' AJMAL MIAN, J.-Since the above three petitions involve common question of facts and law, I intend to dispose of the same by this judgment. The petitioners are the members of Pakistan Vanaspati Manufacturers Association. The said Association was issued Sub-Authorisation No, R.M. 042873, dated 21st July, 1967 of a value of $ 25,20,000 (equivalent to Rupees one crore and twenty lacs only) by the Controller of Imports and Exports, Government of Pakistan, Karachi for the purchase and import from United States of Soyabean Oil in bulk under P L 480 Aid Programme P A 15-303. It has been averred that this Sub-Authorisation purported to be subject to the payment of price equalization surcharge but the above condition was illegal and invalid inasmuch as price equalization surcharge is a tax and cannot be imposed by means of mere condition because of the provision of Article 4$ of the Constitution, The petitioners' consignments arrived on different dates which were allowed to be cleared by the Customs authorities on the basis of written undertakings, dated 22nd November, 1967 4th December, 1967 and 18th December, 1967 that the requisite price equalisation surcharge certificate from the Ministry concerned in respect of the goods released shall be produced within one month from the date of the above undertakings.
Since the Association and the consignees had failed to produce the requisite certificate within the specified period, they were issued three show-cause notices, dated 22nd March, 1968 whereby the petitioners and the Association were called upon to show-cause as to why action should not be taken against them for an offence under section 39 of the Sea Customs Act, 1874 punishable under section 167 (9-B) for wilfully making untrue statement with the intent to defraud the Government of Pakistan of its legal revenue amounting to Rs, 10,42,694.74, Rs, 13,98,806.48 and Rs, 24;51,963.43. The above show-cause notices were replied to by the petitioner's counsel, on 27th March, 1968 in continuation of his earlier legal notice, dated 22nd March, 1968. After that the petitioners filed the present petitions for the above reliefs.
2. The respondents have filed counter-affidavit, in which it has been inter alia averred that the Government of Pakistan issued S.R.O. No, 196 (R)/67, dated 1st November, 1967 and published in the Extraordinary Gazette of Pakistan, dated 1st November, 1967 in pursuance of subsection (1) of section 4 of the Imports of Goods (Price Equalization Surcharge) Act, 1967 (hereinafter referred to as the Act). It has been further averred that under the above S.R.O. The petitioners were liable to pay equalisation surcharge. It may be advantageous to reproduce hereinbelow the above S.R.O.
Which reads as follows : "S.R.O. 196 (R)/67.-In pursuance of subsection (1) of section 4 of the Import of Goods (Price Equalization Surcharge) Act, 1967 (III of 1967) the Central Government is pleased to declare, in relation to edible oil specified in column 1 of the schedule below and imported in any shipping period after the 31st day of October, 1967, the rate specified in column 2 of that schedule to be the highest rate of landed cost as determined under the subsection.{{TABLE}} SCHEDULE Specified goods Highest rate of landed cost per maund 1 2 Rs,
1. Soyabean/cottonseed oil unrefined 94
2. Soyabean/cottonseed oil refined 99 H.D. CHOUDHURY, T.A.Q., C.S.P., Deputy Secretary."
3. During the pendency of the above cases, a consent order was passed by the Court, on 29th August, 1979 which has direct bearing on the result of the above cases, which reads as follows :- "29th August, 1979 Mr. Khalid Anwar, Advocate ' Mr. Shah Jamil Alam, Deputy Attorney-General.
' Both Mr. Khalid Anwar and the learned Deputy Attorney-General state that for deciding these petitions it is very essential that the record of the consignment on the basis of which highest landed costs was fixed by the Ministry of Commerce be summoned. In view of the joint request rightly made by the learned counsel we direct the respondent No, 3 Ministry of Commerce, Government of Pakistan to produce the record of the consignment on the basis of which the impugned demand was made from the petitioners. In case the respondent No, 3 fails to produce the record before the next date of hearing, these petitions will be decided on the assumption that there existed no record in support of its impugned demand made from the petitioners. Copy of this order be supplied to the learned Deputy Attorney-General. Adjourned to a date in office after one month."
