1. HAMOODUR RAHMAN, C. J.--The appellant in Civil Appeal No. 141 of 1970 is a limited liability company carrying on the business of manufacturing textiles. It operates two cotton textile mills at Lyallpur and Liaquatabad respectively. Each mill is situated in an area specified under section 23 of the West Punjab Cotton (Control) Act, 1949, as an area into which cotton of different varieties grown in other areas can only be imported under a licence. The requirements of the appellant- company's mills of ginned cotton being much in excess of the supply available within the area, it had to import ginned cotton from other areas under licences granted by the Government of West Pakistan from time to time and had to pay a fee of 3 annas per maund on unginned cotton and 8 annas per maund on ginned cotton so imported under rule 21 of the West Punjab Cotton Control Rules, 1949.
2. In July 1959 the appellant-company ultimately challenged the validity of the fee by a Writ Petition being No. 387 of 1959. In these proceedings, it also obtained an interim order for the issuance of licences for the years 1959-60 to 1966-67 without payment of the fee but subject to furnishing security. The writ petition was dismissed by the High Court on the 29th of November 1967 by a short order relying mainly on a decision of this Court in the case of the Crescent Textile Mills Ltd. Civil Appeal No. 122 of 1965, decided on 22-12-1966.
3. The appellant-company then came up to this Court for special leave to appeal by Civil Petition No. 143 of 1968, but this, too, was dismissed on the 22nd of May 1968. The appellant company then filed Review Petition No. 33 of 1968 and its prayer was granted on the 14th of April 1970 on the ground that the decision of this Court in the case of the Crescent Textile Mills Ltd. "was based not on merits, but on the concession of the learned counsel appearing in that case".
4. Leave was also granted by this order to consider whether rule 21 of the West Punjab Cotton Control Rules, 1949 was Intra vires the provisions of the West Punjab Cotton (Control) Act, 1949 and whether the validating provisions of the West Pakistan Cotton Control Ordinance, No. XX of 1966 and the West Pakistan Cotton Control (Validation of Levy of Fees) Ordinance, No. XIII of 1966 had, in any event, validated the impugned fees.
5. The appellant in Civil Appeal No. 142 of 1966 is a private limited company operating a textile mill under the name and style of "Premier Cloth Mills" at Lyallpur. For purposes of its business of manufacturing cotton yarn and cloth, it, too, had to import considerable quantities of ginned cotton from areas beyond the Lyallpur zone under licences granted by the Pro--vincial Government, on payment of the fees prescribed by Rule 21 of the West Punjab Cotton Control Rules, 1949. This company, too, filed a writ petition in the High Court in July 1959 to challenge the vices of the above-mentioned rule, but its petition was also dismissed on the 29th of November 1967. Its petition for special leave to appeal was also dismissed by this Court on the. 22nd of May 1968, but, on review, the order of dismissal was set aside and leave granted on the 14th April 1970 to consider the same questions as in the case of the Kohinoor Textile Mills Ltd.
6. Since the facts of both the cases are similar and the questions of law involved are the same, they have been heard together and will be disposed of by this judgment.
7. Before entering upon a consideration of the arguments advanced in support of these appeals, it has to be pointed out that, since the mills of the appellants in both these appeals are run by electrical power, the provisions of the Punjab Cotton Control (Validation of Levy or Fees) Ordinance No. XIX of 1971 do not apply to them. The above-mentioned Ordinance only validates the levy, charging, collection and realisation of fees under the West Punjab Cotton (Control) Act, 1949 and the Bahawalpur Cotton Control Act, 1949 from the occupiers of cotton ginning factories run by diesel oil. The mills of the appellants, with which we are now concerned, are not run by diesel oil.
8. Learned counsel, appearing for the appellants in these cases, have advanced three main contentions in support of these appeals: -
(1) that rule 21 of the West Punjab Cotton Control Rules, 1949, in so far as purports to make the payment of a fee a condition precedent to the grant of a licence for the import of cotton of a variety different from the one prescribed for that local area from any other area, is clearly beyond the scope of the powers conferred on the Rule-making Authority by the West Punjab Cotton (Control) Act, 1949;
(2) that, in any event, the appellants are not cotton dealers upon whom this fee can be levied ; and
(3) that the Ordinance of 1966 cannot have the effect of validating the impugned levies, if they were not valid under the revealed Act of 1949.
9. With regard to the first contention, it is urged that the rule-making power that was conferred on the executive by section 0 of the Act of 1949 was to "make rules consistent with this Act to give effect to the provisions of this Act." The Rues could not, therefore, clearly go beyond the provisions of the Act.
10. Indeed, according to the provisions of clause (p) of section 30 itself, as it originally stood, the rule- making power extended to making provision for "the fees to be paid by the owners of Cotton Ginning Factories, Cotton Pressing Factories and Cotton Seed Oil Factories and by the Managers of any Cotton Market to cover the cost incurred by Government on the staff appointed under this Act".
