WIQAR AHMAD, J. Through this single judgment, we intend to decide the following connected writ petitions, as in all these petitions, common questions of law and facts, are involved: -
1. Writ Petition No. 6261-P/2019 M/S New Mohmand Steel Mills through its attorney Abdul Majeed Khan vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others"
2. Writ Petition No. 6260-P/2019 M/S Universal Steel Mills through its attorney Hazrat Ali vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
3. Writ Petition No. 6263-P/2019 M/S Al Haj Foundry through its attorney Fayaz Khan vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
4. Writ Petition No. 6264-P/2019 M/S Mustafa Steel Mills through its attorney Haji Rehmat Shah vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
5. Writ Petition No. 6265-P/2019 M/S MK Steel Mills through its proprietor Meraj Khalid vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
6. Writ Petition No. 2874-P/2020 Malik Ice Factory through its owner/proprietor Atta Ullah Khan & others vs Federation of Pakistan through Federal Secretary Energy (Power) Division, Islamabad & others".
7. Writ Petition No. 4078-P/2020 SpeenGhar Ice Factory through its owner Khalil-ur-Rehman & others vs Federation of Pakistan through Federal Secretary Energy (Power) Division, Islamabad & others".
8. Writ Petition No. 4732-P/2020 M/S Talha Steel Furnace through its partner Umar Shah vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
9. Writ Petition No. 94-P/2021 M/S AK Tariq Foundry through its partner Tariq Khan Afridi vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
10. Writ Petition No. 95-P/2021 M/S Dua Steel Furnace through its attorney Arabistan Khan vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
11. Writ Petition No. 96-P/2021 M/S Iftikhar Steel Mills & Furnace through its attorney Muhammad Sajjad vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others"
12. Writ Petition No. 97-P/2021 M/S Muslim Steel Mills through its attorney Abdullah vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
13. Writ Petition No. 98-P/2021 M/S Lillah Steel Mill through its proprietor Hikmat Shah vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
14. Writ Petition No. 99-P/2021 M/S Naseeb Steel Furnace through its attorney Muhammad Sajjad vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others"
15. Writ Petition No. 100-P/2021 M/S Mohmand Moulding Works through its proprietor Ghafoor Khan vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
16. Writ Petition No. 101-P/2021 M/S Irfan Ullah Steel Mills & Furnace through its attorney Muhammad Sajjad vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
17. Writ Petition No. 364-P/2021 M/S Z.K Steel Mill through its attorney Bait Ullah Afridi vs Government of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others".
2. Petitioners in all these connected petitions have challenged vires of Entry No.58 of Table 1 of First Schedule to Federal Excise Act 2005 where-under, federal excise duty has been imposed at the rate of 17 percent in sales tax mode. Said entry had been inserted vide amendment brought in the Schedule through Finance Act 2019. A corresponding amendment in Entry No.153 of Sixth Schedule of the Sales Tax Act 1990 brought through Finance Act 2019 had the effect of exempting all steel products from levy of sales tax. Grievances of petitioners in all these petitions are that their products had already been exempt from levy of sales tax under SRO No.1212(I)/2018 issued on 05.10.2018 by the Federal Government and through substitution of sales tax with federal excise duty in the mode and manner as stated above, they had been deprived of the benefit of enjoying exemption from levy of sales tax. While highlighting their grievances before this Court and raising a challenge to impugned levy, the petitioners have heavily pressed in service the history of constitutional and legal development of the area. Promulgation of 25th Constitutional Amendment has been a turning point in the constitutional and legal development of former tribal areas, comprising of two parts, provided in Article 246 of the Constitution as Federal Administered Tribal Area (hereinafter referred to as "former FATA") and Provincially Administered Tribal Area (hereinafter referred to as "former PATA").Through constitutional amendment, both these areas stood merged in the province of Khyber Pakhtunkhwa. It is case of petitioners in these proceedings that while merging these areas with the province of Khyber Pakhtunkhwa, the federal government had promised with people of the area that tax exemptions being enjoyed by them before promulgation of 25th Constitutional Amendment would be kept continued for a period of ten years and it was for fulfilling of such promise that the government had issued SORs No.888(I)/2018 dated 23.07.2018, No.889(I)/2018 dated 23.07.2018 and No.890(I)/2018, which had subsequently been substituted by SROs No.1212(I)/2018 and No.1213(I)/2018 on 05.10.2018. Petitioners further contended in their petitions that change of mode of levy from sales tax to federal excise duty had been carrying a malafide intention of subjecting former tribal territory to such levy and thus causing withdrawal of the benefit of exemptions from sales tax, in effect. It is also pertinent to mention here that through Finance Act 2021, the mechanism has again been changed where under federal excise duty has been abolished and sales tax has been made leviable on steel products. At the very outset, learned counsel for petitioners was asked whether the petitioners would be interested in pursuing these petitions any further in view of such new developments, to which he replied that grievances of the petitioners remained alive as in most of cases, the impugned levy of federal excise duty have not been collected by the concerned Revenue authority because of the instant litigation and that impugned levy to the extent of recovery of arrears have still been effective and a live issue.
