' This order will dispose of four miscellaneous applications C.M.No,4716 of 1988, C.M.No,4717 of 1988, C.M.No,4718 of 1988 and C.M.No,4719 of 1988 filed by Punjab Cables Limited, applicant, for restraining the respondents from realizing the bank guarantees submitted by them, pursuant to the interim orders of this Court dated 9-4-1988, or for extending the stay orders granted by this Court on 9-4- 1988 till the disposal of the writ petitions.
2. The brief facts of the case are that on 9-4-1988 this Court in the four writ petitions filed by the applicant ordered the applicant to furnish bank guarantees to the satisfaction of the Collector of Customs, Lahore, to cover the fines imposed on it and to release the goods thereafter, subject to normal customs duties, sales tax, surcharge, Iqra surcharge, income tax and other taxes, which were not disputed, being paid by the applicant company. Since writ petitions filed by the applicant only related to the question of fines imposed by the Customs Department, the bank guarantees were ordered to be furnished to only cover the fines. In view of the statutory period of six months, as contained in sub-Article (4-A) of Article 199 of the Constitution, having expired, the respondents called upon the applicant to pay the fines, failing which it would realize the amounts from the bank guarantees furnished by it. Being aggrieved by the said notices, the applicant filed the above applications, which are now before me for disposal.
3. On behalf of the applicant it is submitted that action was taken by the Collector of Customs in the four cases under section 156(1)9 of the Customs Act and the goods were ordered to be confiscated, with no orders as to penalties, which could have been imposed, and taking a lenient view, the Collector allowed the applicant to redeem the machineries on payment of stated sums by way of fines, in addition to customs duties and taxes chargeable thereon. It is stated that the dispute was as regards the nature of the goods and whether they were liable to confiscation or penalty under section 156(1)9 of the Customs Act and since the impugned orders challenged in the writ petitions relate to orders regarding confiscation of goods and not to assessment or collection of public revenues, it is submitted that Article 199 (4-A) of the Constitution does not apply to the instant cases. Learned counsel has cited a large number of dictionaries to show that confiscation or forfeiture of property or imposition of fine is by way of pecuniary punishment for an offence, which action would therefore, not amount to assessment or realization of public revenues.
4. On behalf of the Customs Authorities it is submitted that public revenues include all public moneys which the State collects and receives from whatever sources and in whatever manner and, therefore, the impugned orders of the Collector of Customs relate to both assessment and collection of public revenues.
5. Since arguments have been heard at length, these applications are being admitted and will be disposed of by this order.
6. In the instant` cases, the applicant imported certain machineries, which came in separate consignments. The Customs found that they were reconditioned, instead of new. There was no dispute as regards the assessm ent of duties. The dispute was as regards the nature of the goods and whether they could be confiscated for violation of the law. The Collector took up proceedings under section 156(1)9 of the Customs Act, 1969. Under this provision of law, the goods can be confiscated and penalty can also be imposed. The Collector found the goods to be reconditioned and ordered their confiscation, but did not impose any penalty. However, taking a lenient view, the Collector, acting under section 181, allowed the applicant to redeem the goods on payment of stated sums of money by way of fines, in addition to customs duties and other taxes which were chargeable thereon. The applicant challenged these four orders in separate writ petitions, which were admitted. By way of interim relief, the goods were ordered to be released against furnishing of bank guarantees to cover the fines, subject to payment of the duties etc., which were not in dispute. The applicant now desires the extension of these interim orders.
7. At this stage it may be stated that due to a heavy overload of pending writ petitions, the applicant's writ petitions could not be taken up during the statutory period of six months. Their disposal is likely to take some time.
8. The Customs Act, 1969, does not define the word "duty" or "customs duty". There is nothing in the Act to suggest that moneys realised out of confiscation, penalty or fine should be treated as customs duty. Section 2(ccc) of the Central Excises and Salt Act, 1944, however, defines "duty" to include regulatory duty and all A sums payable under any of the provisions of the Act or the Rules made thereunder. Monetary receipts arising out of confiscations, fines and penalties under the Central Excises and Salt Act, 1944, thus legally come within the scope of central excise duty, but this is not so under the Customs Act, 1969.