11. Neither the appellants came within any one of the categories mentioned in clause (p); nor did the substantive provisions of the Act itself make any pro--vision for the levy of fees in respect of the issuance of import licences.
12. The scheme of the Act of 1949, it is pointed out, was that where the Legislature intended that a fee should be charged, it made specific provision in that behalf ; as for instance, in sub--section (1) of section 9. Wherein it was provided that "no cotton ginning or cotton pressing factory shall be worked without a license granted to the occupier thereof by such authority, in such form, subject to such conditions and on payment of such fees as may be prescribed".
13. "16. (1) No person shall commence the construction of any new factory or any extension of an existing factory, which is likely to increase its capacity for ginning or pressing cotton, unless he has been granted a license on the payment of a prescribed fee. An application for a license under the sub--section shall be made as may be prescribed. A license granted under this subsection shall be valid for such period as may be specified therein, but may be renewed by the prescribed authority whenever necessary."
14. The provisions of section 23 of the statute dealing with the prohibition regarding importation read as follows:-- "23. (1) The Government may, for the purpose of avoiding adulteration in the cotton grown in any area in the Province by notification, prohibit the import of cotton or of any specified kind of cotton into that area by rail road, air, or sea or by more than one of such means, save under and in accordance with the conditions of, a license in the prescribed manner for the issue of which the Government shall frame rules: Provided that no such notification shall be deemed to prohibit the import into any notified area of packages containing any kind of cotton samples not exceeding ten pounds avoirdupois in weight.
(2) Delivery to, and the taking of delivery by any person, at any place situated in notified area, of any cotton the import of which into that area is prohibited shall be illegal unless such person holds a license for the import of such cotton into that area." .
15. There is thus nothing in section 23 itself to show that the levy of any fee was Intended. Furthermore this interpretation of section 23 receives confirmation also from the fact that the Legislature itself felt the necessity of amending the law firstly by the Punjab Cotton (Control) (Amendment) Act, 1953 (Act I of 1954) whereby in clause (p) of section 30 the words "the cotton dealers" were introduced for the first time. This was evidently done because it was realised that no fee could be levied from "cotton dealers" under the provisions of the Act of 1949, as they then stood.
16. Again, for the first time, provision was made for the pay--ment of a fee in respect of licenses issued for importation of cotton and cotton seed of different varieties from one area into another, by section 22 of the West Pakistan Cotton Control Ordinance No. XX of 1966. This section reads as follows:- "22. Power to issue notification prohibiting import of cotton into specified areas.-(1) Government may, for the purpose of avoid--ing adulteration in the cotton grown in any area in the Province, by Notification, prohibit the import of any cotton or cotton seed or any specified variety or varieties of cotton or cotton seed into an area where their cultivation is forbidden under this ordinance, by rail, road, air, sea or by more than one of such means, save under and in accordance with the conditions of a licence granted in the manner, by the authority and on pay--ment of such fee as may be prescribed: Provided that no such notification shall be deemed to prohibit the import into any notified area of packages contain--ing any kind of cotton samples not exceeding ten pounds avoirdupois in weight.
17. Delivery to, and the taking of delivery by, any person, at any place situated within a notified area, of any cotton, the import of which into that area is prohibited, shall be illegal unless such person holds a licence for the import of such cotton into that area."
18. It will be observed that the Legislature thought it necessary for the first time to say in this section that the importation shall be made "in accordance with the conditions of a licence granted in the manner, by the authority and on payment of such fee as may be prescribed" If the realisation of a fee could be made under the unamended provisions of section 23 of the Act of 1949, then this change in phraseology was wholly unnecessary. But, since the Legislature has thought it fit to do so, the only inference possible is that, in its opinion, the original provisions did not provide for the payment of such a fee.
19. It is unnecessary to enter into an examination of the question as to whether the levy of a fee for this purpose was at all justified. The appellants have contended that for the issuance of a licence for such importation, no such machinery was necessary nor had any additional expenditure to be incurred, and, therefore, the levy of a fee for the issuance of such a licence was not at all justified, as no corresponding service was rendered by the authorities while issuing such a licence.
20. The contention advanced on behalf of the appellants is that, upon the wording of the Statute itself there appears to be no nexus or connection between the provisions of sub-rule (2) of rule 21 of the West Punjab Cotton Control Rules, 1949 and section 23 of the Act of 1949.
21. Learned counsel, appearing on behalf of the Provincial Government, has, on the other hand, sought to contend that rule 21 was intra vires the provisions of the Act of 1949, because, one of the objectives of the Act, as stated in its preamble, was to regulate the supply of cotton to the factories for ginning and to prevent the mixing of different varieties, mainly to prevent adulteration. The Act itself, it is said, by section 17 gave power to the Authority to see that no cotton, which contains an admixture of different varieties, shall be ginned or pressed in a factory and it is for this service that rule 21 provided for the levy of a fee, which was justified both by section 23 and section 30 of the Act itself.
