| Case ID |
324d9062-8591-474f-b685-b420af587e61 |
| Body |
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| Case Number |
Writ Petition No.17893 of 2013 |
| Decision Date |
May 19, 2014 |
| Hearing Date |
|
| Decision |
The Lahore High Court ruled that the impugned Rules were ultra vires Section 3(1B) of the Sales Tax Act, 1990, and could not extend to the taxing regime based on retail price provided under Section 3(2)(a). The court emphasized that the Capacity Tax imposed in lieu of sales tax and federal excise duty was invalid as it replaced multiple distinct taxing regimes without proper legislative authority. The petitioners were directed to continue paying sales tax and excise duty according to existing laws. |
| Summary |
In the case of Pakistan Fruit Juices Co. (PVT.) LTD. vs. Federation of Pakistan, the Lahore High Court addressed the legality of the Federal Excise Duty and Sales Tax on Production Capacity Aerated Waters Rules, 2013. The petitioners, manufacturers of aerated beverages, challenged the constitutionality of the Capacity Tax imposed under these rules, claiming it unlawfully replaced existing sales tax and excise duties. The court found that the Capacity Tax was intended to be a singular tax based on production capacity, which should not coexist with other tax regimes. The ruling emphasized the necessity for clear legislative guidelines when substituting tax structures, ultimately declaring the impugned rules invalid. This case highlights the complexities of tax law and the importance of adhering to constitutional parameters when implementing new tax regimes. |
| Court |
Lahore High Court
|
| Entities Involved |
Central Board of Revenue,
Seven-Up Bottling Company (Pvt.) Ltd.
|
| Judges |
SYED MANSOOR ALI SHAH, J
|
| Lawyers |
Salman Akram Raja, Advocate,
Abdul Hafeez Pirzada, Advocate
|
| Petitioners |
others,
PAKISTAN FRUIT JUICES CO. (PVT.) LTD.
|
| Respondents |
FEDERATION OF PAKISTAN,
others
|
| Citations |
2014 SLD 1542 = 2014 PTD 1837 = 2014 PTCL 696
|
| Other Citations |
Central Board of Revenue and 3 others v. SEVEN-UP Bottling Company (Pvt.) Ltd. 1996 SCMR 700,
Northern Bottling Co. (Pvt.) Ltd. v. Government of Pakistan, Ministry of Finance, Pakistan Secretariat, Islamabad through the Secretary Finance and 2 others (2000 PTD 870),
Tandlianwala Sugar Mills Ltd. and others v. Federation of Pakistan through Secretary, Ministry of Finance, Revenue and Economic Affairs, Islamabad and others (2001 PTD 2094),
Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582
|
| Laws Involved |
Sales Tax Act, 1990,
Constitution of Pakistan, 1973,
Federal Excise Act, 2005
|
| Sections |
3(1B),
Fourth Schedule, Part I, entry No. 52,
3(3)(a)
|