3. Learned counsel for petitioners submitted during the course of his arguments that the impugned levy imposed through Finance Act 2019, has no doubt been effected throughout the country but its particular target have been former tribal areas. He built on the argument that for industrialist of rest of the country change of mode of impugned levy from federal excise duty to sales tax, had been having no adverse effects as one levy had technically been substituted by another levy but the consumer had not been bearing any extra burden in rest of the country, while in case of former tribal areas, such a change had the effect of taking away the existing and available exemptions from levy of sales tax. In same way, he continued, the new legislation brought through Finance Act 2019 had been discriminatory and ultra vires to the extent of petitioners but if this Court finds it inappropriate to declare it as such, then the principle of reading down may be employed and the impugned change may be read down to the extent of industrialist of former tribal areas including the petitioners. Regarding powers of the Court to read down part of a legislation, learned counsel placed reliance on the judgment of Hon'ble Supreme Court of Pakistan rendered in the case of "Province of Sindh through Chief Secretary & others v/s M.O.M through Deputy Convener & others" reported as PLD 2014 Supreme Court 531. Learned counsel for petitioners also submitted that impugned levy had been confiscatory to the extent of petitioners and that the legislation had been colorable in its nature and introduced with a malafide intention.
4. Learned Additional Attorney General submitted in rebuttal that presumption of constitutional its was attached to every legislative instrument, competently enacted by the legislature. He also added that malafide could not be attributed to legislature and that the regime of taxes provided for collection of levy of federal excise duty in sales tax mode had been provided for whole of the country and such legislation could not be termed to be discriminatory. He placed reliance on the case law reported as 2002 SCMR 312, 2015 SCMR 1739 and PLD 2007 SC 133 as well as judgment of Hon'ble Supreme Court of India reported as 2013 SCMR 34.
5. Learned counsel appearing on behalf of Inland Revenue in all these cases adopted and supported the arguments of learned Additional Attorney General.
6. We have heard arguments of learned counsel for the parties and perused the record.
7. Perusal of record reveals that through Finance Act 2019, Entry No.158 was inserted in Table 1 of First Schedule to the Federal Excise Act 2005 and through a corresponding amendment, Entry No. 153 was inserted in Sixth Schedule to the Sales Tax Act 1990. The net effect of above mentioned amendments were that entire steel products had been exempt from levy of sales tax and instead federal excise duty had been imposed in sales tax mode, at the rate of 17 percent. Cause of grievance of petitioners have already been mentioned above and its repetition is not required again.
