Law: Sales Tax Act, 1990

Section: 3

Law: Constitution of Pakistan, 1973

Section: 185(3)

Law: Central Excise Act, (I of 1944)

Section: 2(f)

Sales Tax Act (VII of 1990)---S.3---Central Excise Act (I pf 1944), S.2(f)---Constitution of Pakistan (1973), Art. 185(3)---Levy of sales tax---Slitting of M.S. sheet/strips/coils--­Process of manufacturing---Contention of the Authorities was that by slitting of M.S. sheet/strip/coils they were changed into "intermediary goods, as such, the same were leviable to sales tax---Validity--Process of slitting neither made nor produced any new product as the process started with M. S. strips/coils and ended as such---Process in question kept original character of the goods intact---Mere cutting to the required size by itself did not Change the nature of the goods and its utility also remained the same--Final commodity was not essentially different from the original one---Contention of the Authorities was that it was the case of "manufacturing" --Such contention being devoid of any force leave to appeal was refused. Assistant Collector of Central Excises and Land Customs and 2 others v. Orient Straw Board and Paper Mills Ltd. PLD 1991 SC 992 fol. JUDGMENT NAZIM HUSSAIN SIDDIQUI, J.---The petitioners have impugned judgment, dated 6-10-2000 of a learned Division Bench, High Court of Sindh, Karachi, whereby C.P. No.D-1577 of 1991 filed by the respondents was allowed. 2. The petitioners visited the respondents, Messrs Hilal Steel Industries (Pvt.) Ltd. on 2-1-1990 and found them engaged in the process of slitting M. S. Sheets Coils for consumption in manufacturing of M. S. Pipes (unglavanised wedded pipe), for which they hold valid Central Excise Licence. It is alleged that the respondents during last five years preceding the date of inspection slit the M.S. Sheets Coils, weighing 10844 M. Ton, worth Rs.7,15,00,000 and cleared the same without payment of sales tax leviable thereon. The petitioners claimed that process of slitting amounted to "manufacturing", as per section 2(f) of the Central Excises and Salt Act, 1944 and that the slitted M. S. Strips fell under PCT Heading 73.12 and were chargeable to sales tax, to the tune of Rs.79,44,444.45. On 24-2-1990, show-cause notice was served upon the respondents for paying the aforesaid amount as sales tax. The respondents…

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