| Case ID |
4370f0bb-6635-48e3-96e3-b902f7173d8a |
| Body |
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| Case Number |
Civil Petition No. 125 of 1996 |
| Decision Date |
Mar 18, 1996 |
| Hearing Date |
Mar 18, 1996 |
| Decision |
The Supreme Court of Pakistan granted leave to appeal, recognizing the need to interpret the relevant notification regarding sales tax exemption for newly established industries. The court noted that the petitioner, having purchased assets from a liquidated company, argued that they had established a new industry despite the previous existence of the machinery. The court acknowledged that the term 'set up' in the context of the notification requires a nuanced understanding, particularly when assessing whether the transformation of purchased machinery into a new operational factory qualifies for exemption under the Sales Tax Act. The court's decision emphasizes the importance of the context in which terms like 'industry' are used in legal statutes and notifications, suggesting that the petitioner's substantial investment in new machinery and infrastructure to produce a new product could meet the criteria for exemption. |
| Summary |
In the case of Flying Kraft Paper Mills (Pvt.) Ltd. vs. Central Board of Revenue, the Supreme Court of Pakistan dealt with the interpretation of the Sales Tax Act, 1990, particularly section 13, and its application to the exemption from sales tax for new industries. The petitioner claimed entitlement to this exemption after purchasing assets from the liquidated Pakistan Paper Corporation Ltd. Despite objections from the Collector about the qualification for exemption, the court found merit in the petitioner's argument that the transformation of the acquired assets into a new operational factory constituted the establishment of a new industry. The ruling emphasizes critical terms like 'industry' and 'set up' in legal contexts, illustrating how substantial investments in new production capabilities can influence tax exemption eligibility. This case sheds light on the intersection of corporate liquidation, asset acquisition, and tax law, highlighting the complexities involved in determining eligibility for tax relief under specific government notifications. Keywords such as 'sales tax exemption', 'new industry', and 'legal interpretation' resonate strongly within the current legal landscape and are pertinent for ongoing discussions regarding taxation in industrial sectors. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
CENTRAL BOARD OF REVENUE,
FLYING KRAFT PAPER MILLS (PVT.) LTD.
|
| Judges |
SALEEM AKHTAR, J.,
SAIDUZZAMAN SIDDIQUI, J.,
MUHAMMAD BASHIR KHAN, J.
|
| Lawyers |
Irfan Qadir, Advocate,
Ejaz Ahmed Khan, Advocate-on-Record,
K. G. Sabir, Advocate-on-Record
|
| Petitioners |
FLYING KRAFT PAPER MILLS (PVT.) LTD.
|
| Respondents |
2 others,
CENTRAL BOARD OF REVENUE
|
| Citations |
1996 SLD 1232 = 1996 SCMR 922
|
| Other Citations |
Commissioner of Wealth Tax, Madras v. Ramaraju Surgical Cotton Mills Ltd. AIR 1967 SC 509
|
| Laws Involved |
Sales Tax Act, 1990,
Constitution of Pakistan (1973)
|
| Sections |
13,
185(3)
|