QAISAR KHAN, J.--This is a writ petition under Article 98 of the Constitution filed by the Charsadda Sugar Mills Ltd., Charsadda (hereinafter referred to as the petitioner) against the Government of Pakistan through the Secretary, Ministry of Finance, the Central Board of Revenue through its Chairman and the Collector of Central Excise and Land Customs, Lahore. The petitioner has prayed for the following reliefs : -- (a)To declare that the Excise Duty on Production Capacity (Sugar) Rules, 1966 (hereinafter referred to as the Rules) were not good law and Notification No, S. R. 0. 87 (R)/66promulgated on 11-6-66 was not enforceable.
(b)To declare that the notification directing the assessment of duty on the basis of production capacity could not be given effect to and in terms of the express provisions of section 3 (1) and section 3 (7), Central Excises and Salt Act of 1944, the only method of levying excise duty legally available to the respondents was on the basis of actual production of sugar.
(c)To direct the respondents that any determination of the production capacity of ttie petitioner could only be done after inviting/permitting the petitioner to lead evidence relevant to the matter and that respondent No, 2 could not determine the production capacity of the petitioner's Sugar Mill otherwise than by giving the petitioner an opportunity of being heard and that the law contemplated their passing a speaking order in this behalf.
(d)To declare and order for the reasons explained in paras. 18, 19, 20 and 21 of the writ that respondent No, 2 was bound to allow the petitioner rebate from payment of excise duty for a period of 41 days as against 32 days allowed by respondent No, 2.
(e)To declare the order of respondent No, 2 fixing the production capacity of the petitioner at 30,000 tons for the year 1966-67 and at 26,000 tons for the year 1967-68 as illegal and that as such no action could he taken on its basis.
(f)To declare that the amendments introduced by the Finance Act, 1966 in section 3 of the Central Excises and Salt Act, 1944 were ultra vires.
(g)To direct the respondents to levy and realize from the petitioner excise duty on the production of sugar on the basis of sugar actually produced by it in any year.
(h)To direct the respondents to refund to the petitioner any amount realized from it in excess of its legal liability.
(i)To grant any other or further relief that the Court may deem fit or proper in the circumstances of the case.
In the exercise of its power under Article 131 of the Constitution read with item 43, Clause (ti) of the Taird Schedule thereof, the Central Government have exclusive powers to make laws for the levy, collection, etc. of the duty of excise. The excise duty on sugar manufactured at the sugar factories in Pakistan was levied at the rate of Rs, 14 per hundredweight under section 3 of the Central Act called the Central Excises and Salt Act of 1944 (hereinafter referred to as the Act) at item No, 8 of the First Schedule of the Act. Section 3 of the Act runs as follows :- "3(i) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in Pakistan and a duty on salt manufactured in, or imported by land into, any part of Pakistan, as, and at the rates, set forth in the First Schedule.
(ii)The Central Board of Revenue may, by notification in the official Gazette fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the First Schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force.
(iii)Different tariff values may be fixed for different classes or descriptions of the same articles.
(iv)Notwithstanding anything contained in subsection (1), the Central Government may, in lieu of levying and collecting duties of excise on excisable goods under that subsection, levy and collect, in such manner and at such rates as may be prescribed, duties of excise on the productive capacity of the plant or machinery, or a part thereof, manufacturing or producing excisable goods."
3. According to the Constitution (Sixth Amendment) Act II of 1966 which came into force on 31-3- 1966, clause (i) was added after clause (h) of item No, 43 of the First Schedule. Clause (i) runs as follows :- "(i) Taxes and duties on the production capacity of any plant, machinery, undertaking establishment or installation in lieu of the taxes and duties specified in items (b), (c) and ( f ) of this entry, or in lieu of any one or more of them.
