SC Upholds PHC, Rejects Customs Duty Appeal

Islamabad, September 3, 2025, 08:10 PM PKT — The Supreme Court has delivered a decisive ruling, dismissing an appeal by the Collector of Customs to recover duty drawback/rebate from vegetable ghee exporters under Section 21 of the Customs Act, 1969, upholding a Peshawar High Court (PHC) decision, as reported by media. A three-member bench, led by Chief Justice Yahya Afridi, rejected the Customs department’s challenge to the PHC’s time-barred ruling, which invalidated recovery claims for overpayments from 2010–2015 under Free Trade Agreement (FTA) and Preferential Trade Agreement (PTA) concessions.

The Customs counsel argued that an audit justified a five-year limitation under Section 32(3A), not the three-year limit under Section 32(3), contesting the PHC’s findings. However, defense counsel for M/s Yaqout Oil Processing & Extracting Mills Pvt Ltd, Bilour Ghee Industry, and Uthman Ghee Industry countered that retrospective notifications were illegal, citing different legal frameworks for earlier years. Delayed enforcement, due to conflicting FBR rulings and SRO 1066 (I) 2018 amendments, had stalled demand notices. The Supreme Court affirmed the PHC’s dismissal, rejecting Customs’ overpayment recovery. Web context on tax disputes shows past inconsistencies, while posts found on X reflect relief mixed with scrutiny—some cheer justice, others question policy clarity. Critically, the narrative of “legal resolution” may mask enforcement gaps—web data hints at systemic issues, and X sentiment suggests distrust in uniform application, pointing to potential challenges.