' AJMAL MIAN, J.---This is a petition for leave to appeal against the judgment dated 3-5-1990 passed by a Division Bench of the High Court of Sindh in Constitution Petition No,1346 of 1986, filed by the petitioners challenging the levy of regulatory duty, dismissing the same.
2. The facts to be noted are that the petitioners were granted an import licence on or about 16-1- 1986 under the Import Policy for the year 1985-86, hereinafter referred to as the import licence, for the import of Castic Soda (Sodium. Hydro-oxide Aqueous Solution), hereinafter referred to as Castic Soda, of the value of Rs,47 lacs. It is the case of the petitioners that pursuant to the Import Licence, they established a letter of credit in favour of the supplier on 29-1-1986. It seems that the Government of Pakistan, through a notification dated 24-2-1986, amended Notification No, S.R.O.645(1)/85 dated 1-7-1985, hereinafter referred to as the notification, by providing against Item No, 28.17-B regulatory duty at the rate of Rs,750 per ton, hereinafter referred to as the regulatory duty, on Sodium Hydro-oxide Aqueus Solution. It is also the case of the petitioners that after the imposition of the regulatory duty, they made efforts to get the above L.C. Cancelled and to delay the shipment of consignment, but eventually the Castic Soda arrived at Karachi.In or about May, 1986. Upon arrival of the Castic Soda, the petitioners filed a Bill of Entry for clearance of the consignment under section 79 of the Customs Act, 1969, hereinafter referred to as the Act, and declared the value of the Castic Soda at $ 85 per metric ton. However, the petitioners made representation to the Customs Authorities that the prices of Castic Soda had gone down and, therefore, the value for the purpose of the assessment of the customs duty under section 25 of. The Act, should be in consonance with the price obtaining in the market. Thereupon, the Customs Authorities, instead of assessing the value of the Castic Soda at $ 85 per metric ton, assessed the same at $ 80 per metric ton. Since the regulatory duty was also demanded, the petitioners filed aforesaid Constitution petition, in which inter alia it was averred that the petitioners' vested right could not have been taken away by the notification. The above contention did not find favour with the High Court and the writ petition was dismissed on the ground that in terms of section 30 of the Act, the petitioners were liable to pay customs duty and regulatory duty on the basis of the rate obtaining on the date of the Bill of Entry for home consumption under section 79 of the Act. The petitioners have, therefore, filed the above petition for leave to appeal.
3. In support of the above petition, Mr. Nasim Faruqui, learned A.S.C. Appearing for the petitioners, has vehemently urged that as the petitioners had already established a letter of credit for the import of Castic Soda prior to the issuance of the notification, their vested right to pay customs duty on the basis of the rates obtaining at the time of the establishment of the letter of credit, could not have been taken away by the notification by making it applicable to the transactions which were concluded earlier.
' On the other hand, Mr.Naeemur Raman, learned Standing Counsel for the official respondents, who filed Caveat, has submitted that the imposition of the regulatory duty in question does not involve any infringement of the petitioners' alleged vested right and that in terms of section 30 of the Act, the respondents were entitled to recover inter alia the regulatory duty.
4. Mr.Nasim Faruqui, in furtherance of his above submission, has referred the following cases:-- ' Collector of Central Excise and Land Customs and 3. Others v. Azizuddin Industries Ltd., Chittagong (PLD 1970 S.C. 439); ' in which the facts were that the Federal Government, under section 12-A of the Central Excises and Salt Act, 1944, through a notification dated 30-6-1961, granted exemption from the excise duty for a period of four years to the persons who were to establish their factories inter alia for manufacturing cigarettes in Chittagong Hill Tracts, which was part of the tribal area. Pursuant to the above notification, the respondents established a factory in the above Chittagong Hill Tracts. However, the Central Board of Revenue by a subsequent notification dated 28-2-1964, purported to withdraw the above exemption before the expiry of the above period of four years on the ground that in view of the Constitution (First Amendment) Act, 1964, which was passed on 10-1-1964, the Chittagong Hill Tracts were excluded from the definition of the 'tribal area'. The above action of the Government was impugned through a Constitution petition which was allowed by a Division Bench of the'High Court of East Pakistan. Against the above judgment, the Federal Government tiled an appeal with the leave of this Court, which was partly allowed in respect of certain items which were exported outside the district of Chittagong Hill Tracts in Pakistan. However, in respect of the above notification granting exemption, the following observations were made:- "The respondent had acquired vested right of exemption the levy of excise duty on all the goods produced or manufactured by it for a period of four years under the Notifications of the Central Government referred to above. That vested right could not, therefore, be taken away by an executive action. The Notification dated the 28th February, 1964, being completely destructive of the right vested in the respondent company was in this view without lawful authority and of no legal effect. As a result of this declaration the District of Chittagong Hill Tracts continued to be included in the Schedule to the Notification of the 17th May, 1963, granting exemption from payment of excise duty leviable on the goods produced and manufactured by the respondent in that District up to 30th June, 1969."
