NASIR-UL-MULK, J. - By this single judgment Appeals Nos. 1388 and 1389 of 2002, 410 to 418 of 2005, 266 and 267 of 2006 and 395 of 2005 are disposed of. As they all involve the interpretation of sub- section (2) of Section 4 of the Central Excise Act, 1944 (hereinafter referred to as the Act). Civil Appeals Nos. 1388 and 138$ of .2002 arise from the. Judgment of the Peshawar High Court , and the remaining from the judgments of the Lahore High Court. Both the High Courts have accepted the point of view put forth by the assessee on the interpretation of the said provision. The High Court of Sindh in -the Pakistan Beverages, v. Federation of Pakistan (C.P. No. 1926 of 2002) decided on.
14.1.2005 had concurred with opinion of the other two High Courts. The said judgment, however, has* not been assailed before this Court.
2. Leave to appeal in these cases was first granted to the appellant in Civil Appeal No. 1388 of 2002 (Pakistan through Secretary Finance, etc. v. M/s. Lucky Cement) to determine the correct construction of sub-section
(2) of Section 4 of the Act, which alongwith sub-section (1) thereof reads as under:- "[4. Determination of value for the purposes of duty [(1) Where under this Act any article is chargeable with duty at a rate dependent on the value of the articles, such value shall be deemed to be the wh^le sale-cash price for which an article of the like kind and quality is sold or is capable of being sold to the general body of retail traders [or, if there is no general body of retail traders, the general body of consumers] on the day on which the article which is being assessed to duty is removed from the factory or the warehouse, as the case may be, without any abatement or deduction whatever except the amounts of duty and sales tax then payable].
[(2) Notwithstanding the provisions of subjection (1), the Federal Government may, by notification in the official Gazette, declare that in respect of any goods or class of goods the duty shall be charged on the retail price fixed by the manufacturer, inclusive of all charges and taxes, other than sales tax levied and collected under section 3 of the Sales Tax Act, 1990, [***] at which any particular brand or variety of such article should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price: Provided that the retail price shall be legibly, prominently and indelibly [indicated] on each article, packet, container, packages, cover or label, as the case may be [:]] ..................................................................
The controversy between the revenue and the assessee is whether in view of the words of sub- section (2) of Section 4 that "duty shall be charged on the retail price fixed by the manufacturer, inclusive of all charges and taxes, other than sale tax ............ " retail price would include the excise duty leviable on the goods. The stand point of the revenue is that the retail price shall include the amount of excise duty leviable 'whereas the assessee (respondents herein) oppose this construction and the High Courts have agreed with the later and have held that excise duty shall not be included as a component for determination of the value (retail price) for levying excise duty.
Leave was granted essentially to re-examine the two opposing points of view.
3. Mr. M. Sardar Khan, Sr. ASC entered appearance on behalf of the appellants and was ably assisted by Mr. Mumtaz A. Sheikh, Member (Legal) C.B.R, in Civil Appeals Nos. 1388 and 1389 of 2002, whereas Mr. Izhar-ul-Haq, ASC appeared for the appellants in the remaining appeals. For the respondents Barrister Wasim Sajjad, Sr. ASC, Mr. Ali Sibtain Fazli, ASC, Mr. Ashtar Ausaf Ali, ASC, Syed Najmul Hassan Kazmi, ASC represented the respondents in different cases.
4. Mr. M. Sardar Khan, leading the arguments for the" appellants, submitted that the High Courts have misunderstood the true import of sub-section (2) of Section 4 of the Act by holding that the inclusion of excise duty in the retail price and levying duty on such price amounted to double taxation. The learned counsel maintained that the excise duty leviable on the price of goods and the profits thereon is notionally included in the retail price and no duty is charged or levied at the stage of such inclusion. The learned counsel submitted that reference in ,the said provision to "taxes" for the purpose of its inclusion as a component of the retail price would also include excise duty. He contended that had the legislature intended to exclude excise duty as a component of retail price it would have specifically mentioned in the same way as sales tax was expressly excluded from the said price. He further referred to Central Excise General Order No. 14 of 1969, explaining the said provision by including the excise duty in the retail price. In support of his contention that tax includes 'duty' the learned counsel cited: The Marriage Halls Association v.
