LAHORE, May 17: The sales tax department informed the Lahore High Court on Monday that the Ittefaq Textile Mills had been removed from the list of "suspected" industries.

Counsel for the tax department told the court that the tax law had no such provision as to place an industry on suspected list because cases of default were treated under a different procedure which did not include declaring an industry as such.

A division bench of the high court accordingly disposed of the mills intra-court appeal against the decision of a single bench which had upheld the department's decision about one year ago.

The name of the mills was put on the list of "suspected" industries about one and a half years ago on the charges of non-payment of sales tax and failing to file annual returns. On it, the mills management moved the LHC.

The petition, which held the CBR chairman and the income tax collector as respondents among others, was rejected by a single bench on the submission of a department counsel that the decision was taken on non-payment of tax.

Mills' counsel Tariq Aziz pleaded that the department's decision was malafide and amounted to political victimization because no prior notice was served or a legal process initiated. He submitted that the issue involved legal lacunas and not a factual illegality because the department took an arbitrary decision.