4. In exercise of its power under Article 131 of the Constitution read with Clause (i) of Item 43 of the First Schedule thereof, the Central Legislature amended section 3 of the Act vide Finance Act XI of 1966. The Finance Bill of 1966 was introduced in the National Assembly on 11-6-65 and published in the Gazette, Extraordinary of Pakistan on the 17th of June 1966. It became Act on the 30th of June 1966 and was published in the Gazette, Extraordinary of Pakistan the same day. It was to be effective from the 1st of July 1966. According to the aforesaid amendment, subsection (iv) of section 3 of the Act was replaced by the following subsections (4), (5), (6) and (7)- "S. 3. Subsection (iv).--With the prior approval of the Central Government, the Central Board of Revenue may, in lieu of levying and collecting under subsection (i) duties of excise on excisable goods, by notification in the official Gazette, levy and collect duties on the production capacity of plants, machinery undertakings, establishments or installations producing or, manufacturing such goods and such notifications shall specify-- (a)the guiding principles for the determination of production capacity, (b)the production capacity, as determined in accordance with such guiding principles, of the plants, machinery, undertakings, establishments or installations affected by it, (c)the duty or the rate of duty on production capacity, and (d)the manner of collection of such duty.
(v) The production capacity of any plant or machinery or part thereof specified in a notification under subsection (iv) shall, upon an application made to the Central Government within thirty days of the notification by any aggrieved person, be reviewed by a Review Board constituted under subsection (iv) to which the application shall be referred; and the decision of the Review Board shall be final.
(vi) The Central Government shall, for the purpose of subsection (v) constitute a Review Board consisting of the following :- (a)the Secretary to the Government of Pakistan, Ministry of Finance, who shall be the Chairman, (b)the Secretary to the Government of Pakistan, Ministry of Commerce, and (c)the Secretary to the Government of Pakistan, Ministry of Industries.
(vii) The Central Board of Revenue may, by notification in the official Gazette, at any time, cancel a notification under subsection (iv); and where a notification is so cancelled or, for any reason whatsoever, cannot be given effect to, the duty under subsection (i) in lieu whereof the duty under subsection (iv) was levied by such notification, shall be levied and with necessary adjustment, collected for the financial year during which such notification is cancelled or for the period for which it cannot be given effect to."
5. In exercise of its power under subsection (iv) of section 3 of the Act read with section 37 thereof, the Central Board of Revenue with the prior approval of the Central Government made the following rules for the levy and collection of a duty on the production capacity of the plants and machinery of the factories manufacturing sugar, in lieu of the duty of excise leviable on sugar under subsection (i) of the said section.
"1.--(1) These rules may be called the Excise Duty on Production Capacity (Sugar) Rules, 1966.
(2) They shall come into force on the first day of July 1966.
2. Unless there is anything repugnant in the subject or context, words and expressions used in these Rules shall have the same meaning as in the Central Excises and Salt Act, 1944 (I of 1944) and the rules made under section 37 thereof.
3. The production capacity of the plant and machinery in each factory shall be determined with reference to--
(a) the manufacturers' declarations about the production capacity of his factory made to Government in any conection; (b)the daily-rated capacity of the factory for the crushing of sugarcane and beet ; and (c)the percentage of the yield of sugar from sugarcane and beet ; and (d)the actual production of sugar in the preceding years.
4. If a factory works for less than one hundred and sixty days in a financial year, then for each day, short of the said period of one hundred and sixty days, on which the factory does not work an abatement from duty leviable under rule 3 shall be allowed at the rate of one hundred and sixtieth of the total amount leviable for the financial year; Provided that, in the calculations for the purpose of allowing abatement under tnis rule, the following events shall not be taken into account, namely :-
(1) any closure of the factory for a period of less than six days at a time, or (ii)any closure of the factory for more than a period of six days at a time about which advance notice was not given in writing to the proper officer ; or (iii)any closure of the factory for normal cleaning, repair or maintenance purposes.
5. The annual amount of duty leviable in accordance with rule 3 for a financial year shall be paid on twelve equal monthly instalments : (1)Provided that, for the financial year 1966-67, if the manufacturer so desires, the total amount of duty may be paid in eight equal monthly instalments commencing from October 1966.
