SHAUKAT AZIZ SIDDIQUI; J.--The duty of the court becomes more delicate, exceedingly onerous and deeply intricate, when a law passed by the legislative organ of the State is brought before it for its judicial review. Such is the case in the instant matter, when a bulk of Constitution Petitions, filed by hundreds of Industrial Units of the Country, challenging the vires of the Gas Infrastructure Development Cess Act, 2011, hereinafter referred to as the Act, came for adjudication before this court. This court allowed the Writ Petitions, by means of a single short order dated 31-1-2013, which is reproduced here in below for ready reference:- "For the reasons to be recorded later on, all above captions writ petitions are allowed through instant single order.
2. Gas Infrastructure Development Cess Act, 2011 is declared Ultra Vires to the Constitution, void, an infringement to the fundamental rights, offensive to principles of fair play, equality, transparency, social, justice, good governance and tantamount to exploitation. GIDC enactment is also besides the dictums laid down by the superior Courts of the country. It is further declared that levy and collection of GIDC is illegal.
3. Respondents are restrained from making demand of GIDC, and the amount already received on this account has to be adjusted in the future bills of the petitioners."
2. The reasons for the above reproduced short order are as follows:- In all the writ petitions captioned above, the petitioners, who are consumers of natural gas in the industrial sector of the country, have attacked the legality of the levy and demand of Gas Infrastructure Development Cess through the impugned Legislation i.e. The Gas Infrastructure Development Cess Act, 2011. Brief facts of the case are that The Gas Infrastructure Development Cess Act, 2011 was passed by the National Assembly on 25-11-2011 as a Money Bill. It received the assent of the President on 13-12-2011 and was published in the Gazette of Pakistan, Extraordinary, Part-1 on 15-12-2011 as Act No.XXI of 2011. It is pertinent to mention here that vide letter No.F- 4(34)/CF.V/2009 dated 18-10-2011, the bill was Certified as a Revenue, Economic Affairs, Statistics and Planning and Development. After promulgation of the Act the respondent No.1 vide notification dated 30-12-2011, notified the rates of cess. As per Sr.No.3 of Column No.1, the industrial Sector was levied with a cess of Rs.13 per MMBTU, in accordance with the rates specified in the Second Schedule of the Act. It is case of the petitioners before this court that under section 7 of the Act, the Federal Government is only empowered to amend First Schedule of the Act and no power to amend Second Schedule specifying the rates of cess has been given to the Federal Government.
Subsequently, vide notification dated 29-6-2012, the respondent No.1 raised the rate of cess from Rs.13/ MMBTU to Rs.100/ MMBTU for Industrial Sector. However vide another notification dated 7-9- 2012 the rate of cess was reduced from Rs.100/ MMBTU to Rs.50/ MMBTU. Apart from the vires of the Act, the petitioners have also assailed the notifications dated 13-12-2011 and 29-6-2012 on the ground that Federal Government cannot amend the Second Schedule to the Act. The learned counsel for the respondents have appraised the court that no amendment has been made by the Federal Government, rather the Second Schedule has been amended through section 19 of the Finance Act, 2012 published in the Gazette of Pakistan, Extraordinary, on 27-6-2012, therefore, the amendment was made by the legislature itself.
3. Learned Counsel appearing on behalf of the petitioners argued the case at great length about the fundamental rights at stake in the matter; the power, scope and, jurisdiction of the superior courts to review the legislative enactments; and issues pertaining to rule of law, democratic norms, good governance and equal treatment in context of the lis in hand. The crux of their arguments is given in the following passages.
While referring to a number of celebrated judgments of the court of apex as well as from Indian Jurisdiction, the learned counsel maintained that whenever a policy is framed, with reference to uplifting the socio-economic conditions of the citizens, 'object should be to ensure enforcement of their fundamental rights. Relied upon 2012 SCMR 773; PLD 2010 SC 1109; PLD 2010 SC 759; PLD 2011 SC 619; PLD 1994 SC 693 Judicial review is designed to prevent the cases of abuse of power and the superior courts of the country under the constitutional jurisdiction are conferred with wide powers to reach injustice where ever it is found. In this regard reference made to PLD 2012 SC 292; PLD 2011 SC 963; PLD 2011 SC 997; 2012 SCMR 6; PLD 2011 SC 407, PLD 1967 SC 569; 2010 INDLAW DEL 928.
The superior court's power of judicial review of legislative enactments is squarely, adequately and widely available on the grounds of conflict with any of the provision of the Constitution including fundamental rights.
While referring to Articles 18, 15, 24 of the Constitution submitted that in fact the impugned enactment and consequent levy of cess tantamount to prohibit and prevent the business and trade in the country. Reasonable restriction does not, at all mean deprivation of citizens from fundamental rights.
Impugned enactment as well as levy and demand of Gas Infrastructure Development Cess do not stand the test of due process as well as fundamental rights as envisaged under Arts.4, 9, 14 and 25.
The respondent's acts are also against the very concepts of good governance, rule of law, which are recipe for exploitation besides being illegal, ultra vires to the constitutional commands and discriminatory as well.
Fundamental rights in the Constitution are to be read and interpreted by the superior courts in expansive, dynamic and flexible manner. Articles of 'Universal Declaration of Human Rights have also been taken in consideration by the superior courts of the country while interpreting the fundamental rights as guaranteed in our own Constitution. Reliance placed on PLD 2011 SC 407; 2012 SCMR 6, PLD 2012 SC 292; PLD 1993 SC 341; PLD 2011 Lahore 120; 1999 SCMR 1379.
All the gas supply companies, acting under the blessings of the government, operate in a monopolistic manner, whereas the petitioners are the commercial entrepreneurs who are acting in competitive commercial markets. The manner, the authority is being exercised; the consumers must have to suffer the loss in each and every circumstance.