' It may be observed that under the above consent order it was agreed that the respondent No, 3 Ministry of Commerce, Government of Pakistan would produce the record of the consignments on the basis of which impugned demand was made from the petitioners. It was also agreed that in case the respondent No, 3 fails to produce record before the next date of hearing the petitions would be decided on the assumption that there existed no record in support of the impugned demand made from the petitioners.
' The above cases were adjourned from time to time at the request of the learned counsel for the respondents for the production of record but the same was not produced. However, it seems that on 30th August, 1983 the record was available with the learned Deputy Attorney-General. On 28th September, 1983 by consent the record was inspected by the Advocate of the petitioners. When the matter came up for hearing before us on 6th October, 1983 the Deputy Attorney-General stated that in the record available with him, there is no document to indicate on what basis the highest landed cost was fixed in the aforesaid S.R.O., dated I st November, 1967.
4. (a) Mr. Khalid Anwar learned counsel for the petitioners has contended that the petitioners have raised a number of legal points but for the purpose of the disposal of the above petitions, it will suffice to urge that since the respondents had no basis for fixing the highest landed cost, the impugned demand is not covered by section 3 of the Act.
(b) On the other hand, it was contended by Mr. Aziz Munshi learned Deputy Attorney-General that the consent order, dated 29th August, 1979 cannot constitute an estoppel against the respondents and that notwithstanding that no document has been produced to show the basis of fixing the highest landed cost, the S.R.O. In question is sufficient to show that the landed highest cost was fixed by the respondents in accordance with law.
5. As regards the first submission of Mr. Aziz Munshi in my view the above consent order only states the factual position, namely, if no record would be produced by respondent No, 3, the, petitions would be decided on the assumption that there existed no record in support of the impugned demand. Factually, respondent No, 3 has not produced any record before us to indicate the basis on which highest landed cost was fixed and, therefore, the above petitions are to be decided on the basis that no record existed indicating the basis on which the highest landed cost was determined. It is not a question of concession on a legal point. It is a question of fact, ' whether there existed some record on the basis of which the above S.R.O. Was issued.
6. As regards the second contention of the learned counsel for the parties, it may be advantageous to reproduce hereinbelow sections 2, 3, 4 and 5 of the Act which read as follows : "2. Definitions.--In this Act, unless there is anything repugnant in the subject or context -
(a) "highest rate" in relation to any specified goods imported in any shipping period, means the highest rate of landed cost declared in relation to such goods under subsection (I) of section 4 ;
(b) "landed cost", in relation to any specified goods, means the aggregate of the c.i.f. Value, duties, taxes, fees and other charges payable on or for the import of such goods into Pakistan ; #TBS (d) #TBE
(c) "price equalization surcharge" means the additional duty levied under section 3 ; "shipping period" means a period beginning on the first day of January and ending on the thirtieth day of June, or a period beginning on the first day of July and ending on thirty-first day of December, each year or such other period as the Central Government, may, from time to time, by notification in the official Gazette, declare to be a shipping period for the purposes of this Act ; and
(e) "specified goods" means such of the goods specified in the Schedule as the Central Government may, by notification in the official Gazette, declare to be the goods which shall be subject to the levy of the price equalization surcharge.
3. Levy of price equalization surcharge.-There shall be levied on the specified goods imported in any shipping period into Pakistan after the 22nd day of April, 1966, or, if the Central Government in respect of any specified goods by order so directs, after such later date as may be specified therein, whose rate of landed cost is lower than the highest rate, an additional duty as price equalization surcharge at the rate by which the rate of the landed cost of such goods falls short of the highest rate.
4. Determination of highest landed cost.- The Central Government shall determine and by notification in the official Gazette, declare, in relation to every specified goods imported in any shipping period, the highest rate of landed cost of such goods.
