KARACHI: A two-member bench of the Sindh High Court (SHC) extended the interim order and restrained FBR officials from any taking any adverse action against the petitioners till next date of hearing on a constitutional petition filed by M/s Rahman Cotton Mills Limited and others against show cause notice for recovery of sales tax.
On 20 May 2021, counsel for the petitioners argued that petitioners were imported raw cotton during period 2013 and 2014 through Customs Appraisement East Karachi and paid sales tax @ 2% and advance income tax under section 148 of the income tax ordinance 2001, @ 1%, kind attention is invited to the fact that since the petitioners fell under the purview of SRO 1125(I)/2011 and its suggested lower rated of 2% of the value and likewise lower rate of advance income tax @ 1% on import of raw cotton falling under chapter 52 of the first schedule to the customs act, 1969.
He further argued that petitioners, during said period, imported as many as 11 consignments of raw cotton and cleared the same from the customs as per goods declarations, after the clearance of the said goods, the customs raised observation that the raw and ginned cotton were excluded from the purview of SRO 1125(I) 2011 through amending SRO 154(I) 2013, therefore, the petitioners were not entitled from the benefit of SRO 1125(I)/2011 and in this respect a show cause notice.
Citing secretary finance, chairman FBR, Collector of Customs Appraisement East as respondents, petitioners pleaded the court to direct them not to recover or initiate the recovery proceedings, in any mode or form, on disputed recovery of amount till the finalization of appeal pending before the concerned authority.
Counsel further pleaded the court may direct them to decide the appeal of the petitioners within the statutory time period as provided in customs act, 1969 and restrain them from taking any adverse action against the petitioners till final order in this petition.