The impugned enactment is punitive, arbitrary expropriatory, confiscatory, vague, overboard unreasonable and violative of the fundamental rights to carry on business or to hold properties.
It invites uncertainty, and a colorable piece of legislation, which not only invites discrimination between the consumers in general but also a direct and personal burden on the industrial consumers of gas.
The impugned levy is not a tax as the same cannot form part of Constitution as the purpose of levy is not to cater for general expenditure, therefore, the same could not have been introduced as money bill.
The impugned levy is not a tax, rather a fee, therefore, for all legal purposes it has to have a quid pro quo, which element is missing in the impugned levy. The consumer is fully discharging its liabilities regarding the provision and consumption of gas provided to him, therefore, no further levy, that too, for future procurement of any facility, can be imposed.
As per entry 51 of the Forth Schedule of the Constitution, the federal legislature is only empowered to levy the tax on mineral oil, natural gas for use in generation of nuclear energy. Admittedly the natural gas used by petitioner is not for generation of nuclear energy; therefore, the Federal legislature has no authority to impose the same.
Entry No. 2 of the Part-II of Fourth Schedule, inter alia, is in relation to natural gas, but the same does not permit the levy of any tax/cess in respect of same.
Under Article 154 of the Constitution, only the Council of Common Interests has the power to formulate and regulate policies in relation to natural gas. 'This important bill was neither prepared or formulated, nor approved by CCI, hence the same is violative of the express provisions of the Constitution.
The intended projects for the infrastructure development of which the cess is to be utilized is not within sight so far. No cost of such projects is determined and approved. Even no time lines could be determined at present for the start of these projects, therefore, the impugned enactment is a colourable legislation, which is for uncertain reasons and without any criteria.
The mandate of Article 73 was not followed in letter and spirit. The bill was passed in unholy haste.
The copy of the bill was not simultaneously transmitted to Senate as required under Article 73 of the Constitution, which was done after the session of the National Assembly has prorogued.
If the bill be considered as Money Bill, then the same ought to have been routed through Cabinet in terms of Rule 16 read with Rule 27 of the Rules of Business, 1973, but no approval from Cabinet was obtained and the bill was directly placed before NA.
The important legislation is hit by the principle of legitimate expectancy, doctrine of propriety and promissory estoppels.
Even otherwise, it is consistently followed law that what is directly forbidden cannot be achieved indirectly and also that when a thing is to be done in a particular manner it must be done in that way and not otherwise, but the impugned enactment and subsequent notifications are violative of these golden principles of law. The learned counsel relied upon 2010 SCMR 1437, PLD 1971 SC 61, 2005 PLC 634, AIR 1975 SC 2299.
In support of their arguments. learned counsel also placed reliance on 2012 SCMR 6; 2001 CLC 848; AIR 1967 MP 268; AIR 1961 SC 552; PLD 1993 SC 176; 2004 PTD 2267;PLD 2005 SC 193; PLD 1957 SC 9; PLD 2005 SC 873; PLD 2011 Lah. 120; 2009 SCMR 187; PLD 2011 SC 44; 2011 PLC (C.S) 7; 1991 CLC 13; 2002 SCMR 312; 1998 SCMR 2268; 2007 SCMR 1835; PLD 1966 SC 628; 1997 SCMR 503; 1988 SCMR 715; 1993 SCMR 1905; PLD 2011 SC 997; 2009 CLC 1343.
4. On the other hand, while vehemently refuting the arguments advanced from petitionersside, learned counsel for respondents contested the petition and took the stance of non- maintainabilityof writ petition by raising preliminary objections, which are as follows:- No Board Resolutions conferring authority upon the petitioners have been attached with the petitions.
Alternate remedies were available to petitioners under the law.
The impugned enactment is in field since 2011. The cess has been paid by consumers. No objections were raised. The petitioners are now estopped from impugning the same. Reliance placed on PLD 2004 Lahore 404.
The questions in the petitions involve determination of facts and call for detailed factual inquiry which is beyond the scope of the constitutional jurisdiction of this Court.
The notifications were issued in consequence of the amendments made by the legislature. This fact has been concealed by the petitioners.
No vested right accrued in favour of the petitioners. All actions are transparent, and open to the public. Hence, there is no discrimination or exploitation, and due process of law has been followed.
National Assembly has the power-to pass legislation for matters related to natural gas. Therefore, the Act and the powers granted thereunder are valid law.
The country is facing a back breaking energy crisis. Immense suffering and irreparable loss is likely to occur on the national scale if urgent steps are not taken in this regard, therefore, the policy of government to import gas from other States is fully consistent with public interest and a step towards cultivation of greater ground for enjoyment of fundamental rights by the citizens; hence, the petitions are misconceived.
The petitions seek interference in the policy matters, which is not permissible under the law and against the established practice of this court.
The stance adopted by the petitioners is self serving, which is contrary to national and public interest, hence petitions are liable to be rejected.
The petitions are hit by the principle of estoppel, hence not maintainable.
That the impugned levy is a tax, which has rightly been introduced as Money bill. The bill was passed by the National Assembly, which was assented to by the President; hence it is a valid law.
The bill falls within the legislative competence of the National Assembly.
The amendment in the 2nd Schedule of the Act was made through Finance Act 2012, and not on the basis of any press release therefore the petitioners are guilty of non-disclosers of true facts to the court.
No element of quid pro quo is attracted in the peculiar circumstances.
Reliance has been placed on PLD 2011 SC 44, PLD 2011 Lah 120, AIR 1960 Madras 160, PLD 2005 Karachi 55, PLD 2009 Karachi 69, PLD 1997 SC 582, 2003 CLC 649, 1998 CLC 1912, 1998 CLC 1924, 1999 MLD 721, 1999 MLD 731, PLD 1995 SC 281, PLD 1986 Lahore 237, PLD 1986 Lahore 242, PLD 1960 Dacca 502, 1998 SCMR 2492, 1998 SCMR 2502, 2011 PTD 2643, 1999 SCMR 1402, 1999 SCMR.1418, 2010 PLC 306, PLD 2011 Lahore 120, PLD 2011 Lahore On the basis of the above mentioned arguments learned counsel for respondents prayed for the dismissal of the writ petitions.
