1. ' MUHAMMAD ASLAM ARA1N, J.---The petitioners' case is that they are the assemblers of FIAT brand Tractors in Pakistan in collaboration with their principals Fiat Trattori Italy, and a joint venture company with Pakistan Automobile Corporation (PACO), Habib Management Services Ltd. The petitioners import consignments of Agricultural Tractors in completely knocked down condition (CKD-condition) for the purpose of assembly. The petitioners, who have a factory at Dent Ghazi Khan, get the tractor engines partly manufactured and assembled with imported parts at Bela Engineers Ltd. (BEL), a PACO unit, at Lasbella. The consignments of tractors, imported by the petitioners, after clearance from customs, are partly sent to their factory at Dera Ghazi Khan while the engine parts to Bela Engineering Ltd., Lasbella. No part of the imported consignment is either used or consumed and sold within the local limits of the respondents Nos. 2 and 3 and no octroi is as such leviable on such consignments.
2. ' The petitioners in normal course were entitled for grant of Transit Pass (T.P.). Facility vide No,P-263 both for Dera Ghazi Khan and Lasbella. The orders of grant of T.P. Are on record as Annexures 'A' and 'B'.
3. ' Under the T.P. Enlistment Scheme, all that the petitioners, on arrival of the consignment had to do was to file a declaration, and upon assessment, an order of security deposit was made, whereafter upon deposit of such amount, transit pass for such consignment was allowed. The amount of security deposit was refunded to The petitioners after the transit of consignment from KMC jurisdiction.
4. ' Without any notice to the petitioners, the T.P. Facility was arbitrarily cancelled by the respondent No,2, vide letter dated 25-11-1985. An appeal was filed by the petitioners before the Mayor K.M.C. It was at this stage that for the first time the petitioners came to know that the action of withdrawing T.P. Facility to the petitioners was taken on a complaint by one Jamil Mumtaz, who alleged certain malpractices and collusion of petitioners with the Director Octroi. Nor the petitioners were at any time informed that some inquiry in the alleged malpractices was being conducted against them.
5. ' However, the appeal of the petitioners was decided by the Mayor K.M.C. On 6-5-1986 who allowed partial refund of the Security Deposit for the period prior to the alleged complaint. The rest of the secuirty deposit refund was deferred till the finalization of the enquiry. Against the order of the Mayor dated 6-5-1986, the petitioners filed an appeal before the Chairman, Sindh Local Council Appellate Tribunal, Karachi under Rule 5 of the Sindh Local Councils (Appeal) Rules, 1982, section 108 of Ordinance, 1979, and Rule 216 of the West 'Pakistan Municipal Committee, Octroi Rules, 1984.
6. ' The petitioner's appeal was allowed and it was directed by the Tribunal that entire accumulated amount of security deposit together with interest at 14% per annum from the date of deposit of respective amounts till final payment be made to the petitioners within one month. The Tribunal also made certain observations with regard to the so-called inquiry being pending. This order of the Tribunal was never challenged by the respondents 2 and 3.
7. ' Thereafter, the petitioners constantly went on sending the demand for refund of security deposit but the respondents failed, rather refused to refund the same in compliance with the Appellate Tribunals order dated 31-8-1986, with the result that on the date of filing this petition, a sum of over Rs,2 crores was lying withheld by the respondents Nos.2 and 3, which they were liable to refund together with interest at 14% per annum.
8. ' The petitioners as a last attempt, made an application to the respondent No,1 and the said representation was taken up by the Administrator K.M.C. Who by his order dated 11-7-1987, partly conceded to the grant of restoration of T.P. Facility for Dera Ghazi Khan. The T.P. Facility for Lesbella was refused. This order was assailed by the petitioners by way of an appeal to the respondent No,1 under the provisions of section 53 of the Sindh Local Government Ordinance, 1979 but it was dismissed by order dated 10-9-1987.
9. ' With these facts, the learned counsel for the petitioners has contended that the action of the respondent No,3 in cancelling the T.P. Facility to the petitioners allowed vide P.263 and withholding the secruity deposit is illegal and based on mala fide. He has also contended that since the respondents did not challenge the order of Appellate Tribunal dated 31-8-1986, it attained finality and the respondents are liable to act in accordance with the said order of Tribunal. He has also argued before us that there is no proof on record with the respondents 2 and 3 that the consignments of the petitioners, after transit from K.M.C. For either to D.G. Khan or Bella were brought back to Karachi, and consumed or sold in local market. The allegations of respondents Nos.2 and 3 that the petitioners, used to bring back their goods within the limits of K.M.C. After its transit amounted to constructive sale, were all denied by the learned counsel for the petitioners.
10. ' Mr. Muslim Naqvi and Mr. Hayat Qureshi the learned counsel for the respondents have contended that the petitioners were entitled to T.P. Facility which was granted to them. But since the petitioners were misusing the facility, it was withheld. Their case is, and as is stated in their counter-affidavit, that the petitioners after exporting their goods at Bella, were bringing the same back to Karachi.
11. This according to them was a device to evade the payment of octroi tax. According to the learned Advocates for the respondents, an enquiry was pending where the allegations of sub malpractices were being looked into and till such time that the result of the enquiry is known the respondent No,3 was justified in withholding T.P. Facility and the security deposit. The learned Advocates for the respondents have also contended that the Chairmtin/Judge Appellate Tribunal Local Councils Sindh had no jurisdiction to hear the appeal of the petitioners and pass order dated 31-8-1986 directing the respondents to refund the security deposit to the petitioners and also interest at 14% per annum.
12. ' We have been taken through the relevant rules of "goods in transit", particularly the rules, 35, 64, 77, 80 and 88. We find that the goods which are to be exported outside the K.M.C. Limits are simply to be declared by a party, a security deposit is tp be paid, which is refundable on their showing that the goods have left the limits of K.M.C. On submitting a proof to that effect the security deposit is refundable forthwith and no octroi is leviable.
13. This transit pass facility was enjoyed by the petitioners and was withdrawn by the respondent No,3 without any notice or hearing them. Their security deposit which by now runs into crores of Rupees has been withheld, causing substantial loss to them.
14. ' The respondents' Advocates have given no satisfactory answer to a question by the Court about the alleged ex parte enquiry pending since 1985. Nor have they been able to satisfy us that they have detected any case whereby petitioners, after exporting their goods outside K.M.C. Limits on the T.P. Facility had brought back the same and consumed/sold in Karachi. We have also gone through the order dated 31-8-1986 passed by the Chairman/Judge Tribunal Local Councils Sindh who had ordered the refund of the security deposit of the petitioners with interest at 14%.
15. Having given our serious consideration to the facts of the case, and the perusal of the case-law, the rules and regulations, we are of the view that withholding T.P. Facility to the petitioners and withholding their security deposit is without lawful authority. For these reasons we had by a short order passed earlier allowed the petition in the following terms:--
(1) The respondent shall allow T.P. Facility to the petitioner according to rules for goods, which arc exported by the petitioner to Bela Engineers Ltd. Lasbella without imposing precondition that the petitioner owns a factory in that area.
(2) The petitioner will be entitled to the refund of the amount of security furnished in respect of the goods exported outside the limits of K.M.C., which have reached the destination at Lasbella. Mr. Justice (Retd.) K.A. Ghani is appointed as Commissioner to ascertain the amounts liable to be refunded to the petitioner.
(3) The petitioner and respondents shall produce such evidence as may be necessary for ascertaining the amount.
(4) The petitioner shall pay a tentative fee to the Commissioner in the sum of Rs,20,000.