Government of Sindh (1999 YLR 1247), M/s. Elahi Cotton Mills Ltd. And others v. Federation of Pakistan through Secretary M/o Finance, Islamabad and others (PLD 1997 S.C. 582), M/s. Central Insurance Co. And others v. The Central Board of Revenue, Islamabad and others (1993 SCMR 1232),' Atlas Battery Ltd., Superintendent Central Excise & Land Customs, Circle 'C' Karachi and others (PLD 1984 S.C. 86), The Province of Madras v. Messrs Boddu Paidanm & Sons (AIR (29) 1942 Federal Court 33) and Governor General in Council v. Province of Madras (A\R (32) 1945 Privy Council 98 Federal Court). Mr. Izhar-ul-Haq Sheikh adopted the arguments of Mr. M. Sardar Khan and reiterated that the amount of excise duty payable on the goods is incorporated in the retail price is paid only once.
5. Barrister Wasim Sajjad, Sr. ASC defending the impugned judgment submitted that it is not in ail cases that the word 'tax' includes 'duty' and whether or not such inclusion is to be construed would depend upon the construction of the statute as a whole in which the words appear. He referred to a number of statutory provisions as well as items numbers 43 to 52 of the 4th Schedule to the Constitution to elaborate his contention that taxes and duties are separate and distinct forms of levies, In the context in which 'taxes' is used in sub-section (2) of Section 4 of the Act as a component of retail price, it was argued, would not- include excise duty, It was further contended that if the interpretation placed upon the said statutory provision by the ^revenue is accepted it would result in payment of excise duty twice on the same goods. Mr. Ali Sibtain Fazli, ASC has submitted an elaborate written note duly supported by case- law and we have benefited from it in reaching our conclusions. To strengthen his argument that excise duty is be excluded while fixing the retail price under sub-section (2) of Section 4 of the Act, the learned counsel had sought support from Muhammad Ismail and others v. The State (PLD 1969 S.C. 241), Government of Pakistan, etc. v. Hashwani Hotel Limited (M/s) (PTCL 1990 CL 427), Pakistan Textile Mill Owners Association, Karachi and two others v. Administrator of Karachi and two others (PLD 1963 S.C. 137), M/s. Hirjina & Co. (Pakistan) Ltd., Karachi v. Commissioner of Sales Tax Central, Karachi (1971 SCMR 128), The State v. Zia-ur-Rahman and others (PLD, 1973 S.C. 49), United Bank Limited v. Canadian Apparel Company Ltd. And others (PLD 1995 Karachi 577), M/s. Lucky Cement Limited v. C.B.R, and others (PTCL 2002 CL. 449), Pakistan Beverages Limited v. Federation of Pakistan (CP. No. D- 1926/2002, High Court of Sindh, Karachi), Collector of Customs & Central Excise, Customs House, Multan v. M/s. Ogries, Kabirwala and others (CPs. 1527/L to 1530/L & 1576/L to 1579/L to 2000, Supreme Court). Mr. Najmul Hassan Kazmi, ASC adopted and endorsed the submissions already made by the other two learned counsel.
6. In the impugned judgments the High Courts had declared as illegal the inclusion of the excise duty in the retail price under sub-section (2) f Section 4 of the Act, mainly on two grounds. Firstly, that this amounted to double taxation and secondly, that the plain reading of the said provision does rot admit the inclusion of excise duty in the word 'tax', as used therein. As to the first ground we do not find ourselves in agreement with the findings of the High Courts. Section 4 of the Act provides two modes for determining the value of the goods for levying of excise duty, laid down separately in sub-sections (1) and (2) thereof. Under sub-section (2), the interpretation of which has given rise to the present controversy, levy is to be on the 'retail price' fixed by the*manufacturers which shall include charges and taxes other than sales tax. The charges and taxes, which according to the revenue includes excise duty, is notionally added to the cost of manufacturing of the goods and profits, as fixed by the manufacturer, and upon sum total of all these components excise duty is levied. No duty is charged when the 'retail rice' is being determined and the levy is made only once after the price is fixed, It is therefore not correct to say that the same goods are subjected twice to levy of excise duty. The findings of the High Courts on this point therefore cannot be maintained.
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7. As regards the findings of the High Courts that the words "duty shall be charged on the retail price fixed by the manufacturer, inclusive of all charges and taxes, other than sales tax in sub- section (2) of Section 4 does not include excise duty we are persuaded by the reasoning given in the impugned judgments and augmented by the submissions made by the learned counsel for the respondents.