(2)The proper officer shall deliver to a manufacturer, in the month of July a demand for the amount of duty due from the manufacturer under these rules, indicating both the total amount of duty for a financial year and the amount of the monthly instalment.
(3)The monthly instalment for the month of July shall be paid by the 31st of July and the instalments due for subsequent months shall be paid by the twentieth day of the respective months.
6. Nothing in these rules shall apply to sugar manufactured by a factory and not cleared therefrom on payment of excise duty before the coming into force of these rules; nor shall these rules affect the liability of such sugar to excise duty under subsection (1) of section 3 of the Act.
7. The provisions of the rules made under section 37 of the Act, shall in so far as they are not inconsistent with these rules, apply to sugar and the manufacturers governed by these rules as they apply to excisable goods and manufacturers of excisable goods on which duties of excise are levied under subsection (1) of the section 3 of the Act.
THE SCHEDULE S. No.Name of the Sugar Factory Annual Production Capacity Tons
1. Desh Bandu Sugar Mills Ltd., Charshahr3200
2. Kishwerganj Sugar Mills, Kashoreganj Mymensingh.4500
3. Zealpak Sugar Mills Ltd. Dewanganj My mensingh.12800
4. Rajshahi Sugar Mills, E.P.I.D.C., Harian, Rajshahi.12800
5. Sitabganj Sugar Mills (Private Ltd.)
Setabganj, Dinajpur10200
6. North Bengal Sugar Mills (Private Ltd.) Gopalpur, Rajashahi19400
7. Rangpur Sugar Mills Limited, Rangpur19200
8. M/s. Carew & Co. Limited Darsana, Kushtia15400
9. Thakurgaon Sugar Mills E.P.I.D.C., Thakurgaon Road.13300
10. Jaipurhat Sugar Mills, Jaipurhat, Bogra.25600
11. Kushtia Sugar Mills, E.P.I.D.C., Jagatikushtia12800
12. Frontier Sugar Mills & Distillery, Takht-i-Bhai, Mardan.19000
13. Premier Sugar Mills Limited, Mardan 69700
14. The Rahwali Cooperative Sugar Mills, Rahwali, District Gujranwala.10400
15. Kohinoor Sugar Mills, Jauharabad, Sargodha.23500
16. Leiah Sugar Mills, Leiah. 23100
17. Charsadda Sugar Mills Ltd., Charsadda35000
18. Crescent Sugar Mills & Distillery Lyallpur41900
19. Hyesons Sugar Mills Ltd., Jetha Bhutta, Khanpur.25000
20. Bannu Sugar Mills, Serai Naurang, Bannu16200
21. Fauji Sugar Mills, Tando Muhammad Khan, Hyderabad.24600
22. Habib Sugar Mills Ltd., Nawabshah 23700
23. Bawany Sugar Mills Ltd., Talhar, Hyderabad.19200
24. Mirpurkhas Sugar Mills Ltd., Mirpukhas19200 These production capacities of the various sugar mills were fixed for production of sugar both from beet and sugarcane.
6. These rules were published in the Gazette, Extraordinary of Pakistan on 11-6-66 and were to take effect from 1-7-66. The petitioner thereupon filed a review petition to the Revenue Board, set up under subsection (6) of section 3 of the Act and the Review Board by its order dated 24-10.66 reduced its production capacity to 30,000 tons for the year 1966-67 and 32,000 tons for the year 1967-68 and the succeeding years. By Notification No, S.R.O.1659 (K)/67 dated 23-9-67 the production capacity of the petitioner was reduced from 35,000 tons to 28,800 tons. This reduction was allowed on the ground that according to the amended rules duty on sugar produced from beet was not to be levied on production capacity basis. This notification does not indicate as to whether it applied to the production capacity for the year 1966-67 as well or not. According to counsel for the petitioner it did apply to the year 1966-67, while according to the counsel for the respondent it did not. It appears that this notification was issued without taking into consideration the order of the Review Board, reducing the production capacity of the petitioner from 35,000 tons to 30,000 tons for the year 1966-67 and to 32,000 tons for the year 1967-68, for if the order of the Review Board had been taken into consideration then the reduction for the year 1967-68 should have been from 32,000 tons to 28,800 tons and could not have been from 35,000 tons to 28,000 tons as given in the notification.