9. Before dealing with the arguments, it is necessary to refer to Article 199(4-A) of the Constitution: "(4-A) An interim order made by a High Court on an application made to it to question the validity or legal effect of any order made, proceedings taken or act done by any authority or person, which has been made, taken or done under any law which is specified in paint I of the First Schedule or relates to, or is connected with, State property or assessment or collection of public revenues shall cease to have effect on the expiration of a period of six months following the day on which it is made, unless the case is finally decided, or the interim order is withdrawn, by the Court earlier."
' The main question that arises is whether the Collector's orders are orders made, proceedings taken or acts done by him which relate to or are connected with State property or assessment or collection of public revenues. See Dewan Textile Mills Ltd. v. Pakistan (PLD 1976 Kar.1368).
10. In order to assess whether an order made, proceedings taken or act done by the Collector in any given case relates to or is connected with State property, it is necessary to look into the provision under which action has been taken. Section 156(1)9 of the Customs Act, 1969, may be reproduced here with advantage: "156Punishment for offences.-(1) Whoever commits any offence described in column 1 of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the punishment mentioned against that offence in column 2 thereof: {{TABLE}} ' Offences Penalties Section of this Act to which offence has reference9. (i) If any goods, not being goods referred to in clause 8, are imported into or exported from Pakistan evading payment of leviable customs-duties or in violation of any prohibition or restriction on the importation or exportation of such goods imposed by or under this Act or any other law; or
(ii) if any attempt be made so to import or export any such goods; or (iii)If any such goods be found in any package produced before any officer of customs as containing no such goods; or
(iv) if any such goods be found either before or after landing or shipment to have been concealed in any manner on board any conveyance within the limits of any seaport, airport, railway station or other place where conveyances are Such goods shall be liable to confiscation and any person concerned in the 15 & offence shall also be liable 16 to a penalty not exceeding two times the value of the goods.
Ordinarily loaded or unloaded; Or
(iv) if any such goods, the exportation of which is prohibited or restricted as aforesaid be brought within a customs-area or to a wharf, with the intention of loading them on a conveyance for exportation in violation of such prohibition or restriction."
' It is obvious from this provision that two penalties are provided; one relating to the goods, which are liable to confiscation, and the other relating to the person concerned, who is liable to a penalty not exceeding twice the value of the goods. Section 167(8) of the Sea Customs Act, 1978, which is a somewhat similar provision, was discussed by the Supreme Court of India in Sewpunjanrai Indrasanarai Ltd. v. Collector of Customs (AIR 1958 S.C.845), where it was held that proceedings so far as they related to the confiscation of the goods were basically proceedings in rem, as the penalty was enforced against the goods, whether the offender was known or not known, and that the order of confiscation under section 182 of the Sea Customs Act operated directly upon the status of the property and by virtue of section 184 it transferred an absolute title to Government. It is, therefore, clear that proceedings under section 156(1)9 of the Customs Act, 1969, are proceedings in rem, that the penalty is enforced against the goods and that the order of confiscation operates directly upon the status of the property, in view of section 182 of the Act, which clearly states that when goods are confiscated, they shall forthwith vest in the Federal Government and the officer who orders confiscation shall take and hold possession of the same.
11. With the above background, I may now examine the four orders of the Collector passed in the instant cases. In each of the cases the Collector found that the machinery imported was old, used and/or re-con'litioned and, therefore, imported in violation of the law. He, therefore, ordered their confiscation under section 156(1)9 of the Customs Act, but taking a lenient view he allowed the applicant to C redeem the same on payment of certain stated sums of money as fine, in addition to customs duties and taxes, which were chargeable thereon. In view of the rule stated by the Supreme Court of India in Sewpujanrai's case (supr.), the order of confiscation operated directly upon the status of the property and transferred its title absolutely to the Government. As held in Industrial Development Bank of Pakistan Karachi v. Aamir Fisheries Ltd (PLD 1977 Kar 1000), where a confiscation order is made, the title in the goods and the possession there of vest in the Federal Government and all rights therein vesting in any other person stand extinguished. The full effect of the Collector's four orders was that the title of the applicant in the imported goods stood extinguished and stood transferred to the State and the applicant by virtue of the option granted to it was entitled to redeem them on payment of the fines fixed, in addition to the duties and taxes payable on the goods. The orders made by the Collector, therefore, can be stated to relate to or be connected with State property.
12. The next question is whether the orders of the Collector can be said to be those relating to or are connected with the assessm ent or collection of "public revenues".
