7) of the Customs Act, 1969, for decision.
3. During the course of hearing before us, the learned counsel for the appellant produced copies of the Collector of Customs, Peshawar's letter C. No. CUS/207/98/7261, dated 31.7.1999 and C.B.R's reply C. No. 3/37-STB/99, dated 2.8.1999 clarifying that fresh fruits, imported or locally- produced, are exempt from sales tax under serial No. 3(ii) of the Sixth Schedule to the Sales Tax Act, 1990, but dry fruits and bottled or canned or packaged fruits are not exempt from the levy of sales tax. He pleaded that refund of sales tax, is, as such, due and admissible, which should not be denied on grounds of Section 3-B of the Sales Tax Act, 1990 and should rather be refunded under Section 66 ibid. He prayed for the refund of the sales tax paid by the importers of fresh fruits as its levy and recovery was not due or lawful.
4. The learned Departmental Representative opposed the appeal and argued that all importers paying sales tax on import of fresh fruits until the clarification was received under C.B.R.'s aforesaid letter, dated 2.9.1999. He pleaded that sales tax, being an indirect tax, got included in the consumer's price of such imported fresh fruits and its incidence stands passed on to the consumers. He argued that there is no moral or legal justification to refund an amount, collected and paid in the name of Federal Sales Tax, to the importers who invariably include the incidence of such indirect taxes in their price to the consumers. He prayed for rejection of the appeal.
5. Having heard the parties and on perusal of record of the case, we find that provisions of Section 6(1) of the Sales Tax Act, 1990, provide as hereunder:- "(6) Time and manner of payment.- (1) The tax in respect of goods imported to Pakistan shall be charged and paid in the same manner and at the same time as if it were a duty of customs payable under the Customs Act, 1969, and the provisions of the said Ac t including Section 31-A thereof, shall, so far as they relate to collection, payment and enforcement of tax under this Act on such goods where no specific provision exists in this Act, apply".
6. The sales tax on import of fresh fruits is collected in the manner prescribed under Customs Act, 1969, and the provisions of the said Customs Act, where no specific provisions exist under the Sales Tax Act, 1990, applies for collection, payment and enforcement of sales tax on imported goods.
Section 66 of the Sales Tax Act, 1990, and Section 33(1) of the Customs act, 1969, both provide for refund of sales tax and customs duty, respectively, paid through inadvertence, error 4 or misconstruction/misconception when claimed within one year from the date of its payment in case of refund under Section 66 of the Sales Tax Act, 1990, and within 6 months from the date of its payment in case of refund under Section 33 (1) of the Customs Act, 1969. The record of the case shows that there was general and consistent misconception (amongst the importers of fresh fruits and Customs officers assessing these fresh fruits) that import of such fresh fruits were liable to sales tax and the sales tax was paid accordingly without any protest, interruption, dispute or representation, It was only in July, 1999, that the importers and their agents became aware of their error and misconception about which C.B.R, issued aforesaid clarification, dated 2.8.1999. However, in the meantime, such importers had inadvertently paid the sales tax on import of fresh fruits due to error and misconstruction/misconception. Therefore, we hold that the importers could claim refund, if otherwise due and admissible, of sales tax paid by them, under Section 66 of the Sales Tax Act, 1990, subject to the limitation period as prescribed under the law.
7. As regards applicability of Section 3-B of the Sales Tax Act, 1990, to such claims, we find that it is a common economic principle that incidence of indirect tax is invariably included in the general market price to the consumer. The importers/appellant, in this case, have not shown that, despite payment of sales tax, they did not include the incidence of this sales tax (paid on import) when they sold these imported fresh fruits to wholesalers or retailers or consumers. The provisions of Section 3-B of the Sales Tax Act, 1990, which reads as hereunder, is very clear on this issue:- "3-B. Collection of excess tax, etc..- (1) Any person who has collected or collects any tax or charge, whether under misapprehension of any provision of this Act or otherwise, which was not payable as tax or charge or which is in excess of the tax or charge actually payable and the incidence of which has been passed on to the consumer, shall pay the amount of tax or charge so collected to the Federal Government.
(2) Any amount payable to' the Federal Government under sub-section (1) shall be deemed to be an arrears of tax or charge payable under this Act and shall be recoverable accordingly and no claim for refund in respect of such amount shall be admissible.
(3) The burden of proof that the incidence of tax or charge referred to in sub-section (1) has been or has not been passed to the consumer shall be on the person collecting the tax or charge.".
8. We also hold that the provisions of Section 3-B of the Sales Tax Act, 1990, apply to sales tax paid on imported goods in terms of Section 6(1) of the Sales Tax Act, 1990, as there is no provision to the contrary whether under the Customs Act, 1969, or under the said Section 6(1) of the Sales Tax Act, 1990. The appellant has not yet discharged the burden of proof placed upon them by the law under Section 3-B(3) of the Sales Tax Act, 1990 and, therefore, no refund claim is admissible under the specific provision of Section 3-B(2) of the Sales Tax Act, 1990. As a result, the refund provisions of Section 66 of Sales Tax Act, 1990 here correctly, not been accorded by the respondent Assistant Collector for non-compliance of the provisions of Section 3-B of that Act. We accordingly confirm the impugned order and the appeal stands disposed of as dismissed.
9. Inform all concerned.
10. Announced.