7. The petitioner again filed a review petition against the aforesaid notification dated 23-9-67 fixing its production capacity at 28,800 tons for the year 1967-68 and the Review Board by its order dated 16-2-68 reduced its production capacity to 26,000 tons for the year 1967-68. The net result of the above was that the production capacity of the petitioner was fixed for sugar produced from sugarcane and beet both during the year 1966-67 at 30,000 tons and for the sugar produced from the sugarcane alone at 26,000 tons for the year 1967-68 and the succeeding years. It is under these circumstances that the writ petition was filed.
8. The vires of the Act was questioned on the ground that subsection (4) of section 3 of the Act as substituted by the Finance Act of 1966 was ultra vires being against the provisions of the constitution as also on account of excessive and impermissible delegation of power which conferred upon respondent No, 2, the authority to impose tax, to determine the rate of duty and to lay down the guiding principles for determining the production on which tax was to be imposed, which in turn meant delegation of uncontrolled legislative powers without declaring with precision or at all the principle or policy of law imposing the tax.
The vires of the rules was questioned on the ground that on 11-6-66 these could be made by the Central Government and not by the Central Board of Revenue as the Finance Act of 1966 received the assent of the President on 30-6-66.
But before assailing the vires of the Act and the rules, the learned counsel for the petitioner Mr. Mahmood Ali Qasuri raised the following contentions alleging that the assessment of the production capacity was without lawful authority and of no legal effect even if the Act and the rules were intra vires :--
(i) That the assessm ent of the production capacity was arbitrary as no record was asked for from the petitioner and neither was any pro forma supplied by the petitioner nor any data collected by the respondents.
(ii)That the production capacity of the petitioner was fixed by the Assessing Authority without giving the petitioner an opportunity of hearing and its order was, therefore, bad in law.
(iii)That whenever there was a right of correction by a higher authority of an order, the order must be a speaking one giving reasons therefor, which had not been done.
(iv)That the Mills should have been dealt the separately and (sic) assessing the Mills collectively at the same time showed that the Assessing authority could not and had not applied its mind to the case of the petitioner and had, therefore, not dealt with the case fairly, justly and equitably, which the authority was bound to do.
(v)That according to the written statement of the res-pondents the Review Board had laid down certain principles of universal application which were nowhere disclosed and that the petitioner had a right to know those principles before his review petitions were disposed of.
(vi)That the production capacity of all the Mills could not be determined at the same time on 11-6- 66 when the rules laying down the guiding principles were framed, that if these production capacities had been determined earlier, then these were not determined under the rules and the guiding principles were evidently not taken into consideration.
(vii) That the production capacity of the petitioner's Mills could not be fixed at 30,000 tons for the year 1966-67 as against 26,000 tons for the year 1967-68, because the production capacity had to be the same for each and every year.
(viii) That the rules were framed and published on 11-6-66 in exercise of powers under subsection
(4) of section 3 of the Act read with section 37 thereof and that since subsection (4) of section 3 was nowhere in existence on 11-6-66, the rules could not be framed under the law which was not in existence and were, therefore, bad in law.
(ix)That the liquidation period of two days had wrongly been added to the yearly working days of the petitioner's Mill while allowing rebate and that the same liquidation period had wrongly been subtracted from the breakdown period of 7 days.
10. The Advocate-General on behalf of the respondents met these contentions by alleging that there was no right of hearing before the Assessing Authority and that at any rate hearing was given to the petitioner by the Review Board, which was sufficient. According to the learned counsel the production capacity had been correctly determined in the case of the petitioner according to the relevant law and rules and that the liquidation period of 2 days had to be subtracted while counting the breakage period and had to be added to the yearly working days.
