S.Z. CHOUDRI, J.---Since all these writ petitions raise identical questions of law and facts, these have been heard together and are disposed of by this single order.
2. The facts leading up to the present controversy briefly stated are that the petitioners are engaged in the business of arms manufacturing operating under different names-styles for more than 12 years. Petitioners Hassan Muhammad in Writ Petition No.29 of 1986 and Muhammad Ilyas in Writ Petition No.34 of 1986 have set up their factories at Chechian and Bhimber respectively while the remaining petitioners have their factories for the purpose at Mirpur. Notices were issued to them by respondent No.1 on 30-6-1986 intimating them that they were engaged in the business of manufacturing arms and the Sales Tax under the provisions contained in the Sales Tax Act, 1951 was to be levied and they under Rules were required to secure the licences for the purpose and to maintain the relevant record. As they failed to do so, they were, therefore, asked to get the licences issued and to complete and submit the record within a week for payment of the tax. They were further warned that in case they failed to do so, they were to be proceeded against in accordance with law. Demand notices thereafter were issued to them on 15-7-1986 directing them to make payment of the tax amount and were also asked to explain as to why the action be not taken against them for their failure in making payment and in getting the licences issued. They were further directed to secure the licences and to prepare and submit the relevant record for the period after 26-2-1986.
3. Feeling aggrieved the petitioners through these writ petitions have challenged the competency of the respondents to levy and collect the Soles Tax mainly on the grounds:--
(a) That as the Sales Tax Act has not been enforced in Azad Kashmir as required under section 1 subsection (3) of the Sales Tax Act, 1951, the respondents have no competence or authority either to levy or collect the said tax. All the proceedings initiated by them against the petitioners for the purpose were, therefore, of no legal effect;
(b) That even if it be assumed that the Sales Tax Act has duly been enforced still it was the Income Tax Officer and not the Deputy Collector Excise and Taxation who had the competence in the matter. The proceedings thus, initiated by respondent No.1 were, therefore, of no legal effect;
(c) That since no tax was levied earlier to the promulgation and enforcement of the Sales Tax (Adaptation) Act, 1985 and no proceedings have been initiated for the purpose, no tax could, therefore, be levied or collected for the period prior to the Adaptation Act of 1985. Besides, tax could only be imposed through an Act and not through the Ordin4nce so, therefore, proceedings thus, initiated against the petitioners for levy and collection of the tax pertaining to the period prior to the Adaptation Act of 1985 were of no legal consequence;
(d) That since the Notification or Government Circular of 1986 published on 16-12-1986 was only prospective in nature and respondent No.1 having been conferred with the authority by the Board in October, 1986 no tax could, therefore, be levied or collected for a period earlier to the said Notification and the proceedings initiated by respondent No. 1 against the petitioners for a period prior to October, 1986 were thus, without lawful authority;
(e) As there was no legally constituted Central Board of Revenue existing in Azad Kashmir, no tax could, therefore, be levied or collected by the respondents from the petitioners;
(f) That the tax could only be levied under the provisions contained in the Sales Tax Act, 1951, levy and collection of tax under the Central Excises and Salt Act, 1944 was, therefore, without lawful authority;
(g) That as the petitioners' business was in the nature of cottage Industry they were, therefore, exempted from the payment of Sales Tax; and
(h) That no statutory notices were issued to the petitioners nor were they afforded an opportunity of being heard, the proceedings thus, initiated against them were violative of the relevant provisions of the Act and Rules.
4. As regards their first pointof objection, it was argued on behalf of the petitioners that Sales Tax Act, 1951 although adapted but has not so far has been enforced in Azad Jammu and Kashmir. The Act as required under section 1, subsection (3) of the Sales Tax Act, 1951, could only be enforced through a Notification issued by the Azad Kashmir Government and published in the Official Gazette of Azad Jammu and Kashmir Government. Since no such Notification has up to date been issued and published in the Official Gazette, all the actions taken and proceedings initiated by the respondents against the petitioners were, therefore, without lawful authority, submitted the learned counsel.
5. Controverting the arguments Ch. Riaz Akhtar learned counsel for the respondents argued that the said Act was not only adapted but has also been duly enforced in Azad Kashmir by the Azad Jammu and Kashmir Government. The argument on the point addressed on behalf of the petitioners having no force did not merit consideration.
