Shahid Karim, J. This constitutional petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 brings a challenge to the letter dated August 7, 2019 issued by the Ministry of Commerce and Textile (Commerce Division) Government of Pakistan, (the impugned letter). It reads as under: "I am directed to refer to the M/s Service Industries Limited' s application dated 21st May, 2019 regarding the above captioned subject and to inform that your request was examined in this Division in light of the decision of the Economic Coordination Committee (ECC) of the Cabinet in case No.08/03/2019 dated 15th January , 2019, wherein it was decided that the discrepant claims, resubmitted after the due date shall not be entertained.
2. In view of the above, your request for acceptance of the subject claim is regretted."
2. The facts are refreshingly simple and may be stated shortly . It is the case of the Service Industries Limited (Service) that in order to encourage exports and boost the competitiveness of the country' s exports, the Government of Pakistan offers various incentive packages to export-oriented industries, including duty drawback.
This means that exporters are partially paid back the duties and taxes they have paid at the time of procurement of raw materials which are exported after being processed into finished goods in Pakistan. One such scheme was the drawback scheme titled Drawback of Local Taxes and Levies Order , 2015 (the Order 2015) which was introduced by Government of Pakistan through SRO No.415(I)/2015 dated 15.05.2015. It was notified under Section 3 of Import and Export (Control) Act, 1950. The primary benefit which flowed from the Order 2015 was encapsulated in clause 1(2) read with 3(1) and was to the following ef fect: "1(2) The drawback shall be available on annual basis on FOB-realized values of enhanced exports for shipments made during 2013014, if increased beyo nd 10% over last years' s exports i.e. 2012-13. The export performance shall be analyzed separately for each category of eligible products."
3(1) Eligibility .-(1) The drawback shall be provided to the exporters on export of products as specified in Annex-I, at the rate of 4% of FOB value of their enhanced exports.
(2) the exporter shall hold a valid NTN number and previous tax returns for two years.
(3) The exporter shall furnish data or any information related to its operations, domestic sales, accounts and exports as required by the Association/ respective chamber ."
3. There is no dispute regarding the entitlement of Service to claim for and the grant of drawback in terms of the Order 2015. Clause 5 of the notification prescribes the procedure for claims and mentions certain conditions to be fulfilled for the drawback to be provided. The controversy centers around two clauses, that is, clause 5(iii) and (vii) which provide that: "(iii) exporter shall submit the filled-in forms duly certified by the Association/respective Chamber along with supporting documents as mentioned in Annex II, by 1st June, 2015 to the nomina ted authorized bank. No claims shall be accepted after 2nd June, 2015.
(vii) applications containing discrepancies shall be returned by the SBP to the authorized banks within thirty days from the date of submission of claims. The authorized banks, after rectification of the discrepancies, shall submit claims within twenty days. While resubmitting the applications, authorized banks shall quote the reference of the "forwarding schedule" under which the application was originally submitted. In case of non submission within twenty days, the claims shall be rejected without any further process. The detailed guidelines for the banks would be issued by SBP BSC."
4. In terms of scheme of the Order 2015, the exporter was required to give an undertaking that it had nominated one bank of its choice and that the claims had not been submitted for the same shipment through another bank. By the clauses, reproduced above, the exporter was to submit the filled-in forms duly certified by the Association/respective Chamber along with supporting documents by 1st June, 2015. It was provided that no claims shall be accepted after 2nd June, 2015. There is no cavil that the date was extended till 30th July, 2015. In terms of clause 5(vii) above, the applications which contained discrepancies were to be returned by State Bank of Pakistan (SBP) to the authorized banks within thirty days from date of submission of claims. It was thereafter incumbent upon the authorized bank, after rectification of discrepancies, to resubmit claims within twenty days. At the heart of the controversy is the stipulation that in case of failure to resubmit within twenty days, the claims shall be rejected without any further process. The arguments in this Court made by the Government of Pakistan and SBP were precisely that the submission of the claim after removal of discrepancies was made by Service beyond twenty days prescribed by clause 5(vii) of the Order 2015. On this basis, Government of Pakistan stone-walled the claim by Service through the impugned letter .
5. The historical facts of the claim filed by Service and the missive exchanged with SBP pointing out discrepancies will lend actuality to the analysis.
6. It began by submission of the initial claim by Service on 22.5.2015 through its nominated bank. This is admitted on all hands. A reply was received by Service from SBP for the first time on 01.02.2016, that is, almost eight months after the submission of claim by Service. It falls to be noted that ostensibly SBP itself failed to adhere to the timeline provided in the Order 2015 by returning the applications containing alleged discrepancies on the part of Service beyond a prescribed period of thirty days. This is admitted by SBP in the reply filed to the petition. The plea put forth for the delay has been mentioned in reply to paragraph 1 1 of the petition in the following terms: "The case was processed in January 2016 as there were other claims submitted before this claim and processing is done under FIFO bases. The discrepancies found in the claim were communicated to AD (respondent no.3) through letter no. FEOD-DL T(Excluding Textile)-05-2016 dated February 2016 and advised to rectify them in 20 days. The response was submitted on February 19, 2016 under respondent no. 3' s letter no. DL TL-GLB-16/0002."
