MUHAMMAD AZAM KHAN, J.--This petition filed under Article 9 of the Provisional Constitution Order, 1981 seeks to challenge the orders of the respondents dated 25-7-1973, 22-8-1975 and 19-7-1982 by which the petitioner was held liable to pay excise duty amounting to Rs.20,84,620.05 as well as penalty of Rs.10,000.
2. The facts succinctly stated are that the petitioner is a public limited company engaged in the business of manufacture and sale of paper. It came into being and started production of paper in April, 1971. Under the Finance Ordnance 1970, vide Item No.36 paper, all sorts, was made excisable and subject to duty at Rs.15 per CWT. However, no duty was chargeable in respect of newsprint and white woodfree creamlaid paper (55-60 Gsm). The petitioner produced paper of the said quality and cleared the same, without payment of duty during the period of April, 1971 to December, 1972. It carried the impression that no duty was leviable in respect of this paper. The Tax Authorities, however, thought otherwise and served it with a notice to show-cause why it should not pay the duty due as also the penalty for violating the rules. It took the stand that what was being produced by it was the same for which exemption from payment of duty had been extended vide Notification SRO-12(1)71 dated 5-1-1971. The plea did not prevail and accordingly a demand for Rs.20,84,620.05 was raised against it vide order of Respondent-1 dated 25-7-1973 and a penalty for violation of the rules was also imposed on it to the tune of Rs.10,00,000. This order was questioned by the petitioner in an appeal before Respondent-2, who maintained the levy rejecting the appeal vide order dated 22-8-1975, but reduced the penalty to Rs.10,000. His order was objected to in revision petition before Respondent-3, but with the same result. Hence this constitutional petition.
3. It is not disputed that the paper cleared during the period in question without payment of excise duty was writing paper (55-60 Gsm) . The paper of this kind used to be produced by Karnafuli Paper Mills in East Pakistan. It was almost exclusively used for preparing school exercise books.
Accordingly to ensure the availability of cheap exercise books to students the paper was exempted from payment of excise -duty. The paper Mills in West Pakistan, as it then was, represented to Government to also exempt them from payment of excise duty in respect of this type of paper. The Government agreed and issued Notification S.R.O.No.12(1)71 dated 5-1-1971. The relevant part of the Notification is as under:-
(3) Writing paper (55 to 60 GSM) manufactured by paper Mills which do not have dandly roll equipment.
4. This notification was pressed into service by the petitioner in claiming that it was not leviable with any excise duty. Not denying that the said notification exempts writing paper 55 to 60 GSM from payment of excise duty, it was contended by the opposite side that the exemption could be claimed only by the Mills which did not have dandy roll equipment, whereas petitioner had such an equipment. It was seen by the staff of Respondent-1 on the Mills premises and it would be enough for the purpose of charging the duty that they were in possession of the equipment, it was added.
5. The petitioner has got the dandy roll equipment and appears to have received it along with its other machinery. But according to it, all along it has remained idle and never been used. It was stated that as originally packed it was there lying in the stores. Attempts had been made to dispose it of by sale and advertisements for the purpose had been given in the Press, but no one had offered to purchase it. Merely because, it was contended, the equipment happened to be on the premises, without having been ever used, would not justify levying the duty. Possession of the equipment would not be taxable, but its use. It would be too narrow and strict construction of the relevant expression if the petitioner be burdened with payment of huge amount of duty for being in possession of the equipment of which it had made no use, it was added.
6. So, the point on which the fate of the case hinges is if by being in possession of equipment called dandy roll the petitioner would or would not be liable to pay the excise duty. The plea for claiming exemption from payment of the duty as levied, on the part of the petitioner throughout has been on the line that the equipment has never been used in the manufacture of paper, though the comments filed by the Respondents disclose a different position. The same show that the petitioner had in the first instance concealed that it had dandy roll equipment. When the equipment was discovered, the petitioner did not assert that it was not being used. But to this effect there appears no observation in the orders impugned herein, suggesting that the petitioner has been shifting its stand. For the first time in comments an attempt has been made to raise this impression.
7. However, the fact remains that the petitioner is having the dandy roll equipment. On the plain reading of the Notification (S.R.No.l2(1)/71, dated 5-1-1971) there appears no scope for the petitioner to escape payment of the duty. 1t is also quite settled that fiscal and financial statutes require to be strictly construed. But the provision is apparently very harsh. Merely for the fact that the equipment happens to be there, though never used, the levy of duty cannot be 1 justified. That would mean taxing possession of the equipment rather than the stuff produced. This should not be the intention.
8. In the Notification in wording the provision proper care seems to have not been exercised. It is held in Lt.- Col. Nawab-rada Muhammad Amir Khan v. The Controller of Estate, Duty and 2 others PLD 1961 Supreme Court 119 that the Court can modify language of an Act to give effect to the manifest and undoubted intention of the legislature. In this context at page 143 of the judgment there appears reference to Crawford on Statutory Construction (5.201 P.348) in the following words:- "If the true meaning of - the legislature appears from the entire enactment, errors, mistakes, omissions and misprints may be corrected by the Court, so that the legislative will may not be defeated. As a result, spelling, grammar, numbers and even words, may be corrected. This, as already stated, is simply making the strict letter of a statute yield to the obvious intent of the Legislators. But it must clearly, or at least with reasonable certainty, appear that the order is in fact one before the Court will be justified in making the proper correction or amendment or the Court will invade the province of the legislature and exercise legislative power. But when satisfied of the error, the Court may make the necessary correction. In accord with this principle, an erroneous description may be made to describe the thing actually intended or a misnomer made to name the thing really meant."
9. At the same page in the very next paragraph the following rule from Maxwell's Interpretation of Statutes (p.229, 1953 Edition) has been quoted. "Where the language of the statute in its meaning and grammatical constructions, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence.
10. We feel persuaded to follow the above rules of construction. As already stated, it appears to us that the provision has not been appropriately worded.
11. We also note that no demand for the subsequent period till date has been made by the respondents on account of excise duty from the petitioner. Therefore, we find that the orders passed by the respondents are based on a wrong construction of the Notification (SRO-12(1)/71, dated 5-1-1971) and by accepting the writ petition we set them at naught declaring them to be not legally binding on the petitioner, but we make no order as costs.