MUHAMMAD ATHER SAEED, J.--- The petitioners are involved in the business of import, purchase and sale of liquor. They have challenged the levy of assessment fee, vend fee and surcharge on assessm ent fee levied in accordance with the rules framed by the Government of Sindh dated 29th September, 1997 as amended from time to time promulgated by the Government of Sindh in exercise of the powers conferred by Articles 21 and 31 of the Prohibition (Enforcement of Hadd)
Order, 1979.
2. The brief facts of the case are that upon promulgation of Prohibition (Enforcement of Hadd)
Order, 1970, prohibition were imposed on manufacture, import, export, sale etc. Of intoxicants or drugs and the violation of this prohibition was made punishable. However, under Article 17 of this Order the Provincial Government was authorized to issue licences for bona fide medicinal or other purposes for manufacture, import, sale, possession etc. Of intoxicant or articles containing intoxicant liquor for different purposes including for consumption by a non-Muslim citizen of Pakistan or by a non-Muslim foreigners. Under Article 18 of this order it was provided that the licence shall be granted on payment of such fee, for such period and on such conditions and shall be in such form and shall contain such particulars as the Provincial Government may direct generally or in a particular case. Under Article 31 of the Order, the Provincial Government was empowered to make rules for the purpose of carrying out the provisions of the Order. Sub-Article
(2) of this Article provided that the Provincial Government may make rules for the following purposes:--
(a) for the issue of licences and the enforcement of the conditions thereof;
(b) prescribing the powers to be exercised and the duties to be performed by Prohibition Officers in furtherance of the objects of this order;
(c) determining the local jurisdiction of Prohibition Officers in regard to inquiries and investigations;
(d) authorizing any officer to exercise any power or perform any duty under this order;
(e) regulating the delegation by the Collectors or other Prohibition Officers of any powers conferred on them by or under this order;
(f) declaring in what cases or classes of cases and to what authorities appeals shall lie from orders, whether original or appellate, passed by an authority other than a Court under this Order or under any rules made thereunder or by what authorities such orders may be revised and prescribing the time and manner of presenting appeals and procedure for dealing therewith;
(g) for the disposal of articles confiscated and of the proceeds thereof; and
(h) examination of persons referred to in Article 12.
3. In exercise of the powers conferred by Article 31 of the above Order, Sindh Provincial Government framed rules, which were published in the Sindh Government Gazette dated 18th November, 1979.
Vide Rules 23, the categories of licence and the payment of fees for these licences were specified ranging from Rs,6000 to Rs,10,000. Vide Notification No,1(2001)81-VI-Excise-2030 dated 1st July, 1981, the licence fee was enhanced and sub-rules (23-A) and (23-B) were added vide which the vend fee and the assessm ent fee on various types of licences were prescribed. The Sindh Prohibition Rules 1979 were again amended vide .Notification dated 10th February, 1985 in which for the first time a new fee/tax was levied. This fee called surcharge on the assessment fee. Through various other Notifications, licence fee, vend fee and assessment fee have been enhanced from time to time. However, according to the petitioner, the alleged surcharge on the assessment fee was not charged for more than seventeen and half years and it was for the first time somewhere in 2002 that they received the challans of payment of ten per cent surcharge on advance assessment fee.
4. On behalf of the petitioners, the case was mainly argued by Mr. Jhamat Jethanand and Dr. Farogh Naseem, learned counsel representing some of the petitioners. Other learned counsel adopted their arguments. The main contention of Dr. Farogh Naseem, learned counsel for the petitioner, was that Article 18 of the Prohibition of (Enforcement of Hadd) Order 1979, only sanctioned the levy of licence fee and no other import. He, argued that any charge of levy, which has not been sanctioned in the main Statutes/Act/Ordinance, cannot be, imposed under rule making powers delegated by the Act. He said that under the Constitution of Islamic Republic of Pakistan, taxes could only be levied under an Act of Parliament or a Provincial Assembly by or in terms of Articles 77 or 127.
