' WAJIHUDDIN AHMED, J.---This order shall dispose of Constitutional Petitions Nos.D-962 of 1986 and D-469 of 1987.
2. The facts, as detailed in these petitions, are that the petitioner restaurant, common to these petitions is a registered firm said to be functioning as a restaurant establishment of a small scale and catering to the poor and middle class community. A show-cause notice, dated 14-3-1983, issued by the Assistant Collector, Central Excise and Land Customs, Landhi Div. Karachi was served on the petitioner, in response to which, per reply dated 10-4-1985, the petitioner denied allegations for liabiliy to take out L-7 Licence under Rule 174(1)(d) read with rule 96-W of the Excise Rules, 1944. It was also, inter alia, urged in such reply that, apart from catering to the lower and middle class community and providing ordinary tea, food etc. At the establishment, the petitioner was rendering such services in an open space, touching a public Bus-Stop, away from Zaibun Nisa Street, and could hardly be termed as Tea shop. The petitioner's annual turn over (A.T.0) according to Income Tax Assessm ent did not exceed Rs.500,000, which was the exempted outer limit under Notification No.SRO555(1)/79 dated 28-6-1979, issued by the Federal Government, in exercise of its power under section 12-A of the Central Excises and Salt Act, 1944. It was also maintained that under SRO 492(1)/77, dated 11-6-1977, quantum of A.T.O. Stands pre-determined at Rs.400,000 in respect of Karachi and Lahore and Rs.200,000 in all other cases. However, vide an order dated 12-6-1986, the Assistant Collector rejected the pleas of the petitioner, whereupon an appeal was preferred under section 35 of the Central Excises and Salt Act, 1944 which also was rejected on 19-5-1986, leading the petitioner to prefer a revision under section 36 of the said Act before the Federal Government, which revision was yet pending. Still, during the pendency of the revision application the Superintendent Central Excise and Land Customs, Malir Circle, Karachi, issued letter dated 13-8- 1986 demanding and directing payment of Rs.103,000 by way of Central Excise duty and Rs.51,900 as Additional duty. Such orders and proceedings were questioned in Constitutional Petition No.D- 962/86. On 25-11-1986, before the admission of the petition the petitioner was allowed to add para 8 to its petition, questioning the Survey Report dated 11-3-1985 on the basis of which the Assistant Collector determined the A.T.O. At Rs.730,000. In such context it was averred that a copy of the Report was never provided, as mentioned in the show cause notice and reflected in the relevant order of the Assistant CoRector and, further, that the petitioner had no knowledge of any such survey which, if at all, was conducted behind its back. Another amendment was occasioned in the same petition and a further amended petition was submitted on 5-12-1989 wherein the order in revision by the Federal Government, having been passed on 15-1-1989 was also assailed.
3. Subsequently, Constitutional Petition D-469 of 1987 was filed by the petitioner impugning therein a notice of demand of Rs.154,900 dated 25-4-1987, referring to another like notice issued under section 11 of the Central Excises and Salt Act and pertaining to the year 1984-85. It has been maintained in such petition that no appeal lies under section 35 in the context of action taken under section 11 of the said Act. The impugned notice dated 25-4-1987 in such petition, as adverted above, refers to an earlier notice dated 23-11-1985 claiming dues of Rs.103,000 towards Central Excise duty and Rs.51,900 as Additional duty for the year 1984-85, which had remaind unpaid.
4. The respondents have submitted Counter-Affidavits. A perusal of such counter-affidavits and the orders and proceedings impugned herein indicates that a notice was issued to the petitioner for production of Annual Turn Over duly supported by Books of Accounts on 13-11-1984, purportedly, as required under SRO-555(I)/79 dated 28-6-1979. A reminder dated 15-12-1984 was also issued.
None of these elicited any response from the petitioner. A show-cause notice, therefore, followed by an addendum were issued on 14-3-1985 and 15-8-1985, respectively, requiring the petitioner to show-cause as to why action should not be taken for violation of rules 174(1) (4) and 96-W of the Central Excise Rules, 1944, and as to why Central Excise duty amounting to Rs.103,000 and Additional duty to the tune of Rs.51,900, respectively, should not be recovered under Rule 10 of the Rules for the period 1-7-1984 to 30-6-1985 on the basis of A.T.O. Of Rs.730,000, as visualised in the Survey Report dated 11-3-1985 of the Deputy Superintendent, Central Excise and Land Customs, Malir Circle, Karachi. Such facts are expressly recited in the impugned order dated 12-2-1986 of the Assistant Collector referred above. The contentions raised, on hearing before the Assistant Collector, were that the Annual Turn Over of the petitioner came to Rs.250,000 after deducting 126 days from the total number of days in the year owing to nonworking days and closure of business, due to Ramazan, weekly holidays on Fridays, gazetted holidays and half day closures on Thursdays.
