This writ petition calls in question the validity of the order dated 13-6:1981, of the Second Secretary, Central Board of Revenue, Karachi.
2. The petitioners' case is that they made trade enquiries from Messrs S. B. & Company, Dubai, about machinery items and were inter alia offered electrical starters of Korean origin. After protracted correspondence, resulting in offers and counter-offers, the price was negotiated and thereafter, the petitioners formed a group with other persons holding import licences and as group leaders the petitioners opened a letter of credit through United Bank Limited, Lahore, specifying therein that the goods would be of Korean origin, mentioning the import licences number of the several licences. In due course, the petitioners received the invoice and the bill of lading from the shippers stating clearly that the goods would be of Korean origin. The petitioners' Representative, who made enquiries at the port in December, 1979, regarding the arrival of the goods, noticed that the packages bore Indian origin marking. It is stated that since import of goods of Indian origin from places other than India was permitted, vide Import Policy Orders, 1979 and 1980, petitioner asked his clearing agent to make the correct declaration and have the goods cleared. The petitioners received a show-cause notice bearing No. SIB-88/80, dated 5th March, 1980, from the Deputy Collector of Customs Preventive, Customs House, Karachi, charging them with Import Trade Control Regulation contravention and mis-declaration of origin and also attributing the ownership of the goods to Messrs Saeed Akhtar and Company, Karachi (a copy of the show-cause notice is attached as Annex--ure `A'). From the show-cause notice, the petitioners learnt that top officers of the Preventive Collectorate had examined the goods in Karachi Port Trust area in the absence of the petitioners/their representative. The petitioners submitted their reply to the show-cause notice.
It was not found satisfactory. The Deputy Collector of Customs, vide his order dated 31-3-1980 (Annexure B), ordered the seized goods to be confiscated outright under section 156 (9) of the Custom Act, 1969, and also imposed personal penalty of Rs. 50,000 on the petitioners for contravention of Import Trade Control Regulation. Messrs Saeed Akhtar and Company was also imposed personal penalty of Rs. 50,(.00. The appeal filed by the petitioners was rejected by the Collector of Customs, vide his order dated 27-9-1980 (Annex--ure C). The revision petition also met the same fate, but the personal penalty imposed on Messrs Saeed Akhtar and Company, was remitted, vide an order dated 13-6-1981 (Annexure D) which has been impugned in this writ petition.
The impugned order, is based on the presumption that. Under the aforesaid provisions of the Import Policy Order, trade in the, private sector was not permissible with India either directly or indirectly and that the import of goods of Indian origin were restricted to the public sector only.
3. Learned counsel for the petitioners submits that under the Import Policy Order, 1979 and 1980, there is no restriction on import of goods of Indian origin from countries other than India. He further submits that Para. 7 (5) of the Import Policy Order, 1979, has not been correctly inter--preted by respondent No. 1. It is next contended that amendment made in the Import Policy Order, 1980, by virtue of notification dated 13-10-1980, would show that a change has now been made from the previous state of law which did not envisage restrictions on import of goods of Indian origin from places other than India. The Notification reads thus :-- "S. R. O. 1040 (1)/80.-In exercise of the powers conferred by sub--section (1) of section 3 of the Import and Export (Control) Act, 1950 (XXXIX of 1950), the Federal Government is pleased to direct that the following amendment shall be made in the Import Policy Order, 1980, namely :- In the aforesaid Order, in paragraph 8, in sub-paragraph (4), after the word "origin", the words "from any country" shall be inserted."
4. The stand taken by the respondents as stated in their written report is ;-- .-"It is correct that in the current Import Policy an amendment has been carried out as pointed out by the petitioners. Ft has been done with a view to making the existing provisions clearer because the Import Policy is meant not for legal experts but for general people as well and it is always effort of the Government to make this document as clear for a lay man as possible.
There is no ambiguity in the provision. The provision has been existing for many years and the trade circles are fully aware of it.
