' RAHMAT HUSSAIN JAFFERI, J.---The pi :'sent Constitutional Petitions Nos.D-34 of 1995 and D-2659 of 1994 are disposed of through this judgment as in these petitions common questions of law and facts are involved.
2. In Petition No,D-34 of 1995 the petitioners have challenged the vires of S.R.Os. Nos.568(I)/93 dated 10-7-1993 and 594(1)/93 dated 17-7-1993 on the ground that import fee of 6% of C&F value paid at the time of opening of letters of credit are illegal and ultra vires. In Petition No,D-2659 of 1994 the petitioners have prayed that the imposition of import fee at 6% based on above-mentioned S.R.Os.
May be declared as illegal and the Authorities may be directed to refund the payment so received to the petitioners.
3. The respondents filed their comments defending the S.R.Os. In question and took the plea that the S.R.Os. Are not ultra vires.
4. We have heard Mr. Tariq Javed, Mr. Anjum Ghani Mr. Fareed-ud-Din, Advocates, Mr. Sajjad Ali Shah, D.A.-G, perused the record and case law cited at the bar.
5. The learned D.A.-G. Has raised a preliminary objection about the maintainability of Petition No,34 of 1995 by stating that Muhammad Ahmed, Secretary of the petitioner's company, verifies the petition but has not been authorized to do so by a resolution passed by the Board of Directors of the petitioner's company. Therefore, the petition is not maintainable. He has relied upon a case of Iftikhar Hussian Khan of Mamdot v. Ghulam Nabi Corporation Limited PLD 1971 SC 550. Conversely, the learned Advocate for the petitioners has stated that Muhammad Ahmad, Secretary of the petitioner's company was authorized to verify the petition by resolution of Board of Directors of the petitioner's company and the Articles of Association also authorizes Muhammad Ahmed to file the petition. He has filed the copy of resolution of the Board of Directors of the petitioner's company passed on 21-12-1994. He has relied upon a case of Muhammad Siddiq Muhammad Umer v.
Australasia Bank Limited PLD 1996 SC 684.
6. It is pointed out that when the petition was filed, at that time, the above-mentioned resolution of the petitioner's company was not filed, but subsequently through an application, the petitioners filed the above resolution and Articles of. Association. A letter was sent to the Registrar, Joint Stock Companies to place before the Court a copy of the aforesaid resolution. The Registrar, Joint Stock Companies vide letter dated 15-4-2005 reported that the copy of the resolution authorizing the Company's Secretary for filing the case was neither required nor filed by the petitioner's company in his office. The reporting of minutes of the meeting of Board of Directors to the Registrar is not a statutory requirement of the Companies Ordinance, 1984 unless specifically demanded. He further reported that a company is required to cause and enter a fair and accurate summary of the minutes of all the proceedings of the Directors and Committee of Directors, in properly maintained books in terms of provisions of section 173 of Companies Ordinance, 1984. In view of above position the above-mentioned resolution and Articles of Association were allowed to be kept on the record.
7. According to Order XXIX, rule 1, C.P.C., in a suit by or against a Corporation, any pleading may be singed and verified on behalf of the Corporation by the Secretary or by any Director or other Principal Officer of the Corporation, who is able to depose to the facts of the, case. In the present case Muhammad Ahmed was the Secretary of the petitioner's company, therefore, he was competent to verify the pleadings. Rule 1, only deals with the subscription to a verification of the pleadings in suit by or against Corporation. However, it does not authorize the institution of suit. In view of the case of Iftikhar Hussain Khan of Mamdot (supra), if a suit is filed and verified by a person mentioned in Order XXIX, C.P.C. Then the said person should be having an authority conferred upon him through a resolution of Board of Directors of the Company to verify the pleadings. This Authority deals with a situation when the persons mentioned in Order XXIX, C.P.C.