13. The word "assessm ent" in relation to taxation or revenue obviously means the process of ascertaining or adjusting; determining the share of a tax or duty to be paid by a person or apportioning E the same among different taxable persons. Assessment in relation to taxation includes all steps necessary which are taken in the legitimate exercise of the power to tax.
14. The expression "revenue" as applied to the income of a Government has a broad and general meaning. It would include all public moneys which the State collects and receives from whatever source and in whatever manner. The revenues of a State include all income, annual profits received from lands or other funds, money at the disposal of the Government, etc. The chief sources of Government revenue are (1) State property belonging to the State, (2) Taxation-- income-tax, customs and excise duty, stamp duty, death duty, wealth-tax, capital gains-tax, gift tax, sales-tax, etc., (3) Certain managed enterprises as posts and telegraphs, telephones, lands, woods and forests and miscellaneous holdings, such as shares and collections and other profits or fiscal prerogatives of the State.
15. The expression "public revenue" means the revenue of the Government of the State or nation.
Used in a general sense, it would include all the income of the Government or State from all sources, out of which the public expenses can be defrayed.
16. The main question which arises is whether the words "public revenue" in Article 199(4-A) of the Constitution are used in this general sense, to cover all income of the Government or State from all sources, or used in any distinct sense as to cover all income generally received through taxation.
The fact that "State property" is dealt with separately, clearly shows that the general meaning is not intended. The words "relates to, or is connected with assessment or collection of public revenues" are also significant, for they show that what is intended are revenues which are normally assessed, as such. If an order relates to or is connected with the assessment of public revenue, it obviously relates to revenue which is receivable in the established sense through some form of determination or realisation by way of assessment, as in taxation. Proceedings for confiscation of goods or imposition of fines or penalties for offences are not proceedings for assessment of revenue, in the established sense. A fine is not a tax levied. See Ark-Allis v. Jefferson County (34 Ark 307) and Corpus Juris Secundum Vol. 36A page 432. A fortiori, a penalty imposed for an offence, would also not be a tax levied. The words "collection of public revenues" must be read ejusdem generis with the words "assessm ent of public revenues". In short "public revenues" referred to in Article 199(4-A) cover all types of income of the Government from sources akin to taxation which is receivable through some form of determination or realisation by way of assessment.
17. In the Federation of Pakistan v. United Sugar Mills Ltd. (PLD 1977 SC 397), the Supreme Court attempted to ascertain the Parliament's intention underlying clause (4-A) of Article 199 of the Constitution.
' It was pointed out to the Court by the learned Attorney-General that the object of the said provision was to put an end to the gross abuse of the porcess of the Court by which enormous sums of money recoverable by the State as taxes were held in abeyance for indefinite periods as a result of stay orders which were generally secured by big industrialists and businessmen to the detriment of the public revenues. Agreeing with this view, the Supreme Court held that this was the mischief which the Parliament clearly intended to eradicate by restricting the duration of the interim orders issued by the High Courts. This case supports the above view that the prime intent of the Government is to realise taxes which are due and recoverable.
18. Rule 4-A of Order XXXIX of the Code of Civil Procedure, which was introduced in 1976, is also on lines similar to sub-Article (4-A) of Article 199 of the Constitution. However, under Rule 4-A of Order XXXIX of the Code, an explanation has been added to extend the meaning of the expression "public revenues" to include dues of any Bank owned by the Federal Government or of any Corporation or undertaking owned or controlled by the Federal Government or Provincial Government. No such Explanation appears under sub-Article (4-A) of Art. 199 of the Constitution. The words "public revenues" as appearing in sub-Article (4-A), therefore, cannot be given any extended meaning to cover any income arising to Government out of fines and penalties.
19. Article 73 of the Constitution of Pakistan which deals with the procedure relating to Money Bills specifically defines what a Money Bill is. Under Article 73(2)(a) & (g), a Bill or amendment, for the purposes of Chapter II, is deemed to be a Money Bill if it contains provisions inter alia dealing with
(i) the imposition, abolition, remission, alteration or regulation of any tax or (ii) any matter incidental thereto. Under Article 73(3)(a), a Bill will not be deemed to be a Money Bill by reason only that it provides for the imposition or alteration of any fine or other pecuniary penalty or for the demand or payment of a licence fee or a fee or charge for any service rendered. Thus, a Money Bill imposing a tax could also, as a matter incidental thereto, provide for fine or other pecuniary penalty, in which case the whole Bill would be treated as a Money Bill, but if the Bill by way of amendment were only to provide for the imposition or alteration of any fine or other pecuniary penalty, it need not be treated as a Money Bill. 'Provisions dealing with penalties, fines and/or forfeitures in Statutes relating to customs and excise are ancillary and incidental to such Statutes.