(ii) Federation of Pakistan and others v. Ch.Muhammad Aslam and others 1986 SCMR. 1916; ' In the above case, the facts were that the Federal Government under the Imports and Exports (Control) Act, 1950, framed a Gift Scheme, where Pakistanis living abroad were permitted to import bus and truck chasis purchased against their foreign exchange earnings in C.K.D. Condition through recognised assemblers in Pakistan. To further encourage the above imports, it was also decided that they could import bus and truck chasis in both C.K.D. And Built-up conditions. The respondents imported 126 units of Isuzu trucks less than two years old although they were truck chasis which were held to be new by the High Court. The Federal Government, through a Press Nate dated 16-7-1978, clarified that the words "new bus/trucks chasis" mean of the latest model. The Customs authorities declined to clear the respondents' 107 new unused truck chasis of Isuzue make of 1980 Model on the ground that they were of not latest model. The respondents challenged the above action through a Constitution petition, which was allowed by the Lahore High Court, against which an appeal with the leave of this Court was filed by the Federal Government. This Court, while declining the appeal, observed as under:-- "The department's contention that it possessed untrammeled powers and could prospectively prohibit or control the imports is correct considering the wide amplitude of powers conferred by section 3(1) of Act XXXIX of 1950 and the nature of the right that a seeker of the import licence can claim. Such a power has been recognised by this Court in Zamir Ahmad's case. All the same, even such an extensive power has its limits. One such limit was .Spelt out in Zamir Ahmad's case and it is that vested rights cannot be allowed to be overridden, unless it takes place by unequivocal words, by an organ or authority competent to impair or override the vested rights. The question will still remain whether the respondent writ petitioner at that stage of the proceedings had at all acquired any vested rights. The second limit now well-recognized is that all executive powers have to be exercised fairly and justly, for advancing the object of the legislation. In other words every such exercise of power has 'to satisfy the test of reason and relevance.
' In order to ascertain the nature of the right and to determine whether it had come to vest in individuals, we must in the first place note that it was not a totally unoccupied field which was sought to be controlled or regulated by Press Note dated 20-3-1981. The Gift Scheme had been in existence since 1st July, 1975. Pakistanis living abroad were the beneficiaries. They were provided the incentive to conserve their foreign exchange earnings, to enter into contracts with foreign suppliers for repatriation of their earnings in the form of specified goods and articles and to inject them in the main stream of nation's economy. If these contracts had been bona fide and legally entered into and had given rise to rights and liabilities enforcible at law then certainly vested rights had come into existence which could not be overridden even in the matter of import and export, except on express words of an authority competent to legislate retrospectively, competent to override or impair such vested rights. An agency or authority not empowered to override or impair vested rights cannot achieve that and simply by giving its dispensation in the form of a declaration."
(iv) Al-Samrez Enterprise v. The Federation of Pakistan (1986 SCMR 1917); in which, the facts were that the Federal Government in exercise of powers contained in section 19 of the Customs Act, 1969, issued a notification dated 8-6-1972 exempting certain items of machinery or articles for use with machinery or as component parts or spare parts of the machinery as defined in the notification and set out in the Table given thereunder from "so much of customs duties leviable thereon as is in excess of 20% ad valorem". Pursuant thereof, the appellant made firm commitment and established a letter of credit. However, the Federal Government by notification dated 11-6-1977 first raised the ceiling for customs duty for the eligibility of exemption from 20% to 25% and imposed a condition that exemption would only be available to goods imported against industrial licences. By another notification dated 4-8-1977, the Federal Government purported to withdraw exemption from the sales tax. The above action of the Government was challenged unsuccessfully by the appellant in the High Court of Sind. Appeal was filed with the leave of this Court, which was allowed and, while allowing the above appeal, the following observations were made:- "Therefore, the exemption notification is basically addressed to public-atlarge or in any case to prospective importers. It will be inequitable and unjust to deprive a person who acts upon such assurance of the right to exemption and expose him to unforeseen loss in the business transaction by suddenly withdrawing the exemption after he has made legal commitments. It is in this perspective that a right is created in his favour and a subsequent withdrawal of exemption cannot be given retrospective operation by an executive act to destroy this right. The High Court in its review order did not doubt the genuineness of the assertion made by the appellants that the fee for opening the Letter of Credit was deposited by them on 10th June, 1977, but gave no importance to this fact or being