6. The Sales Tax Act of 1951 of Pakistan was firstly adapted through an Ordinance called the Sales Tax (Adaptation) Ordinance of 1983 promulgated on 2-3-1983. Under section 1, subsection (3) of Adaptation Ordinance of 1983, it has expressly been provided that it shall come into force at once.
All the subsequent Ordinances and the Adaptation Act of 1985 also contained the identical provision. It is thus, clear that the Sales Tax Act of 1951 was not only promulgated but was also enforced m Azad Kashmir firstly through Ordinance dated 2-3-1983 and then through successive Ordinances and finally by Adaptation Act of 1985. On careful consideration of the point involved we, therefore, find no force in the argument addressed on behalf of the petitioners on the point.
7. It was next argued on behalf of the petitioners that as required under section 5, subsection (1) of the Income-tax Act, it was only the Income Tax Officer who had the competence to levy and collect the tax and to initiate the proceedings for the purpose. Respondent No. 1, the Deputy Collector Excise and Taxation had no authority to act as Sales Tax Officer in the matter. All the actions taken and the proceedings initiated by respondent No. l according to the earned counsel, were, therefore, without lawful authority. The learned counsel for the respondents on the contrary submitted that respondent No. l having duly been clothed with the authority by the Azad Jammu and Kashmir Board of Revenue had the competence to proceed in the matter and the objection taken on behalf of the petitioners was without any substance.
8 We have carefully examined the relevant provisions contained in the Act that has been referred to by the learned counsel for the petitioners. Under subsection (1) of section 5, it is indeed correct that the Income Tax Officer had the competence to exercise the powers of Sales Tax Officer. Under subsection (2) of section 5, the Board has the authority and competence to appoint any person by name or by virtue of office to exercise the powers of a Commissioner of Sales Tax, Inspecting Assistant Commissioner of Sales Tax or Sales Tax Officer. The Central Board of Revenue Azad Jammu and Kashmir Government Muzaffarabad in exercise of powers made available to it under subsection (2) of section 5 of the Act through Sales Tax Circular No.1 of 1986 published in Official Gazette on 4-10-1986 empowered the Deputy Collectors Central Excise within their respective areas of jurisdiction to act as Sales Tax Officer. The objection on the point taken on behalf of the petitioners is found to have no force.
9. It was next argued on behalf of the petitioners that the Sales Tax Act, 1951 in the first instance was adapted through an Ordinance promulgated by the President of Azad Jammu and Kashmir on 2- 3-1983. After this Ordinance had lived its normal span of life, the Act was kept enforced through successive subsequent Ordinances and finally the Adaptation Act of 1985 was passed. During all this period these Ordinances remained enforced, no tax was levied and no proceedings had been initiated against the petitioners. Since all these Ordinances at the time when the Sales Tax Adaptation Act of 1985 was promulgated had lived their lives and stood repealed, no tax could either be levied or collected relating to that period by the respondents. The action thus, taken and proceedings initiated against the petitioners by the respondents in 1986 for the period earlier to the Adaptation Act were, therefore, without lawful authority, argued the learned counsel for the petitioners. In reply it was argued on behalf of the respondents that Azad Kashmir Government through its functionaries under law had the competence to levy and collect the tax that became payable during the period when the Sales Tax Act remained enforced through the Ordinances. The argument addressed on behalf of the petitioners having been misconceived and having no substance merited no consideration, contended the learned counsel.
10. The grievance of the petitioners precisely put is firstly that no tax could be levied through Ordinance and secondly that after the Ordinances had been repealed and no tax having been levied at the time when they were enforced, it could not, therefore, be levied after their repeal. In order to have a correct perception of the point involved and for its proper determination it is necessary first to determine as to what the term `Ordinance' really means. Subsection (2) of section 41 of the Interim Constitution Act provides "an Ordinance promulgated under this section shall have the same force and effect as an Act of the Assembly and shall be subject to like restrictions as the power of the Assembly to make law". Again subsection (2) of section 2 of the Interim Constitution Act defines the Ordinance as "in this Act, act of Assembly" or `act of the council' shall include an Ordinance promulgated by the President under subsection (1) of section 41, or as the case may be, under subsection (4) of that section". From the bare reading of these constitutional provisions it become abundantly clear that the Ordinance carries the same.