5. I have heard the learned counsel for the parties and through their able assistance gone through the statutory and precedent law. For better understanding of the controversy raised in these petitions, it would be quite relevant and advantageous to reproduce the impugned Act herein "No. F.22(20)/2011-Legis.--The following Act of Majlis-e Shoora (Parliament) received the assent of the President on 13th December, 2011, and is hereby published for general information:-- Act No.XXI of 2011 An Act for imposition and collection of gas infrastructure development cess WHEREAS it is expedient to provide for imposition and collection of infrastructure development cess on natural gas and for matters connected therewith; It is hereby enacted as follows:--
1. Short title, extent and commencement.---(1) This Act may be called the Gas Infrastructure Development Cess Act, 2011.
(2) It extends to the whole of Pakistan.
(3) It shall come into force at once.
2. Definitions.---In this Act, unless there is anything repugnant in the subject or context,-- (a)'cessm eans the gas infrastructure development cess chargeable from gas consumer, other than the domestic sector consumers, of the company over and above the fixed sale price and payable under section 3; (b)"company" means a company specified in the First Schedule; (c)"fixed sale price" in relation to a company or a consumer and in respect of any period means the sale price as in force on such day, whether before or after the commencement of this Act, as the Federal Government may, by notification in the official Gazette, specify in this behalf; (d)"House" means the National Assembly; hydrocarbons and other gases which at sixty degrees Fahrenheit and atmospheric pressure are in the gaseous state (including gas from gas wells, gas produced with crude oil and residue gas and products resulting from the processing of gas) consisting primarily of methane, together with any other substance produced with such hydrocarbons;
(f) "prescribed" mean prescribed by the rules; and
(g) "rules" means rules made under this Act.
3. Levy of cess.---(1) The Company shall collect and pay cess at the rates specified in the Second Schedule and in such manner as the Federal Government may prescribe.
(2) A mark up at the rate of four percent above three months KIBOR prescribed by the Federal government shall be payable on any amount due under subsection (1), if the said amount is not paid within the prescribed time.
4. Utilization of cess.---(1) The cess shall be utilized for or in connection with infrastructure development of Iran Pakistan Pipeline Project, Turkmenistan Afghanistan Pakistan India (TAPI)
Pipeline Project, LNG or other projects or for price equalization of other imported alternative fuels including LPG.
(2) An annual Report in respect of the utilization of the cess shall be laid before the House after three months of the end of the each fiscal year.
5. Allowance to be made for cess for purposes of income tax.---The cess paid by a company shall be an expenditure for which allowance is to be made under the Income Tax Ordinance, 2001 (XLIX of 2001) in computing the profits or gains of that company.
6. Power to make rules.---(1) The Federal Government may, by notification in the official Gazette, make rules for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for,
(a) the manner and time of payment of cess;
(b) the manner of collection and recovery of arrears of cess; and
(c) any other matter, not inconsistent with the provisions of this Government, necessary for carrying out the purposes of this Act.
7. Power to amend the First Schedule.-- The Federal Government may, by notification in the official Gazette, make such amendments in the First Schedule as it deems fit.
THE FIRST SCHEDULE [see section 2(b)]
1. Sui Northern Gas Pipelines Limited;
2. Sui Southern Gas Company Limited;
3. Mari Gas Company Limited;
4. Pakistan Petroleum Limited; and
5. Tullow Pakistan Development Limited; THE SECOND SCHEDULE [see section 3(1)] S.No. Sector Cess (Rs.MMNTU)
(1) (2) (3)
1. Fertilizer-Feed Stock (Except for fertilizer plants having fixed prices contracts)197
2. Compressed Natural Gas (CNG) (a) Region-1 KPK, Balochistan and Potohar Region (Rawalpindi, (Islamabad and Gujar Khan)141 (b) Region-II Sindh and Punjab (Excluding Potohar Region)79
3. Industrial 13
4. WAPDA/KESC 27
5. Independent Power Plants (IPPs) 70
6. Commercial -
7. Domestic -
8. Cement -
9. Liberty Power Plant - An amendment was made in the Second Schedule of the Act through the Finance Act, 2012 and the Second Schedule was substituted by following: "19. Amendment of Act XXI of 2011.-- In the Gas Infrastructure Development Cess Act, 2011 (XXI of 2011), for the second schedule, the following shall be substituted, namely:- The SECOND SCHEDULE"
[See Section 3(1)] S.No. Sector Maximum Rate of Cess (Rs.MMBTU)
(1) (2) (3)
1. Fertilizer-Feed Stock (Except for fertilizer plants having fixed prices contracts300
2. Compressed Natural Gas (CNG) 300
(b) Region-II Sindh and Punjab (Excluding Potohar Region)200 Industrial (including Captive Power) 100 WAPDA/KESC/GENCOs 100 Independent Power Plants (IPPs) 100 Commercial - Domestic - Cement - Liberty Power Plant -
6. Before dilating upon the issues, I deem it appropriate to take up the issue of the maintainability of the writ petitions under Article 199 of the Constitution and power of the superior courts of judicial review of legislative enactments. It is well settled law that in Pakistan the power of Parliament is subject to constraints contemplated by the Constitution in accordance with the procedure provided therein, but so long as it is not amended, the Parliament has to act within its four corners; so a statute or any of its provisions can be struck down on the ground of being ultra vires of the Constitution including fundamental rights. As this proposition has already been exhaustively discussed, comprehensively elaborated and thoroughly settled in a variety of cases. It would be advantageous to reproduce following passages from the judgment of the honorable Supreme Court in case of "Dr. Mubashir Hassan and others v. Federation of Pakistan and others" reported as (PLD 2010 SC 265): "It is also to be noted that while examining the vires of a statute the Court is free to examine the same on the touchstone of different constitutional provisions as it has been held in Muhammad Mubeen-us-Salam v. Federation of Pakistan (PLD 2006 SC 602): "52. In this behalf it may be noted that this Court, in exercise of constitutional jurisdiction conferred upon it under various provisions of the Constitution, including Articles 184, 185, 186, 187(1) and 212(3), enjoys enormous power of judicial review. Besides, it is well-settled by this time that being the apex Court, it has also been vested with inherent Powers to regulate its own authority of judicial review, inasmuch as, that in Zafar Ali Shah v. Pervaiz Musharraf, Chief Executive of Pakistan (PLD 2000 SC 869), it has been held by the full Court that "so long as the superior Courts exist, they shall continue to exercise powers and functions within the domain of their jurisdictionand shall also continue to exercise power of judicial review in respect of any law or provision of law which comes for examination before the superior Courts." Argument by one of the learned counsel that in the absence of violation of any of the fundamental rights, guaranteed by the Constitution, section 2-A of the STA, 1973 can be struck down only if in derogation of Article 8 of the Constitution and there is no other specific provision in the Constitution, authorizing this Court to exercise powers in this behalf is untenable on the face of it. A reference to the case of Mr. Fazlul Qader Chowdhry (ibid) would indicate that "<u>superior Courts have inherent duty, together with the appurtenant power, to ascertain and enforce the provisions of the Constitution in </u> any case coming before them."