Such A.T.O. Being below half of the exempted limit no licensing was required and the petitioner was not liable to pay any Central Excise duty on the services rendered. The Assistant Collector examined the case in detail. He found that the closures claimed could not be allowed, except that for the month of Ramazan a maximum of 50% closures, on the basis of half working days, could be granted. Deducting 15 days on such basis and assessing the Turn Over on an average of Rs.2,000 per day the Annual Turn Over of Rs.700,000 was worked out. It was also observed that, the absence of submission. Of A.T.O. And non-observance of requrirements under Rule 96-W, including the omission to take out necessary Licence, had occasioned a survey by the Deputy Superintendent from 9-3-1985 to 11-3-1985. Such Survey Report was to the effect that the restaurant was located in a very busy commercial area of Sadar, off Zaibun Nisa Street, and persons frequenting the area normally visited the restaurant in large numbers, throughout the day, including lunch and dinner hours. The restaurant operated from 9.00 a.m. To mid-night and served meals and snacks of a number of varieties on considerable charges, as evidenced by the printed Menu Card, which apart from Pakistani Dishes included Soup, Fried Fish, Mixed Grill, Tea and Coffee. The restaurant was found equiped with 20 tables and 80 seats in the ground floor hall and on upper gallery. It also had telephone amenity available in it. The staff consisted of one cashier, four waiters, two Nan-makers and two dish-washers, who assisted in due rendering of Excisable Services. Taking all the referred factors into consideration, the Turn Over in the Report was accepted. The petitioner was directed to take out Central Excise licence and start paying Central Excise duty, besides paying Central Excise duty amounting to Rs. 103,000 and Additional duty in the sum of Rs.51,900 for the period 1-7-1984 to 30-6-1985. In the copy of the memo of appeal against such order, which has been brought on record, nowhere has the Survey Report of the Deputy Superintendent, Central Excise and Land Customs, been questioned nor has it been said that this Report was not supplied to the petitioner.
During the hearing in the appeal it was, however, contended that the said Report was based on daily Turn Over at Rs.2,000 per day, which was completely out of tune with realities requiring Annual Turn Over to be the basis of liability. It was also contended that such Turn Over had been assessed at Rs.150,000 per annum by the Income Tax Department. The Collector, (Appeals) re-examining the case affirmed the findings in the Central Excise Order in-Original thereby also upholding the Survey Report of the Deputy Superintendent, in the absence of due submission of A.T.O. By the party. Before us, the memo. Of revision has not been submitted but in the order of Revision, passed by the Additional Secretary, the pleas about the Survey Report do not seem to have been taken and resultantly, per order dated 15-1-1987 the findings of fact of the Excise functionaries have been affirmed.
5. Now, the expression "Excisable Services" has been defined to mean in section 2(dd) of the Central Excises and Salt Act, as "Services, facilities and utilities, specified in Part II of the First Schedule, as being subject to a duty of Excise." Item 13.01 in Part II of such Schedule, inter alia, includes in the category of Excisable Services "all services, facilities and utilities, including supplies and merchandise, provided or rendered by a restaurant" and defines a "restaurant" to mean "an establishment, organization or place where food or drinks are sold, whether or not it provides any other services, facilities or utilities, by whatever name called, and includes a night club and a cabaret." Rule 174 of the Central Excise Rules, 1944, in sub-rule (1) clause (d) requires every person, providing or rendering Excisable Services to take out a licence and prohibits the conduct, inter alia, of any such business in regard to such services otherwise than by the authority and subject to the terms and conditions of a licence granted by a duly authorised officer: in proper form.
Correspondingly, Rule 96-W of such Rules, which lays down special procedure regarding hotels and restaurants, details comprehensive requirements for the owner or manager of every hotel or restaurant with regard to issuance of receipts, maintenance of accounts etc. And submission of periodic return.
6. It is the case of the respondents that the petitioner neither took out the required licence termed as L-7 Licence, for rendition of Excisable Services nor, in spite of notice, furnished details of A.T.O.
Based on requisite books of accounts mandated by the rules aforesaid, leaving the respondent no scope whatever but to resort to collateral means to determine the A.T.O. (Annual Turn Over), which having been duly done, necessary determinations were made and demands were raised. There can be no getting away from the proposition that the services rendered by the petitioner clearly fall within the terminology of Excisable Services and under Rules 174(1)(d) and 96-W the petitioner was required to obtain the prescribed L-7 Licence for conduct of its business and for rendering of Excisable Services as also to maintain requisite accounts and submit due returns which it, patently, failed to do. The department, therefore, was left with no alternative but to devise suitable means to ascertain the A.T.O. At every level of the departmental hierarchy these questions which are pre- eminently of fact have been examined and re-examined and we, in the circumstances of the case, can find no fault with the same. Indeed, as recently reiterated in Government of Pakistan v. Furqan Ahmed Qureshi (1988 SCM R 623) we, in our constitutionl jurisdiction, cannot sit in appeal against the orders of the departmental authorities and, as opined in Muhammad Younus v. Central Board of Revenue PLD 1964 SC 113 in matters where the person sought to be made liable falls within the letter of law the imposition is to be given effect to.