on the free list it was not necessary to obtain an import licence and it was only sufficient to deposit fees for opening the Letter of Credit. Therefore, the fact that the Letters of Credit were opened on 15th June, 1977, is of no significance but in any case the explanation for delay is contained in the letter of the Habib Bank on record. The notification which was in force on the date when the Bill of Entry was presented was that under section 30 of the Customs Act the rate of duty applicable with reference to the date of the Bill of Entry was chargeable. However, as discussed above the particular rate of duty was in force is not relevant to the controversy but whether exemption from this rate could be availed by the appellants.. Clearly in respect of an item on the free list an importer could make binding and irrevocable commitments with a foreign supplier without obtaining an import licence. We, therefore, do not agree with the view taken by the learned Judges of the High Court that no vested right was created or that the transaction is open to doubt as 'fraudulent as an attempt to evade the payment of duty. As already observed retrospective operation cannot be given to executive orders so as to destroy contractual rights and obligations already accrued. In the result this appeal succeeds and the Constitutional petition of the appellants is accepted. The appeal is allowed with no order as to costs: ' On the other hand, Mr.Naeemur Rehman has referred to the following cases:--
(i) Messrs Sh. Abdur Rahim, Allah Ditta v. Federation of Pakistan and others (PLD 1988 S.C. 670); ' in which vires of the imposition of the regulatory duty was challenged in the High Court through a writ petition, which was declined. Against the judgment of the High Court, an appeal with the leave of this Court was filed by the appellants. It was urged before this Court that the authorisation of imposition of regulatory duty under subsection (2) of section 18 of the Act, amounts to abdication of the legislative functions by the Legislature and that even the Legislature was not Competent to impose regulatory duty after having imposed customs duty under Subsection (1) of section 18 of the Act. The above contentions were repelled by tbit Court as follows:- "What is prohibited by the Legislature is the delegation of its function to make the law but not the authority exercised under and in pursuance of the law itself to another agency in regard to the provision of details when by the very nature these are incapable of being laid down by the Legislature itself.
' In Rafiuddin v. Chief Settlement and Rehabilitation Commissioner PLD 1971 SC 252, it was contended that paragraph 15-A, of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, was invalid by reason of the excessive delegation of legislative power which it purported to make in favour of the executive, but this contention did not prevail as it was held: `Having regard to the nature of the legislation itself it was impossible to expect the Legislature to provide for all possible eventualities which were likely to arise due to the complexities of the problems from day-to-day. This was a fit subject, therefore, in respect of which the power of making Subsidiary provisions could be validly delegated to the executive or those responsible for administering the law." ,, "The next limb of this contention namely that the power to impose regulatory duty was not available as the Federal Legislature had already exercised the power by making a provision of the levy of customs duty in . Subsection (1) of section 18 of the Act, is also of no substance. While considering the scope of the legislative power it should be borne in mind that it is a recognised principle of Constitutional law that except where limitations have been imposed by the Constitution itself the power of legislature to legislate on the enumerated subjects is unlimited and practically absolute. The Legislatue is free to exercise this power as and when the occasion requires. Keeping this in view, a reading of Article 70 (1) and (4) of the Constitution makes it plain that there is no constraint or limitation in the exercise of power. It is essentially a legislative function to add, substract, decrease or increase the customs duty so long as the subject of legislation is covered by item No,43, which is the touchstone of the validity of the legislative measure.
Accordingly, it was futile to say that the power of the Legislature was exhausted either to impose the further charge itself or to authorise the Federal Government to impose the additional charge.
The further argument that as the power was exhausted it could not be delegated is also of no substance as it was always available and could be exercised from time to time."
(ii) Messrs Yousuf Re-rolling Mills v. The Collector of Customs and another (PLD 1989 S.C. 232); ' In the above case, this Court has held that levy of the Regulatory Duty on the imported items, which are subject to the levy of the customs duty under the First Schedule to the Act, more than 50% of the amount of customs duty is ultra vires of subsection (2) of section 18 of the Act and that the customs duty to the extent of 50% on such goods could be recovered.
6. In our view, none of the above three cases cited by Mr. Nasim Faruqui has application to the present case. All the above cases are founded on the principle of promissory estoppel. In the case of the Collector of Central Excise and Land Customs and 3 others v. Azizuddin Industries Ltd.
