SHAMEEM HUSSAIN KADRI, ACTG. C. J.-The appellant-Company is running a sugar Mill at Faisalabad, the Production capacity of which was fixed at 30000 tons of sugar under section 3 (4) of the Cetral Excises and Salt Act, 1944 read with Excise Duty on Production Capacity (Sugar) Rules, 1972, (hereinafter called the Rules) (printed at page 123 off L D 1973 Central Statutes).
2. The appellant-Company under rule 4 of the said Rules, applied for the exemption of the payment of the excise duty on the short fall of 6660.67 tons of sugar, amounting to Rs. 91,54,424.85, regarding the year 1975-76 since it could not produce the sugar according to its full capacity due to reasons beyond its control. The representative of the Company was heard on 3-5-1977 and 27-6-1977. On the latter date the hearing was granted by Mr. Hafeez-ud-Din Ahmad, Member (Central Excise) but no order was passed on the representation.
3. The ,appellant-Company approached this Court by Writ Petition No. 2013 of 1978. The Company was granted relief for disposal of its petition pending before the Board w.Th an injunction not to realise the amount till the disposal of the application. This order was passed after hearing the Deputy Attorney-General on 23-4-1978. On 27-5-1978, Mr. Fazalur Rahman, Member (Central Excise) passed an order allowing abatement to the extent of Rs. 50,31,224.85. The earlier petition was disposed of having borne fruit. The appellant-Company challenged this order of abatement by Writ Petition No. 2908 of 1978, which was dismissed by the learned Single Judge of this Court on 7-6-1978.
4. Mr. Mumtaz Husain, the learned counsel for the appellant-Company has raised the following points for consideration against the impugned order:-
(i) The Central Board of Revenue has passed the order on a prescribed formula of following. 10% abatement, on the shortfall, which is not envisaged by rule 4.
(ii') Mr. Hafeez-ud-Din Ahmad provided the opportunity of hearing twice and the last date of hearing was 27-6-1977. The order of abatement was passed after about a year i. e. on 27-5-1978 by Mr. Fazalur Rehman. The order violates the principle of maxim audi alteram parten.
(iii) It was hardly possible for Mr. Fazalur Rahman to pass the order of abatement on the basis of the arguments submitted before Mr. Hafeez-ud-Din Ahmad a year before and in fact he could not be conversant with the submissions made before his predecessor-in-office.
(iv) The order could be passed with the approval of the Central Govern--ment which is lacking in the instant case.
5. Mr. Mumtaz Hussain, learned counsel for the appellant, has placed reliance on a case of similar nature reported as Charsadda Sugar Mills Ltd v. Federation of Pakistan (1) and approved by the Supreme Court in Federation of Pakistan and others v. Messrs Charsadda .Sugar Mills Ltd. (2). Mr. Zia Mahmood Mirza, the learned counsel for the Central Government, submitted that the first contention raised by the learned counsel for the appellant is incorrect, for the 10 formula of allowing abatement on shortfall was not the basis of the decision in the instant case. This being factually incorrect has no force.
6. In support of the second and third contentions the learned counsel for the appellant has referred to paragraph 76 of Halsbury's Laws of England, Volume I, on "Opportunity to be heard" Errington and others v. Minister of Health (3) in which it has been observed that the Statutory Body making inquiry without the participation of the person affected by its order amounts to an action without lawful authority. The learned counsel has also referred to Stafford v. Minister of Health (4). He has also relied upon Ridge v. Baldwin and others. (5) paragraph `F' at page 81 of which is to the following effect:- "The body with the power to decide cannot lawfully proceed to make a decision , until it has afforded to the person affected a proper opportunity to state his case."
Reliance is also placed on Pad-field and others v. Minister of` Agriculture, Fisheries & Food and others (6). Its paragraph `I' at page 701 is to the following effect:-- "But there may be something in the nature of the things empowered to be done, something in the object for which it is to be done, some--thing in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person on whom the power is reposed to exercise that power when called upon to do so."
In Breen v. Amalgamated Engineering Union (7), in paragraphs `h' and 7' at page 1153 it has been observed as under :- "(h) It is now well settled that a statutory body, which is entrusted by statute with a discretion, must act fairly. It does not matter whether its functions are described as judicial or quasi-judicial on the one hand, or as administrative on the other hand, or what you will. Still it must act fairly. It must, in a proper case, give a party a chance to be heard."
"(j ) The discretion of a statutory body is never unfettered. It is a discretion which is to be exercised according to law."
The learned counsel has also referred to Syed Muhammad Azim etc. v. The State (8), and Muhammad Sharif v. Government of the Punjab etc. (9), and an unreported judgment in Writ Petition No. 269 of 1978 (Mazari & Mazari Ltd. v. Federation of Pakistan etc. in support of his contention.
(1) PLD ,1978 Pesh. 23(2) 1981 SCMR 428
(3) (1935) 1 K B 249 (4) (1946) 1 K B 621
(5) (1963) 2 All E L R 66 (6) (1968) 1 All E L R 694
(7) (1971) 1 All E L R 1148(8) PLD 1970 Quetta 27
(9) PLD 1975 .Lab. 1115
7. It is pertinent to mention here rule 4 which is reproduced as under :- "(4) If in a financial year, the actual production of sugar of a factory, for reasons which, in the opinion of the Central Board of Revenue, were beyond the control of the manufacturer, falls short of its production capacity to such extent as the Central Board of Revenue considers to be substantial, the Central Board of Revenue may, in its discretion but with the prior approval of the Federal Govern--ment, grant abatement of duty leviable under rule 3 at such rate and to such extent as it may consider proper."
It is now well settled law that even if the right of hearing is not mentioned in the Statute, it should be read into it unless it is specifically prohibited therein.