Meanings and status as an Act of the Assembly. The argument on the point addressed on behalf of the petitioners that tax could only be levied by an Act and not under the Ordinance, in our view, is misconceived.
11. The other part of objection taken on behalf of the petitioners was that since during the enforcement of repealed Ordinances no proceedings have been initiated against the petitioners, these could not, therefore, legally be taken thereafter. On careful consideration, it is also found to have no force for the reason that the respondents had the competence to levy and collect the Safes Tax that became payable during the enforcement of the repealed Ordinance as the petitioners would not be absolved of the liabilities and obligations arising during the period when the repealed Ordinances were enforced. It would be helpful to have a reference to section 56(c) of the Interim Constitution Act which reads:-- "56-C. Effect of repeal of laws-Where a law is repealed, or is deemed to have been repealed, by, under, or by virtue of this Act, the repeal shall not, except as otherwise provided in this Act,-- (a)I
(b) affect the previous operation of the law or anything duly done or suffered under the law;
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the law;
(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against the law; or
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment; and any such investigation, legal proceedings or remedy may be instituted, continued or enforced, and any such penalty, forfeiture. Or punishment may be imposed, as if the law had not been repealed; From the bare reading of this provision it becomes clear that respondents have the competence to proceed against the petitioners for realization of the tax that was due to be paid by them. The argument on the point having no force, therefore, stands rejected.
12. Adverting to the, next point of objection, the learned counsel for the petitioners argued that the Circular issued by the Azad Jammu and Kashmir Board of Revenue on 16-12-1 9S6 was only prospective and respondent No.1 having been appointed and authorized by the Azad Jammu and Kashmir Central Board of Revenue on 4-10-1986, the proceedings initiated under the provision contained in the Central Excises Act and Rules by respondent No.1 earlier to this Circular of 1986 were, therefore, without lawful authority. It was further contended on behalf of the petitioners that Circular of 1986 issued by the Board could not be termed as a Notification, the proceedings thus, initiated against the petitioners by respondent No.1 suffered from grave legal infirmity even on this count. These were, therefore, of no legal consequence, argued the learned counsel for the petitioners. As against this the learned counsel for there respondents submitted that the respondents have the competence to levy the tax and initiate the proceedings for collection of it even for a period earlier to 1986 and the action thus taken by respondent No. l being perfectly legal was open to no exception. It was further argued that Central Excises Act, 1944 having been enforced in Azad Kashmir under the Central Excise Adaptation Act of 1990 and having been made operative from 1-7-1979 contained validation clause, the action of the respondents even if suffered from any irregularity stood validated under section 3 of the Adaptation Act of 1990.
13. We have given our deep thought to the points canvassed on behalf of the petitioners. Under proviso to subsection (4) of section 3 as contained in the Sales Tax Act the Board has competence to direct the levy and collection of the Sales Tax as if it was a duty of excise leviable under section 3 of the Central Excises and Salt Act, 1944 and that all the provisions and the Rules made there under were to apply. The Boardin exercise of its authority made available to it under this provision issued a Notification/Circular on 16-12-1986 duly published in the Extraordinary Gazette to the effect that the Sales Tax was to be collected as if it were a duty of Excise leviable under section 3 of the Central Excise Act as enforced in the Azad Jammu and Kashmir and all the provisions of the said At and the Rules made thereunder were to apply notwithstanding the provisions of the Sales Tax Act, 1951.