Have no authority to sign or verify the pleadings. In such situation authorization through resolution, Board of Director is essential and without that, the suit cannot be filed. However, if the said persons have authority through Articles of Association of the Company then no further authorization is required though the Board of Directors of the Company. The Honourable Supreme Court, in the case of Muhammad Siddiq Muhammad Umer v. Australasia Bank Limited PLD 1996 SC 684, .Held that if a person mentioned in the Order XXIX, rule 1, C.P.C. Is authorized by the Articles of Association of the Company then he can sign and verify the pleadings on behalf of the company. In view of above position both the above-mentioned authorities of the Honourable Supreme Court of Pakistan deal with two different circumstances and situations therefore, they can be applied to the situations mentioned thereunder.
8. In the present case Muhammad Ahmed, Secretary of the petitioner-Company has been authorized under the Articles of Association to file the suit. Furthermore, the learned Advocate for the petitioners has also filed the resolution of Board of Director's meeting dated 21-12-1994 further authorizing Muhammad Ahmed, Secretary of the petitioner's company to prepare, sign, execute and submit all necessary documents on behalf of Company to the Court from time to time, either personally or through some other Officer of the Company who may be authorized by him for the said purpose.
9. Thus, Muhammad Ahmed, Secretary of the petitioners is competent to file the suit. Hence the petition is maintainable.
10. On merits Mr. Tariq Javed has contended that there is difference between charging fee and tax; that unlike tax, charging of fee has to be commensurate with the services provided by the respondents; that no services are being provided in this case at all, as such, imposition of fee is illegal and it amounts to imposition of tax, which cannot be done without legislative authority.
11. Mr. Anjum Ghani, Advocate for the petitioners in. C.P. No,D-2659 of 1994 has adopted the arguments of Mr. Tariq Jawaid. He has relied upon the cases of Collector of Customs v. Sheikh Spinning Mills 1999 SCM R 1402, Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582, Star Textile Mills Ltd. v. Pakistan 1999 M LD 3001 and Dewan Salman Fibres Ltd. v. Federal Government (PTCL 2003 CL 456).
12. Conversely, Mr. Sajjad All Shah, learned D.A.-G. Has stated that the respondents have provided privileges to the petitioners in the shape of providing foreign exchange, therefore, the imposition of fee is legal and proper and that import of material falls within the ambit of Import Policy, 1993 under which the Government is competent to charge fee. He has relied upon the cases of Rasheed Mehmood v. Muhammad Riaz Akhtar 1997 SCM R 1406, Ayaz Textile Mills Ltd. v. Federation of Pakistan PLD. 1993 Lahore 194, Star Textile Mills Ltd. v. Pakistan 1999 M LD 3001, Noor Sugar Mills Ltd. v. Market Committee and others PLD 1989 SC 449 and All Pakistan Textile Mills Association v. Province of Sindh SBLR 2003 Sindh 1345. Mr. Fareed-ud-Din, Advocate, has adopted the arguments of the learned D.A.-G.
13. We have given due consideration to the arguments, gone through the material available on the record and case-laws cited at the bar.
14. Article 18 of the Constitution of Islamic Republic of Pakistan, 1973 deals with the trade, business and profession. The said Article reads as under:-- "18. Freedom of trade, business or profession.---Subject to such qualifications, if any, as may be prescribed by law, every citizen shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business: ' Provided that nothing in this Article shall prevent:--
(a) the regulation of any trade or profession by licensing system; or
(b) the regulation of trade, commerce or industry in the interest of free competition therein; or
(c) the carrying on, by the Federal Government or by Provincial Government, or by a corporation controlled by any such Government, of any trade, business, industry or service, to the exclusion, complete or partial of other persons."
15. A bare reading of the above Article reveals that right of freedom of trade, business or profession guaranteed by the above Article is not absolute, as it can be subjected to reasonable restrictions and regulations as may be prescribed by law, hence such right is not unfettered. Thus, regulations of any business, profession or trade through licensing system in the interest of free competition, empowers the legislature as well as authorities concerned to impose restrictions on the exercise of such rights. However, they must be reasonable, relating to the trade, business or profession for the purpose of promoting general welfare of the citizens.
