AHMAD ALI U. QURESHI, J.--1. This constitutional petition has been filed by the petitioners, who are limited company doing business in the manufacture and marketing of cement at their plant located at Nooriabad. The petitioners received a letter dated 8th December, 1987 from the respondent No. 2 requisitioning their records of accounts for the purpose of their audit. The petitioners felt aggrieved and filed this petition assailing the impugned order and praying for the following reliefs:- "(a) Declaration that the respondents' action in directing and carrying out audit of the petitioner's record is without lawful authority and no legal effect. That the impugned order dated 4th April, 1988 is void, inoperative and illegal.
(b) Prohibitory injunction do issue to the respondent, their Agents, Privies, and subordinates from visiting/calling for any accounts records of material for purposes of audit or doing any act, deed or things in connection therewith.
(c) Any other order or direction in addition to and/or in substitution of the foregoing along with the cost of the petition be ordered by this Hon'ble Court."
2. Mr. Nasim Ahmad Farooqui learned counsel for the petitioners contended, that under ^Notification No. SRO 653(I)/1985, dated 30th June, 1985] the petitioners are liable to maintain the account of the. Raw materials and packing material specified in column 3 of the Table only and therefore, the respondents have no right to requisition their other books for auditing. It was further submitted, that there is no provision of the rules or law under which the respondents could summon the books for auditing. It was further submitted by Mr. Nasim Ahmad Farooqui learned counsel for the petitioners, that no such order could be passed without show-cause notice to the petitioners and without giving them an opportunity to be heard.
3. The respondents have filed para-wise comments to this petition. Mr. Qadir Hussain Sayeed.
Standing Counsel appearing for the respondents has submitted that the reasons as to why the books are requisitioned lor the purpose of audit- are shown in para. 4 of the parawi. Se comments.
According to this para., the petitioner's unit was working on self-assessment basis and no Central Excise Staff is posted to their manufacturing business, It is submitted, that the Central Excise General Order No. 1 of 1963, dated 16th January, 1963 would be applicable to the units working on the self-assessm ent basis and under sub-rule (5) of Part II of the said order the respondents had powers to call for inspection of all accounts and documents of the manufacture prescribed as well as others. It is further submitted in para. 4 of the para wise comments, that the actual production of the petitioners' unit was much behind the required level and the wastage shown by petitioners exceeded the normal limit of wastage for such unit and that there was discrepancy in the consumption of electricity as shown by the petitioners and as acquired by the WAPDA Authorities and also that normal consumption of furnace oil was more than required for manufacturing of one metric ton of clinker. It is submitted, that for the above reasons the respondents considered it necessary to summon the books of the petitioners for audit.
4. It is submitted by Mr. Qadir Hussain Sayeed learned counsel for the respondent that the books summoned by the Excise Authorities are with respect to the raw material as mentioned in ^Notification No. SRO 653(I)/85, dated 30th June, 1985] and that even if the letters include some other books, the Excise Authorities have got powers to summon such other books/documents for the purpose of inspection. In this context it will be relevant to refer to the aforesaid sub-rule (5) of the Central Excise General Order No. 1 of 1963, dated 16th January, 1963 which reads as under:- "(5) The manufacturer should keep all prescribed accounts up-to- date and make available all accounts and documents, prescribed as well as others, available to Excise Staff for inspection whenever required." This order is applicable for all the manufacturers, who clear the goods on self- assessm ent basis. It is not denied, that the petitioners cleared their goods on self-assessment basis and no Excise Staff is stationed in their factory. This rule makes it obligatory that not only the prescribed books would be made available by the manufacturer for inspection by the Excise Staff, but other books would also be made available for the said purpose.
5. Mr. Nasim Ahmad Farooqui learned counsel for the petitioners contended that even under this rule the respondents would have the right of inspection and not of audit.
6. Word 'audit' has been defined in Black's Law Dictionary (Fifth Edition) to mean "inspection and verification by I.R.S. Of a tax-payer's return or other transactions possessing tax consequences.
Systematic inspection of accounting records involving analyses, tests and confirmation. The hearing and investigation had before an auditor." Word 'Inspection' has been defined in the same Dictionary to mean "to examine; scrutinize; investigate; look into; check over; or view for the purpose of ascertaining the quality, authenticity or conditions of an item,-product, document, residence, business, etc." Thus it will be seen that there is practically no difference between the meaning of words 'audit' and 'inspection'. Mere use of work 'audit' by the respondent No. 2 would not ipso facto oust their jurisdiction of inspection of the accounts books etc. Conferred upon them under the aforesaid sub-rule (5) of the Central Excise General Order No. 1 of 1963, dated 16th January, 1963.