In the case of A.M. Khan has been emphasized that " <u>in cases of conflict between the supreme law of the Constitution and an enactment it is the duty of the superior Courts as its protectors and defenders to declare the enactment in question as invalid to the extent of its repugnancy with the constitutional provision in the absence of any bar either express or implied. </u>" Similarly, in Messrs Electric Lamp Manufacturers of Pakistan Ltd. v. The Government of Pakistan (1989 PTD 42), it has been held that the Parliament in England is sovereign in the real sense and it is not subject to any constraints as in England there is no written Constitution, whereas <u>in Pakistan the Parliament is subject to constraints contemplated by the Constitution in accordance with the procedure provided therein, but so long as it is not amended the Parliament has to act within its four corners; so a statute or any of its provisions can be struck down on the ground of being ultra vires of the Constitution</u>. "Likewise, in the case of Fauji Foundation v. Shamimur Rehman (PLD 1983 SC 457), it is held that " when a Court, which is a creature of the Constitution itself, examines the vires of an Act, its powers are limited to examine the legislative competence or such other limitations as are in the Constitution; and while declaring a legislative instrument as void, "it is not because the judicial power is superior in degree or dignity to the legislative power" but because it enforces the Constitution as a paramount law either where a <u>legislative instrument is in conflict with the constitutional provision so as to give effect to it or where the Legislature fails to keep within its constitutional limits. </u>" In the case of Liaqat Hussain v. Federation of Pakistan (PLD 1999 SC 504), the conclusion was that "<u>Court cannot strike down a statute on the ground of mala fides, but the same can be struck down on the ground that it is violative of a constitutional provision</u>. In Collector of Customs and others v. Sheikh Spinning Mills (1999 SCMR 1402), this Court struck down the imposition of preshipment inspection service charge under the Customs Act, 1969 as unconstitutional, which of course was not based on any fundamental rights. Relevant para reads as under:- "Considering the case from all angles, although the Federal Legislature is competent to legislate for the imposition of fees within the meaning of Entry 54, in the Federal Legislative List, Fourth Schedule to the Constitution, but again as already discussed hereinbefore, one has to see what is the nature of the legislation and whether the same could have been legislated within the ambit of the powers of the Federal Legislature. No the matters in the Federal Legislative List, but definitely not for pre- inspection, the benefit of which has to go to the companies appointed to carry out the inspection and not to the payees of the fees. The imposition of such fee is not in lieu of services to be rendered for the benefit of its payees.
For the, foregoing reasons, we are of the view that the imposition of service charge as imposed under section 18-B of the Act towards the pre-shipment inspection is ultra vires of the powers of the Federal Legislature."(Emphasis supplied)
I find it appropriate to borrow the words of wisdom from Honourable Supreme Court, on the powers of superior courts on the judicial review. A Larger Bench of the honourable Supreme Court in the case of Baz Muhammad Kakar v. Federation of Pakistan and others (COCA, 2012 Case), reported as (PLD 2012 Supreme Court 923), held that:
35. The Constitution of Pakistan confers upon the superior Courts power and jurisdiction under Articles 199 and 184(3) to examine the constitutionality of the executive and the legislative actions.
In Mehram Ali v. Federation of Pakistan (PLD 1998 SC 1445) this Court adjudged the constitutionality of various provisions of the Anti-Terrorism Act, 1997 and declared sections 5(2)(i), 14, 19(10)(b), 24, 25, 26, 27, 28, 30, 35, 37 and 40 of the Act to be invalid being violative of various Articles of the Constitution, namely, Articles 10, 13(b), 25, 175 and 203 of the Constitution and the principle of independence of judiciary enshrined therein. Similarly, in the case of Liaqat Hussain v. Federationof Pakistan (PLD 1999 SC 504) it was held that Court cannot strike down a statute on the ground of mala fides, but the same can be struck down on the ground that it is violative of a constitutional provision. Consequently, the Court declared section 6 of the Pakistan Armed Forces (Acting in Aid of the Civil Power) Ordinance, 1998 in so far as it allowed the establishment of Military Courts for trial of civilians charged with the offences mentioned in the Schedule to the said Ordinance to be unconstitutional and without lawful authority. Also see Civil Aviation Authority v. Union of Civil Aviation Employees (PLD 1997 SC 781), Elahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582), Pir Sabir Shah v. Shad Muhammad Khan (PLD 1995 SC 66), Federation of Pakistan v. Shaukat Ali Mian (PLD 1999 SC 1026), Wattan Party v. Federation of Pakistan (PLD 2006 SC 697), Muhammad Mubeen-us-Salam v. Federation of Pakistan (PLD 2006 SC (PLD 2009 SC 107), Dr. Mobashir Hassan (supra) and All Pakistan Newspapers Society v. Federation of Pakistan (PLD 2012 SC 1).