11. Now we proceed to deal with the aforesaid contentions seriatim : Points: (0, (iii) and (iv) are interconnected and, therefore, dealt with jointly. The learned counsel for the petitioner contended that there was no material whatsoever before the Assessing authority on which it could determine the production capacity of the petitioner and that the Assessing authority by dealing with the cases of all the Mills collectively had prejudiced the petitioner's case and had not acted justly, fairly and equitably because in the circumstances it was not possible for the authority to apply its mind to each and every case individually. He further contended that whenever there was a right of correction of a certain order by a higher authority, the order to be passed by the lower authority shout I be a speaking order giving reasons therefor; otherwise the higher authority would not be in a position to perform its duty properly. In this connection the learned counsel referred to the fixation of the production capacity of the Textile Mills and contended that before fixing the production capacity of the Textile Mills the Government appoint. ed a Committee vide Notification No, 5/16-CS (B&L)/67 dated 12-8-67, published in the Gazette, Extraordinary of Pakistan dated 12-8-67 for determining the production capacity of each mill, which Committee properly dealt with the case of individual Mill and on receipt of the report of the said committee regarding the production capacity of each mill, the Central Board of Revenue thereafter notified rules under section 3 (4) of the Act fixing the production capacity of each mill. According to the learned counsel that was the proper procedure which would have been followed in cases of the Sugar Mills as well for giving the Mills a proper opportunity of presenting their cases.
Learned counsel for the respondents on the other hand contended that the Assessing authority had material before it in the form of statements annually received from the Mills regarding their actual production, on the basis of which to assess the production capacity and that the Assessing authority was an administrative body, which was not bound to write detailed orders, giving reasons therefor. Learned counsel for the petitioner met these contentions by alleging that the order of the Assessing authority did not show even this much that it had considered the statements sent by the petitioner and that even an administrative tribunal was bound to act judicially if it had to give a decision affecting the property of a person after considering evidence before it. For this he relied on Halsbury's Laws of England Third Edition, Volume II, pages 55-56.
It is laid down there that; 'Even an administrative body in ascertaining facts or law may be under a duty to act judicially notwithstanding that its proceedings have none of the formalities of, and are not in accordance with the practice of, a Court of law. It is enough if it is exercising, after hearing evidence, judicial functions in the sense that it had to decide on evidence between a proposal and an opposition. A body may be under a duty, however, to act judicially although there is no form of lb inter partes before it; it is enough that it should have to determine a question solely on the facts of the particular case solely on the evidence before it. Moreover an administrative body, whose decision is actuated in whole or in part by questions of policy, may be under a duty to act judicially in the course of arriving at that decision." One of the authorities mentioned in Note (b) under para. 114 of the aforesaid Halsbury Laws at page 56 shows that even the duty of an Assessing authority has been held to be judicial.
12. After considering the arguments of the counsel for the parties, we have come to the conclusion that the assessm ent of the production capacity by the Assessing authority has been done in an arbitrary manner without the least, conforming to principles of natural justice as there is nothing to suggest that any material whatsoever was taken into consideration by the Assessing authority or that the case of each Mill had been dealt with by it fairly, justly and equitably. The order of the Assessing Authority was, therefore, bad in law and the order of the Review Board based on the said order was also bad in law in view of the principle laid down in the authority reported in Yousuf Ali v. Muhammad Aslam Zia and 2 others .
13. So far as point No, (ii) is concerned, the case of the petitioner is that the Assessing authority did not at all hear it while fixing the petitioner's capacity at 35,000 tons according to notification1 dated 11-6-66 and also again did not hear the petitioner while fixing its capacity at 28,000 tons on 23-9-67. It was not denied by the respondents that no hearing was given to the petitioner for the foresaid assessm ents, but the contention of the learned counsel for the respondents was that since the Assessing authority was not acting judicially, and since there was no provision in the Act or the rules for any hearing, the petitioner was not entitled to be heard. For this reliance was placed on the authority reported in Tafazzal Hussain v. Government B of East Pakistan and another .
