Law: Customs Act, 1969

Section: 18,32,32(1)(2),32(3A),179)

Law: Federal Excise Act, 2005

Section: 3,3(1)(b),12(3),14,19,1st Schedule

Law: Income Tax Ordinance, 2001

Section: 14,148

Law: Sales Tax Act, 1990

Section: 3(1),11,33(5)

RESULT: Appeal disposed of accordingly. CUSTOMS ACT, 1969 (IV OF 1969) Sections 32 & 179 Customs Authorities through show cause notice have jurisdiction to demand sales tax and federal excise duty, short levied or evaded at the time of import.-The controversy of jurisdiction has a material bearing upon the legality of the Show Cause Notice under Section 32 of the Act and the adjudication order passed. The appellant challenged this aspect on the ground that concerning the recovery of Sales Tax, Federal Excise and Income Tax, the jurisdiction of Customs officers would have been ousted under Section 32 of the Customs Act, 1969. Rather enabling provisions would be like ones under section 11 of the Sales Tax Act, 1990 and section 14 of the Federal Excise Act, 2005 respectively with respect to Sales Tax and Federal Excise duty (to be exercised by the officers of Inland Revenue Service). The department opposed the contention on account of the legal provisions incorporated under Section 32 of the Act not only cover Customs duties but also other taxes. It is viewed that the demand for taxes through Show Cause Notices is not restricted to Customs Duty alone. It is quite evident that the show cause notice was lawfully issued by the Customs authority invoking section 32 of the Customs Act, 1969 through recourse to adjudication proceedings under section 179 of the said Act for recovery of evaded taxes (Sales Tax and Federal Excise) pertaining to the instant case. Regarding the jurisdiction over Sales Tax, Federal Excise etc., the Honorable Lahore High Court, Lahore, in a case titled "M/s Gulistan Textile Mills Limited vs. Federation of Pakistan & others" (PTCL 2019 CL. 118). unequivocally held that Customs Authorities have jurisdiction to demand Sales Tax and Federal Excise Duty short levied or evaded at the time of import. The dictum held by the Honorable Supreme Court of Pakistan in case titled "Collector Sales Tax and Central Excise vs. Zamindara Paper and Board Mills" (reported as PTCL 2007 CL. 260), held that "...instead of taking into consideration technicalities, the Court looks into the matter with different angles namely as to whether substantial compliance…

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