8. Mr. Zia Mahmood Mirza, the learned Standing Counsel for the Central Government, with reference to rule 4 has submitted that it was not necessary for Mr. Fazalur Rahman to give an opportunity of hearing to the appellant-Company especially when Mr. Hafeez-ud-Din Ahmad had heard the Representative of the Company twice. Reliance was placed on Collector, Sahiwal etc. v.
Muhammad Akhrar (1). This was a case of dismissal of a person from service and the Supreme Court observed that failure to give show-cause notice provided in the Statute rendered the impugned act void ab initio. The lacuna at the initial stage would remain incurable even if an opportunity of hearing is afforded at a subsequent stage. This judgment obviously goes against the submission made. He has cited a Supreme Court authority reported as R. T. H. Janjua v.
National Shipping Corporation (2). The facts of this case are that an employee personally appeared before the Inquiry Committee and at the conclusion of his oral examination he stated :- "Apart from what I have said above, I do not intend to produce any witness. Even at the penultimate stage of the proceedings, the petitioner filed a fresh written statement against the findings of the Inquiry Committee, and also appeared before the Finance Director to show cause against his proposed removal from service."
It was held as follows :- "The argument that the petitioner was not allowed adequate opportunity to defend himself or that proceedings were farcial and, therefore, mala fide is without substance."
This case is obviously distinguishable from the facts of the instant case and is hardly relevant.
Lastly he relied on Government of Pakistan v. Shahid Afzal and another (3). This was a case under the Censorship of Films Act (XVIII of 1963), where rule 21 of the Censorship of Films Rules, 1963, was examined by the Supreme Court. Sub-rule (3) of rule 21 provides an embargo on passing any order prejudicial to the interest of any person unless he has an opportunity of representing his case to the Federal Government. The following observation in paragraphs 12 and 13 at page 105 of this judgment is reproduced below :- (1)1971SCMR681 (2)PLD1974SC146 (3)1981SCMR101 The Members of the Board unanimously held that it was not. This finding was naturally challenged by the respondents. However, the Federal Government, after considering the reply of the respondents, found no reason for not accepting the version of the Lahore Censor Board. There is no ground in these circumstances as the learned Single Judge has pointed out for the Court to substitute its own opinion for that of the Federal Government.
(13) On this view of the matter, the other ground which prevailed with the learned Judges of the Division Bench, namely, that reasons were not recorded for decertifying the film also loses its importance. This being a simple case of two versions, the competent authorities having accepted one of them in preference to the other there was no necessity for recording any elaborate order.
The impugned order of the Federal Government could not be set aside on this ground in the circumstances of the present case. As for the true import of the phrase `opportunity of representing his case before the Federal Government' we agree with the learned Judges of the Division Bench reproduced in para. 7 above that this will vary from case to case. In the instant case, the opportunity given satisfied the requirements of the relevant rule."
The last case is obviously distinguishable, for, there were two different versions and the versions of the Board which saw the film was accepted. It was hardly necessary for the Federal Government to provide an opportunity to the exhibitors to show the film over again for the counter version to the functionary of the Central Government. Perhaps it would be a futile exercise. Even otherwise the learned Judges have observed that opportunity of representation will vary from case to case.
9. We are of the view that even the note left by Mr. Hafeez-ud-Din` Ahmad on the last hearing on 27-6-1977 for the consideration of passing the order by Mr. Fazalur Rahman on 27-5-1978 cannot be considered to be a fair opportunity of hearing provided to the appellant-Company, for, in the first place the officer who heard the matter did not decide it himself and secondly a year had elapsed in-between the hearing and the date of the order passed by Mr. Fazalur Rahman.
Repeatedly the Supreme Court has made observation that in any case where judgment is reserved and it has not been written within a period of three to four months, fresh hearing is necessary in such circumstances. Surely this principle would be attracted to the instant case as well. The learned Standing Counsel for the Federal Government has submitted that no prejudice has been caused to the appellant and the learned Single Judge has dealt with this aspect of the case.
10. The learned counsel for the appellant referred to the second reason mentioned at page 9 of the writ petition. The plea of non-availability of sugar-cane in its zone area and its efforts to meet its cane requirement from outside the zone area to the extent of 20 per cent. Which was passed by a Notification (Annex. P. 6 with the writ petition) was raised before the learned Single Judge which was within the competence of the Board to consider after looking into the evidence and the relevant notifications.
The argument of the learned counsel for the Federal Government is devoid of force that no prejudice has been caused to the appellant, for, this aspect has been examined by the learned Single Judge. We are afraid disputed questions of fact are not normally gone into in the exercise of writ jurisdiction. In any case, this was - the domain of the Board and surely prejudice has been caused to the appellant, for, it has been deprived of this opportunity before the relevant authority.
The argument of the learned counsel for the appellant has immense force on the contentions raised by him.
11. The last submission of the learned counsel for the appellant is devoid of force, because this provision of rule 4 has been complied with for, Mr. Fazalur Rahman who was also Secretary to the Federal Government, gave approval as he was competent to do so. Since the basic order suffers from inherent disability, the superstructure raised thereupon falls to the ground and the order impugned in the writ petition cannot be said to have been passed with lawful authority (Yousaf Ali v. Muhammad Aslam Zia and others PLD 1952 SC (Pak.) 104,is referred.
12. For the foregoing reasons, we accept this Intra-Court Appeal, set aside the order of the learned Single Judge, dated 7-6-1978, and declare the order passed by the Board as one without lawful authority. The application of the appellant shall be deemed to be pending and will be decided within a period of one month. In the circumstances of this case, we would not like to burden the.
Respondents with costs.
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