SHAFIUR RAHMAN, J.--1. All the ten petitions for leave to appeal filed by various Textile Mills raise a common question of law. Relating to interpretation of a statutory instrument and they arise out of a consolidated judgment of Sind High Court dated 17-6-1984, whereby not ten but twelve constitutional petitions were dismissed.
2. For their efficient, competitive and profitable operation in the international market in particular the Textile Mills in Pakistan have been using Auto cone-winders. Under a statutory order S.R.O.
695(1)77, dated 4th August, 1977, the Auto cone-winders qualified as "machinery or articles for use with machinery or as component parts or spare parts of machinery" and were made, and notwithstanding the subsequent notification touching the subject continued to enjoy exemption "from so much of the customs duties leviable thereon as are in excess of 40% ad valorem provided their import was "identifiable as intended for use only with machinery" and were imported for the projects approved by the Government for initial installation or for balancing, modernisation, replacement or extension of the existing units".
3. Next in point of time appeared a notification on 29th June, 1978, (S.R.O. 820(I)/78) whereby plant and machinery as defined in the earlier notification were made "exempt from the whole of the customs duties chargeable thereon if imported for .The projects approved by the Government, for balancing, modernisation Or replacement............................... Subject to the condition that it is certified by the Ministry of the Industries, the Textile Commissioner or an officer authorised by him in this behalf that such machinery is not being manufactured locally". The Auto Cone winders qualified for this exemption as well.
4. Then, there appeared notification dated 26th June, 1980. It is reproduced hereunder in extenso, for its interpretation alone is the subject- matter of these petitions- GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE AND ECONOMIC CO-ORDINATION NOTIFICATION Islamabad, the 26th June, 1980 CUSTOMS S.R.O. 702(0/80.-- In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and in supersession of this Ministry's Notification No. S.R.O. 820(I)/78, dated the 29th June, 1978, the Federal Government is pleased to direct that plant and machinery as defined, in this Ministry's Notification No. S.R.O. 695(I)/77, dated the 4th August, 1977, shall be exempt from the whole of the Customs duties leviable thereon if imported by the approved industrial projects of the type specified in column 2 of the table below for the purposes indicated in column 3 of the said table subject to the condition that it is certified by the Textile Commissioner or an officer authorised by him in this behalf that such machinery is not being manufactured locally.
TABLE S. No. The type of approved projects Purpose for which exemption shall be admissible ~~T 2 3 1 Textile Industry .. For balancing, modernization or replacement.
2 Made-up garments, hosiery and towel industry For initial installation .. Balancing, modernisation, replacement or extension.
3 Textile processing industry For initial installation, modernization, replacement or extension.
Explanation:- (i) For the purposes of this notification "textile industry" means units manufacturing goods made of cotton, wool, silk or art silk only.
(ii) Automatic cone-winders being a substitute for locally manufactured cone-winders shall not be eligible for the concession under this notification."
5. This was followed, finally by another Notification S.R.O. 1147(l)/82, dated 21st November, 1982 whereby exemption was granted to Cone-win- ding machines imported for balancing, modernization and replacement of approved Textile industries for which letters of credit were opened prior to 26th June, 1980 from the whole of the customs duties subject to the conditions set out in the original Board pf Revenue's Notification No. S.R.O. 702(I)/80, dated 26th June, 1980.
6. Near about middle of 1982, or in any case after 26th June, 1980 the petitioners sought from Controller Imports and Exports import licences for automatic cone-winders, stating that "there is a price differential of at least U.S. $40 per bale of 400 pounds between yarn wound on conventional cone-winder (non automatic cone-winder) and that "auto cones are now not covered in C.G.O. Or S.R.O." The petitioners were "advised to bring recommendation from Textile Commissioner and organisations for Import of above". The Textile Commissioners' organisation issued the required recommendation with the condition that "you will pay the customs duty and sales tax whatsoever leviable thereat at the time of its import". On its import the goods were subjected to 40% customs duty ad valorem in terms of first notification of the year 1977, referred to above. The case of the petitioners even before the Customs Department was that the auto-cones were not locally produced not were the imported goods a substitute for locally manufactured ones, and unless the Textile Commissioner heid otherwise, the imported goods were entitled to exemption from customs duty in terms of S.R.O, of 1980. Not meeting with success there, and while the matter was still pending in the Customs heirarchy, the petitioner invoked the- constitutional jurisdiction of the High Court.
7. The grounds of attack relevant for the present discussion are contained in the following three paragraphs of the writ petition (in C.P. 338/84).
"(c) That the said item (ii) of the explanation is an exception to the exemption generally granted to the import of plant and machinery including automatic cone-winders and the said item (ii) of the explanation should, therefore, be construed strictly.