8. Contentions of petitioners raised in these writ petitions as well as arguments of their learned counsel, based on the history of constitutional development of the areas of Ex-FATA as well as Ex- PATA had also been raised before this Court during hearing of the case of "M/S Hadi Khan Silk Mills & others v/s Government of Pakistan through Federal Secretary Finance & others" reported as 2021 PTD 1842 and had been addressed by this Court with the following observations: "14. So far as the mechanism provided in the case of Taj Packages for release of consignments in lieu of post-dated cheques at import stage is concerned, it is important to be noted that said mechanism had been provided by this Court, when the Income Tax Ordinance had not been extending to FATA or PATA. With promulgation of Twenty-fifth Amendment, Income Tax Ordinance stood extended to these specified areas ipso facto. This Court had felt a necessity for providing temporary arrangements due to the fact that no alternateprocedure for getting exemption had been available by then. This fact is itself clear from concluding part of the judgment where such a mechanism had been provided. Said Para is re-quoted for ready reference herein;
(v) Direct that till the decision is taken by the Federal Government regarding the security mechanism stated hereinabove the Board shall obtain from the petitioners postdated cheques for the payment of taxes at import stage under the Act and the Ordinance, as security, for goods destined for utilization and consumption in FATA or PATA. The postdated cheques shall be returned to the petitioners upon production of consumption certificates duly issued by the concerned commissioners, as specified in Notification dated 28.22011. It will be the liability of the petitioners to approach the respondents for the issuance of consumption certificates. "
(emphasis supplied)
When the Income Tax Ordinance stands extended and being fully operational in the area, a self- contained mechanism for seeking exemption from payment of liability of income tax stands provided therein. In such situation, resort may not be had to the temporary regime provided in the case of Taj Packages. Section 159 of the Ordinance do provide the mechanism, through which a person who claims to be exempt from payment of any tax liability under the exemptions provided in Part 1st of the Second Schedule of the Ordinance, may get a certificate to said effect and may thereby be treated as exempt from payment of the tax liability. Said provision of law has not been exempted under clause 110 of Part-IV of the Second Schedule, therefore it would have its due operation and petitioners may have recourse thereto if they seek exemption from liability of income tax at import stage."
9. Arguments arising out of the constitutional development of the area and the principles of provisory estopple have already been settled in the above mentioned judgment and need not be discussed again.
10. As stated earlier, the impugned levy cannot be declared as ultra vires of the Constitution or discriminatory in piece meal to the extent of petitioners only. The impugned legislation had got extent and operation across the country and therefore, arguments of learned counsel for the petitioners regarding its constitutional invalidity cannot be subscribed. Contention of learned counsel for petitioners regarding reading down the impugned levy to the extent of petitioners, however merits a consideration here.
11. The theory and concept of reading down has got no basis in either constitutional or statutory law of the land. The theory was in-fact developed as a rule of interpretation by constitutional Courts, in various jurisdictions. This principle was employed by the Federal Court in 1941 in the matter of Hindu Women's Rights to Property Act (1937) wherein the Hon'ble Court was seized with a special Reference (Case No.1 of 1941) sent by the then Governor General of India. It was opined in the Reference that it was a general presumption that a Legislature had not been normally intending to exceed its jurisdiction and that when a Legislature with limited and restricted powers made use of a word of general import as "property" then a presumption should be taken that it was using the word with reference to that kind of property with respect to which it had been competent to legislate and to no other. It was also opined that unless the Act was wholly to be regarded meaningless and ineffective, the word "property" as was used in the Act should be construed as referring only to those forms of properties with respect to which, the Legislature had been competent to legislate. Supreme Court of India while giving its judgment in the case of "the Supreme Court of India in Dehli Transport Corporation v/s D.T.C.Mazdoor Congress" reported as AIR 1991 SC 101 has also held that a court would sustain presumption of constitutionality and to assume every state of facts which could be conceived and could even read down the section if it had become necessary to uphold the validity of the statute. It has further been held in said judgment that rationale behind the rule of reading down was that when a legislature whose powers had not been unlimited, but have enacted a statute which was partly beyond competence of the legislature then it should be presumed, in absence of express intention and clear language to the contrary, that the legislature had implied the requisite limitations and conditions in the statute, so as to immunize it from the virus of unconstitutionality. It was further clarified in said judgment that doctrine of reading down could only be applied in limited situations, particularly when it was necessary to save a statute from being struck down on account of its unconstitutionality.