While analyzing the evolution in the concept of judicial review in United Kingdom, in the COCA case supra, the honorable Supreme Court held: "57. Under the constitutional scheme, the constitutionality of legislation is examined by the Superior Courts in exercise of power of judicial review. Judicial review is a manifestation of the principle of trichotomy of powers, which envisages that the three organs of the State, namely, the legislature, the executive and the judiciary work within their respective domains in a system of checks and balances. The doctrine of judicial review postulates that the legislative and executive actions are subject to scrutiny by the superior courts to determine their compatibility or otherwise with the terms of a written Constitution. The idea that courts could nullify statutes originated in England with Chief Justice Edward Coke's opinion given in the year 1610 in Dr. Bonham's Case [8 Co. Rep. 107a].
Under a statute of Parliament, the London College of Physicians was enabled to levy fines against anyone who violated their rules. The College accused a doctor of practicing without a license and fined him accordingly. Coke J: found that the statutory powers of the College violated "common right or reason" because "no person should be a judge in his own cause". The idea that Courts could declare statutes void was defeated in England with the Glorious Revolution of 1688, when King James II was removed and the elected Parliament declared itself supreme. However, with the passage of time, the concept of supremacy of Parliament has undergone change even in England as noted by one of us, Mr.Justice Jawwad S. Khawaja in a recent case titled as Muhammad Azhar Siddique v. Federation of Pakistan (Constitution Petition No.40 of 2012 (PLD 2012 SC 774)) decided on 19-6-2012 wherein he has observed that in Jackson v. Her Majesty's Attorney. General [(2005) UKHL 560], Lord Steyn writing in the House of Lords, the highest Court of England, has held that the classic account given by Dicey of the doctrine of supremacy of Parliament, pure and absolute as it was, can now be seen to be out of place in the modern United Kingdom.".
Similarly in case of Muhammad Azhar Siddiqui v. Federation of Pakistan and others, reported as (PLD 2012 SC 774), the honorable Supreme Court held: justification in our dispensation, for muddying the crystal and undefiled waters of our constitutional stream with alien and antiquated, 19th Century Diceyan concepts of Parliamentary supremacy.
These concepts have lost currency even in their own native lands. As Lord Steyn writing in the House of Lords, the highest Court of England (the land of our former colonial masters), has written in a recent case, "[t]he classic account given by Dicey of the doctrine of supremacy of Parliament, pure and absolute as it was, can now be seen to be out of place in the 'modern United Kingdom".
Jackson and others (Appellants) v. Her Majesty's Attorney General (Respondents) [(2005) UKHL 560]. It is about time, sixty-five years after independence, that we unchain ourselves from the shackles of obsequious intellectual servility to colonial paradigms and start adhering to our own peoplesConstitution as the basis of decision making on constitutional issues."
In Indian jurisdiction the power of judicial review is elaborated in case of K.C. Gajapati Narayan Deo v. The State of Orissa (AIR 1953 SC 375) it has been held as under:- Whether a statute is constitutional or not is thus always a question of power. A distinction, however, exists between a legislature which is legally omnipotent like the British Parliament and the laws promulgated by which could not be challenged on the ground of incompetency, and a legislature which enjoys only a limited or a qualified jurisdiction. If the Constitution of a State distributes, the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamental rights, questions do arise as to whether the legislature in a particular case has or has not, in respect to the subject- matter of the statute or in the method of enacting it, transgressed the limits of its constitutional powers. Such transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of cases that the expression 'colourable legislationhas been applied in certain judicial pronouncements. The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the . transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise. As was said by Duff. J. in Attorney-General for Ontario v Recinrneal Inclirere. In United States of America, while delivering the opinion of the Supreme Court in a famous case United States v. Butler, 297 U.S. 1 (1936), Mr. Justice Roberts held that: "There should be no misunderstanding as to the function of this 'court in such cases. It is sometimes said that the court assumes a power to overrule or control the action of the people's representatives. This is misconception. The Constitution is the supreme law of the land ordained and established by the people. All legislation must conform to the principles it lays down. When as act of Congress is appropriately challenged in the courts as not conforming to the constitutional mandate, the judicial branch of the Government has only one duty -- to lay the article of the Constitution which is invoked beside the statute which is challenge and to decide Whether the latter squares with the former. All the court does, or can do, is to announce its considered judgment upon the question.
The only power it has, if such it may be called, is the power of judgment. This court neither approves nor condemns any legislative policy. Its delicate and difficult office is to ascertain and declare whether the legislation is in accordance with, or in contravention of, the provisions of the Constitution; and, having done that, its duty ends.".
7. Seeking guidance from the above referred dictums of the honourable Supreme Court, I am of the considered opinion that the petitions are maintainable and this court has ample powers under the Constitution to exercise the power of judicial review in the matter and to adjudge and scrutinize the impugned enactment whether it offends any provision of the Constitution or not?
8. In my view following are the justiciable issues which require determination:
(i) Whether cess levied through the Act is a tax or fee?
(ii) Whether the matter falls within the domain of policy matters?
(iii) Whether the Act, 2011 is ultra wires to the Constitution?