The Board in exercise of its powers made available to it under subsection (2) of section 5 of the Sales Tax Act issued another Notification/Circular on 4-10-1986 investing the Collector Central Excise and Deputy Collector Central Excise with the powers of the Commissioner of Sales Tax, Assistant Commissioner of Sales Tax, Inspecting Assistant Commissioner of Sales Tax and Sales Tax Officer. Besides, an identical Circular had been issued by the Central Board of Revenue of Pakistan on 14-6-1982 to the effect that the Sales Tax was to be collected as if it were a duty of excise lleviable under section 3 of the Central Excises and Salt Act, 1944 and all the provisions of the said Act and the Rules made there under were also be apply notwithstanding the provisions of the Sales Tax Act. The Sales Tax Act as is evident from section 2 of the Sales Tax Adaptation Ordinance of 1983, all the subsequent Ordinances included and also the Sales Tax Adaptation Act of 1985, was adapted and enforced in Azad Kashmir with all the Rules and Notifications made or issued there under and enforced in Pakistan immediately before the commencement of the Ordinances and the Adaptation Act. So, therefore, it becomes clear that the tax could rightly be levied and collected as an excise duty under the Central Excise and the Rules made there under. The Argument thus, advanced on behalf of the petitioners that Circular of 1986 being prospective, no duty, therefore, could be levied pertaining to a period earlier to the Notification, is found to have no force. The Central Excise Act, 1944 was firstly adapted and enforced in Azad Jammu and Kashmir under the Adaptation of Laws Act, 1951). It seas then enforced in Azad Jammu and Kashmir under the Central Excise Act, 1974. Central Excise and Salt Act, 1944 was again enforced through an Ordinance in 1978 and kept alive through successive Ordinances issuedby the President of AzadJammu and Kashmir uptill 1979. After the repeal Ordinance of 1979 issued by the President of Azad Jammu and Kashmir Central Excise Act, 1944 was again enforced, this time by the Azad Jammu and Kashmir Council through Adaptation Act, 1979. It was again enforced through an Ordinance issued on 26-2-1989 by the President of Azad Jammu and Kashmir. It was kept enforced thereafter by successive Ordinances till the Adaptation Act, 1990 passed by the Azad Jammu and Kashmir Assembly which was given retrospective operational effect from 1-7-1979. Under section 3 of it all the actions taken, proceedings initiated and collection etc. Made under the Act from and after 1-7-1979 were validated. It thus, becomes clear that the Central Excise Act remained enforced in Azad Kashmir from 1959 onward. Of course, the Adaptation Act, 1979 which remained enforced from 1-7-1979 uptill 26-2-1989, was enforced by the Azad Jammu and Kashmir Council without legislative competence but all the proceedings and actions that had been taken during this period stood validated under validation clause contained in the Ordinances that were issued by the Azad Kashmir Government from 26-7-1989 till the passing of the Adaptation Act, 1990 which too contained the validation clause namely section 3. So the respondents, therefore, had the authority to initiate the proceedings against the petitioners. Even if it be assumed that under the Government Notification/Circular of 1986 the respondents have no competence to initiate the proceedings for a period earlier to these Notifications still the respondents have sufficient authority and competence to initiate the proceedings under Government Order No.242/59 dated15-5-1959 where under the Officers of the Taxation and Excise Department were empowered to exercise the powers under various laws as contained in Annexure `A' to that order. So, therefore, even if, it be assumed that the actions of the respondents suffered from any irregularity under the Notification of 1986 they still under the provisions contained in the Central Excise Act and Rules made there under had sufficient powers and authority to proceed and initiate the proceedings against the petitioners.
14. It was obligatory for the petitioners to send their returns to the Sales Tax Officer under section 10 of the Sales Tax Act. They were also under the provisions contained in the Central Excise Act and rules made there under required to intimate the respondents about the date when they had started manufacturing arms in their factories with the of machinery, the premises wherein it was installed and all the relevant record. Despite of the notices issue' `to' them they failed to carry out the obligations cast on them under law. It appears that they had not even maintained the relevant record and books of accounts. Under subsection (7) of section 10 of the Sales Tax Act read with Central Excise Rule 10, the respondents had the competence and authority to proceed against the petitioners for the period prior to 1986, As the Sales Tax Act had been enforced in Azad Kashmir on 2-3-1983, the actions of the respondents even if be assumed to have suffered from any irregularity, these stood fully validated under section 3 of the Central Excise (Adaptation) Act, 1990 by the Azad Jammu and Kashmir Assembly. The argument on the point, addressed on behalf of the petitioners is, therefore, found to have no substance.
15. It was next argued on behalf of the petitioners that no Central Board of Revenue could legally be constituted in Azad Kashmir without first Adaptation of the Central Board of Revenue Act, 1924.