12. In the case of "Province of Sindh through Chief Secretary and others v/s M.O.M through Deputy Convener and others" reported as PLD 2014 SC 531, it was held regarding employing of the principle of reading down; An argument was raised that the Court should make every effort to save the statute and this can be done by invoking the principle of 'reading in' or 'reading down'. However, in this context two principles have to be kept in view. First, that the object of 'reading down' is primarily to save the statute and in doing so the paramount question would be whether in the event of reading down, can the statute remain functional? Second, would the legislature have enacted the law, if that issue had been brought to its notice which is being agitated before the Court?
Learned counsel for petitioners has though relied upon judgment of Hon'ble Supreme Court of Pakistan given in the case of Province of Sindh Supra, but ratio of said judgment is not applicable to the case in hand. In ibid judgment the Hon'ble Supreme Court of Pakistan had given the cases in which the principles for reading down may be employed but it could only be resorted to when it is found that the statute or part of it cannot be given its literal effect, as giving of such an effect might bring the statute in conflict with any constitutional provision or other law with which it could not be harmoniously reconciled. When a statute is not in conflict with any constitutional provision, or other law on the subject and no absurd consequences flows therefrom then the preferable course of construction open to the Courts would be adopting the rule of literal construction. Hon'ble Supreme Court of Pakistan while giving its judgment in the case of "Baz Muhammad Kakar and others v/s Federation of Pakistan through Ministry of Law and justice and others" reported as PLD 2012 Supreme Court 923 has also clarified that words used in a statute should be given its ordinary and plain meaning. Mittal in his treatise named as "Interpretation of Taxing Statutes" has also explained that the theory of reading down is a rule of interpretation resorted to by the Courts when a provision is found offending a fundamental right or falls outside the competence of a particular legislature, if read literally. Supreme Court of India while giving its judgment in the case of "Calcutta Guj. Education Society & another v/s Calcutta Municipal Corportion & others" reported as AIR 2003 SC 4278 has also held that the rule of reading down a provision of law was in-fact the rule of harmonious construction but with a different name. It has also been held that purpose of the rule was to smoothen the crudities or ironing the creases found in a statute so as to make it workable. The most important and relevant part of observations recorded in the judgment was that in the garb of "reading down" it was not open to react words and expressions not found in a statute and thus to venture into a kind of judicial legislation. The rule of reading down was provided to be used for limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute, for the purpose of fulfilling competence of the statute.
For employing the theory of reading down, it has to be established that the legislation under challenge has either been violative of any provision of the Constitution or same had been inconsistent with any other law, to an extent that the two provisions of law could not be harmoniously interpreted when found coinciding together. This Court has already held, that after promulgation of 25th Constitutional Amendment, constitutional immunity of the area from operation of tax laws have been removed by repealing Article 247 of the Constitution, while giving its judgment in the case of "M/S Hadi Khan Silk Mills & others vs. Government of Pakistan through Federal Secretary Finance & others" reported as 2021 PTD 1842. Thereafter, Sales Tax Act 1990 and all the other laws have become applicable in all these areas like it had been having extent and operation in rest of the country. Federal Excise Act 2005 had its applicability even prior to promulgation of 25th Constitutional Amendment as held by this Court in its judgment given in the case of "Taj Vegetable Oil Processing Unit, Skhakot, Dargai, Malakand Agency vs. The Government of Pakistan through Federal Secretary Finance & Revenue Division, Islamabad and others" ("W.P. No. 4495-P/2017").
