LAHORE, Aug 20: The Lahore High Court Judge Justice Nasim Sikandar on Monday linked the collection of special excise duty, challenged by the sugar mills, to the final outcome of his order.

The judge also issued notice to the Central Board of Revenue (CBR) on petitions filed on behalf of sugar mills owned by commerce minister Humayun Akhter’s brother Senator Haroon Akhter and relatives of former prime minister Mian Nawaz Sharif.

Justice Sikandar ordered: “In the meanwhile if any levy is paid by the taxpayer and is collected by the Revenue that shall be subject to the final outcome of this petition.”

The mills, through Ijaz Awan advocate, said on June 6, 2007, Ministry of Finance, Economic Affairs, Statistics and Revenue (Revenue Division), Islamabad, issued a notification whereby special excise duty was levied illegally in exercise of powers claimed to have been conferred by Section 3-A of the Federal Excise Act, 2005. The lawyer said Section 3-A was not part of the Act at the time and date when the notification (SRO 655(1)/2007) was issued.

The lawyer said on July 1, 2007, a bill to give effect to the financial proposal of the federal government and to amend and enact certain laws was passed by the National Assembly. The Section 3-A, titled Special Excise Duty, was incorporated in the Federal Excise Act, 2005, after the assembly dispensed with its business and enacted the Finance Act 2007, the lawyer added.

He said Section 1 of the Finance Act, 2007, which gave rise to the amendment (Section 3-A) in the Federal Excise Act, stated that it would, unless otherwise provided, come into force on the first day of July, 2007.

He said the levy and enactment of Section 3-A, established that these were absolutely prospective in nature because of the absence of any specific mention of the words and phrases giving it any retrospective effect.

He added his clients were in the dark because the Special Excise Duty was silent with respect to the payment of the duty on the goods already produced, manufactured and imported prior to the said levy.

The lawyer said the levy amounted to double taxation because the goods of the petitioner were already subjected to the payment of Sales Tax and double taxation was a violation of the norms and principles of law.

The lawyer prayed to the court to declare illegal and set aside the notification and if the duty was considered payable the respondent be ordered not to collect it on the sale of the sugar produced prior to the insertion of Section 3-A on July 1, 2007.