7. In the same vein, SBP admits that a reply from Service was received within the stipulated period of twenty days, that is, on February 19, 2016. On 19.04.2016 once again beyond the period of thirty days, SBP wrote back to Service (through the nominated bank, respondent No.3) pointing out certain discre pancies to be rectified. This was duly done by Service in its reply dated 09.05.2016, within the twenty days time prescribed for the purpose. This too has not been denied by SBP in its reply . Thereafter Service received another letter from SBP once again through its nominated bank dated 27.06.2016 and further discrepancies were found to exist in the claim filed by Service which were sought to be rectified. This was done by re-submission of the case for duty drawback on 25.7.2017.
This has been taken by SBP to be a late submission of the rectified claim by Service and so SBP has conveniently applied the limit of twenty days to the re-submission of the case by Service to deny the claim for duty drawback. To complete the narration of facts, Service wrote to SBP for payment of its admissible drawback payment and on 2.8.2016, SBP wrote back in the following terms: "Please refer to your letter dated 25-07-2016 re-submitting therewith claim for Rs.48,466,240/- under EPD SBP Circular Letter No.11 dated 20-05-2015. During scrutiny of the case, it has been observed that the claim was re- submitted after 20 days from the date of objection. Hence, the case is time-barred."
8. Through letter dated 12.08.2016, Service nudged SBP further citing serious flaws in its response of 2.8.2016.
The following reply of SBP on 17.8.2016 referred Service to the Ministry / Division of Government of Pakistan by stating that: "The timelines for submission and resub mission are specifically mentioned in the SRO. As such allowing any relaxation is not in SBP domain. Only the SRO issuing ministry may allow any relaxation. Hence, you claim is time barred as informed vide our letter no. FEOD-DL TL (Excluding Textiles)/5668/2016 dated 02-08-2016 and cannot be processed further ."
Suffice to say that the refusal of the Government of Pakistan and SBP to allow the claim for duty drawback to Service is untenable and has no legal legs to stand upon.
9. In the reply submitted by SBP, as adumbrated, the substantial facts have not been denied. The claim has been denied on the misplaced notion that lastly it was submitted beyond twenty days while the letter by SBP was addressed on 27.6.2016 and Service resubmitted the case after rectification of discrepancies on 25.7.2016. The learned counsel for Service has produced a press release dated 28th June, 2016 which is a general information, issued by the Ministry of Interior , Government of Pakistan to the effect that 5th July to 8th July 2016 will be public holidays on account of holy festival of Eid ul Fitr. If this press release is taken into account, clearly the case of Service was submitted within the period of twenty days mentioned in the Order 2015. Yet, on its own showing, SBP has no reason to hold that the resubmissi on was beyond time. In reply to paragraph 15 of the petition, SBP has this to say: "The due date of response to letter no. FEOD-DL TL (Excluding Textile)-4814-2016 dated June 27, 2016 was July 16, 2016 (Saturday) which would be considered July 18, 2016 but AD submitted its letter on July 25, 2016 with a delay of nine days."
10. Thus SBP itself considers the time to be deemed to extend till 18.07.2016 (by excluding Saturday and Sunday).
However , the same rule has not been applied to all intervening weekends and public holidays. SBP cannot be permitted cherry picking at its own whim. This was the premise set up by Service in its letter of 15.4.2019 (Annex "T?) which was as under: "Due to prolonged Eid Holidays in 2016, twelve (12) non-working days (6 days on account of Eid Holidays and 6 days comprising the three weekends) fell during the twenty-seven days' period, which actually reduced the time period available to SIL and seriously affected the ability of SIL to submit claim within a shorter period of time.
However , SIL had made best efforts to submit the claim in the shortest possible time after rectification of discrepancies pointed out by SBP ."
11. This aspect of the matter was mechanically applied and reflexively treated by both Government of Pakistan and SBP to stunt the claim of Service. No heed was paid to the past correspondence and the promptitude with which Service responded on previous occasions to discrepancies pointed out by SBP .
12. It is the case of SBP itself (see reply to paragraph 13) that on 19.04.2016, (that is, almost a year after the promulgation of Order 2015), SBP issued new instructions to all authorized banks calling on them to file revised drawback claims as the manner of calculation of growth in exports for the appli cation of Order 2015 had been modified, on the basis of exchange rate conversion formula to be applied. This was being done unilaterally by SBP and without regard to the terms in which the Order 2015 was couched initially . Thus, by its own conduct, SBP was in fact laying down new terms on which submission of claims (after rectification) was to be made by exporters including Service. This flies in the face of the tenor of Order 2015.
