Lahore High Court (LHC) has made SRO No. 1035(I)/2017, dated 16.10.2017, inapplicable till final outcome of the writ petitions. Under this SRO, regulatory duty (RD) has been charged the rates ranging from 10 to 45% percent on import of 731 listed items. It is learnt that on multiple writ petitions (WP No. 108547 of 2017) filed by the importers, Lahore High Court has granted interim relief, ordering that any regulatory duty to be paid by the petitioners shall be subject to the final outcome of the petitions (importers).

The background of the case is that in order to generate additional revenue the federal government through SRO No. 1035(I)/2017, dated 16.10.2017, issued in pursuance of section 18(3) of the Customs Act, 1969 imposed regulatory duty at the rates ranging from 10 to 45% on import of 731 items listed therein. Certain importers challenged the notification on multiple grounds including that the notification offends the judgement of the Supreme Court of Pakistan in M/s Mustafa Impex vs Government of Pakistan reported as PLD 2016 SC 808 as also that the duties levied through the notification are ex-proprietary and offends the fundamental right of trade and business and treaty in the Constitution.

It was explained to the court that earlier the Supreme Court had held that under the Constitution and rules of business any notification levying any tax or duty is to be issued by the federal government after getting approval from the federal cabinet and any approval given by the concerned minister is void. After the judgement of Supreme Court in Mustafa Impex, certain amendments were made in all the taxing statutes and wherever any delegated powers were given to the federal government the expression was substituted with the board, with the approval of federal minister in-charge. After similar amendments in Section 18(3) of the Customs Act the impugned notification imposing regulatory duty was issued by the Federal Board of Revenue with the approval of federal minister incharge.

In its order, Lahore High Court has said that the counsel for the petitioner lays a challenge to the SRO No. 1035(I)/2017, dated 16.10.2017. According to the counsel, the issuance of this notification offends the judgement of Supreme Court of Pakistan in M/s Mustafa Impex, Karachi & Others vs. Government of Pakistan (PLD 2016 SC 808) as also that the duties levied through this notification are ex-proprietary and offends the fundamental right of trade and business and treaty in the Constitution. Any duty to be paid by the petitioner shall be subject to the final outcome of this petition, the LHC order added.

Copyright Business Recorder, 2017