Contravention of provision of Import Policy had taken place and penal action was therefore justified."
5. The learned Deputy Attorney-General submits that the amendment made in the Import Policy Order, 1980, is in its nature explanatory and declaratory and is intended to clarify the position as it existed before the amendment and it does not introduce any change in the policy. In aid of the interpretation, he emphasized that an explanatory provision takes effect retrospectively. He places reliance at pages 364 and 365 of Crates on Statute Law (5th Edition). The relevant passages read thus .- "Explanatory and Declaratory Acts Retrospective.-Where a statute is passed for the purpose of supplying an obvious omission in a former statute, or, as Parke, J. (t), said, in R. V. Dursley (u), "to `explain' a former statute, "the subsequent statute has relation back to the time when the prior Act was passed.
Where an Act is in its nature declaratory, the presumption against construing it retrospectively is inapplicable."
6. In order to appreciate the contentions of the learned counsel for the parties, it would be appropriate to trace out the brief legislative history of trade relations between Pakistan and India. It is an admitted fact that there were no trade restrictions between India and Pakistan, both on private as well as public sector before 1965 War. Thereafter, the trade relations remained suspended for a period of about ten years and were resumed in 1975 under the India Pakistan Trade Protocol of the 30th November, 1974 which has since expired in January, 1978. Status quo was, however, maintained till 30-6-1978 in view of the trade talks between India and Pakistan.
7. It may be pointed out that, according to the petitioners, there was no bar on the import of goods of Indian origin from any other country during the currency of India Pakistan Trade Protocol of 1974.
From 1-7-1976 till the pro--mulgation of Import Policy Order, 1979, bilateral trade was allowed to private sector. Neither the Deputy Attorney-General nor the Assistant Controller of Imports and Exports were in a position to specifically deny this assertion of the petitioners. It may be further pointed out that the Chief Con--troller of Imports and Exports was required to issue Notification in respect of Import of goods from India, the importing agencies and the procedure for imports. No Notification has been produced by the respondents to show that the import of goods of Indian origin from any country other than India by the private sector was banned. .
7. Under Para. 7 (1) of the Import Policy Order, 1974, there was total ban on the import of goods from India and of goods originating from India. The aforesaid provision read thus :- "7. Sources of Import.-(1) General.-Import under Cash will be per--missible from all countries except where otherwise specified. In case of loan, credit, US PL-480, barter or trade agreement, import shall be made only from the source specified. No import shall be permissible from Israel, South Africa, Taiwan Province of the People's Republic of China, India, Rhodesia or of goods originating from any of these countries." *(Underlining is mine).
In the year 1975, a change was made in the import policy and import of goods from India (including goods of India origin) were made permissible by modifying Paras. 7 (1) and (7) of the Import Policy Order, 1975, which read thus .- "7. Sources of Import.-(1) General.-Import under Cash will be per--missible from all countries except where otherwise specified. In case of loan, credit, US PL-480,. Barter or trade agreement, import shall be made only from the source specified. No import shall be permissible from Israel, South Africa, Taiwan Province of the People's of China, Rhodesia or of goods originating from any of these countries.
(7) Import of goods from India (including goods of Indian origin) will be permissible in accordance with the India-Pakistan Trade Protocol of the 30th November, 1974. The goods, the importing agencies and the procedure for imports will be notified by the Chief Controller of Imports and Exports."
The position was further changed in the Import Policy Order, 1976, wherein Para. 7 did not contain any corresponding provision of Para. 7 (7) of Import Policy Order, 1975. Para. 7 of the Import Policy Order, 1976 reads thus :- "7. Sources of Import.-(1) General.-Import under cash will be per--missible from all countries except where otherwise specified. In case of loan, credit, US PL-480, barter or trade agreements, import shall be made only from the source specified. No import shall be permissible from Israel, South Africa, Taiwan Province of the People's Republic of China, Rhodesia, or of goods originating from any of these countries.
