AAMER FAROOQ, JUSTICE:---.---

Pakistan International Airlines Corporation Limited (the petitioner) is a statutory Corporation, which is running the business of air transport service and allied activities and is result of creation of Pakistan International Airlines Corporation (Conversion) Act, 2016 (the Act). The petitioner, in the year 2013, added three Air Crafts to its fleet on Dry Lease. At the relevant time, when this was being done, it received demand from the competent authority for payment of customs duties, sales tax and other taxes. The petitioner referred the matter to the then Minister for Finance, which eventually, was considered by the Economic Coordination Committee (ECC) of the Cabinet and vide its decision dated 17.12.2013, the petitioner was allowed to pay the referred taxes in the sum of Rs. 1,258,044,330/- in installments. Apparently, as a result of post clearance audit, a contravention case was made out against the petitioner bearing No.28/2019-20, which resultantly culminated into show cause notice from respondent No.6. The allegations levelled in the show cause notice were that surcharge as per section 83 of the Customs Act, 1969 was not levied at the time of payment of duty and taxes, hence petitioner was asked to show cause as to why a sum of Rs.84,120,240/- may not be paid by it vide its reply dated 09.03.2020, the petitioner denied the allegations and primarily relied on the decision of ECC dated 17.12.2013 for making payments in installments. The show cause proceedings culminated in Order-in- Original dated 09.06.2020, whereby the petitioner was required to make payments as per the demand. The petitioner challenged the referred order in the instant proceedings and subsequently, it also filed an appeal before Appellate Tribunal Inland Revenue, however, due lo non-availability of the Chairman, the Appellate Tribunal was non-functional at the relevant time.

2. Learned counsel for the petitioner inter alia contended that appeal has been preferred against the order impugned in the instant petition, however, Appellate Tribunal Inland Revenue does not have the jurisdiction in the matter inasmuch as it cannot go behind the original proceedings which started w ith non-payment of customs duty timely and levy of surcharge; to substantiate his argument, learned counsel placed reliance on cases reported as 'Messrs Kamalia Sugar Mills Limited, Kamalia Vs. Superintendent, Intelligence and Investigation (Customs and Central Excise), Regional Office, Lahore and another" (2002 PTD 632) and Commissioner of Income Tax, Banglore Vs. B.C. Srinivasa Setty [(1981) 128 ITR 295], Learned counsel further submitted that arrangement, on the basis of which Air Crafts were obtained by the petitioner from overseas lessor, was a dry lease and the referred property did not become the asset of petitioner and as such there was no import into the country. It was argued that under the facts and circumstances, the Customs Duty, Sales Tax and Income Tax were neither chargeable nor could be collected under the provisions of Customs Act. 1969. Sales fax Act. 1990 and Income Tax Ordinance, 2001 on the Air Crafts bearing No.AP-BLC. AP-BLB and AP-BLD obtained on dry lease. It was submitted that since the principal duty was not chargeable, hence question of surcharge does not arise. In support of his contentions, learned counsel took the Court through sections 18 and 25 of the Customs Act, 1969 and stressed that the categories of goods, on which duty is payable under section 18 ibid, do not cover the transaction in question; likewise, it was argued that section 25 ibid provides for valuation which cannot be done in the instant case, as there is no import of goods, Learned counsel pointed out that similar question arose in other jurisdictions like India and United Kingdom and law was according!} amended to cover such transactions.

3. Mr. Anwar Kamal. Senior Advocate Supreme Court further submitted that since no duty is receivable hence, demand made and duties/taxes levied, which the petitioner was required to pay, were uncalled for in the facts and circumstances, hence a declaration be granted. In this behalf, in support of his contentions, learned counsel placed reliance on cases reported as Dr. Sher Afghan Khan Niazi Vs. Ali S. Habib and others (2011 SCMR 1813), Kamalia Sugar Mills Ltd. Vs. Superintendent. Intelligence and Investigation (Customs and Central Excise), Regional Office Lahore and another (2020 PTD 632). The Collector of Customs. Customs House, Lahore and 3-others Vs. Messrs S.M. Ahmad and Company Pvt. Ltd. (1999 SCMR 138), The Murree Brewery Co. Ltd. Vs. Federation of Pakistan and 2-others' (PLD 1972 SC 279), Syed Ali Abbas and others Vs. Vishan Singh and others (PLD 1967 SC 294), Lt. Col. Nawabzada Muhammad Amir Khan Vs. The Controller of Estate Duty (PLD 1961 SC 119), Ch. Iftikhar Ahmad V.s Chief Secretary Punjab and others (2012 PLC (CS) 1470), 'Corruption in Hajj Arrangements in 2010 (PLD 2011 SC 963). Commissioner of Income Tax Legal Division, Lahore and others Vs. Khurshid Ahmad and others (2016 PTD 1393), Engineer Iqbal Zafar Jhagra and another Vs. Federation of Pakistan and others (2013 SCMR 1337), Sanofi Aventis Pakistan Limited and others Vs. Province of Sindh and 2-others' (PLD 2009 Karachi 69), Abdul Sattar Vs. Federation of Pakistan and 2-othcrs (2006 PTD 1171), Messrs Mahmood and Company Vs. Assistant Collector, Sales Fax (Enforcement and Collection), Shalimar Division, Lahore and 2-othcrs (2005 PTD 72), Sadia Jabbar Vs. Federation of Pakistan and others (PTCL 2014 CL 537), CIT Vs. B.C. Srinivasa Setty [(1981 128 ITR 294)]. Sui Northern Gas Pipelines Vs. Deputy Commissioner Inland Revenue and others (2014 PTD 1939) and M/s Pfizer Laboratories Ltd. Vs. Federation of Pakistan and others (PLD 1998 SC 64).