7. With regard to submission of Mr. Nasim Ahmad Farooqui learned counsel for the petitioners, that he was entitled to notice before impugned letter was issued by the respondent, he has relied upon the case of Government of Pakistan v. Shahi Bottlers Ltd. (Now reported as PTCL 1987 CL 25). In the reported case it was admitted by the parties before the High Court that only 'crown cocks' used in the bottles of Beverages had been specified, whose accounts had to be maintained. Their Lordships, therefore, observed, that "the High Court, has rightly held that in respect of any other raw material such an account as finds mention in Rule 226 was not required by law to be maintained nor could the stock of it or register pertaining to it maintained by the manufacturer of his own be utilized for exercising powers reserved under sub-rule (2) of Rule 226." Sub-rule (2) of Rule 226 of the Central Excise Rules, 1944 referred to above is also reproduced hereunder:-- "(2) If the manufacturer of any excisable goods liable to duty under Act- fails to render proper accounts regarding the manufacture, storage of disposal of such goods or of the receipt, storage, utilization or disposal of raw materials (including manufactured and semi-manufactured components) used in the manufacture of such goods, as prescribed by these Rules, to the satisfaction of the officer empowered by the Central Board of Revenue in this behalf, the Officer shall determine the amount of duty payable in respect of such goods in his discretion: Provided that, if the officer is satisfied that the accounts maintained by a manufacturer show a lesser quantity of excisable goods manufactured and accounted for than should have been shown on. The basis of the quantities of raw materials (including the manufactured and semi- manufactured components) received by the manufacturer, he may demand from the manufacturer such amount of duty as is, in his judgment payable by the manufacturer".
8. It may be pointed that in the aforementioned case the penalty has been imposed upon the respondent before he moved the High Court in the Constitutional petition. In the instant case no adverse order has been passed against the petitioners except that they have been asked to produce the books for inspection/audit. ^Notification No. S.R.O. 653(I)/85,] relied upon by the learned counsel for the petitioners provides the maintenance of accounts of raw material with regard to the goods specified in Column 3 of the Table, but does not provide that no other account books would be maintainable by the petitioners. Annexure 'D' to the petition lists books of accounts that the petitioners have been asked to produce. Item No. 1 shows the raw material register showing the raw material with respect to the goods specified in Column 3 of the aforesaid Table, and certain other registers.
9. Mr. Nasim Ahmad Farooqui learned counsel for the petitioners has also relied upon the case of Rana Muhammad Afzal v. Inspector-General of Police, West Pakistan. Lahore and another PLD 1974 SC 31. Their Lordships held therein as under:- "Under the Constitution of 1962, taking of any action detrimental to the life, liberty, body and reputation of any person except in accordance with law is forbidden. There is a constitutional guarantee for the protection of a person's reputation. 'The rule of natural justice is to be presumed to be granted into every law. According to this rule, no action affecting the reputation of any person can be taken unless he has been given an opportunity of showing cause against the action proposed to be taken.
Where, therefore, no show-cause notice was issued to the person concerned, the order passed by the authority for opening of history- sheet of the person was held to be illegal."
In the reported case history-sheet of the petitioner was opened by the Police without giving opportunity of showing cause and such an action was held by their Lordships to be detrimental to his liberty and reputation. In the instant case no detrimental order has been passed and as pointed above, even under the rules under which the petitioners claim the privilege of clearance of goods under the self-assessm ent scheme, the Excise authorities are allowed to call upon them to produce the books of accounts for their inspection. Under the said scheme the Excise staff has been withdrawn from the factories and for the purposes of taxation reliance is placed on their own assessm ent.
10. Chapter II of Central Excise Order No. 1 of 1963 specified the obligations of the manufacturers under the new procedure. Sub-rule (2) provides that he should maintain account register printed under bound. Rules 226, 243 and 244 of Central Excise Rules of 1944 deal with the maintenance of various books of accounts by the manufacturer. Rule 243 as well as rule 244 specifically deal with the maintenance of accounts and other Excise documents with respect to self- clearance procedure. These books of accounts contain transactions possessing tax consequences and as such their inspection by the Excise authorities would amount to auditing as defined in Black's Law Dictionary. As such by using word "audit" in the impugned letter instead of word "inspection" used in the Rule would not render the letter or notice illegal. The Excise authorities cannot be restrained from exercising their powers under the rules to examine as to whether the manufacturer is keeping proper account and paying taxes correctly. However, while using the other books of accounts, which are not prescribed, for the purpose of imposing any penalty, the concerned authorities would have to keep in view the law laid down in the aforesaid case of Government of Pakistan v.
Shahi Bottlers Ltd.
Presently the petitioner does not appear to have any cause of action on the basis of this letter. If any adverse order is passed against them, without having recourse to the principle of natural justice, they can seek relief from this Court. At present the impugned letter does not suffer from any illegality to call for interference by this Court. This petition is, therefore, dismissed in limine.