5. The learned counsel for the petitioner submitted that the vend fee as is apparent from a perusal of Rule 23-A of the Sindh Prohibition Rules is a turnover fee as it is charged on the quantity or the turnover of the liquor whereas the assessment fee is prima facie also a fee on the turnover of the liquor. He further submitted that the terms vend fee and the assessment fee have neither been defined in the said Order or the rules. He further stressed that these terms cannot be by any stretch of included in the definition of such fee for, the issuance of licence. In support of his above contentions, the learned counsel for the petitioner relied on a number of case-laws, which are quoted below:--
(a) Province of East Pakistan and another v. Nur Ahmad and another (PLD 1964 SC 451).
(b) Mc Carthy and Stone (Developments) Ltd v. London Borough of Richmond Upon Thames (1994 SCM R 1393)
(c) M. Afzal and Son and others v. Federal Government of Pakistan and another (PLD 1977 Lahore 1327)
(d) Kohinor Textile v. Federation of Pakistan (2002 PTD 121).
6. In the first case cited above the Honourable Supreme Court held as under:-- ' Reading the rule in the above manner would be tantamount to enlarging its scope by depriving the aggrieved party of the right of being heard which he has. The Basis Democracies Order does not deprive him of that right. The rule-making Authority, therefore, cannot clothe itself with power, which the Statute itself does not give.
7. In the second case cited above the House of Lords held as under:-- "In these circumstances, if an officer of the executive seeks to justify a charge upon the subject made for the use of the Crown (which includes all the purposes of the public revenue), he must show, in clear terms, that Parliament has authorized the particular charge. The intention of the legislature is to be inferred from the language used, and the grant of powers may, though not expressed, have to be implied as necessarily arising from the words of a statute; but in view of the historic struggle of the legislature to secure for itself the sole power to levy money upon the subject, its complete success in that struggle the elaborate means adopted by the Representative House to control the amount, the conditions and the purposes of the levy, the circumstances would be remarkable indeed which would induce the Court to believe that the legislature had sacrificed all the well-known checks and precautions, and, not in express words, but merely by implication, had entrusted a Minister of the Crown with undefined and unlimited powers of imposing charges upon the subject for purposes connected with his department."
8. In the third case of M. Afzal and Son and others v. Federal Government of Pakistan and another (PLD 1977 Lahore 1327) the Lahore High Court held as under:-- "6. As for the first question it is to be noted that a tax or a duty can only be imposed under the authority of an Act of Parliament in view of Article 77 of the Constitution. This being essentially a legislative power cannot be delegated to a subordinate authority empowering it to levy a tax or duty---."
9. In the fourth case of Kohinoor Textile v. Federation of Pakistan (2002 PTD 121) a Division Bench of this Court held as under:--
5. It is equally settled law that rules made under delegation of powers cannot go beyond the mandate conferred by the parent statute see Malik Muhammad Din v. Trustees of the Port of Karachi (PLD 1966 Kar. 518) and Chairman, Railway Board v. Wahabuddin Sons (PLD 1990 SC 1034)- -Thus the general rule making power delegated under section 37 cannot be extended to creation of a charge, I would in fact go a step further. Even if section 37, hypothetically speaking had delegated to the C.B.R. The power to introduce a charge or a levy, the said delegation would be bad since it is now pretty much settled that the power to impose or introduce a tax, levy or a fee is only legislative functions which cannot be delegated---."
10. Learned counsel for the petitioner denied the allegation made by the Department that the petition was badly hit by laches as the impugned levies were imposed vide rules framed between 1981 and 1985 and the petition was filed in the year 2002. The learned counsel for the petitioner submitted that factually despite the imposition of surcharge vide the amendment made in the rules in the year 1985 no surcharge was sought to be collected for almost 17 years and the first time they received the challans for surcharge was in the year 2002 when the impugned challan for the payment of surcharge was received by them. He, however, said that all the impugned levies are unconstitutional and therefore illegal and void and cannot be enforced and there are no laches against an unconstitutional order. In support of his contention he relied on the judgment of the Honourable Supreme Court in the case of Mr. Fazlul Quader Chowdhry v. Mr. Muhammad Abdul Haque (PLD 1963 SC 486) where a Full Bench of the Honourable Supreme Court held that in case where is a continuing wrong which is unconstitutional laches cannot be alleged and there is no estoppel against the Constitution.