22. The "conditions" referred to in section 23, it is urged, included the condition for the levy of a fee, and in support of this, reliance was sought to be placed on a decision of the King's Bench Division In England in the case of Liverpool Corporation v. Arthur Maiden Ltd. (4AllER200). Learned counsel has relied on certain observations in the judgment of Croom-Johnson, J., which seem to concede that the charging of a sum of money by way of a fee for a licence might be authorised without express power being granted in that behalf by the Statute under which the charge is sought to be made, even though the normal practice of drafting such legislation appears to be to give such power expressly. The actual decision is, however, to the contrary. Indeed, the learned Judge, very clearly, came to the conclusion that, reading the provisions of the Statute before him, it was quite clear that the words "terms and conditions" mentioned in the statute did not give to the local authority the power to levy a fee for the issuance of a licence. For coming to this conclu--sion, the learned Judge also relied on a provision in the same Statute which provided, as in the statute now under considera--tion, a penalty for the contravention of any of the provisions of the Statute or the terms and conditions of any licence granted under that Statute and he made the following pertinent obser--vation :- "If I were to construe those words `terms and conditions' as justifying a money payment, it would mean that it would produce the absurd result, as it seems to me, under this section, that any person who did not make a money payment would be liable to pay a penalty not exceeding --5, and a daily penalty of 20s. This penalty would be a penalty for the non-payment of a sum of money which broadly speaking, is quite contrary to the policy of our law. I am bound to confess that a construction which would enable that result to be arrived at strikes me as a very extraordinary construction."
23. These observations apply with equal force in the present case, for, here, too, by subsection (3) of section 25 of the Act of 1949 it is provided that;; "any person who contravenes the provisions of section 23 or section 24 or who fn contravention of the provisions of subsection (1) of this section, without reasonable excuse, the burden of proving which lies upon him, delivers any cotton to a consignee or other persons shall be liable on first conviction to a fine not exceeding one thousand rupees, and upon any subsequent conviction to imprisonment which may extend to three months or to a fine which may extend to five thousand rupees or to both."
24. Such a penal provision, would necessarily apply also in the case of non-payment of the fee, if a fee is included within the words "terms and conditions". This would clearly lead to absurd results, for, supposing the fee levied in a particular case -exceeds one thousand rupees, it would be possible for the assessee to avoid the liability by paying the penalty of Rs. 1,000 as prescribed by subsection
(3) of section 25. Again if the fee, could be realised by certificate proceedings the imposition of the penalty would be manifestly unjust. Clearly, therefore, the words "terms and conditions" did not, and could not, include the levy of a fee for the grant of a licence under the provisions of section 23 of the Act of 1949. The provisions of sub-rule (2) of rule 21 of the West Punjab Cotton Control Rules, 1949 were, therefore, in our opinion, ultra wires the provisions of section 23 of the West Punjab Cotton (Control) Act of 1949. The power of levying a fee given to the authority under clause (p) of section 30 of the Act of 1949 could not be invoked for levying a fee for a purpose which was not authorised by the substantive provisions of the Statute itself. Our constitution itself provides that no levy shall be made for the purposes of a Government except by or under the authority of an Act of the Legislature (vide Arts. 48 and 90 of the Constitution of 1962).
25. With regard to the next question, we are unable to accept the contention of the learned counsel for the appellants that they could not be brought within the category of "cotton dealers". The definition of a "cotton dealer" given in sub-rule (5) of rule of the West Punjab Cotton Control Rules, 1949 is in very wide terms and includes a person or an unregistered firm or company "which purchases 500 maunds or more of cotton or cotton seeds in any one month". If the appellants purchased, as they in fact did this quantity of cotton for the purposes of their mills in any one month, then they came within the definition of a "cotton dealer" However, we need not pursue this question further in view of our opinion that the levy of fee under sub-rule (2) of rule 21 for the issuance of an import licence under section 23 of the Act of 1949 was ultra vires the provisions of the Act.
