Law: Sales Tax Act, 1990

Section: 13

Law: Customs Act, 1969

Section: 19, 30

 Retrospective Application of Tax Law Amendments – Sales Tax Exemption for FATA/PATA IndustriesDetails:• Petitioners, comprising individuals and private limited companies, operate manufacturing units in the erstwhile Federally and Provincially Administered Tribal Areas (FATA/PATA).• Before the 25th Constitutional Amendment (2018), businesses operating in these areas enjoyed tax exemptions. These exemptions were continued post-amendment via SROs 1212(I)/2018 and 1213(I)/2018.• The Finance Act, 2024, extended the exemption till June 30, 2024, but altered the condition for securing tax-exempt imports, replacing post-dated cheques with pay orders.• Petitioners contested the retrospective application of this amendment to goods already imported and manifested before July 1, 2024.Held:• The amendment in the Finance Act, 2024, does not have retrospective effect unless explicitly stated.• A statute affecting substantive rights should not be presumed retrospective unless expressly or necessarily implied.• If imports were manifested or reached Pakistan's territorial waters before July 1, 2024, the old security instrument (post-dated cheque) remains applicable.• Section 30 of the Customs Act, 1969, which determines applicable duties based on the date of goods declaration, is inapplicable since the amendment did not alter the charging or machinery provisions of the Sales Tax Act, 1990.• The matter of factual verification (whether goods were manifested before July 1, 2024) is left to the relevant Collectorates.• Writ petitions were allowed in favor of the petitioners.Citations:• Al-Samrez Enterprise Case – Supreme Court held that vested rights created under a tax exemption cannot be withdrawn retrospectively.• Gas & Oil Ltd. Pakistan v. Collector, Model Customs Collectorate of Preventive & Others (2020) – Sindh High Court judgment on tax exemption applicability.• M/s Gadoon Textile Mills & Others v. Federation of Pakistan & Others (2023) – Similar principle of non-retrospective application of fiscal statutes.• Aziz-ud-Din Industries Ltd. Case – Apex Court reaffirmed that no statute should be construed retrospectively unless explicitly stated.• Zila…