13. The reason that learned counsel for petitioners had been pleading for reading down of the impugned levy was that same had been inconsistent with the object, purpose and text employed in SRO No. 1212(1)/2018 and SRO No. 1213(1)/2018 as well as Entry No. 151 of Sixth Schedule of Sales Tax Act 1990. So far as SRO No. 1212(1)/2018 is concerned, it has been issued by the Federal Government under the powers vested in it by section 13 (2) (a) of the Sales Tax Act 1990 while SRO No. 1213(1)/2018 has been issued by the Federal Government under section 53 (2) of the Income Tax Ordinance 2001. The Federal Government has only been authorized by above mentioned two sections of law to add or delete any entry in the respective Schedules providing for adding or omitting subjects which were to be given exemptions or excluded from exemptions. Mere inconsistency with a piece of subordinate legislation cannot be made a ground for reading down part of a primary legislation. This Court while giving its judgment in the case of "Ahzada Colonel Sharif-ud-Din & others v/s The Settlement Officer District Upper & Lower Chitral & others" reported as 2021 CLC 1968 has clarified that when there was a conflict between subordinate and primary legislation, the latter would prevail and should be given full effect. The impugned levy had neither been violative of any provisions of the Constitution nor had it been inconsistent with any other law. So far as its inconsistency with SRO No. 1212(1)/2018 is concerned, it cannot be read down for the reason that its provision had been inconsistent with prelude of SRO No.1212(I)/2018 or SRO No.1213(I)/2018 issued by the Federal Government in their powers of subordinate legislation. The Federal Government had only got powers to amend Schedules of the Sales Tax Act 1990 and Income Tax Ordinance 2001, given to them under section 13(2)(a) of the Sales Tax Act 1990 and under section 53(2) of the Income Tax Ordinance 2001 respectively. Said powers of subordinate legislature had only been limited to amending schedules of the respective laws for providing tax exemptions but for providing such tax exemptions or amending any entries in the respective schedules any prelude or preamble given therein cannot be given any effect particularly when it comes in contrast with any piece of primary legislation.
14. Arguments of learned counsel for petitioners based on existence of a deeming clause in Entry No.151 of Sixth Schedule of the Sales Tax Act 1990 were also raised but had not prevailed with this Court in similar circumstances, while giving its judgment in the case of "M/S Taj Re-rolling & Steel Mills through Manager Imports v/s Government of Pakistan through Federal Secretary Finance & others" ("W.P No.946-M/2019"), wherein it was held; "Another argument of learned counsel for petitioners regarding introduction of a deeming clause in Entry No. 151 of the Sixth Schedule and reading it to the effect that Article 247 of the Constitution should be deemed to have continued for the purpose of levy of sales tax, is also difficult to be agreed with. A deeming clause has been inserted in Entry No. 151 by the legislature, but for limited purposes. It is itself clear from express words contained in Item No. 151 where it provides; (exemption by specifying that) imports of plant, machinery, equipments and industrial inputs by the industries located in the tribal areas, to which the provisions of the Act or the notifications issued thereunder would have not applied, had Article 247 of the Constitution not been omitted under the Constitution through Twenty-fifth Amendment.
Purpose of insertion of the deeming clause has been no other than, identifying those plants, machinery, equipments and industrial inputs which were aimed to be exempted from levy of sales tax. Intention of the legislature in inserting the words had not been giving a blanket exemption from sales tax."
15. Neither petitioners could establish that the impugned levy had been running contrary to any provision of the Constitution nor they could establish that the impugned legislation had been inconsistent with any other legislation. Same have not been producing any absurd or illogical consequences. In such a scenario, no case for reading down the impugned legislation was found available in these petitions.
16. The Federal Legislature had got powers for enacting the impugned legislation under respective entries in the Federal Legislative List annexed as Fourth Schedule to the Constitution. It has already been held by Hon'ble Supreme Court of Pakistan in a number of cases including the case of "Messrs Elahi Cotton Mills Ltd and others v/s Federation of Pakistan through Secretary M/o Finance, Islamabad and 6 others" reported as 1997 PTD 1555 that presumption of constitutionality is always attached to legislative instruments and that Courts should lean in favour of constitutionality of statute rather than the other way round. In the case of "Pakistan v/s Sala-ud- Din" reported as PLD 1991 Supreme Court 546 it has also been held that doctrine of promissory estoppel cannot be invoked against the legislature. Further reliance in this respect may also be placed on judgment of Hon'ble Apex Court rendered in the case of "Mian Nazar Sons Industries v/s Government of Pakistan and others" reported as 1992 SCMR 883.
17. In light of what has