16. In pursuance of the above Article and in order to regulate the imports and exports the legislature enacted the Imports and Exports (Control) Act, 1950 under which power has been given to Federal Government to prohibit or restrict import or export under section 3 of the said Act which is as follows:- "3. Powers to prohibit or restrict imports and exports.-- (1) The Federal Government may, by order published in the official Gazette and subject tp such conditions and exceptions as may be made by or under the order, prohibit, restrict or otherwise control the MI port or generally all practices (including trade practices) and procedure connected with the import or export of such goods, and such order may provide for application for licences under this Act, the grant, use, transfer, sale or cancellation of such licences and the form and manner in which and the period within which appeals and applications for review or revision may be preferred and disposed of and the charging of fee in respect of any such matter as may be provided in such order.
(2) No goods of the specified description shall be imported or exported except in accordance with the conditions of a licence to be issued by the Chief Controller or any other officer authorized in this behalf by the Federal Government.
(3) All goods to which any order under subsection (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 16 of the Customs Act, 1969 (IV of 1969), and all the provisions of that Act shall have effect accordingly.
(4) Notwithstanding anything contained in the aforesaid Act Federal Government may, by order published in the official Gazette, prohibit, restrict or impose conditions on the clearance whether for home consumption (or warehousing) or shipment abroad of any imported goods or class of goods."
17. Thus, the Federal Government has been given powers to prohibit, restrict or otherwise to control the import and export of goods or allow it subject to regulations relating to the trade practices or grant of licence.
18. In order to implement the above provisions of law, the Federal Government through Ministry of Commerce issued various orders, notifications etc. Including the import policy order to regulate the import and export. The import policy was being changed from time to time keeping in view the circumstances and conditions for promoting general welfare of the citizens.
19. In the year 1993 import policy order was issued through S.R.O. 568(1)/93 on 10-7-1993, which has been impugned in the petitions. Under this import policy the previous import policy which was announced through Licences and Permits Fee Order, 1979, was changed. Under the present import policy, the importers are required to register themselves before the offices of Export Promotion Bureau and then they are authorized to import the items mentioned in the order. For that purpose, procedure has been simplified and the registered importers are required to open letter of credit before the Bank and are required to pay 6% fee of C&F value of the goods to be imported, which is required to be paid at the time of establishment of letter of credit.
20. The learned Advocate for the petitioners has argued that the Government has not provided any service for payment of said fee; therefore, it cannot be termed as fee. It is pointed out that the word "Fee" has not been defined in the Imports and Exports (Control) Act, 1950 or the Import Policy Order, 1993 as such, as per settled law; the Dictionary meaning of the word "Fee" is to be relied upon.
According to the Webster's new International Dictionary, Volume I, the word "Fee" means "the charge fixed by law for the services of a public officer or for the use of privilege under the control of the Government, In Webster's Encyclopaedic Unabridged Dictionary the word " free" has been defined as charge or payment for services as doctor's fee, a sum paid or charged for a privilege, such as admission fee, a charge allowed by the law for the services of a public officer.
21. Thus, fee is a payment for services or special benefit or privilege provided. The Honourable Supreme Court of Pakistan in the case of Collector of Customs v. Sheikh Spinning Mills (supra) while defining the word "Fee" has also relied upon the definition of "Fee" as mentioned in the above- referred dictionaries and formed the similar view. The Honourable Supreme Court observed that "Fee" is received for rendering certain services for the benefit of payee. The Supreme Court of India in the case of Commissioner, Hindu Religious Endowments Madrass v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt AIR 1954 SC 282,, while giving difference between the "Tax" and "Fee" observed that the distinction between a "tax" and "Fee" lies primarily in the fact that a tax is levied as a part of common burden while a fee is paid for a special benefit or privilege.
22. From the above position, it is clear that the fee is charged for the services rendered by the statutory functionaries and for the conferment of a benefit or a privilege as well.
23. Now it is to be seen whether the Government is providing any services, giving benefits or privileges to the petitioners to empower the Government to collect fee from the petitioners. It is pointed out that in an inquiry whether an enactment is ultra vires a rule has been set down by the Honourable Supreme Court of Pakistan in the case of Collector of Customs v. Sheikh Spinning Mills (supra) under which the view taken by the Federal Court of India was relied upon and it was observed that in such inquiry the Court must ascertain the true nature and character of the challenged enactment, its pith and substances and not the form alone, which it may have assumed under the hands of the draftsmen.