(supra), the respondent on the basis of the exemption notification from the payment of excise duty for a period of four years invested huge amount in setting up a factory for manufacturing of cigarettes in Chittagong Hill Tracts. In that context, it was held that the respondent had acquired a vested right of exemption from the levy of excise duty on the goods produced and manufactured by them for a period of four years, whereas in the case of Federation of Pakistan and others v. Ch. Muhammad Aslam and others (supra), the respondent in terms of the Gift Scheme imported 126 units of Isuzu trucks from the foreign earnings of his assignor. The clearance to 107 new unused trucks was denied on the basis of the amended definition of the word "new" as of latest model, which was sought to be pressed into service retrospectively and, therefore, it was held that "if these contracts had been bona fide and legally entered into and had given rise to rights and liabilities enforcible at law then certainly vested rights had come into existence which could not be overridden even in the matter of import and export, except on express words of an authority competent to legislate retrospectively, competent to override or impair such vested rights".
Similarly in the caseof AlSamrez Enterprise v. The Federation of Pakistan (supra), the appellant made firm commitment and established a letter of credit for the import of certain machinery etc. On the basis of exemption notification to the extent mentioned therein, which was withdrawn before the appellant's consignment could reach Karachi Port and cleared. In that context, it was held that "the exemption notification is basically addressed to public-at-large or in any case to prospective importers. It will be inequitable and unjust to deprive a person who acts upon such assurance of the right to exemption and expose him to unforeseen loss in the business transaction by suddenly withdrawing the exemption after he has made legal commitments. It is in this perspective that a right is created in his favour and a subsequent withdrawal of exemption cannot be given retrospective operation by an executive order to destroy this right.
It may be observed that in the above three cases, there was an element of an express representation made by the Government in the form of exemption notifications and the gift scheme, which is lacking in the instant case. It may be pointed out that when the Government issues an import licence for the import of certain goods, it does not make any representation that it would not levy any new customs duty or would not increase its rate. In fact there is no nexus between issuance of an import licence and levy of a new customs duty or increase in its rate.
Section 30 of the Act provides the mechanism for determining the value of the imported goods and the rate of customs duty. It is not the case of the petitioners that the respondents are not determining the amount of the customs duty in terms of the above section. We may also observe that levy of new customs duty or increase in its rate is a normal incident of a business transaction.
The additional burden is passed on in terms of section 64-A of the Sales of Goods Act, 1930, which reads as follows:- "64-A. In contracts of sale amount of increased or decreased or duty to be added or deducted.--In the event of any duty of customs or excise of tax on any goods being imposed, increased, decreased or remitted after the making of any contract for the sale of such goods without stipulation as to the payment of duty or tax where duty or tax was not chargeable at the time of the making of the contract, for the sale of such goods duty paid or tax paid where duty or tax was chargeable at that time,--
(a) if such imposition or increase so takes effect that the duty or tax or increased duty or tax as the case may be, or any part thereof, is paid, the seller may add so much to the contract price as will be equivalent to the amount paid in respect of such duty or tax or increase of duty or tax and he shall be entitled to be paid and to sue for and recover such addition, and
(b) if such decrease or remission so takes effect that the decreased duty or tax only or no duty or tax, as the case may be, is paid, the buyer may deduct so much from the contract price as will be equivalent to the decrease of duty or tax or remitted duty or tax, and he shall not be liable to pay, or be sued for or in respect of, such deduction."
7. It may further be observed that levy of Regulatory duty not only regulates the price structure of the item concerned, but it also generates additional fund for the public purpose. To put constraint upon the exercise of the power contained in subsection (2) of section 18 of the Act of the nature sought to be pressed into service by the petitioner will not be in the interest of the public. This Court already in the case of Messrs Sh. Abdur Rahim, Allah pitta v. Federation of Pakistan and others (supra) has examined the vires of the Regulatory duty and has held that "what is prohibited by the Legislature is the delegation of its function to make the law but not the authority exercised under and in pursuance of the law itself to another agency." It was also held that levy of the Regulatory duty in terms of subsection (2) of section 18 of the Act was intra vires. It may be observed that the Legislature has provided the framework for the levy of the Regulatory duty, the extent, the period for which it can be levied and the authority which can levy. The levy of the Regulatory duty in question is within the above framework and, therefore, no exception can be taken to it, the impugned judgment of the High Court seems to be in consonance with law.
8. Before parting with the above discussion, we may observe that from the impugned judgment, it seems that before the. High Court, it was not canvassed at the Bar that the levy of the Regulatory duty in issue is not in terms of the judgment of this Court in the case of Messrs Yousuf Re-rolling Mills v. The Collector of Customs and another (supra) and is excessive, but before us it was so urged by Mr. Nasim Farooqui. Suffice to observe that the respondents are expected to determine the petitioner's liability of the Regulatory duty in accordance with law.
' The upshot of the above discussion is that leave is refused.