Counsel for the petitioner on the other hand contended that the maxim audi alteram partem (no man shall be condemned unheard) was not confined to only judicial proceedings but extended to all proceedings even before administrative Tribunals which affected the person or the property of a party, that the absence of any provision as to notice in the statute could not override the principle of natural justice and that order affecting right to property could not be passed without affording an opportunity of hearing to the party. According to the learned counsel the right of hearing was deemed to be present in every enactment in the absence of any provision to the contrary Since there was no provision to the contrary in the Act or the rules allowing hearing to a party, the petitioner, according to the learned counsel, was thus entitled to a hearing on the ground of natural justice. For this reliance was placed on the authorities reported in Chief Commissioner Karachi and another v. Mrs. Dina Sohrab Katrak ,Commissioner of Income-tax, East Pakistan v. Fazlur Rahman , Sh. Abdur Rahman, Advocate, Bahawalnagar v. The Collector & Deputy Commissioner, Bahawalnagar and 13 others , The University of Dacca through its Vice-Chancellor and another v. Zakir Ahmad and Abdus Saboor Khan v. Karachi University and another .
14.Now so far as the authority referred to by the learned counsel for the respondents is concerned, it has no application whatsoever to the facts of the present case as there the Ordinance was of a preventive nature under which action had to be taken promptly and where the seriousness of the situation could not be gauged by the Court, for it could not be in possession of material which was available to the executive. Even according to the said authority, the rule of prior hearing was to be judged with reference to the facts and circumstances of each case such as the nature of the right concerned and the abridgement complained against. This authority, therefore, did not and could not apply to the facts of the present case.
So far as the authorities cited by the learned counsel for the petitioner are concerned, they apply on all fours to the facts of the present case and we, therefore, hold that the petitioner was entitled to a hearing before the assessing authority as well as before the Review Board.
15.Counsel for the respondents, however, relying on the authorities reported in Muhammad lshaq and another v. Dr. Saiduddin Swaleh and others and Mrs. Gladys M. Jacob v. Chief Settlement Commissioner, Lahore and another contended that there was no failure of natural justice, if the petitioner had not been heard by the Assessing authority, as a hearing was given to it by the Review Board. According to these authorities if a party to whom notice was given by the first tribunal was able, taking into consideration the proceedings before the first tribunal and the final tribunal as whole, to present his case substantially as he wanted to be and was entitled to present it, then the decision of the last tribunal would not be bad merely on the ground that notice was not given by the first tribunal. It will have to be determined in each case whether the principle of natural justice had been sufficiently complied with on account of an opportunity of hearing before the final tribunal. The fact that the original order was passed without notice did not necessarily mean that the order was to be set aside. The proceedings as a whole are to be taken into consdieration for finding out whether the non-hearing by the first tribunal had caused any prejudice or not Prejudice would be there if the party affected could show a reasonable possibility that the order would have been different had he been allowed to raise a plea before the first tribunal.2 3 4 5 6 7 8 9
16. In the instant case, however, there is nothing on the file to suggest that the petitioner did not or could not present any material to the Review Board which it wanted to present to the Assessing authority. There is nothing to show that the material, if any, which was placed before the Review Board, would have brought out different results if placed before the Assessing authority. In the circumstances, relying on the aforesaid authorities, we hold that the notification dated 11-6-66 fixing the production capacity of the petitioner at 35,003 tons and dated 23-9-67 fixing the petitioner's capacity at 28,800 tons were not bad merely on account of want of hearing as hearing was given to the petitioner by the Review Board and the notifications amended.
17. So far as the fifth point is concerned, the respondents in written statement in reply to para. 10 of the writ petition have contended that while considering the application for review, the Review Board laid down certain principles of universal applica tion and thereafter gave its decision on each with necessary adjustments depending on the merits of each individual case. Counsel for the petitioner contended that the principles of universal application laid down by the Review Board were never disclosed to his client and that even now it was not clear as to what those principles were. According to the learned counsel since the order of the Review Board affected the property of his client, his client was entitled to have known those principle before presenting his case to the Review Board, and that since his client was not informed of those principles, his client had been prejudiced in presenting his case and the order of Review Board on that account was bad in law.