(2) Ferro-Chrome.-Import from any country of ferro-chrome manufac--tured from materials exported from Rhodesia shall not be permissible. No clearance of ferro-chrome will be allowed unless the importers concerned furnish the Customs authorities with certificates from the suppliers abroad to the effect that their imports are not attracted by this ban.
(3) Import of the items listed in Annexure IV shall be permissible exclu--sively from Turkey.
(4) Import of dates shall be allowed exclusively under the trade agreement with Iraq, on the basis to be announced by the licensing authority."
The position remained unchanged under the Import Policy Orders, 1977 and 1978. Para. 7 (5) of the Import Policy Order, 1979 restricts imports of goods from India (including goods of Indian origin) to public sector agencies However, no restriction has been placed under Para. 7 (1) for the import of goods of Indian origin from any country other than India by the private sector. The relevant provision of the Import Policy Order, 1979 reads :- "7. Source of Import.-(1) General.-Import under cash will be per--missible from all countries except where otherwise specified. In case of loan, credit, US PL-480, barter or trade agreements, import shall be made only from the source specified. No import shall be permis--sible from Israel, South Africa, Taiwan Province of the People's Republic of China, Rhodesia, or of goods originating from any of these countries.
(5) Import of goods from India (including goods of Indian Origin) will be allowed to public sector agencies. While trade on Pakistan side will be conducted through Public sector agencies only, on the Indian side both the private as well as public sectors may participate in such trade."
The same position was maintained in the Import Policy Order, 1980, on trade with India. However, amendment was made under para. 8 (1), wherein -import from Israel, South Africa or of goods originating from these countries were totally banned but the restrictions earlier imposed on the import of goods from Taiwan Province of the People's Republic of China and Rhodesia or goods originating from any of these countries were deleted. The relevant provisions read thus :- "8. Source of Import.--(1) General.-import under cash will be per--missible from all countries except where otherwise specified. In case of loan, credit, U8 PL-480, barter or trade agreements, import shall be made only from the source specified. No import shall be permissible from Israel, South Africa or of goods originating from these coun--tries."
(4) Import of goods from India (including goods of Indian origin') will be allowed to public sector agencies. While trade on Pakistan side will be conducted through public sector agencies only, on the Indian side both the private as well as public sectors may participate in such trade."
Para. 8 (4) of the Import Policy Order, 1980 was further amended, vide Notification, dated 13-10- 1980. The amended provisions read thus :- "8 (4) Import of goods from India (including goods of Indian origin from any country) will be allowed to public sector agencies. While trade on Pakistan side will be conducted through public sector agencies only, on the Indian side both the private as well as public sectors may participate in such trade."
8. It is evident from the history of the import policy that the Govern--ment has in the past not totally banned trade relations between India and Pakistan in private sector. In the absence of specific denial by the respon--dents, I am inclined to agree with the stand taken by the petitioners that bilateral trade between India and Pakistan was allowed to private sector from 1st July, 1976 and before Import Policy Order, 1979. It is, therefore, difficult to hold that there is any ambiguity in para. 7 (5) of the Import Policy Order, 1979. There is nothing in the said provision to show which could indicate to the trade circle that there was ban on the import of goods of Indian origin from any country. In these circumstances, recourse may be made to the general rules of the interpretation of statutes and documents having statutory validity in discovering the true intention of the legislature.