13. Be that as it may, the controversy does not hinge upon the question whether the resubmission of claim made by Service was within twenty days or not. Reduced to its core, the central issue revolves around the question whether the outer limit of twenty days mentioned in the notification applies to the peculiar facts and circumstances of the present case or not. Plainly , these are two different questions and would beg a different reply . For, it is clear from the narration of facts by now that the rule regarding the period of thirty days for removing discrepancies and of twenty days of submission of the application after rectification has not been adhered to by SBP so as to lay the foundation for rejection of the claim made by Service. Certainly , SBP or Government of Pakistan cannot be heard to say that a part of the notification which imposes an obligation on Service as an exporter is to be followed in letter and spirit and the other may be ignored at the whim and choice of SBP. This would make it a case of invidious discrimination liable to result in gross injustice simply because Government of Pakistan and SBP, as dominant players, choose to bend the rules to suit their interests, and correlatively refuse to extend the same concession to Service as well.
14. The Government of Pakistan has placed on record the minutes and decision of the meeting of Economic Coordination Committee (ECC) of the Cabinet held on 15.01.2019. The ECC considered the case of drawback of local taxes and levies under the Order 2015 on the basis of the summary submitted by the Commerce Division on 11.1.2019. The decision of the ECC alludes to three types of claims pending with SBP and the precise claim relating to Service was also considered by ECC, that is, discrepant claims resubmitted upon rectification of discrepancies after the due date. It was proposed by the Commerce Division that only those cases which were submitted in time but pending for want of funds might be entertained. This view was endorsed by ECC and was ratified by the Cabinet in its meeting held on 24.1.2019. However , in my opinion, the decision taken by ECC and ratified by governmental decision impinged upon the right of Service to claim duty drawback as the case of Service in its peculiarities and nuances was not considered by either the ECC or the Cabinet. The case of Service was not a case of time barred claim but on the other hand Service adhered to the period of twenty days while resubmitting the case after rectifying the discrepancies through its nominated bank. It was in fact SBP which did not follow the prescribed period of thirty days to return the application of Service allegedly containing discrepancies. SBP on the other hand did so without regard to its obligation to do it within thirty days and during this period commencing 22.5.2015 (the first time that the claim was filed) till 22.7.2016 when lastly Service submitted its claim did SBP raise any objection. However , on 02.08.2016 SBP informed the nominated bank of Service that the claim was time barred and by implication was being denied. Since then Service has been in corres pondence with not only SBP but the Commerce Division of Ministry of Commerce and Textile in order to impress upon these governmental authorities that the case of Service was wrongly rejected being time barred. This was finally rejected through the impugned letter on 7.8.2019 on the basis of the decision of ECC of the Cabinet.
15. As stated above, the case of Service is clearly not one of being time barred. This might have been argued as the basis, had SBP followed the timeline given in the Order 2015. Doubtless, Service made its first application for the claim within time.
Thereafter , SBP took eight months to raise an objection with regard to the claim and to point out discrepancies.
Service promptly replied to the letter of SBP and the discrepancies were rectified. Once again SBP slept over the case and wrote back on 21.4.2016 which too was beyond the prescribed thirty days. At all times therefore SBP did not feel compelled in following the time prescribed by the Order 2015 and in order to cover up its negligence has conveniently shifted the blame to Servic e to deny the claim. The ECC of the Cabinet in its decision taken on 15.01.2019 merely proceeded on the summary submitted by the Commerce Division regarding drawback on local taxes and levies and the case of Service was neither before the ECC nor was it dilated upon in that meeting.
Therefore, the decision of the ECC is inapplicable and ineffective towards Service as the factual aspect of the case of Service as a separate matter was not deliberated upon in that meeting. It is axiomatic as a rule that the terms of a notification have to be applied evenly and to all parties to that notification on whom obligations have been cast.
The conditions mentioned in the Order 2015 applied respectively to SBP as well as Service as an exporter and by its terms does not make a distinction on the relaxation of any particular term of the notification with regard to one or more of the parties. SBP is a governmen t instrumentality and is in a dominant position in the scheme of things.
However , neither the law nor the Constitution entitles Government of Pakistan or SBP to use their dominating bargaining power to deny a claim to Service while throwing to the winds its own obligations under that notification.
16. "Democracy is founded on the principle that each individual has equal value. Treating some as automatically having less value than others not only causes pain and distress to that person but also violates his or her dignity as a human being." (Baroness Hale in Ghaidan v Godin - Mendoza [2004] UKHL 30).
17. Formal equality requires officials to apply or enforce the law consistently and even-handedly , without bias. This is fundamental to the notion of the rule of law .
