LAHORE - The Lahore High Court Tuesday set aside a statutory regulatory order (SRO) for regulatory duty on more than 700 items for being issued without lawful authority.

These items include hot rolling steel, flat rolled products of alloy steel, tubes, pipes, wire of iron and some dairy products.

There would also be no regulatory duty even on import of waste and scrap of tinned iron or steel, turnings, shavings, chips, milling waste, sawdust, filings, trimmings and stampings, whether or not in bundles.

Justice Shahid Karim of the Lahore High Court struck down the SRO imposing regulatory duty on import of goods fall under the PCT Code of the first schedule on the petition moved by Global Steel.

The company had challenged SRO No. 1035 (1)/ 2017 whereby the ‘regulatory duty’ was imposed on more than 700 items.

The Federal Board of Revenue last year got approved the SRO in question for being contrary to the fundamental rights and Articles of the Constitution.

The company through its counsel Advocate Muhammad Afzal Awan argued that  the FBR  had imposed ‘regulatory duty’ on import of various steel items vide its Serial No 444 to 458 of SRO No. 1035 (1)/ 2017.   It contended that question arose by  the new SRO that whether approval of federal minister in charge for levy of ‘regulatory duty’ on imported goods was competent enough under the Constitution of Pakistan, 1973, read-with judgment of apex court in the case of Al-Mustafa impex. The company’s counsel presented the copy of the SRO approved by the ministry,  and showed its content  wherein it was stated:“the board, with approval of the Federal Minister-in-charge is pleased to levy regulatory duty import of goods specified in column (3 ),”.

He said the company imported various consignments of raw material, consisting of ‘Cold-rolled, Hot-Rolled, Galvanized Steel, Prime Hot, Dipped Galvanized Steel Coils and Electronic steels and the same were lying within port area under charge, control and custody of the FBR,  or are in transit, against which, the company had entered into binding contracts with the sellers/suppliers from worldwide resources prior to the date of impugned Notification. The counsel said the goods were being shipped to Pakistan accordingly , on which the regulatory duty was imposed. 

The counsel said that the Federal Minister was not empowered to approve for issuance of notification to impose regulatory duty and this act was illegal, unlawful and without lawful authority, hence, the impugned notification is liable to be quashed.

He further argued that it was crystal clear that the decision of imposing regulatory duty had not been exercised for any valid or bona fide reasons  and it was totally irrational, oppressive, unjust and totally violative of the fundamental rights of the company under Article 4, 18 and 25 of Constitution.

The company’s lawyer also submitted that imposing regulatory duty on import items on the company was malafide , discriminatory, arbitrary  and unjust and, hence, contradictory of statue and the Constitution. 

The consignments, the company said, were shipped from China in accordance with the binding contracts/Letters of Credits, entered into prior the imposition of impugned notification which was issued on Oct 16, 2017, therefore, the good were releasable without imposition of ‘regulatory duty’,’.

The counsel contended that the regulatory duty can only be imposed to regulate an uncertain market and not to collect additional taxes, or to take away in this garb any reasonable profit that the company might make.  He prayed to the court to set aside the SRO for being contradictory to the Constitution and restrain the FBR and others to detain the impugned goods and direct them to release the consignments.  The petition was disposed of.