| Case ID |
39b49643-4732-4934-9ff9-5160dbd5506d |
| Body |
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| Case Number |
C. P No.1310-of 2003 |
| Decision Date |
Oct 29, 2005 |
| Hearing Date |
|
| Decision |
The Sindh High Court has dismissed the constitutional petition filed by Lakson Tobacco Company Ltd. challenging the imposition of a penalty by the State Bank of Pakistan under the Export Finance Scheme. The Court upheld the decision of the Joint Director, Banking Policy Department, State Bank of Pakistan, affirming that the company's failure to meet the export targets was not attributable to force majeure. The withdrawal of excise duty and sales tax exemptions by the government did not absolve the petitioner from its obligations under the financing agreement. The Court found that Lakson Tobacco knowingly continued to avail concessionary finance despite the non-viability of its export business post the withdrawal of incentives, thereby amounting to an abuse of the facility. The Federal Ombudsman's observations were supported, emphasizing that the petitioner did not present sufficient grounds to warrant a waiver of the imposed penalties. Consequently, the petition was dismissed, and the imposition of the penalty was upheld. |
| Summary |
In the landmark case of Lakson Tobacco Company Ltd. versus Central Board of Revenue and others, the Sindh High Court addressed critical issues surrounding export finance and governmental fiscal policies. The petitioner, a prominent tobacco manufacturer, sought relief from penalties imposed by the State Bank of Pakistan under the Export Finance Scheme, arguing that the sudden withdrawal of excise duty and sales tax exemptions on cigarette exports rendered their business non-viable. Despite these claims, the Court upheld the penalties, emphasizing that the company's continued availing of concessionary finance amidst known non-viability constituted an abuse of the facility. Key legal frameworks such as the General Clauses Act, 1897, and the Constitution of Pakistan, 1973, were pivotal in the Court's decision to dismiss the petition. This case underscores the judiciary's stance on contractual obligations and the non-applicability of force majeure in scenarios where misconduct or lack of due diligence is evident. Legal professionals and businesses navigating export finance schemes must note the Court's emphasis on accountability and the stringent interpretation of statutory provisions. The decision also highlights the importance of 'speaking orders' as mandated by Section 24-A of the General Clauses Act, ensuring transparency and reasoned judgments in administrative actions. This case serves as a definitive reference for future litigations involving export incentives, financial penalties, and the interplay between governmental fiscal policies and private sector obligations. |
| Court |
Sindh High Court
|
| Entities Involved |
Central Board of Revenue,
State Bank of Pakistan,
Federal Ombudsman,
Lakson Tobacco Company Ltd.
|
| Judges |
ANWAR ZAHEER JAMALI, C.J.,
S. ZAWWAR HUSSAIN JAFFRI, J
|
| Lawyers |
Naimur Rehman,
Sajjad Ali Shah,
Yousaf Ali Sayeed,
M.A. Khan
|
| Petitioners |
Lakson Tobacco Company Ltd.
|
| Respondents |
Central Board of Revenue,
State Bank of Pakistan,
State Board of Revenue,
Federal Ombudsman
|
| Citations |
2009 SLD 118,
2009 CLD 1098
|
| Other Citations |
Chairman Regional Transport Authority Rawalpindi v. Pakistan Mutual Insurance Company Ltd. PLD 1997 SC 14,
Faquir Muhammad and others v. Mst. Muhammad Bibi and others PLD 1991 SC 590,
Government of Balochistan and others v. Azizullah Memon and others PLD 1993 SC 31,
Government of Sindh and others v. Abdul Jabbar and others 2004 PLC (CS) 99,
Dr. Syed Tariq Sohail v. Defence Housing Authority 2001 YLR 1193 rel.
|
| Laws Involved |
General Clauses Act, 1897,
Constitution of Pakistan, 1973
|
| Sections |
24,
199
|