Court allows recovery of special duty from Sharif’s sugar mills

Court dismisses Sharif family’s appeal to set the levy notification aside.

LAHORE:

A Lahore High Court (LHC) division bench on Monday dismissed appeals by the Sharif family challenging a single bench’s decision which allowed the Federal Board of Revenue (FBR) to recover special excise duty from their sugar mills.

While dismissing 16 intra court appeals, the bench comprising Justice Umar Ata Bandial and Justice Asad Munir ruled that since the parliament had passed a law regarding the levy, the FBR was authorised to recover special excise duty.

Previously, the court had restrained the FBR from taking coercive measures against three sugar mills for recovery of the special excise duty. However, the court dismissed the same on Monday.

The appeals were filed by the Ittefaq Brothers and Ramazan Sugar Mills, belonging to the Sharif family and others.

Advocate Ijaz Awan, the appellant’s counsel, said that the Ministry of Finance on June 29, 2007, had issued a notification levying special excise duty of one per cent of the value.

He said the government had wrongly exercised its powers under Section 3-A of the Federal Excise Act, 2005 and called the notification unlawful. Awan said that Section 3-A was not part of the Federal Excise Act, 2005 at the time when the impugned notification was issued.

He argued that the rate of the special excise duty had recently been enhanced from 1 to 2.5 per cent through an amending notification on March 19, 2011 pursuant to Federal Excise (amendment) Ordinance, 2011.

He said the government (FBR) enhanced the rate of the duty ignoring the fact that the original notification levying the excise duty was issued without lawful authority. The counsel said the appellants were forced by the respondent collectorate and its officials to pay the allegedly due special excise duty on goods manufactured and imported before the cut-off date of July 1, 2007.

After a petition was filed, Awan said, the respondent authorities accepted the appellant’s plea and issued a conceding clarification. A single bench of the LHC had later dismissed the petition on May 13.

The counsel asked the court to set aside the May 13 order. He further requested the court to declare the said notification illegal.



Published in The Express Tribune, June 28^th, 2011.