(d) That no manufacturing of automatic cone-winders had commenced in Pakistan on or about 19-3-1982, when the contract (Annexure P. 4) was made between the petitioner and its Japanese seller and that no manufacturing of automatic cone-winders in Pakistan is taking place even now and that the automatic cone-winders imported by the petitioner are not and cannot be substitutes for the locally manufactured manual cone-winders and as such the said item (ii) of the explanation is not attracted to the consignment in the petition.
(e) That the said item (ii) of the explanation is an anticipatory provision and because no automatic cone-winders are being manufactured in Pakistan the provisions of the said item (ii) have not become operative and in any case the automatic cone-winders imported by the petitioners are not substitutes for any cone-winders locally manufactured."
8. After taking note of contentions of the learned counsel and that of the learned Deputy Attorney- General, the High Court spelt out the principles of interpretation of fiscal statutes which were attracted and were found applicable to the question under discussion. It came to the conclusion that power of the Government under section 19 of the Customs Act, to grant exemption was discretionary in nature, were in amplitude, and uncontrolled in its exercise. In exercising it by the impugned notification, particularly its explanation (ii), it had neither acted arbitrarily or unreasonably nor transgressed its authority or impinged on any vested right of the petitioners. The explanation was susceptible of one and only one interpretation, and it had the effect of denying the exemption from customs duty to Auto Cone-winders. Hence all the petitions were dismissed by the High Court,
9. The learned counsel for the petitioners has contended before us that an explanation in a statutory instrument has a place and a purpose. It clarifies preserves, protects and augments the statutory power conferred or delegated and does not abridge, curtail, or' destroy the very provision of which it acts as the explanation. Reliance was placed on Muhammad Hussain Patel v. Habib 'Wali Muhammad (PLD 1981 S.C. 1) On this view of the law the learned counsel for the petitioners contended that the explanation had the effect of conferring on the Textile Commissioner organisation, an ancillary or supplemental power of ensuring in the case of auto-cone-winders alone whether local manufacture had a substitute in imported auto-cone-winders. If it had then only those auto-cone-winders which were according to the judgment of the statutory functionary a substitute for the local ones could forfeit exemption. The explanation was not, according to the learned counsel added to frustrate the judgment and functioning of the statutory functionary, the repository of delegated power.
10. Another argument of the learned counsel for the petitioners is that two views of the law were clearly and reasonably possible and on the very principle enunciated by the High Court for interpretation of fiscal statutory instruments, the one more beneficial to the subject should have been preferred.
11. The learned counsel for the petitioners has also taken us through the factual background of the case with a view to demonstrate that the assertion contained in the notification 'that "Automatic cone-winders being a substitute for locally manufactured cone-winders" is patently erroneous and palpably untenable, and what follows or is based on such a mistaken view cannot be allowed to stand by itself but must be struck down or stand rejected alongwith the mistaken view of a fact.
12. We have heard the learned counsel at length. We are in agreement I with him that the ordinary function of an explanation is to clarify, to facilitate the proper understanding of a provision, to serve as a guide, as held in the case of Muhammad Hussain Patel. Nevertheless, it does not exhaust or.
Complete the function and the purpose of an explanation. In the Privy Council case of Krishna Ayyangar: In re (ILR 43 Mad. 550), it was held that "The construction of the Explanation must depend upon its terms, and no theory of the purpose can be entertained unless it is to be inferred from the language". In another case from Indian Jurisdiction, State of Bombay v. United Motors (AIR 1953 SC 252), the Explanation was found to contain a legal fiction, to provide a simpler and workable test directed at facilitating the operation of the statute itself.
13. The way this explanation is being construed by the learned counsel for the petitioners, has the effect of conferring on the Textile Commissioner, an altogether different jurisdiction, not identical with the one already conferred by enacting provision, that is, to look for substitutes in the case of auto cone-winders, while in all other cases only to ascertain whether the imported article is locally manufactured or not, a much simpler exercise.
14. A second look at explanation (ii) will show that the expression "being a substitute" is a statement of fact, inferential in nature and unqualified in content, not open to question or contest, lt is supposes to provide a rational basis for the differential treatment extended to imported cone- winders. This statement of fact, or disclosure of a reason partakes of a decision on a policy matter, a motivation for the legislative measure, a regulatory control exercised by the delegator over the statutory functionary receiving such a power by delegation. These are all permissible controls. It is admitted that in granting exemptions or in revoking it, no jurisdictional fact is required to be satisfied or disclosed by the Government. Where such is the amplitude of power enjoyed, the disclosure of a reason, the statement of a fact, or the narration of an event, will not throw in jeopardy the power exercised, only because, the reason, the fact or the event does not or cannot stand the strict test of accuracy. Any factual enquiry in this domain, not being an enquiry concerning jurisdictional fact, will be altogether outside the scope of proceedings conducted in constitutional jurisdiction.
12. We are, therefore, satisfied that the impugned decision of the High Court takes a sound view of the statutory instrument, suffers from no legal infirmity and is otherwise unexceptionable. These petitions are, therefore, without merit and leave to appeal is refused in all of them.