8. Before dilating upon these reasoning and the case-law referred to in support thereof we would first attend to the judgment cited by Mr. M. Sardar Khan, Sr. ASC to support his contentions that "taxes" include "duties", In the case, of M/s. Elahi Cotton Mills Limited v. Federation of Pakistan (supra), a 5 members Bench of this Court while dealing with a. Case, under Sections 80-C and 80- D of the Income Tax Ordinance, 1979, examined the case-law and treatises on taxes and duties generally, from which it derived. Thirty four principles and the one pressed into service by the learned counsel for the appellant, number XXV, on page 678 of the judgment reads:- "That a direct tax is one which is demanded from the very person, who it is intended or desired should pay it whereas indirect taxes are those, which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another, like custom duties, excise taxes and sales tax, which are borne by the consumers."
In th case of the Province of Madras v. M/s. Boddu Paidanna & Sons (supra) the question before the Court was whether the Provincial Legislature of the State of Madras was empowered to levy sales tax on the first sale of the goods by. The manufacturer as the levy was in pith and substance excise duty leviable exclusively by the Central Legislature. And while resolving the issue the Court referred to the excise duty and sales tax as 'tax'. The same controversy was brought before the Privy Council in Governor General in Council v. Province of Madras (supra) and after holding that it is not the name of the tax but its real nature and its pith and substance which must determine into what category a tax falls, defined duty of excise as primarily a duty leviable upon manufacturer or producer in respect of commodity manufacture or produced and that it was a tax upon goods, not upon sales, It is these last words that the learned counsel for the appellants referred to in support of his contentions." In the case of Atlas Battery Limited (supra) the very provisions of sub-sections
(1) and (2) of Section 4 of the Central Excise Act were under scrutiny and it was held that under sub-section (2) the manufacturer has to include the charges and taxes in the retail price for the levy of excise duty. However the Court was not called upon to determine as to whether excise duty would also be included in fixing the 'retail price', In the case of Marriage Hall Association v.
Government of Sindh (supra), the High Court of Sindh while drawing a distinction between 'excise duty' and 'license fee' referred to the former as tax and the later as fee.
9. On the other hand certain statutory provisions have referred to tax and duty as separate and distinct impositions. As pointed out by the learned counsel for the respondents Article 260 defines 'taxation' to "include the imposition of any lax or duty whether, generally, local or special and tax shall be construed accordingly". Similarly items number 43 to 53 of the Fourth Schedule to the Constitution refers to taxes, duties of customs, excise and estate duty under .Separate items.
Another example is. Section 202 of the Custom Act, 1969, which refers to tax and duty as separate incidences.
10. From the above resume of the case-law and the use of the terms 'tax and 'duty' in statutes it is not possible to conclude that 'tax' must in all situations be taken include 'duty'. Whether or not such inclusion can be inferred would depend upon the context in which the terms are used. In none of the cases cited on behalf of the appellants the Courts were called upon to directly decide the question as to whether 'tax' would include 'duty' and reference to 'duty' as 'tax' was made while deciding other fiscal disputes. Fr6m the examination of the case-law and the statutory provisions, where the two terms came under discussion, or were used, it appears that the term 'tax' may be used in different senses. In its general and wider sense it means a burden or charge upon, persons, property or activities imposed by the legislature to raise revenue for public purposes, In this sense it encompasses all kinds of taxes and duties, In the case-law cited by the learned counsel for the appellants it seems that the reference to 'duty' as 'tax' was used in such general sense. We are however to construe 'tax' in the context used in a particular statutory provision, namely, sub- section (2) of Section.4 of the Excise Duty, reproduced above.
11. One of the basic rules of interpretation of statute is to assign the words used therein their ordinary meaning, unless the context dictates otherwise. As already observed to be construed accordingly, unless shown ^otherwise. Furthermore it may be noted that four terms of imposition namely, 'duty', 'sales tax', 'charge' and 'tax' have been used in sub-section (2) of Section 4 of the Excise Duty Act. It is a settled rule, reiterated in State v. Zia-ur-Rebman and others (supra) by this Court that where different words are used in the same section or sub-section of a statute the intention of the legislature is not to assign them the same meaning. By inclusion of the terms 'duty' and 'taxes' in subsection (2) of Section 4 the intention of the legislature was clear that one should not include the other. Had the intention been to include duty in fixing the 'retail price' the phrase 'taxes and charges' would have read 'taxes, duties and charges'.
12. Although we are clear in our minds that on the plain construction of Section 4(2) of the Act excise duty is not to be included for the purpose of determining the 'retail price' on which excise duty is to be charged, even if the interpretation placed upon the said statutory provision by the leamed counsel for the appellants was equally possible, or any ambiguity existed therein, it is now settled that in such situations interpretation favourable to the tax-payer is to be preferred.
13. In view of the above discussion we are inclined to uphold the impugned judgments.
Consequently these appeals are dismissed with no order as to costs.