Under section 2, subsection (3)(a) of the Sales Tax Act and under section 2, sub-clause (aa) the Board has been defined as `Central Board of Revenue means the Central Board of Revenue constituted under the Central Board of Revenue Act, 1924'. As the Act of 1924 has not been adapted in Azad Jammu and Kashmir, the constitution of the Board was, therefore, illegal and of no legal consequence. The actions of the respondents and the proceedings initiated by them against the petitioners were, therefore, of no legal effect, submitted the learned counsel for the petitioners. In reply it was argued on behalf of the respondents that constitution of Azad Jammu and Kashmir Board of Revenue was perfectly in accordance with law and suffered from no such legal infirmity as has been contended on behalf of the petitioners. The argument on the point having no force, according to the learned counsel, therefore, did not merit consideration:
16. Under the Adaptation of Laws Act, 1959, Income Tax Act of 1922 and Central Excises and Salt Act, 1944 of Pakistan were adapted and enforced in Azad Kashmir, Section 7 of the Adaptation of Laws Act, 1959 clearly provided that in case of any difficulty in giving effect to the provisions of the Act. Or in regard to the construction to be placed in any adaptation, the Government was empowered to make from time to time such provisions or give such directions as appeared to be necessary for the purpose of removal of such difficulties. The Azad Kashmir Government in exercise of the powers made available to it under section 7 of the Adaptation of Laws Act then issued a Government Order No.626/59 dated 19-12-1959 for Constitution of the Azad Jammu Azad Kashmir Board of Revenue.
Now when tile Sales Tax Act was adapted and enforced thereafter in Azad Kashmir it was clearly provided in section 2 of the Adaptation Ordinances and Adaptation Act of 1985 that the Sales Tax Act and all the Rules and Notifications made or issued there under and enforced in Pakistan immediately before the commencement of the Ordinance were adapted and were to be enforced in Azad Kashmir subject to the modification that `Central Board of Revenue' shall be construed to refer to the Azad Jammu and Kashmir Board of Revenue. Words of similar import have also been used in Central Excise Act. Adaptation Ordinances and Adaptation Act, 1990. The proposition in identical terms came to be considered in an unreported case titled `Novelty Enterprises Limited v.
Deputy Collector Excise and Taxation Mirpur and- others' in Civil Appeal No.6/Mirpur of 1990 and decided by the Supreme Court of Azad Jammu and Kashmir on 26-5-1990. In that case objection was taken on behalf of the appellant as regards the legality of the Constitution of Azad Jammu and Kashmir Board of Revenue. While considering the proposition Supreme Court of Azad Jammu and Kashmir observed:-- "We have given our due consideration to the arguments. There is no controversy that there has been only one Revenue Board constituted in Azad Jammu and Kashmir. Mere wrong reference to the Board constituted by Azad Jammu and Kashmir Government would not render the constitution of the said Board or for that matter the validation of the actions taken by the Board as invalid. It is settled principle of law that if a statutory provision is unhappily worded for want of skill in drafting, it would not go to the root of the matter and should not affect the correct interpretation of the statute. A reference may be made to Abdul Jamil v. Registrar of Trade Unions, West Pakistan, Lahore PLD 1971 Lah. 220 and Zaibtun Textile Mills Ltd., Karachi v. Central Board of Revenue PLD 1971 Kar. 333, wherein the aforesaid principle has been affirmed. So far the law under which the Board of Revenue was constituted by the Azad Jammu and Kashmir is concerned, the same was constituted in pursuance of provisions contained in section 7 of the Azad Jammu and Kashmir Excises and Salt (Adaptation) Act, 1959, as is evident from the notification itself."
On careful consideration of the point involved and in view of the Azad Jammu and Kashmir Supreme Court's judgment, we therefore, find that Azad Jammu and Kashmir Board of Revenue was legally constituted and suffered from no such legal infirmity as has been contended on behalf of the petitioners. The argument on the point is, therefore, found to have no force.
17. As regards next point of their objection, it was contended on behalf of the petitioners that their business being in the nature of small cottage industries stood fully exempted from any tax. The proceedings thus, initiated against the petitioners by the respondents were without lawful authority. We have given our deep thought to the arguments addressed on the point on behalf of the parties. Mere assertion without anything supportive to the claim cannot be made a valid ground for holding that the petitioners' business was in the nature of a small cottage industry.