9. It is amply clear from the phraseology used in para. 7 (5) of the import Policy Order, 1979, that the import of goods whether or not of Indian origin was restricted from India only and not goods of Indian origin through any other source. The omission of the phrase "from any other country" within parenthesis in para. 7 (5). Was not merely accidental. This) conclusion is fortified on reference to the pheaseologly used in para. 7 (1),j wherein the import is not permissible from Israel, South Africa, Taiwa Province of People's Republic of China and Rhodesia, but also of good originating from any of these countries. 1f the intention of the legislature was that the import of goods from India including goods of Indian origin from any other country will. Be restricted to public sector agencies alone, in would have used the unambiguous phraseology of para. 7 (1) in sub4 paragraph (5) thereof as was rightly done by amending para. 8 (4) of thd import Policy Order, 1980. By no stretch of imagination, the scopd of para. 7 (5) could be extended to import of goods of Indian origin from countries other than India. The provisions of para. 7 (5) of the Import Policy Order, 1979 are in the nature of an exception clause which must be strictly construed in accordance with the accepted principles of interpretation. Reference may be made to Ch. Zahoor Elahi, M. N. A. v. Zulfiqar Ali Bhutto and 2 others (1) and Javed Iqbal Khan v. Central Board of Revenue and 2 others (2).
Reference may also be made to Collector of Customs (Appraisement), Karachi and 2 others v.
Messrs Abdul Majeed Khan and others (3), wherein it was held :- "Penal statutes must be strictly construed and in case of any ambiguity or doubt arising from the construction, the .Benefit must go to the accused person."
(1) PLD 1975 SC 383(2) 1980 CLC 558
(3) 1977 S CM R 371 In the precedent case, it was also observed that :- "In interpreting a penal or a taxing statute the Courts must look to the words of the statute and interpret them in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provisions in the statute so as to support assumed deficiency, as held in Messrs Hirjina & Co. (Pakistan) Ltd. v. Commissioner of Sales Tax, Central, Karachi (1971 SCMR 128)."
10. In the light of the test laid down in the precedent cases and keeping in view the legislative history of the Import Policy on Pakistan's trade relations with India, it is difficult to hold that the amendment made in the Import Policy Order, 1980 was declaratory or explanatory in nature. In any case, if at all two interpretations are possible in the circumstances of this case, then the benefit of it will accrue to the petitioners and the one favourable to them should be accepted in accordance with well-established rules of inter--pretation of statutes. The amendment necessarily implies intention on the part of the Legislature to depart from the earlier law and introduce a change in the previous Import Policy. Reference may be made to Pakistan Lyallpur --Samundri Transport Co. Ltd., Lahore v. Commissioner of Income-tax, Lahore Zone, Lahore (1), wherein it was observed :- "One of the cardinal rules of interpretation of statutes is that where an amendment in the law takes place there must be implied necessarily an intention on the part of the Legislature to depart from the earlier law in some respects. Redundancy cannot be readily attributed to the Legislature. The position canvassed by the learned counsel for the petitioner would lead us to the conclusion that such an amendment is redundant because in spite of it the position in regard to the adjustment of unabsorbed depreciation carried forward remained as it was before the amendment. This cannot be readily accepted. There must be something in the law to irresistibly indicate that the alteration sought has not been achieved on the words or expression used in the amend--ing Act."
The change in the import Policy Order, 1980, through the amending pro--visions cannot affect past and closed transactions and the petitioners have a vested right to demand that their case be decided according to the law as it existed when the action was begun, unless the amendment shows a clear ; intention to the contrary. I am, however, of the considered view that the amendment does not operate retrospectively. Reference may also be made to B. G. N. Bhandari v.
Rehabilitation Authority, Lahore (2) and Ahmad Ali Khan v. Muhammad Raza Khan and others (3), wherein it was held that a subsequent change in the law cannot affect past and closed transactions.
11. It may finally be observed that the Deputy Collector of Customs (Appraisement), vide his order doted I1-1-1981 (Annexure G), having already released tractor parts of Indian origin imported from Singapur under similar circumstances, under the Import Policy Order, 1978, there was no justification in discriminating against the petitioners in confiscating their goods without any distinction.
12. In view of the above discussion, I hold that the impugned orders for the confiscation of the goods, in question, imported by the petitioners are without lawful authority and of no legal effect.
The goods, in dispute, shall be released forthwith subject to payment of import duty in accordance with law.
The writ petition is accepted with costs,
(1) 1980 PTD 69(3) 1977 SCMR 12 (2) PLD 1961 SC 89