7. In addition, we find that the question with regard to the non-supply of the Survey Report was never raised before the departmental authorities and, as to facts, which remained unchallenged before such authorities the rule, speaking generally, is that an administrative body is the sole judge of the facts competently brought before and determined by it. Such question, therefore, not having been agitated in the relevant hierarchy is not open to judicial Review in Constitutional jurisdiction.
8. However, the contention of Mr. G.M. Saleem is that under S.R.O. 555(I)/79, dated 28-6-1979, the Federal Government has exempted the services of a restaurant, the Annual Turn Over of which, as determined by the Assistant Collector of Certral Excise, in any financial year, subsequent to the year 1972-73, was less than Rs.500,000 and, further, that under S.R.O. 492 (I)/77, dated 11-6-1977, the question of Annual Turn Over in respect of restaurants, operating at Karachi and Lahore has been determined to be Rs.400,000. It appears to us that merely because notification has been issued by the Federal Government under section 12-A of the Central Excises and Salt Act, exempting any services or class of services from the whole or any part of duty leviable under such Act, the services or class of services, so exempted, do not stand denuded of their prescribed attribute of Excisable Services. All that heppens and can happen, pursuant to such exemption, is no more than a suspension of liability to pay wholly or in part, as the case may be, so long as the exemption remains operative. During such suspension the effect of section 3(1) of the Act 1944, which inter alia, imposes the prescribed levy on all excisable goods rendered in Pakistan remains held back shelved up to revive on expiry or recall of the operative exemption. The obligation to obtain requisite licence or, for the matter of that, to maintain necessary accounts and records, in the form and manner prescribed, is not done away with, merely on account of such an exemption.
9. Indeed an exemption under section 12-A ibid can either be conditional or unconditional. In so far as S.R.O. No.555(I)/79 dated 28-6-1979, is concerned it is conditional upon the determination of the Turn Over of a restaurant, at the level of an Assistant Collector, to be less than Rs.500,000 for a particular year. Such condition would, evidently, require necessary determinations, below the maximum limit, year after year and unless that is done the exemption would not operate.
10. As to the referred notification, S.R.O. No. 491(1)/77, dated 11-6-1977, pertaining to quantum of A.T.O. For restaurants in the cities of Karachi and Lahore, while the learned counsel has not placed a copy of such notification before us, which he was obliged to do, as we cannot take judicial notice of such notification under Article 112 of the Qanun-e-Shahadat, 1984, we were obliged to refer to the counter-affidavit to assess its impact, if any, on the case. From what the respondents say, we are led to assume that such notification, which was superseded through S.R.O. No.555(I)/79, has no bearing on the case and, apparently, provided a rule of thumb for administrative purposes, so long as it subsisted, and does not cut across the effective operation of S.R.O. No.555(I)/79, aforesaid, which is specific on the question and which makes the exemption conditional. Nor can such notification do away with the requirements under the Act and the Rules.
11. As regards of the petitioner's claim for accepting their Income Tax Assessment Order for the purposes of determination of A.T.O. (Annual Turn Over) we can do no better than reproduce what we have said on the same subject in Constitution petition namely C.P.D-588 of 1986: Al-Murtaza Restaurant v. The Federal Government:-- "The only question that how remains is the disallowance by the Excise authorities of the Income Tax Assessm ent, allegedly, determining the petitioner's Turn Over. Respondents say that, on policy, they are required to make their own independent assessment. Such policy is based on sound reasons.
In the first place, Assessm ent proceedings under the Income Tax Law are immune from scrutiny, except in the hierarchy pertaining to that law. However, an Assessee may waive that privilege but such waiver would extend only to the extent the Assessee is disposed so to do so. Thus, the entire proceedings which may be relevant, could be withheld from examination by the Assessee itself.
Further, the Excise Law requires maintenance of account in specific manner and form and that could, perhaps, be more effective in determining the Annual Turn Over. The refusal to examine the Turn Over figures in an Income Tax assessment order does not, therefore, in our view, constitute any illegality to warrant interference."
12. Coming to the subsequent Constitutional petition of 1987 all that we need to say is that nothing was claimed or required to be paid by the Excise Functionaries, as reflected in the demand, which has been questioned in that petition. The disposal of that petition also, accordingly, would depend on the terms of this order.
13. While we are not disposed to grant any relief to the petitioner against the levy of Excise duty, we are mindful of our judgment in Constitutional Petition No.D-3/87 where we have held Additional duty, levied by the Central Board of Revenue, under the relevant Central Excise Rules, 1944 to be without lawful authority. In consonance with such determination, we would allow these petitions but only partially to the extent of the levy and charge of Additional duty and the demand of the respondents for such Additional duty is, therefore, declared to be without lawful authority and quashed. The grant of these petitions, however, shall not carry costs.