4. Learned counsel for the respondents contested the instant petition and submitted that same is not maintainable, as the petitioner has an adequate and efficacious remedy in the form of appeal to the Appellate Tribunal Inland Revenue, which has accordingly been filed. It was also argued that at the time, when instant petition was filed. Appellate Tribunal Inland Revenue was non-functional due to non-availability of its Chairman, however, the same is functional now. as the Chairman has been duly appointed. It was submitted that all relevant objections and arguments can be raised before the said forum. It was also contended that arguments raised on merit, in the instant petition, arc being raised for the first time, as in the reply to the show cause notice and even in the memorandum of appeal before the Tribunal, those arguments have not been raised. It was submitted that the issue of payment of duties and taxes, at the time of lease of the Air Crafts, stands settled and no question was raised regarding non-chargeability at the relevant time. It was submitted that even after issuance of show cause notice in 2020. only lime was sought for payment of the amount and no legal argument was raised. Learned counsel pointed out that since the question of principal liability is a past and closed transaction, the same cannot be agitated in the instant petition by way of declaration without setting aside orders making demand and allowing the petitioner to pay the amount in question in installments by ECC.

4. Arguments advanced by learned counsel for the parties have been heard and the documents, placed on record, examined with their able assistance.

5. The gist of facts, leading to the controversy in hand, has been mentioned in the preceding paragraphs, hence need not be repealed.

6. Before proceeding to render opinion on the arguments addressed by learned counsel for the parties, it is only appropriate to reproduce the prayer made by the petitioner in the instant petition, which is as follows:-

"Wherefore it is respectfully prayed that this writ petition may graciously be allowed with costs and it may be declared that Customs Duty, Sales Tax and Income Tax were neither chargeable nor could be collected under the provisions of the Customs Act, 1969 (Act IV of 1969), the Sales Tax Act. 1990 (Act III of 1951) and the Income Tax Ordinance. 2001 (Ordinance XLIX of2001) on the 3 dry leased air craft AT-BLC, APB LB and AP-BLD inducted into its fleet by the petitioner during the relevant Finance Years 2013-2014 and 2014-2015.

ii) It may further be graciously declared that the penalty of surcharge " amounting to Rs.84,120,240/- has been adjudicated without any legal basis, is without lawful authority and is void ab-initio.

As a consequence of the above declarations, the entire amount of Customs Duty, Sales Tax and Income Tax amounting to Rs. 1,258,044,330/- may graciously be ordered to be refunded with mark up at the rate of Kibor+3% with effect from the date of payment of each installment and the impugned Order-in-Original No. 107 of2020 passed by respondent No. 5, Collector of Customs (Adjudication), Islamabad may graciously be set aside and the demand for Rs.84,120,240/- on account of surcharge under section 83(2) of the Customs Act, 1969 be remitted.

Another other or better relief which this Honble Court deems to be appropriate in the facts and circumstances of the case may also graciously be granted.

It is prayed further that the operation of the impugned order dated 09.06.2020 may graciously be suspended till the decision of this writ petition.

16. For the above reasons, instant petition fails, where it seeks declaration regarding principal liability as well as surcharge and direction for refund, hence relief to the said extent is turned down. However, learned Appellate Tribunal Inland Revenue (respondent No.3) is directed to decide the appeal of the petitioner expeditiously taking into account all legal and factual objections taken in the same and till such time that the decision is rendered, Department is restrained from taking any coercive measures against the petitioner for recovery of the disputed liability.

17. Disposed of accordingly.