SALEEM AKHTAR, J.--1. In all these petitions common question of law is involved. In petition No. 1112/86 the petitioner obtained an import licence on 28th July, 1986 for import of 500 metric tons of RBD Palm Oil and opened a letter of credit on 29th July, 1986. The consignment was imported under different bills of lading on board vessel STOLT EAGLE which reached Karachi on 10th August, 1986. It has been alleged that originally a duty of Rs. 3,000 pier metric ton was leviable on palm oil, but subsequently by means of Notification dated 17th April, 1986 it was reduced to Rs. 2,350 per metric ton. This rate was maintained % a further Notification dated 29th May, 1986. After the opening of letter of credit by the petitioner by means of a Notification dated 22nd August, 1986 issued under section 19 of the Customs Act, customs duty was revised and is alleged to have been enhanced from Rs. 2,350 to Rs. 5,350 per metric ton. Thus duty was enhanced to Rs. 3,000 per metric ton. The petitioner has stated that although the Notification was purported to have been issued under section 19 instead of granting exemption higher customs duty has been levied which is illegal and unconstitutional. In the counter-affidavit the respondents have not denied the import of the consignment as alleged by the petitioner but have pleaded that rate of duty on palm oil with effect from 17th April, 1986 to 21st August, 1986 was 70% ad valorem. However, the Federal Government while exercising its power under section 19 of the Customs Act, 1969 exempted the duty in excess of Rs. 235 per metric ton. Further effective from 22nd August, 1986 a regulatory duty of 100% ad valorem was levied on palm oil under section 18(2) of the Customs Act. However, exemption under section 19 was granted with effect from 22nd August, 1986 by exempting the duty in excess of Rs.
5,350 and Rs. 6,000 per metric ton with effect from 22nd February, 1986 and 20th September, 1986 respectively. The facts and questions of law involved in Petitions Nos. 1113/86, 16/87 and 17/87 are common.
2. These petitions were heard with Petition No. 841/86 which was argued by Mr. Muhammad Ali Sayeed. Mr. Khalid Anwar, the learned counsel besides adopting those arguments has raised other contentions. Mr. Kazim Hassan argued for the respondents in Petition No. 841/86 and his arguments have been adopted by the learned counsel for the respondent in these petitions.
3. Mr. Khalid Anwar, the learned counsel for the petitioner has contended that increase levy of customs duty after the irrevocable letter of credit had been opened by the petitioner adversely affected their vested right and therefore, it is unconstitutional and illegal. Reliance has been placed on A1- Samraz's case (Now reported as PTCL 1987 CL 99). The learned counsel for the respondents have entirely relied upon section 31-A of the Customs Act. Faced with this situation Mr. Khalid Anwar contended that a vested right cannot be taken away by a statute unless it is specifically provided by the statute. It was also contended that section 31-A is a fiscal statute and therefore, it should be strictly construed in favour of the subject and unless it is specifically provided that the vested right is to be infringed or obliterated merely by implication no such effect can be created. Similar question was raised in Petition No. 841/86 (Gul Ahmad Textile Mills v. The Collector of Customs) which was argued alongwith this matter and while dealing this contention it has been observed as follows:- "A vested right is not necessarily a Fundamental right and can be infringed, curtailed or wiped out by law specifically making such provision even with retrospective effect and subject to the limitations imposed by the Constitution.
The background of section 31-A clearly demonstrates that it was enacted with the intention to offset the effect of Al-Samraz's case and the principle enunciated therein that by an executive Notification the vested right of a person cannot be taken away. The enactment of section 31-A was intended to legally recover charges, taxes and duties mentioned therein. But for this provision the duties and charges mentioned under section 18(2) could not have been recovered with retrospective effect.
Mr. Muhammad Ali Sayeed, the learned counsel has contended that section 30 provides method for fixing the date for determination of value and rate of import duty mentioned in the First Schedule and not the duty itself nor does it deal with the imposition of fresh levy therefore, protection of section 31-A cannot be afforded. The value of goods and rate of duty is fixed with reference to a particular date. Such date is to be determined as provided by section 30. Once the relevant date is fixed the rate of duty is to be ascertained as provided by section 31-A. It is after determination of date and rate that the actual duty can be calculated. Under section 18 the Customs duties are levied at such rates as prescribed in the First Schedule or under any other law.
Section 31-A explains the method of calculating the rate of duty which inter alia includes the amount of duty imposed under section 18. In effect there is hardly any difference in prescribing the rate of duty or the duty itself. The rate is the basis for calculating the duty levied. Prescribing rate of duty implies levy of duty. Section 31-A provides method of calculating the rate of duty and the duty itself specifically for the purposes of sections 30 and 31. Therefore, where a duty has been levied which is to be determined under section 30, it will be covered by section 31-A.
The learned counsel then contended that the legislature cannot enact any law which nullifies a vested right created prior to enforcement of such law. In this regard the learned counsel has referred to the judgment passed by the Supreme Court in Civil Appeal No. 96-K of 1984 Ghulam Haider Shah and others v. Mst. Mariam and another. In this case question arose 'whether the Land Reforms (Sindh Amendment) Ordinance, 1979 which was expressly made retrospective, had the effect of nullifying the alienations of land previously held valid under the provisions of the unamended Regulation. It was observed as follows:- It follows from this dictum that once the rights of a person have come under adjudication by a Tribunal in exercise of jurisdiction vesting in it and are determined, with the result that under the existing law such rights come to best in such persons they cannot be disturbed or obliterated by a change in the jurisdiction or power of such a Tribunal subsequently unless such intention is expressed or arises by necessary implication".