Nothing has been placed on record to substantiate the claim by the petitioners. As appears from the record made available, notices have been issued to the petitioners to submit the relevant record and the book's of account and to get the licences issued. No record was made available in compliance with the notices issued to the petitioners. Along with the writ petitions some assessm ent orders regarding the Income-tax and some vouchers have been filed by the petitioners to support their claim that their business was in the nature of a small cottage industry.
These documents relating to the Income-tax, in our view, cannot be taken as a valid evidence for the purposes of Sales Tax. The reason is obvious. The Income-tax is always levied and collected on the basis of income but so far as the Sales Tax is concerned it is always to be levied on the goods manufactured and sold by the manufacturer. Besides, the question as to whether certain concern or business is in the nature of a sma ll cottage industry is to be determined on the basis of detail evidence which is lacking in the present cases and recording of it is an exercise which would generally be not undertaken by the High Court in exercise of its writ jurisdiction. The argument on the point H addressed on behalf of the petitioners having no substance is, therefore, rejected.
18. The learned counsel for the petitioners further argued that the sales tax could only be levied under the provisions contained in the Sales Tax Act and if at all it could only be collected under the provision contained in the Central Excises and Salt Act, 1944 as enforced in Azad Kashmir. Levy and collection of Sales Tax by the respondents under the Central Excise Act and the Rules made there under was, therefore, without lawful authority, submitted the learned counsel. While controverting the argument, Ch. Riaz Akhtar, learned counsel for the respondents submitted that the argument on the point addressed on behalf of the petitioners was misconceived. The respondents had the competence both to levy and collect the tax as duty of excise under the Central Excise Act and the Rules made there under.
19. Proviso of subsection (4) of section 3 'of the Sales Tax Act clearly provided that the `tax, where the Board so directs, be levied and collected as if itwere duty of excise leviable under section 3 of Central Excises and Salt Act, 1944and all the provisions of the said Act and the Rules made there under shall so far as may be and with necessary modifications, apply notwithstanding the provisions I of this Act'. As already stated in the earlier part of this judgment directions in this regard were issued by the Azad Jammu andKashmir Board of Revenue vide its Notification/Circular of 1986 and vide Sales Tax Circular No.2 of 1982 issued by the Government of Pakistan Central Board of Revenue on 14-6-1982 which also stood fully adapted under the Sales Tax (Adaptation) Ordinance, 1983, Ordinances issued thereafter and finally under the Adaptation Act, 1985.
20. The point also came to be considered by the Supreme Court of Azad Jammu and Kashmir in an unreported case titled `Novelty Enterprises Limited v. Deputy Collector Excise and Taxation Mirpur and others' in Civil Appeal No.6/Mirpur of 1990 decided on 26-5-1990. In that case it was contended on behalf of the appellant that under the relevant provisions contained in the Sales Tax Act, 1951 and Salt Act, 1944, the authorities concerned could only collect the tax and not levy the same as, according to the learned counsel, the word levy'would only signify the collection of the tax by the authority concerned and notposing the tax. While considering the point the Supreme Court of AzadJammu and Kashmir observed:-- "It may be stated here that the word `levy' does not carry restricted meaningcontended by the learned counsel for the appellant. A reference may be made to Zaibtun Textile Mills Ltd., Karachi v.
Central Board of Revenue PLD 1971 Kar. 333, wherein it has been held as under:-- "In my opinion, the expression "levy" does not carry this restricted meaning. In Shorter Oxford Dictionary the word "levy" is defined to include powers to impose tax or to raise taxes as well as power to collect taxes. This is also the meaning of the word "levy" adopted in a Canadian decision City of Vancover v. B.C. Telephone Co. 1951 S.C.R. 3 cited in Butterworth's `words and phrases Legally Defined' 1969 Edn.
It is clear from the aforesaid meaning of the word "levy" that it not only, signifies the collection of the tax but also imposition of the tax."
On careful consideration of the point involved we, therefore, find no force in the objection on the point taken on behalf of the petitioners.