9. I may deal to first point, as to whether the cess levied throu the Act is a tax or fee?"
Preamble to the GIDC Act, 2011 provides 'Whereas it is expedient to provide for imposition and collection of infrastructure development cess on natural gas and for matters infrastructure development cess chargeable from gas consumer, other than the domestic sector consumers, of the company over and above the fixed sale price and payable under section 3. Section 4 of the Act lays down the purposes for which the cess shall be utilized, which states that the cess shall be utilized for or in connection with infrastructure development of Iran Pakistan Pipeline Project, Turkmenistan Afghanistan Pakistan India (TAPI) Pipelines Project LNG or other projects or for price equalization of other imported alternative fuels including LPG. Section 7 gives powers to Federal Government to make amendment in the 1st Schedule which specifies the names of the companies charged with the functions of collection of cess under section 3 of the Act. Section 4(2) lays down that annual report in respect of the utilization of the cess shall be made before the National Assembly after 3 months of the end of each Fiscal Year. Preamble of the Act read with sections 3 and 4 makes it abundantly clear that the cess has been levied for specific purpose which is directly related to the provisions of gas facility to the public at large. The learned counsel for the respondents have vehemently argued that the cess levied through the impugned legislation - is a tax for all practical intents and purposes. On the other hand learned counsel for the petitioners have argued that the impugned levy is a fee, therefore, the bill could not have been introduced as a money bill under Article 73 of the Constitution. The word 'Cesshas been elaborately defined by K.
PARAMESWARAN in his famous treatise POWER OF TAXATION UNDER THE CONSTITUTION as "Cess is a tax and is used when the levy is for some special administrative purpose, for example, health cess, education cess etc. That-is to say, the receipts of a particular tax are earmarked for some particular purpose and it does not matter whether it goes to the general revenue of the State or not. This is the only similarity between cess and fee and no question of quid pro quo between collections and services arises in the case of cess.
In THE OXFORD ENGLISH DICTIONARY the definition of Cess is given as follows:
1. "An assessm ent, tax, or levy; in various spec applications. c. India. A tax levied for a specific object: often with prefixed word defining the object."
The BLACK'S LAW DICTIONARY defines the Cess as: "Cess (ses), n, Hist.
1. English law,-An assessment or tax.
2. Scots law. A and tax. ___ Also spelled cesse; cess.
To my mind when the plain meanings of the word Cess do not leave any room for ambiguity, then the same have to be given preference in any attempt to interpret the provisions of law. Similarly, the intention of the legislature, as depicts from the language of the enactment, makes it abundantly clear that the Cess was imposed as a tax, but due to the presence of a specific purpose intended to be achieved through it the nomenclature to the levy was given as Cess being specie of a tax. Even from the substance of the enactment it is crystal clear that the levy is not a fee. In a judgment reported as (PLD 1960 DACCA 502), the High Court has given test for determination of a particular levy, whether it is a tax or not, it has been held: "The main question which has been canvassed before us is: Whether this levy is a tax or a fee?
While considering the well-recognized distinction between tax and fees, the Supreme Court of India in the Madras case on which Mr. Chowdhury has relied, observed (at page 295) as follows:- "The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for special benefit of privilege. Fees confer for a special capacity; although the special advantage, as for example in the case of registration fees for documents or marriage license, is secondary to the primary motive of regulation in the public interest, vide Findlay Shirras on 'Science of Public Finance', Vol. 1, page 202. Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. As Seligman says, 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 State action, vide Seligman's 'Essays on Taxation', page 408."
Here, I am in full agreement with the learned counsel for the respondents that the levy was imposed as a tax in order to cater energy requirement G of the country, so the element of quid pro quo is missing in the same. While reaching to this conclusion, I have sought guidance from the authoritative pronouncements of the superior courts of the country. Therefore I have no hesitation in holding that the bill could have been moved as a Money Bill under Article 73 of the Constitution.
However, in later part of this judgment. I would render my observations whether the mandate and procedure of the said provision of the Constitution was followed in letter and spirit or not? For the time being, the levy of cess.
10. Now, I would like to compass may view on the second point i.e. As to whether the matter falls within the domain of policy matters of the Government or not? My observations are as under:-- There is no doubt that Government has the authority to levy tax and can demand cess but question arises is that, whether an enactment imposing tax can be taken outside the scope of the judicial review of the superior courts on the ground that it concerns matters of policy of the Government? The answer is NO. Because, when a policy of the government is transformed into a law, then it has to remain within the limits prescribed by the Constitution and the superior courts have the power to scrutinize the same in discharge of their constitutional functions and duties.
Therefore, I am not convinced by the objection raised by the learned counsel for the respondents in this regard. In holding so, I am fortified with the view taken by the Lahore High Court in case of Messrs Shaheen Cotton Mills and another v. Federation of Pakistan, reported as (PLD 2011 Lahore 120):-- "If any law is promulgated in derogation of fundamental rights, it would be declared void because <u>at the cost of fundamental rights guaranteed by the Constitution, the executive Government is not empowered to frame a policy</u>
33. Thus, in cases where the policy collides with the Law or the Constitution or it arbitrary or unreasonable, this Court, in view of the afore-quoted judgments of the honourable Supreme Court of Pakistan, can intervene though it may not substitute the policy of the Government by laying down a new policy on the subject. Thus, this Court is not persuaded to hold that it has no jurisdiction to examine the offending Order/notification or the policy of the Government that it manifests. Even in policy matters, this Court can always exercise its powers of judicial review so as to ascertain that the said policy does not violate any law or the Constitution and that the same is not arbitrary or unreasonable.
34. There is yet another aspect of the matter. All government policies eventually must be translated into Legislative or Executive actions. In order to implement the policy, laws have to be made and/or executive orders have to be passed or direction given. In the absence thereof, the policy would merely remain an intention good or bad of the Government with no real effect on the citizens, hence may not provide any ground for grievance thereagainst. In such an eventuality, any controversy regarding such policies perhaps would only be academic in Law.