11. Mr. Jhamat Jathenand adopted the arguments of Mr. Dr. Farogh Naseem, but added that even the licence-fee was violative of Article 151 of the Constitution which provides that trade commerce and intercourse throughout Pakistan shall be free. He also challenged the arbitrary increase in the licence-fee, the vend fee and the assessment fee as being against the rules of propriety. He further informed the Court that rule 23-A has not been gazetted. The other learned counsel appearing for the other petitioners adopted the arguments of Dr. Farogh Naseem and Mr. Jhamat Jathenand.
12. Mr. Abbas Ali, A.-A.G. Sindh, along with the Director-General Excise, Mir Hussain Ali, argued the case on behalf of the Respondents. His main argument was that Article 18 of the Order sanctioned such fee and does not specify that only licence-fee shall be payable for issuance of licence, but specifies that licences will be issued on the payment of such fee for such period and on such conditions or be in such form and contain such particulars.
13. He stated that the scope of Article 18 was very wide and authorized the Government to recover any fees prescribed in the rules for issuance of such licence. Ile referred to the form of licence annexed as annexure A to the Petition No,D-1070 of 2002 and pointed to a clause in sub para. 2 which provided that the licensee shall pay assessment fee on the actual sales of liquor during a month by 7th of the next month. He said that the rules were framed in exercise of the rule-making power of the Provincial Government under Article 31 of the Prohibition (Enforcement of Hadd) Order 1979 and rules providing for the levy of vend fee assessment fee and the surcharge on assessment fee were intra vires the provisions of Article 31 of the Order read with Article 18 and there was nothing unconstitutional or illegal about these levies.
14. In answer to a query he said that the provincial government has exercised the powers of levy of assessm ent fee, vend fee and the surcharge in accordance with clause (a) of sub-Article (2) of Article 31 of the Order, which empowers them to make rules for the issuance of licence and enforcement of the conditions thereon. His contention was that the levy of the assessment fee, vend fee and the surcharge on assessment fee is in accordance with the conditions imposed by the Provincial Government for issue of licence and is, therefore, within the competence of the rule- making powers.
15, In support of his contention, he relied on a judgment of the Honourable Supreme Court of Pakistan in the case of Pakistan Tobacco Company Ltd. v. Government of N.-W.F.P. (PLD 2002 SC 460). In this case, the Tobacco Development cess levied by section 11 of N.-W.F.P. Finance Act, 1996 as reconstructed by Finance Act 1997 was challenged as being ultra vires of Article 151 of the Constitution of Islamic Republic of Pakistan, which forbids taxation on inter provincial trade and commerce and the Honourable Supreme Court dismissed these petitions. This judgment is not relevant to the facts of the present petition.
16. We are also afraid that it is not possible for us to accept the contention of the learned A.A.-G.
That by using the term 'such fee' in Article 18 of the Order the powers of the Provincial Government to levy any fee has been widened and the assessment fee and the vend fee and the surcharge which have been levied as terms and conditions of issuance of licence can be justified. A perusal of form of licence relied on by learned A.A.-G. Shows that the assessment fee is a fee to be levied on the' sales of the petitioners and therefore, is not in nature of fee but in nature of a tax and there is no provision in the order authorizing the Provincial Government to levy any sale tax and, therefore, it is prima facie apparent that the Provincial Government have exceeded their jurisdiction and violated the provisions of Article 77 read with Article 127 of the Constitution of the Islamic Republic of Pakistan and therefore, the levy of the assessment fee, vend fee and surcharge on the assessment fee is in excess of the jurisdiction of the Provincial Government in the exercise of their rule-making powers and ultra vires the constitution and therefore has to be struck down.
17. These are the reasons on the basis of which all the above petitions were allowed by our short order dated 9-12-2005 and the levy of vend fee, assessment fee and surcharge on assessment fee was struck down. However, at the request of learned A.A.-G. The effect of the above judgment had been suspended for a period of four weeks from 9th December, 2005 to enable the respondents to approach the Honourable Supreme Court, if so advised. It is also ordered that after such expiry i,e, on or after 7-1-2006 the Nazir is directed to return the security or refund the deposit made by the petitioners in "accordance with the interim orders of this Court.