21. It was lastly argued on behalf of the petitioners that no notice as required under law had been issued by the respondents to the petitioners and they have been condemned unheard. The assessm ents thus, made by the respondents in a most arbitrary fashion were, therefore, of no legal consequence. Ch. Riaz Akhtar learned counsel for the respondents, on the contrary, argued that it was not correct that notices have not been issued to the petitioners or that they have been condemned unheard. The fact of the matter, according to the learned counsel, was that the petitioners failed to comply with the mandatory provisions and were deliberately evading the payment of tax. The argument on the point addressed on behalf of the petitioners was, therefore, according to the learned counsel, devoid of any substance.
22. We have heard the learned counsel for the parties and have given our careful consideration to the arguments addressed on the points on their behalf. As appears from the record made available by the petitioners themselves, notices in the first instance were issued to them or 30-6- 1986 to the effect that they were engaged in the business of manufacturing arms. Under law Sales Tax had to be paid on all the goods manufactured and sold. Under law it was, therefore, imperative for the manufacturer to prepare the relevant record and secure the licence for the purpose. As the petitioners have not complied with the mandatory provision, they were therefore directed to prepare and submit the relevant record and also to secure the licences within a week. Under section 10 of the Sales Tax Act, it was obligatory for every manufacturer or producer to submit a return in the prescribed form and prescribed manner relating to the sales made by him in the quarter within 30 days of the end of that quarter. It was also mandatory for every producer, wholesaler and exporter to secure the licence under the provision contained in the Sales Tax Act and Central Excises and Salt Act, 1944 as enforced in Azad Kashmir as without which no one could engage himself in the manufacturing or sales of arms. Under Rule 43 of the Central Excise Rules every manufacturer was required to give notice in writing to the Collector at least.
15. Days before commencing operation specific lag therein the nature of the material which he intended to use.
Under Rule 44 before manufacturing the goods, the producer or manufacturer was required to declare in the proper form all the premises, plant, machinery and fittings intended to be used by him. Under Ruler 53 every manufacturer was required to maintain stock account in the proper form showing the goods manufactured and their deposit in the store room and other places approved by the Collector. In compliance of the notices issued to them on 30-6-1986, the petitioners neither appeared nor submitted the relevant record nor from the record made available do they appear to have maintained any books of accounts or the record. The petitioners failed to comply with any of the requirements of the provisions contained in the Sales Tax. Act and the Central Excise Act and the Rules made there under. Even under section 10 of the Sales -Tax Act it was for the petitioners to file their returns. Even under subsection (4) of section 10 of the Act, the respondents had the competence to proceed in the matter. Under subsection (4), if the return as required under subsection (1) was not sent or books of accounts or documents were not produced, the Sales Tax Officer had the authority to make the assessment to the best of his judgment. In the cases of the petitioners despite of directions given to them vide letter dated 30-6-1986 they never bothered to appear and submit their record. They also 7 failed to comply with the mandatory provisions contained under the Central Excise Act and the Rules made there under.
23. The statutes relating to the taxes, in our view, cannot be regarded as penal statutes nor could those be termed as a derogation of natural rights. T here appears, on the other hand, a general tendency to consider these statutes as a burden and is taken by many as money arbitrarily and unjustly extorted from them by the Government. Those liable to pay the taxes justify the evasion and satisfy their conscience in resorting to the questionable means for avoiding payment. Fact of the matter, in our view, however, is that no money paid returns so good and valuable a consideration as money paid for tax is laid for legitimate purposes. The payment of these taxes is just as essential and important as the Government itself; for without them no Government, could in any form exist. The small payment so made by the citizens is the price paid for the preservation of all k hr our property and the protection of all our rights. It is also the bounden duty of the Courts to see that no one, by mere technicalities which do not affect his substantial rights, shall escape his fair proportion. A liberal construction must, therefore, be given to all tax laws for public purposes, not only that the offices of the Government may not be hindered, but also that the rights of all the tax payers may be equally preserved. Viewing the cases now under consideration in this perspective, we feel fully convinced that the petitioners failed to comply with the mandatory provisions of law. There appears to be a deliberate effort on the part of the petitioners to evade the payment of the Sales Tax on one pretext or other but without justifiable reason.
24. For the afore stated reasons, we, therefore, find that the actions taken by the respondents and the proceedings initiated by them against the petitioners were perfectly legal, with competence and suffered from no such legal infirmity as has been contended on behalf of the petitioners. In ultimate analysis, we find no force in the writ petitions. These are, therefore, dismissed with costs.