| Case ID |
037f045d-3ffc-46ea-880c-7d8116a40cef |
| Body |
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| Case Number |
Spl. S.T.R.A. No.364 of 2007 |
| Decision Date |
Feb 24, 2010 |
| Hearing Date |
|
| Decision |
The court ruled that the cash withdrawals allowed by the insurance company to its policyholders cannot be classified as services rendered in respect of advances and loans subject to excise duty. The court determined that these transactions are distinct from typical banking services, as policyholders are required to repay the amount withdrawn with interest, thus establishing a service relationship subject to excise duty. The decision emphasized the specific nature of the services rendered by the insurance company and reinforced the applicability of excise duty under the relevant legislation. |
| Summary |
This case revolves around the interpretation of excise duty obligations of the State Life Insurance Corporation of Pakistan concerning the withdrawals made by policyholders. The central issue was whether the withdrawals, which allowed policyholders to access up to 90% of their paid-up premiums, constituted a service provided by the insurance company that would be liable for excise duty under the Central Excise Act of 1944. The court highlighted the differences between banking services and insurance transactions, concluding that the nature of the relationship between the insurance company and its policyholders did indeed impose an obligation for excise duty. This case is significant for understanding the taxation of financial services in Pakistan, particularly in the context of life insurance and excise duty obligations. |
| Court |
Sindh High Court
|
| Entities Involved |
STATE LIFE INSURANCE CORPORATION OF PAKISTAN,
COLLECTOR OF SALES TAX AND CENTRAL EXCISE
|
| Judges |
GULZAR AHMED, JUSTICE,
IRFAN SAADAT KHAN, JUSTICE
|
| Lawyers |
Ghulam Ali for the Applicant,
Raja Muhammad Iqbal for the Respondent
|
| Petitioners |
STATE LIFE INSURANCE CORPORATION OF PAKISTAN THROUGH DIVISIONAL HEAD
|
| Respondents |
COLLECTOR OF SALES TAX AND CENTRAL EXCISE
|
| Citations |
2010 SLD 561,
2010 CLD 628
|
| Other Citations |
Hirjina and Company v. Islamic Republic of Pakistan and another 1993 SCMR 1342,
ICC Textile Ltd. v. Federation of Pakistan and others 2003 PTD 1017,
Civil Appeal Nos.2296 to 2412 of 2001,
Federation of Pakistan v. Muhammad Sadiq and others PLD 2007 SC 133
|
| Laws Involved |
Insurance Ordinance, 2000
|
| Sections |
89
|