This petition has been filed to challenge the stand taken by to Respondent No, 1, Ministry of Commerce ("Ministry") in its letter dated 28.10.2002 as reiterated in its letter dated 30.3.2004, declining to refund an amount of US$ 50,000/- previously collected from the petitioner as a call deposit for the grant to him of authorization to import bullion.
2. The Ministry had issued a public notice an 25.7.1998 (Public notice") inviting applications for pre- qualification of firms for importing bullion in bulk for onward sale to the public through the banking channels. Conditions No, (xi) in the public notice requires applicants to give "a Call Deposit of US $ 50,000/- refundable in case of non-acceptance of the application." The petitioner's application dated 29.10.1998 was accepted on 17.11.1998 by the Ministry which granted it an import authorization for bulk import of gold and silver.
3. It is established on record that prior to the aforesaid public notice, the requisite call deposit amount for the same import authorization of bullion was US $ 100,000/- Clearly the public notice had liberalized Government policy in the matter of import of bullion. Some four years later, the Federal Government made another major policy concession. Vide SRO 496(I)/2002 dated 6.8.2002 ("SRO") the Ministry altogether withdrew the condition of call deposit and made the import authorization for bullion free of cost. Shortly thereafter, on or about 8.8.2002 the petitioner wrote to the Ministry for the refund of its demand draft furnished in satisfaction of the condition of call deposit.
This was declined by the two letters referred first hereinabove. In the petition the principal ground of challenge to the refusal to give refund is that the amount of call deposit is merely a security deposit which became refundable after the condition for the same was deleted under the new Government policy reflected in the SRO.
4. To fortify the aforesaid claim, the learned counsel for the petitioner has referred to the terms of the public notice and to subsequent correspondence between the parties. Initially, in 1998, the Ministry accepted US Dollar bonds in the amount $ 50,000/-as satisfactory compliance of the condition of a call deposit by the petitioner. However, by letter dated 21.9.1999 the Ministry rejected the said instrument for its non-encashability and demanded its substitution by a demand draft.
This was done by the petitioner and its bank draft was duly encashed by the Ministry. Learned counsel for the petitioner emphasized that the amount of call deposit cannot be retained by the Ministry unless it was collected as a fee or a tax. In the present case, neither the Ministry's public notice nor its correspondence at any point describes the said payment to be a fee or tax.
Therefore, the call deposit amount must possess the character of a security amount which becomes refundable after the aforesaid change in law.
5. The learned Deputy Attorney-General has opposed the foregoing contentions. He submits that the call deposit given by the petitioner pays the registration fee for grant of authorization to import bullion. The public notice cannot be read in isolation in this regard and compliance with its conditions has consequences that are explained in the Schedule to the Import Policy Order 1999 bearing SRO No, 895(1)/1999 dated 3.8.1999. This order makes the following provision with reference to the import of gold: "Importable by companies specifically registered and authorized for the purpose by the Ministry of Commerce. As laid down in the public notice of 25th July, 1998."
6. It is the Import Policy Order 1999 that confers the privilege to import bullion on persons who satisfy its preconditions namely registration and authorization. The call deposit given by the petitioner is stated by the learned DAG to have paid the fee charged for the conditions of registration and authorization that predicate conferment of the privilege to import bullion. The Federal Government had also charged such fee under its previous import policy orders from persons that got registered and authorized to import bullion. Learned Deputy Attorney-General informs that there are three such registered and authorized importers, each of whom" paid registration fee with a call deposit of US $ 100,000/-. However, after the presently relevant change in law by the SRO neither these importers have demanded refund of their call deposit amounts nor have they been offered any refund by the respondents. The claim by the petitioner is objected for seeking refund of registration fee after availing for more than four years, the privilege and benefit conferred thereby to import bullion. The petitioner's claim therefore, seeks refund of the value of a benefit that the petitioner has already consumed. At best it is a speculative claim based on the alleged ambiguity of the expressions "call deposit' used in the public notice the literal meaning of which expression admittedly does not include the charge of "fees".
7. The learned counsel for the parties have been heard and the record perused carefully. It transpires that originally the petitioner had given US$ bonds as purported compliance with the requirement of a call deposit. These bonds were rejected by the Federal Government and instead a demand draft for the amount of US $ 50,000/- was asked for. That demand was contested and not complied by the petitioner; consequently its registration and authorization was cancelled by the respondents on 14.2.2000. The petitioner thereafter submitted the requisite demand draft which was not kept as security but was duly encashed by the respondents and the petitioner's license was resorted on 11.3.2000. The deposit challan for the said demand draft produced on record show that its proceeds were deposited in the account, inter alia, titled as "Other Receipts Fees realized under the Import and Export (Control) Act, 1950." The petitioner's argument that the requisite call deposit is merely a security deposit may have had force if the US$ bonds had been accepted by the respondents as due compliance with condition (xi) of the public notice. However, this argument is futile because the petitioner subsequently paid the call deposit amount to retain its authorization to import bullion. The conduct of the parties makes it abundantly clear that a call deposit was understood to constitute a payment to the respondents rather than the provision of a security to cover the breach or default of the conditions of the import authorization by the petitioner.