Counsel for the respondents could not meet this argument as he could neither show us the principles of general application laid by the Review Board nor assert that there were no such principles laid down. The order of the Review Board based on certain principles of universal application not disclosed to the petitioner, in our opinion, was therefore, bad in law as no person could be condemned on the basis of any rules not disclosed to him.
18.So far as point No, (vi) is concerned, the rules laying down the guiding principles for determination of the production capacities of the various Mills and the production capacities of all the 24 Mills were published on the same day, that is to say, 11-6-66. Learned counsel for the petitioner contended that the production capacities of all the 24 Mills were either determined on 11- 6-66 the day the rules were published or sometime before that day. According to the learned counsel it was not possible that the production capacities of all the 24 Mills should have been determined on 11-6-66 after the rules laying down the guiding principles were published, and if these production capacities had been determined before 11-6-66, then there were no guiding principles under which those could be determined. According to the learned counsel the rules laying down the guiding principles should have been published first and thereafter the production capacities, determined under those rules, should have been published, or at any rate the guiding principles should have been notified first and after the determination of the production capacities according to those principles, the rules should then have been published laying down the production capacities as was done in the case of Textile Mills. Learned counsel for the respondents could not meet this argument in any satisfactory way and we fail to understand as to how could the rules laying down the guiding principles for determination, and the production capacities determined thereunder, could be published at one and the same time. We, therefore, hold that the production capacities mentioned in the rules have not been determined according to the guiding principles mentioned in the rules and the order determining the production capacity of the petitioner was, therefore, without lawful authority and bad in law.
19.So far as point No, (vii) is concerned, there is no force whatsoever in the contention of the learned counsel for the petitioner because the production capacity for the year 1966-67 was for production of sugar from beet and sugarcane both, while the production capacity for the years thereafter was for production of sugar from sugarcane alone. In the circumstances the production capacity for the year 1966-67 had to be more than that for the succeeding years.
20.So far as point No, (viii) is concerned, learned counsel for the petitioner contended that the rules were framed in exercise of powers under section 3 of subsection (4) of the Act on 11-6-66, and since the Act was, passed by the Legislature on 30.6-66, section 3(4) of the Act was not in existence on 11-6-66 and the rules could not, therefore, be framed in exercise of powers under section 3 (4) of the Act and that these were, therefore, framed without lawful authority. Counsel for the respondents met this assertion by contending that since a declaration had been issued on 11-6-66 under section 3 of the Provisional Collection of Taxes Act XVI of 1931 in respect of sections 3 and 4 of the Act (Gazette, Extraordinary of Pakistan dated 17-6-66 page 498) the Act was to be taken to have come into force with immediate effect and the rules could have been validly framed under it. This declaration, however, does not help the respondents in any way as section 4(1) of Act XVI of 1931 lays down that a declared provision shall have the force of law immediately on the expiry of the day on which the bill containing it is introduced. Now Finance bill of 1966 was introduced in the Assembly on 11-6-66 and its provisions in view of the declaration mentioned above shall be effective from 12-6-66 and not from 11-6-66. Section 3 (4) of the Act was not, therefore, in existence on 11-6-66 and the rules could not, therefore, be framed in exercise of powers under the said section. According to section 22 of the General Clauses Act, rules could only be framed under the provision of any act or regulation after it comes into force and not before that.
Since section 3(4) was effective from 12-6-66 and not from 11-6-66, no rules could, therefore, be framed under it on 11-6-66.
Since the rules were framed and published on 11-6.66 these were, therefore, framed without lawful authority and we of no legal effect. Any assessment made under the said rules was, therefore also without lawful authority and of no legal effect.
21.So far as the last point No, (ix) is concerned before discussing it we would like to explain as to what does it mean. When a Sugar Mill starts crushing sugar the juice produced passes through a number of processes before it is converted into sugar. These processes take about two days, that is to say, the actual production of sugar starts two days after the mill starts crushing. Similarly when the Mill stops crushing, sugar continues to be produced for about two days from the juice in existence at the various stages. This period of two days for the juice to be exhausted is called liquidation period.