24. Keeping in view the above principle of law, we have examined the impugned Import Policy Order 1993 and found that the earlier order viz Licences and Permits Fee Order, 1979 has been repealed through the said Order. In order to arrive at a proper conclusion as to what was the necessity of repealing the earlier order it is necessary to examine the said order. A perusal of Licences and Permits Fee Order, 1979, reveals that some importers who were in possession of import licence, import permit or clearance permit were allowed to im port the items for which import licences etc. Were required and for other items for which import licence etc. Were not required. The importers were-required to pay at the rate of 6% ad valorem fee on the face value of each import licence, import permit, clearance permit or letter of credit as the case may be. The said scheme, can be found in Para. 3.1 of the said order which reads as under:-- "3.1 Every person in whose favour any import licence, import permit or clearance permit is granted or who applies for opening of a letter of credit for the import of any goods for which' a specific import licence, import permit or clearance permit is not required, shall pay fee at the rate of 6 per cent ad valorem on the face value of each import licence, import permit, clearance permit or letter of credit, as the case may be: ' Provided that the rate of fee of import licences and import permits required for import of machinery, not locally manufactured in Pakistan for initial installation, expansion, balancing, modernization and replacement, intended to be installed in the Rural Area as defined in the Ministry of Industries' Circular No,6(12)/90-Policy dated, the 7th December, 1990, as amended from time to time, shall be 2 per cent ad valorem: ' Provided further that the rate of import licence and import permit fee on the import of machinery not locally manufactured for industrial unit to be set up in Special Industrial Zones in Port Qasim Area, Lahore, Islamabad Motorway Area and other parts of the country, as the Federal Government may, by notification in the official Gazette, specify, shall be--- per cent ad valorem: ' Provided further that on the import of machinery, not manufactured locally by the industrial units to be set up in the Province of Balochistan except Hub Chowki, and import licence fee at the rate of two per cent shall be charged."
25. Thus. It is clear that under the above policy two categories of imports were allowed; firstly under licensing system and secondly under free competition system. Whereas in the Import Policy Order, 1993 the system of licensing trade has been abolished and system of free competition trade has been allowed in para.1.2 of the Import Policy Order, 1993 which reads as under:-- "All items hitherto permissible for import against import licences shall also be imported by the registered importers against letters of credit established directly by authorized foreign exchange dealers (banks) or against any other mode of payment notified in the Import Policy Order in vogue without obtaining import licences."
26. Under this scheme, the importers are not required to obtain the import licence, import permit or clearance permit or clearance permit but instead thereof they are required to register themselves as importers and exporters before the office of Export Promotion Bureau and thereafter they are required to open letter of credit directly and pay the required fee.
27. On examination of both the Orders, it is clear that the Government has provided special benefit and privilege to the importers under the Import Policy Order, 1993 because previously they were not allowed to import the items for which import licence, import permit or clearance permit was required but now they have been allowed to do so without such restrictions. Had the said licensing system been applicable and if the importers had imported such articles without such licence then they would have contravened the customs laws. Ir order to save the importers from violation of such laws the special benefit and privilege have been given to the said importers to import such items. Furthermore, this will also be in the interest and welfare of the citizens because free competition between the importers and exporters would ultimately benefit the citizens and that is permissible under Article 18 (b) of the Constitution. Therefore, when the Government chooses to offer a benefit or privilege on import on such items or goods through merely registration of imports and directly opening the letter of credit, then the Government can charge a reasonable fee for the benefit or privilege offered to them as well as for the services rendered in the field of import and export. Thus, the impugned orders are not ultra vires.
28. We have gone through the case of Dewan Salman Fibres Ltd. (supra) and are of the opinion that it does not give correct interpretation to the Import Policy Order 1993, which is impugned in the present petitions. We respectfully differ from the view taken in the above case for the above reasons.
29. In the light what has been discussed above the petitions are dismissed.