(2) For the purpose of determining the highest rate, every importer of specified goods shall furnish at such time such papers, documents or information relating to the import of such goods, as the Central Government may direct.
(3) Whoever fails or neglects to comply with any direction under subsection (2) shall be deemed to have contravened the provisions of the Imports and Exports (Control) Act, 1950 (XXXIX of 1950), and shall be punishable under section 5 of that Act,
5. Procedure for collection of price equalization surcharge.-Subject to any rules made under this Act, the price equalization surcharge shall be collected in the same manner as an import duty payable under the Tariff Act (XXXII of 1934) is collected and the provisions of the Sea Customs Act, 1878 (VIII of 1878) shall, so far as may be, apply to the levy and collection of such surcharge."
7. It may be noticed that under section 3 the Central Government was authorised to levy price equalization surcharge on the specified goods imported in any shipping period into Pakistan after 22nd April, 1966 or in respect of any specified goods the Central Government by order so direct after such later date as may be specified therein on the specified goods whose rate of landed cost was lower than the highest rate. The above equalization surcharge was to be the difference between the rate of the petitioner's landed cost and the highest landed cost determined by the Central Government under section 4. Whereas subsection (I) of section 4 provides that the Central Government shall determine and by notification in the official Gazette, declare in relation to every specified goods imported in any shipping period the highest rate of landed cost on such goods.
Subsection (2) of section 4 lays down that for the purpose of determining the highest rate every importer of specified goods shall furnish at such time such papers, documents or information relating to the import of such goods as the Central Government may direct. Whereas subsection
(3) provides that whoever fails or neglects to comply with the above direction under subsection (2) shall be deemed to have contravened the provisions of the Imports and Exports (Control) Act, 1950 and shall be punishable under section 5 of that Act. It may further be noticed that section 5 provides the procedure for collection of price equalization surcharge which was to be collected in the same manner as import duty.
8. Mr. Khalid Anwar has vehemently urged that in order to press into service section 3 of the Act, it is necessary that respondent No, 3 should have some material to indicate that soybean oil was imported at a landed cost more than the petitioner's landed cost. It has been further urged by him that since respondent No, 3 has failed to produce any record to indicate the basis and as the above petitions are to be decided on the assumption that there existed no record in view of the above consent order, dated 29th August, 1970 the S.R.O. And the impugned demand based on the above S.R.O. Are without lawful authority.
' On the other hand Mr. Aziz Munshi, learned Deputy Attorney-General has vehemently urged that under section 3 read with section 4 the Government has to declare the highest rate of landed cost and since such declaration is contained in the S.R.O. The above S.R.O. And the impugned demand are in accordance with law.
It may be observed that this Court cannot sit as a Court of appeal for the purpose of determining what should be the highest rate of landed cost of particular specified goods as it is the prerogative of the Central Government. If the respondent No, 3 could show that there was some basis in the form of the documents relating to the imported consignments during the specified period for calculating the highest rate of landed cost, this Court would not have gone into the working of such highest rate of landed cost but if respondent No, 3 has fixed the highest rate of landed cost without having the above basis, the S.R.O. And the impugned demand based there cannot be sustained. In the instant case as the contention of the petitioners inter alia was that there existed no basis on which above S.R.O. Was issued and as respondent No, 3 has failed to produce any record to indicate the basis, the above petitions are to be decided on the assumption that there existed no record in support of the above impugned demand. In this view of the matter, the petitioners are entitled to succeed on the above ground. I would, therefore, allow the above petitions with no order as to costs. However, the operation of the above judgment will be stayed for a period of 60 days in order to enable the respondents to file petitions for leave in the Supreme Court in case they so wish. The bond furnished by the National Bank of Pakistan in the sum of Rs, 46,72,158.60 shall remain intact for the above period of two months but the same shall stand discharged in case the respondents fail to obtain stay order from the Supreme Court within the, above period of two months.