35. When, in order to implement or give effect to a policy, the Legislature promulgated a Law, such Statutory Instrument is obviously subject to judicial review. It is a well settled law that its Constitutionality can always be examined and if necessary the same can be struck down inter alia for offending against the provisions of the Constitutional for absence of legislative competence or for being in violation of the Fundamental Rights."
11. Now, I render my findings to the main issue. Whether the Act, 2011 is ultra vires to the Constitution?
The Federal Legislative List is provided in the fourth schedule to the Constitution, which has been divided in two parts. There are 59 entries in Part-I of the Federal Legislative List, whereas there are 8 entries in Part-II of the Federal Legislative List. Entry No. 2 in Part-II of the federal legislative list pertains to natural gas. The division of the federal legislative list in two parts is very significant, purposive and meaningful. One of the most important reason for this division, laid down by the framers of the Constitution, is that the matters, fields, heads or areas specified in Part-II of the Federal Legislative List have inextricably been linked to the Council of Common Interests (CCI) constituted under Article-153 of the Constitution. Under the scheme of the Constitution, in the formation of the CCI proper representation has been given to the federating units i.e. the Provinces along with the Federation. Under Article 154 the CC1 enjoys the constitutional mandate to formulate and regulate policies in relation to the matters enumerated in the Part-II of Federal List and to exercise the supervision and control over the related institutions. Article 154 of the Constitution is reproduced herein below: "154. Functions and rules of procedure.-- [The Council shall formulate and regulate policies in relation to matters in Part II of the Federal Legislative List and shall exercise supervision and control over related institutions.] ".
The importance of this constitutional body of the State is highlighted in case of "Muhammad Nawaz Sharif v. Federation of Pakistan", reported as (PLD 1993 SC 473) by honourable Supreme Court of Pakistan by holding that, "Council of Common Interest is an important constitutional institution which irons out differences, problems and irritants between the Provinces inter se and the Provinces and the Federation in respect of matters specified in Art.154". The Honorable Chief Justice of Pakistan, while writ in for the court in famous Pakistan Steel Mills case reported as (PLD 2006 SC 587) has held that "Conscious of the mandate of Articles 153 and 154 of the case.
12. The learned counsel for the petitioner have also pointed out that the hill if treated as money Bill, even then the mandatory procedure laid Constitution, we held that the establishment and working of Council of Common Interest (CCI) is a cornerstone of the Federal Structure providing for protection of the rights of the Federating units". The provisions of the Constitution and the authoritative pronouncements made by the court of apex in terms of Article-189 of the Constitution fully oblige that while formulating and regulating a policy in relation to the matters enumerated in the Part-II of the Federal Legislative List the role of the CCI cannot be ignored, minimized or curtailed, in any manner, whatsoever because it is the policy which eventually transforms into law.
Bypassing this important constitutional body in matters failing in its domain would simply mean to make these provisions of the Constitution as ineffective and redundant; which cannot be allowed by the superior courts, being custodian of the Constitution. Ignoring this constitutional institution in such matters would also tantamount to make it dysfunctional, and a dead organ, which would invite obviously a violation of the Constitutional mandate and commands. Looking from another dimension it would also make the division of the Federal Legislative List into two parts as meaningless, which cannot be attributed to the Constitution as every word, division or entry in the same is meaningful. Any legislative or executive action taken with regard to the matters enumerated in Part-II of the Federal Legislative List in bypassing the CCI also means that the fundamental rights of the people of Pakistan belonging to different federating units have been usurped, and their right to be treated in accordance with law has been defeated.
Any policy regulated or implemented, more particularly the imposition of taxes, which eventually affect the public at large, in such matters without approval of the. CC1 would also mean that the due process of law as envisaged under Article-4 of the Constitution has been violated. The counsel for the petitioners have argued that at one point of time the bill was placed before the CCI but the same was withdrawn without its approval. This position has not been controverted by the learned counsel for the respondents, which leads the court to draw an inference that the same was disapproved by the CCI. Even otherwise, it is a matter of fact on record that the CCI neither prepared, approved or sanctioned the bill nor regulated any policy in this regard, therefore, the impugned levy is a transgression in the Constitutional mandate of the CCI bestowed to it by virtue of Articles 153 and 154 of the Constitution of Islamic Republic of Pakistan and the fundamental right of the people of Pakistan to be governed in accordance with law has been detected. Moreover the spirit behind the division of federal legislative list in two parts has also been violated down under Article-73 has not been followed, as no copy of the bill was transmitted to the Senate simultaneously as required under proviso to the clause (1) of Article-73 and the same was transmitted after the session of the National Assembly stood prorogued. Clauses-1 and 1A of Article 73 are reproduced herein below:--
73. Procedure with respect to Money Bills.--[(1) Notwithstanding anything contained in Article 70, a Money Bill shall originate in the National Assembly.