22.The production capacity of a Mill is determined inter alia on the basis of 160 working days during -.a year and according to rule 4 of the rules, if the Mill actually works for less than 160 days, then it is given a rebate proportionately. Furthermore, according to the proviso to the said rule, the mill is given a further proportionate rebate if it remains closed for a period of more than six days, provided advance notice of the closure is given to the proper officer. Now in the instant case the petitioner's Mills worked for 126 days during the year 1967-68 and it re-mained closed due to breakage from 2 a.m. on 24-12-67 to 4 a.m. on 31-12-67, of which notice was admittedly given to the proper officer. The petitioner, therefore, claims a rebate for 160-126 34 -I- 741 days. The petitioner was, however, allowed a rebate for 32 days only as the working days of the petitioner's Mill were taken as 128 instead of 126 by adding two days liquidation period and the stoppage on account of breakage was taken as three days, for which no rebate was allowed.
Out of the seven days breakage period, the first two days were deducted on account of liquidation period and no rebate was allowed for the 26th and 31st, on the ground that the mill had worked for a few hours on these days. According to the authorities a day was to be counted from zero hour to 24 hours of any day and if a mill worked ever for a single hour during these 24 hours, the day was to be counted as a working day.
23.In this contention No, (ix) the dispute Is with respect to the interpretation of the rules, as to whether the liquidation period is to be added to the actual working days and subtracted from the breakage period for the purpose of rebate and as to whether a day is to be counted as 24 hours working of a Mill or the working of a Mill for any number of hours during the 24 hours from zero hour to 24 hours. Now so far as the addition or subtraction of the liquidation period of two days is concerned, we are firmly of the opinion that the interpretation put forth on it by the respondents have no substance whatsoever in It. There is no doubt that a Mill produces sugar for two days even after crushing starts. In the circumstances the actual working days of a Mill are to be counted either from the start of the crushing to the stoppage of the crushing or from the start of the production of the sugar to the stoppage of the production of the sugar. The liquidation period cannot, therefore, be added to days for which the crushing goes on and similarly it cannot be subtracted from the breakage period. It appears that even the Government did not agree with the interpretation of the respondents and it amended rule 4 by adding the following explanation to it vide Notification No, S. R. 0. (K)/68 dated 29-10-19681 'Explanation.--For the purpose of this rule, a factory shall not be deemed to work on any day on which no crushing of sugar cane is being carried out in the factory, and such a day shall be deemed to be day of close.'
24. So far as the definition of a day is concerned, it is neither given in the Act nor in the rules. Day is not even defined in the General Clauses Act but its definition given in the Factories Act No, 25 of 1934 is as follows : 'Day means a period of 24 hours beginning at midnight'.
The Act and the Rules, however, do not specify that working or stoppage of a Mill for a particular number of hours during a day shall be counted as working day or day of close. In the circumstances, in our opinion, it is only fair to assume that if a Mill works for more than 12 hours during a day, the day is to be counted as working day, and if it remains closed for more than 12 hours during a day, the day is to be counted as a closed day. Applying this interpretation to the instant case, in our opinion, the petitioner's Mill did not work for seven days due to breakage.
Anyhow, these observations of ours are only of an academic nature as we have already held that the determination of the production capacity of the petitioner was without lawful authority and of no legal effect.
Without going into the vires of the Act and the rules, the upshot of the above discussion is that we accept this writ petition and declare that the assessment of the petitioner under the rules was without lawful authority and of no legal effect and that no recovery could be made from the petitioner on the basis of the said assessment. The respondents are to pay the costs of the petitioner. PLD 1958 SC (Pak.) 104 PLD 1965 Dacca 68 PLD 1959 SC (Pak.) 45 PLD 1964 SC 410 PLD 1964 SC 461 PLD 1965 SC 90 PLD 1966 SC 536 PLD 1959 Kar. 669 PLD 1966 Lah. 464 revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.