"With us, every official, from the Prime Minister down to a constable or collector of taxes is under the same responsibility for every act done without legal justification." (A.V. Dicey , The Law of the Constitution, 10th ed.
(1959), p.193) .
18. Order 2015 requires that "applications containing discrepancies shall be referred by the SBP to the authorized banks within thirty days" and that "the authorized banks, after rectification of discrepancies, shall submit claims within twenty days." It further goes on to state that "in case of non-submission within twenty days, the claims shall be rejected without any further process."
19. The first part reproduced above places a "public sector equality duty" on a public authority to have regard to the need to.... "eliminate discrimination and victimization and to advance equality of opportunity between persons."
(See De Smith' s Judicial Review , 7th Edition, at p.283). SBP has been obliged by the word "shall? to return the applications within thirty days. There is no contention that SBP failed to do that. It seems clear that SBP did not feel itself bound by the mandate of thirty days prescribed in the Order 2015 whereas chose to enforce the time limit of twenty days in respect of Service. This approach is inherently egregious and harmful and leads to arbitrary and uncontrolled discretion. If allowed to prevail, this approach will result in a bearcurative stampede of the claims of exporters under the Order , 2015.
"Public authorities owe a general duty not to discriminate on protected grounds. These include the duty not to discriminate, directly or indirectly , on those grounds and also to have "due regard" in the promotion of equality".
(M. Bell, Judicial enforcement of the Duties on Public Authorities to Promote Equality , [2010] P .L. 672.
20. The European Court of Human Rights requires that the quality of the law must have compatibility with the rule of law (Hewitt v UK (1992) 14 E.H.R.R 657) and regarded the "quality of the law" "to encompass notions of transparency , accessibility , predictability and consistency , features of a legal regim e designed to guard against the arbitrary use of power and to af ford suf ficient legal protection to those at risk of its abuse."
21. In R. (on the application of S) v Secretar y of State for the Home Department [2006] EWCA Civ 1157, it was held that a policy document conferring very wide discretion on a Minister to depart from its terms was incompatible with the Convention requirements because it failed "to give any protection against arbitrary interference by Ministers" and because its open-ended nature was not foreseeable."
22. The whole conduct of SBP and Gove rnment of Pakistan, too was not foreseeable by Service and the open- ended approach of SBP led Service to believe that the timelines of the respective acts were no more valid in view of SBP?s discretion to depart from it.
Thus if the Order 2015 cast a duty on SBP (by the use of "shall?) to act within thirty days which was flouted by it capriciously , it cannot be heard to say that Service must suffer for a purported non-compliance of a few days. Order 2015, by its contents, requires its enforcement on the basis of substantive equality . This is being applied as a general principle of law as part of the notion of rule of law. Any act which infringes equality and perpetrates unequal treatment in its operation is unreasonable. This has to be distinguished from the concept of equality enshrined in Article 25 of the Constitution, which prohibits unequal treatment between citizens or different classes. We are here concerned with the enforcement of law which is lopsided and tilts in favour of SBP, an instrumentality of Government of Pakistan, and gives it free rein in performing part of its obligation under the Order 2015. This unequal treatment cannot be countenanced and must be struck down as unreasonable. Notions of equality and public policy require equality of treatment as between a person (or citizen) and the Government so that the power may not be exercised (in this case by Government of Pakistan and SBP) with unfair discrimination. We expect a rational behaviour from government and the state. In this case Government of Pakistan and SBP acted irrationally in denying the claim of duty drawback to Service. In Edwards v SOGA T [1971] Ch. 354, a case involving challenge to the withdrawal of collective bargaining rights, Lord Denning said that our courts, "will not allow a power to be exercised arbitrarily or capriciously or with unfair discrimination, neither in the making of rules or in the enforcement of them."
23. Secondly , and alternately the requirement of resubmitting the application within twenty days was to be followed the first time only and ought not to have been applied strictly on any subsequent occasions. No such intention is discernable from a reading of clause (vii) of the Order 2015. It is also not the case of SBP that on subsequent occasions the applications of Service were discrepant on each of those occasions rather it is common ground that the return of documents by SBP was more on account of change in policy by SBP in the evaluation of the drawback claims and thus the applications will not be deemed "containing discrepancies". There is no quarrel that Service resubmitted the application the first time within the time limit of twenty day. It was also done within time the second time. On the third resubmission, SBP refused to process on the plea of being time- barred. The basis of SBP is null and of no ef fect.
24. It is clear from the above that Service has not been in breach of its obligations under the Order 2015 in submitting the rectification application on time. It is therefore entitled to the claim of duty drawback made through the form submitted on 22.5.2015.
25. In view of the above, this petition is allowed . The impugned letter is held to be without lawful authority and is set aside. The respondents No.1 and 2 are directed to process the case of Servic e and to reimburse the claim of duty drawback within a period of one month from the receipt of the order of this Court.