The Sindh High Court (SHC) has directed the Federal Board of Revenue (FBR) chairman to file comments on petitions of automobile manufacturers against imposition of a 7 per cent additional custom duty.
The petitioners had submitted that the federal government under the Automotive Development Policy 2016-21 extended certain concessions/exemptions in order to attract investment and a five-year tariff plan was notified on customs duties in respect of matters covered there under.
Their counsel submitted that despite the notification, the federal government issued an SRO imposing a 7 per cent additional customs duty. They submitted that the imposition was in excess of the ceiling guaranteed and had been imposed without the earlier concession having been withdrawn or modified.
The counsel relied on several judgments of the superior courts and submitted that the concession / exemption in respect of duties encompassed each of the three constituents under the Section 18 of the Customs Act 1969, therefore the impugned SRO 670/2019 was unlawful.
They also referred to the federal government’s comments to demonstrate the inconsistent plea of the FBR chairman that the exemption under the reference was only in respect of the customs duty and not additional customs duty.
A division bench of the high court headed by Justice Agha Faisal observed that the Supreme Court had taken notice of litigation clogging the docket of the courts on account of unmerited litigation attributable to acts/omissions of the exchequer.
The SHC observed that prima facie, the inconsistency of initial positions taken by government departments and the subsequent contradictory remedial measures were issues that ought to have been resolved by the government itself.
The bench observed that since the same was not done, the matter was repeatedly referred to the executive domain, however, no resolution appeared in sight. The SHC observed that prima facie, oral submission could not be demonstrated to reconcile with the judgments of the Supreme Court. The high court observed that it was considered expedient to call for a specific response from the FBR chairman with respect to the controversy in light of the Supreme Court judgment to which the finance/revenue division were parties.
During a recent hearing, the SHC directed the FBR chairman to file a statement on the matter on the next hearing with an advance copy to the respective counsel for the petitioners and continued the interim orders in the case till the next date of hearing.