Provided that simultaneously when a Money Bill, including the Finance Bill containing the Annual Budget Statement, is presented in the National Assembly, a copy thereof shall be transmitted to the Senate which may, within fourteen days, make recommendations thereon to the National Assembly.] [(1A) The National Assembly shall, consider the recommendations of the Senate and after the Bill has been passed by the Assembly with or without incorporating the recommendations of the Senate, it shall be presented to the President for assent.] This assertion of the petitioners has not been denied by the respondents in their parawise comments, nor has any record to the contrary been produced. The process of seeking recommendation of the Senate has also not been followed in letter and spirit. It is well settled law that the Money Bill is a deviation or exception to the normal legislative process; therefore, being a special procedure it has to be construed strictly. The Lahore High Court in case of East Pakistan Chrome Tannery (Pvt) Ltd Vs. Federation of Pakistan, reported as (2011 PTD 2043) has held: "The special legislative procedure is, therefore, an exception and must operate in its restricted scope. Being a special procedure it also has to be construed strictly as it is a deviation from the normal legislative process under the Constitution. Integrity of a money bill must be jealously guarded and matters falling outside the purview of Article 73 (2) (a) to (g) of the Constitution should not be permitted to stealthily crawl into a money bill (at times due to political sophistry of the Government in power) and adulterate its sanctity. It is useful to paraphrase what A. K. Brohi wrote in the preamble to the Fundamental Law of Pakistan in 1958; "It is equally necessary that all the wielders of "constituted authority", like the legislators, the administrators and the judicial officers, be made fully aware of the limits of their power, so that they may, in the exercise of their authority act, not only within the letter of the thereof. For there is such a thing, says Mr. Walter Lippmann, that famous Publicist, Philosopher and Sage of America, as "lawless legality" and this is often, according to him, to be found where men deny that in making or interpreting law they are bound by the spirit of the law."
Although I have left the discussion with regard to the subsequent increase in the Cess, but I cannot restrain myself without saying that the jump made by the authorities from the rate of cess from Rs.13/ MMBTU to Rs.100/ MMBTU in a period of few months is nothing but exploitation. From the record shown to this court the intended projects are good wishes so far and no concrete step has been taken for their initiation, what to talk of their implementation, but the heavy taxes have been imposed in this regard. The Constitution of the Islamic Republic of Pakistan does not allow any sort of exploitation and permit economic and social wrongs, As the ultimate burden of the cess is to fall on the ordinary citizens of the country as the industrial consumers would be forced to recover the same from them through raising prices of the products manufactured by them. Such demand, imposition or levy of cess is in direct violation of the fundamental rights of the citizens. In case of Muhammad Yasin v. Federation of Pakistan reported as (PLD 2012 SC 132) the honourable Supreme Court has held that "any increase in prices, which results from lack of competence or integrity or because of inefficient regulation would result in depriving the citizens of their fundamental rights guaranteed by Articles 9, 14, 18, 23, and 24 of the Constitution because the scales would impermissibly stand tilted against the citizens and in favour of those engaged in regulated activities". The situation becomes double aggravated when the imposition of tax involves essential commodity like gas or electricity which is a basic and important ingredient of right to life and right to live with dignity in any civilized society. In a recent case of Alleged Corruption in Rental Power Plants etc., reported as (2012 SCMR 773), the honorable Supreme Court of Pakistan has held: "The Constitution of the Islamic Republic of Pakistan mandates that State shall exercise its powers and authority through chosen representatives of the people. A democratic order in place, through the representatives of people, being the members of Parliament, obligates the elected representatives to fulfil their commitments bestowed upon them under the Constitution, and in their representative capacity, they are bound to perform- their functions honestly, to the best of their ability, faithfully, in accordance with the Constitution and the law as well as the Rules of the Assembly, and always in the interest of sovereignty, interparty solidarity well eine and nrosnerity of Pakistan_ Such ensure-well being and prosperity of Pakistan: so whenever they feel threat to the well being of the people of Pakistan for any reason, they are bound to preserve the same."
"It is to be clarified that the Government of the day under Article 29 read with Article 2A of the Constitution is bound to formulate policies for the promotion of social and economic well being of the people, which includes provision of facilities to the citizens for work and adequate livelihood with a reasonable rest and leisure, etc. Energy/electricity is essentially one of the significant facilities required by the citizens for manifold purposes, namely, uplifting of their social and economic status. Non-supply of electricity to the citizen regularly, is tantamount to depriving them of one of the essentials of the life including the security of economic activities, which are relatable to their fundamental rights protected under Articles 9 and 14 of the Constitution. In the cases of the Bank of Punjab v. Hans Steel Industries (PLD 2010 SC 1109), Liaqat Hussain v. The Federation of Pakistan (Constitution Petition No.50/2011), In Re: Human Rights Case regarding fast food chain in F- 9 Park (PLD 2010 SC 759), In Re: SMC No.13/2009 (Case regarding Multi-Professional Housing Schemes) (PLD 2011 SC 619) and Shehla Zia v. WAPDA (PLD 1994 SC 693), Article 9 has been interpreted and its scope has been enlarged to each and every aspect of human life. Therefore, whenever a policy is framed with reference to uplifting the socio-economic conditions of the citizens, object should be to ensure enforcement of their fundamental rights."
13. As I have already held the parent statute i.e. GIDC Act, 2011 as Ultra Vires to the Constitution, therefore, there is no need to discuss the issues, raised at the bar, with regard to constitutionality of the subsequent amendments to the Act introduced through Finance Act, 2012 and the notifications/press releases issued by the respondents in pursuance thereof.
14. At the end of this judgment, I deem it proper to remind ourselves by the guidelines given by the honourable Supreme Court of Pakistan in case of Baz Muhammad Kakar supra, which are fully attracted in the instant case: 'Legislature while legislating or amending the law is duty bound to strictly follow the Constitution - because being the chosen representatives of the people, they have to act according to the will of the people of Pakistan and have to establish an order, citizens. Such constitutional obligation clearly postulates that whatever law shall be enacted, it must have nexus with the welfare of the citizens and the Parliamentarians, being the trustees under the Constitution of the will of the people of Pakistan, have to watch the interests of the beneficiaries the people of Pakistan. Therefore, people of Pakistan earnestly expect that the Parliament is doing nothing without a reason for passing an Act or enactment within it.
15. In view of the above discussion and relying upon the case-law cited by the learned counsel for the petitioners at bar, the GAS INFRASTRUCTURE DEVELOPMENT CESS ACT, 2011 is declared as Ultra Virus to the Constitution.
16. These are the reasons for my short order dated 31-1-2013.