These provisions are incorporated to make the working of these Statutes more effective and complete. By virtue of Article 73(2)(g) of the Constitution, these ancillary and incidental matters become intra vires the Statutes they seek to serve. Other than this, the penalties, fines and/or forfeitures do not expand the scope of the expression "public revenues" as appearing in Article 199(4-A) of the Constitution. Article 78 which relates to the Federal Consolidated Fund and the Public Account also does not clearly define the expression "public revenues", Under sub-Article (1) of Article 78, all revenues received by the Federal Government, all loans raised by that Government and all moneys received by it in repayment of any loan, form part of the Federal Consolidated Fund, whereas under sub-Article (2) of the same Article, all other moneys received by or on behalf of the Federal Government or received by or deposited with the Supreme Court or any other Court established under the authority of the Federation, are credited to the Public Account of the Federation. There is a distinction between "all revenues received" by the Federal Government and "all other moneys" received by or on behalf of the Federal Government. The words "all revenues received" give some indication of taxation, as opposed to all other moneys received by the Federal Government. The word "taxation" has been defined in the Constitution, which includes the imposition of any tax or duty, whether general, local or special and the word "tax" has been attached to this definition, to be construed accordingly. It is, therefore, clear that the words "tax" and "taxation" do not include fine or penalty imposed for offences. This supports the view that the words "public revenues", as contained in Article 199(4-A) of the Constitution, have a restricted meaning, as stated in paras. 9 and 10
20. In interpreting any particular provision of a law, income arising to the Government from various sources may be treated as the general revenues of the State, but for the purposes of other provisions, income from different sources may be treated separately. By way of example, Gopi Parasad v. State of the Punjab (AIR 1957 Punjab 45) may be cited, in which the legal distinction between a "fee" and a "tax" was considered. In that case the question was whether imposition of a fee for taking out a licence by a dealer under the Punjab Tobacco Vend Fees Act, 1974, constituted a tax or a licence fee. The High Court held that fee was imposed primarily with the object of reimbursing the State for services rendered by it, or for the grant of a privilege, whilst a tax was an enforced contribution levied with the object of providing revenue for the State. It also held that if the primary object of the charge was to regulate or restrain a trade, it was a fee, and if it was to produce revenue, it was a tax. The Court also observed that though all fees and taxes could be treated as the general revenues of the State, as all income of the State, in view of the Constitutional requirement, was credited to and formed part of the Consolidated Fund of the State and fees received for the administration of an Act could not be shown separately in the Budget under any separate head, yet, for the purposes of proper distinction, a "fee" was not a "tax" if it was enacted particularly with the ooject of administering the Act and not with the object of providing revenue for the State. This case, therefore, shows that whilst the expression "revenues", as appearing in Article 266 of the Indian Constitution, could be treated as including incomes from all sources as a part of the general revenues, but for a more correct determination of the matter under another law, different types of incomes could be treated distinctively or separately.
21. In the instant cases, assessm ent or realisation of customs duties etc., were never in dispute. The petitioners were prepared to pay all this. The dispute between the parties was whether new machineries had been imported, or used or reconditioned ones. The case of the Collector was that they were all old, used and or reconditioned. He, therefore, took up proceedings to determine this question and to confiscate the machineries, if they were old, used and/or reconditioned. What was being considered was the question of confiscation of private property to public use, as a penalty for violation of the law. In these circumstances, the orders impugned in the writ petitions cannot be treated as relating to or connected with the assessment or collection of public revenues.
22. In view of the findings given in para. 8 above, sub-Article (4-A) of Article 199 of the Constitution is applicable. It is not possible to restrain the respondents from realising the Bank guarantees submitted by the applicants, or extending the stay orders granted by this Court.
23. There being no merit in the four miscellaneous applications C.M.No,4716 of 1988, C.M.No,4717 of 1988, C.M.No,4718 of 1988 and C.M.No,4719 of 1988, the same are dismissed.