These observations of the Supreme Court do not support the contention of the learned counsel for the petitioner as section 31-A is not intended to cover cases where rates of duties have been ascertained, adjudicated and paid. Such cases will be beyond the scope of retrospection as the right has been determined and duty adjudicated by the relevant authorities. It is a past and closed case and cannot be reopened unless law specifically provides for such action. But all cases in which no decision has been taken and the rates of duties are yet to be ascertained and calculated, there irrespective of the fact that a vested right has been created the provision of Section 31-A will be applicable. The main intention of section 31-A is to provide a legal cover for recovery of duty at the specified rate including the amount of duty imposed under section 18 of Customs Act, section 2 of the* Finance Ordinance, 1982 and section 5 of the Finance Act, 1985 and the anti-dumping or counter vailing duty imposed under Ordinance III of 1983 and such amount of duty which may have become payable due to withdrawal of exemption Notification. The closing part of section 31-A, sub- section (1) clearly indicates that if any body claims any vested right by virtue of any agreement for sale or opening of letter of credit then it shall not prevail over this provision of law. Protection to vested right is claimed on general principle of law as enunciated in Al-Samraz's case. Section 31-A specifically refers to this decision without naming it and also covers rights arising from the contract, agreement of sale or opening of letter of credit. This clearly indicates that the Legislature intended to completely obliterate such rights."
4. Mr. Khalid Anwar, the learned counsel for the petitioner also relied on IRC v. Airshire Association Ltd. (1946) All. England Law Reporter 637. In this case section 31(1) of Finance Act, 1933 came up for consideration which was passed after a series of cases had decided that a mutual insurance company was not liable to be taxed in respect of a surplus arising from transaction of purely mutual insurance between the company and its members. Its intention was to render the surplus taxable. But it was held to have failed because it assumed erroneously that transactions with non- members are taxable. There is nothing relevant in this judgment except that the legislature had intended to cover certain cases which were exempted by virtue of certain decisions of superior Courts and in spite of amendment it was held that even this did not make the amount taxable. The learned counsel has pointed out one sentence in the judgment that "legislature has plainly missed fire" to show that even if amendment is made to offset a particular situation, the same may not be achieved. There can be no dispute about it. The expression referred may be attractive but a close reading of section 31-A will show that it has hit the target and not "missed fire".
5. The learned counsel for the petitioner contended that the Notification by which the duty has been levied was issued under section 19 of the Customs Act which only authorises to grant exemption from customs duty and not to levy duty or prescribe any rate of duty. It is well settled that under section 18(1) of the Customs Act rate of duty is prescribed in Schedule I and Schedule II of the Act. Section 18(2) authorises the Federal Government to levy regulatory duty by Notification.
The extent of period of validity has also been fixed by section 18. It is therefore to be seen whether the impugned Notification has levied any duty or granted any exemption. The last Notification dated 22nd August, 1986 reads as follows:-- NOTIFICATION (Customs)
S.R.O. (86).--In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the goods specified in column 2 of the Table below and falling within the heading number of the First Schedule to the said Act specified in column 1 of the said Table shall be exempt from so much of the customs duties chargeable thereon as are in excess of the rates of duty specified in column 3 of the Table with dates and duties specified in column 4 of the Tables against each.
TABLE Heading No. Description In the First of goods. Schedule to the Customs Act, 1969 (IV of 1969)
Rate of Duty Date 1 2 3 4 15.07 (1) Soyabean Oil, (a) Rs. 2,350 22nd August, Cotton Seed metric ton. 1986.
Oil, Sunflower Seed Oil, Ra- (b) Rs. 3,000 20th September, pe, Colza or metric ton. 1986.
Mustard Oil.
(2) Palm Oil. (c) Rs. 5,350 22nd August, metric ton. 1986.
(d) Rs. 6,000 20th September, metric ton. 1986.
This Notification shall take effect on the 22nd August, 1986.
(S.T.R. Zaidi) Additional Secretary." {{TABLE MISARRANGED}}
6. According to this notification certain variations have been made in the amount of exemption.
Under the earlier Notification No. SRO 505(I)/86 similar wordings were used. In column 3 of the table of the Notification rate of duty has been specified, but it is not the rate of duty applicable as provided by the 1st Schedule. The rate of duty as mentioned in column 3 is for calculating the actual duty. According to this Notification exemption shall be only in respect of so much of the customs duty chargeable as is in excess of the rates of duty specified in column 3. Therefore, for the purposes of calculating the exemption one has to first ascertain the rate of duty prescribed by the 1st Schedule. After calculating such rate of duty the rate of duty specified in column 3 has to be substracted and thus the balance which is in excess of the rate mentioned in column 3 will be the exemption allowed under the Notification. The rate of duty prescribed in the schedule was 60% ad valorem which is in excess of Rs. 5,350 per metric ton. Thus by this Notification the amount of exemption has been reduced, and the exemption granted earlier has been curtailed and partially withdrawn. Thus there is no question of levy or prescribing rate of customs duty by a Notification under section 19 of the Customs Act. The learned counsel for the petitioner has referred to an unreported judgment of a Bench of this Court in Constitution Petition No. D-23/88. In this case the facts were completely different as the notification under section 19 of the Customs Act had imposed fresh levy and did not withdraw part of the exemption.
7. The petitions are therefore dismissed.