26. This brings us to the last contention, namely, as to whether the levy was validated by the Ordinance of 1966. The levy of a fee for the issuance of a licence for importation of cotton or cotton seed from one area to another area was authorised for the first time by subsection (1) of section 22 of Ordinance No. XX of 1966 which came into force on the 8th of May 1966 and was gazetted on the 11th of May 1966. This Ordinance not only makes provision for the payment of a fee for a licence for Importation of cotton but also adopts the definition of "cotton dealer" as given in the West Punjab Cotton Control Rules, 1949. Both the lacunae are thus removed and as from the date this Ordinance carne into force, the levy of the fee has become legally justified. The question, however, still remains to be considered; namely, as to whether this levy has been validated with retrospective effect by reason of the provisions of section 31 of the aforesaid Ordinance. Subsection (2) of section 31 reads as follows:----- 31.----------------------------------------------
(2) Notwithstanding the repeal of the enactments mentioned in subsection (1), anything done, action taken, obligation, liability, penalty or punishment incurred, inquiry or proceed--ings commenced, officer appointed or person authorised, jurisdiction or power conferred, rule made, fee imposed or realised and order issued under any of the provisions of the said enactments shall, if not inconsistent with the provisions of this Ordinance, continue in force and be deemed to have been respectively done, taken, incurred, commenced, appointed, authorised, conferred, made, imposed, realised or issued under this Ordinance."
27. Similarly, section 2 of the West Pakistan Cotton Control (Valida--tion of Levy of Fees) Ordinance No. XIII of 1966, which was promulgated on the 27th April 1966, reads as follows:- "2. Validation of levy of fees, etc., from occupiers of cotton factories, etc.-Notwithstanding anything contained in clause (p) of section 30 of the West Punjab Cotton (Control) Act, 1949 (Punjab Act IV of 1949), before its amendment by the .Punjab Cotton (Control) (Amendment) Act, 193 (Punjab Act I of 1954), or any judgment or decree of any Court, the fees levied, charged, collected or realized from the occupiers of cotton---ginning, cotton pressing or cotton seed oil factories, cotton dealers or managers of companies for the period from 24th March 1949 to 3rd January 1954, in accordance with the provisions of the said clause (p) as substituted by the Punjab Cotton (Control)
28. (Amendment) Act, 1953, shall be deemed to have been validly levied, charged collected or realised, as the case may be, and where any such fees have not been paid or realized before the coming into force of this Ordinance, the same shall be recoverable in accordance with the provisions of the said clause (p) as substituted by the Punjab Cotton (Control) (Amendment) Act, 1953."
29. The provisions of the Punjab Cotton (Control) (Amendment) Act, 1953 (No. 1 of 1954), which included "the cotton dealers" in clause (p) of section 30 and also contained a validation clause for providing that "any liability hithertofore incurred or imposed or tees realized or action taken under clause (p) of section 30 of the Punjab Cotton (Control) Act, 1949 shall, to the extent permitted by clause (p) as substituted by section 2 of this Act, be deemed to have been incurred imposed, realized or taken under the said clause (p) as substituted by section 2 of this Act", cane up for consideration by this Court in the case of Muhammad Ismail & Co. v. Chief Cotton Inspector (PLD 1966SC388), and this Court pointed out: "The substituted clause (p) introduced by the amending Act, must be construed as operative from the date of enactment of Act I of 1954, viz., 4-1-54, 1n the absence of a deeming clause which could give it force from the date of the original Act."
30. The validation clause in Ordinance No. XIII of 1966 is further--more, by its own terms, not of any assistance to the appellants, because, it validates the liability only to the extent permitted by clause (p) as substituted by section 2 of the Act of 1954. If the levy of a fee was not authorised by section 23 of the Act of 1949, as fit stood in its original form, then the validation purported to be made by Act I of 1954 could be of no effect as up to that stage, the levy of a fee for the issuance of a licence for the import of cotton from one area to another area, was not authorised under the provisions of the Act of 1949. The levy of the fee became authorized by law for the first time by subsection (1) of section 22 of Ordinance No. XX of 1966, which came into force on the 8th May 1966.
31. The validation clause in this case was also not, in our view, sufficient to validate the illegal levy with retrospective effect, because, it suffered from the same defect that was found in the validation clause incorporated in the Punjab Cotton (Control) (Amendment) Act, 1953 (Act I of 1954). If the intention was to give retrospective validation, then the opinion of this Court in the case of Md. Ismail & Co. (earlier quoted) should have been given heed to and some words added in the validating clause itself to show that the amended provisions were to be deemed always to have been incorporated in the original Statute. No words to that effect occur in the validating clause of Ordinance No. XX of 1966. We cannot, therefore, for the same reasons as were given in the case of Md. Ismail & Co., accept the contention that the validation took effect retrospectively. The levy could certainly be made for any period subsequent to the coming into force of Ordinance No. XX of 1966, but the levy for any period anterior to that date must be declared to have been made illegally.
32. In this view of the matter we do not consider it necessary to express any opinion with regard to the other contention raised on behalf of the appellants to the effect that in any event an act which was ab initio illegal could not be subsequently validated.
33. For the reasons given above these appeals succeed to the extent that the levy of the fees purported to be made in respect of licenses issued under section 23 of the Act of 1949 prior to the 8th May 1966 are hereby declared to have been made without lawful authority. The appellants will be entitled to their respective costs in these appeals.