8. The fact, however, 'remains that there is no statutory instrument that describes the subject call deposit as a fee. Therefore, the point of importance is whether the Federal Government has lawful authority to collect amounts as fee for citizen without any express and specific charge being imposed by a valid legal instrument. Registration and authorization for import of bullion under the Import Policy Order, 1999 was given to applicants who satisfied the conditions specified therefore.
Quite obviously the grantees of such registration and authorization were conferred a special privilege in comparison to other registered importers in the country. It cannot be claimed nor is urged by the learned counsel for the petitioner that the law gives the petitioner a right for the gratuitous conferment of such a privilege. It is a legal presumption in our jurisprudence' that unless stated so expressly, no benefit and, therefore, privilege can be deemed to be conferred gratuitously on a party. The law presumes against free rides. That is the rationale of Section 70 of the Contract Act 1872 which sets out the legal principle of non-gratuitous benefits in quasi contractual relations.
The nature of the privilege conferred on the petitioner by import registration and authorization is subject to terms specified by the Ministry. Although granted in the public domain, this privilege is derived from offer and acceptance in relations that resemble a contractual arrangement.
Therefore, the foregoing principle should apply filly to the facts of the present case. Hence the petitioner cannot deny its obligation to reimburse to the Ministry the value of the privilege enjoyed by it. Indeed, it is also established law that the Government is vested with authority to charge a free for conferring a benefit or privilege on a person. This quid pro quo as a basis for imposition of 'fee' is highlighted by the Honourable Supreme Court in Collector of Custom vs. Sheikh Spining Mills and others (1999 SCM R 1402):- "The controversy arising for determining in these appeals is to ascertain the exact nature of levy as to whether it is a customs duty in contradistinction to the terms 'fee' and tax'. As far as fee is concerned, it is distinguishable from tax. The distinction between "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: Fees confer a special capacity although the special advantage as for example, in the case of registration fee for documents or marriage licence is secondary to the primary motive or regulation in the public interest. Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit, which the individual receives. It is the special benefit accruing to the individual, which is the reason for payment in the case of fees: In the case of a tax, the particular advantage if it exists at all; is an incidental result of a State action." (emphasis added).
9. It is common ground that under Section 3 of the Import and Export (Control) Act 1950 ("Act") the Federal Government has lawful authority to charge fees for conferring the privilege of import authorization on qualified persons. That statutory power is exercisable by executive action through notification in the official Gazette. Under the law laid down by the Honourable Supreme Court in Saghir Ahmed through legal heirs vs. Province of Punjab through Secretary, Housing and Physical Planning Lahore and others (PLD 2004 SC 261), it is not necessary that every notification must be published in the Official Gazette. In the present case, no cavil is raised to the effectiveness of the public notice relied by the petitioner to successfully notify the requirement of call deposit.
Therefore, the public notice sufficed to comply the statutory requirement of notification. Given that the petitioner availed a privilege conferred by the Federal Government the former is under a lawful obligation to pay for the value of such privilege. Moreover, the Ministry has authority under the Act to charge fees for granting import registration and authorization. This has been exercised through the public notice to require payment of the call deposit amount. On the foregoing facts, the case of the petitioner reduces to the semantical question whether the meaning of the expression "call deposit" can include the charge of a fee as recompense for a privilege conferred. This expression is not a term of art either under the law developed in relation to the Act nor under taxation law. The meaning ascribed thereto in banking law is of no relevance to the facts of the present case and therefore need not be considered. However, in the context of the petitioner's duty to reimburse the benefit availed, it is clear from the conduct of the parties that they understood the meaning and effect of the expression "call deposit' of grant of registration to import bullion to be a payment and not merely the provision of a security amount. There is nothing in the public notice, the Import Policy Order, 1999 or the SRO to suggest that the call deposit, amount was refundable after acceptance of application. Indeed, none of these instruments contain any provision for refund of the call deposit. Consequently, the petitioner's claim that the-call deposit represent a security amount is merely a sophisticated argument lacking legal or factual foundation.
10. Accordingly, in the facts of the case and under the applicable law, the payment of the call deposit amount by the petitioner, the quantum whereof is not attacked in the petition, constitutes a payment of fees as recompense by the petitioner for the privilege and benefit of being granted registration and authorization to import bullion. It is a lawful charge collected by the Federal Government from the petitioner. Therefore, this petition has not merit and is dismissed but with no order as to costs.