RAZA AHMAD KHAN, J.---Messrs Gadoon Textile Mills Limited, incorporated under the Companies Ordinance, 1984, the petitioner herein, has invoked Constitutional jurisdiction of this Court seeking a declaration to the effect that the petitioner-Company is not liable to pay regulatory duty at the rate of As.5 per Kg. On Viscose Staple Fibre as the demand of the respondents for the payment of the same is illegal, arbitrary, mala fide and without lawful authority. It is further prayed that the respondents be directed to refund the duties, so far paid under protest, and release the bank guarantee, already submitted by the petitioner against the goods which have been duly consumed, without further delay.
2. The circumstances leading to the instant petition, briefly stated, are that the Federal Government, by a Notification SRO No.517(I)/89, dated 3rd June, 1989 (hereinafter referred to as the Notification) exempted such raw materials and components as are imported for the exclusive manufacture of goods by a recognised industrial unit located in the approved industrial estate of Gadoon Amazai "from whole of the customs duties and sales tax leviable thereon" albeit subject to certain conditions enumerated therein. Hitherto the goods imported for the petitioner-Company have been ex-bounded when the bank guarantees for the equal amount of customs duties were furnished to the respondents Nos.l and 2. However, these: guarantees have been approved by them and consequently the goods have been released to the petitioner. The said guarantee, however, stood discharged when raw material is consumed by the petitioner. In the wake of this when, on or after 20th September, 1990 the petitioner wanted to further release the bounded goods in the aforesaid manner; respondent No.l, reportedly on the advise of respondents Nos.2 and 3, directed the petitioner that the goods will be released only if the regulatory duty at the rate of Rs.5 per Kg. Is paid in cash, notwithstanding the fact that the earlier instructions of respondent No.3 had been that the raw material would be released against bank guarantee. Consequently the petitioner, per force of circumstances had to pay Rs.4,00,775 under protest. It is averred in the petition that this act of the respondents was in negation of the declared policy of the Federal Government in that the Industrial units set up on the Gadoon Amazai Industrial Estate shall be exempted from all sorts of customs duties including surcharge enforced under Finance Ordinance, 1982 and Iqra surcharge under Finance Act, 1985 and it was in pursuance of this policy that the aforementioned notification was issued.
3. We have heard Mr. Abdul Latif Yousafzai, Advocate, learned counsel for the petitioner and Mr. Abdul Hakeem Kundi, learned Standing Counsel of the Federal Government for the respondents at length and also perused the available record with considerable degree of care.
4. It is contended on behalf of the petitioner that the industrial units of the petitioner having been established in the recognised industrial estate of Gadoon Amazai are legally entitled to claim exemption from the "whole of the customs duties" leviable thereon and in this context the petitioner is not liable to pay the regulatory duty which in essence is additional customs duty and is also levied under the Customs Act; nor the respondents have any authority to claim the same from the petitioner. In support of this argument, the learned counsel for the petitioner referred to Surcharge imposed under the Finance Ordinance, 1982 and Iqra Surcharge under Finance Act, 1985, which though fall within the category of additional customs duties, stand exempted through notifications under the relevant laws. On this premises the learned counsel maintains that since the whole of customs duty is exempted by the notification issued under section 19 of the Customs Act, 1969, it shall cover the regulatory duties as well. He thus urged that the demand on the part of respondents for the payment of regulatory duties at the rate of Rs.5 per kg. Is violative of the aforesaid notification dated 3rd June, 1989 issued under section 19 of the Customs Act and hence liable to be held as illegal, without lawful authority and of no legal effect.
5. As against this the learned Standing Counsel. For the respondents submitted that the regulatory duty imposed by the respondents is not covered by notification granting exemption from customs duty inasmuch as the rate and mode of levying regulatory duty is distinct from ordinary customs duty, the rates whereof are specified as per First and Second Schedules annexed to the Customs Act. In this regard he referred to the instructions issued by the Central Board of Revenue vide Circular No.3 (19) Tar-I/86, dated 23-6-1990 and notification dated 1-7-1990 issued under section 18(2) of the Customs Act, 1969 whereby viscose Fibres is levied with a regulatory duty at the rate of Rs.5 per Kg. He therefore, contended that the regulatory duty cannot be equated with the customs duty when it is imposed under a distinct provision of law as contained in subsection (2) of section 18 of the Customs Act, and which deals with special situation other than customs duties levied under subsection (1) of section 18(ibid). Elaborating his arguments, the learned Standing Counsel submitted that the word "customs duty" used in subsection (1) of section 18 read with section 19 pertains to the customs duty prescribed in 1st and 2nd Schedules of Customs Act and as such exemption granted under section 19 would cover only customs duty as laid down in 1st and 2nd Schedules and not the regulatory duty under subsection (2) of section 18 inasmuch as, per contra, the regulatory duty is either levied or not levied at all, and is levied year to year. As such grant of its exemption does not fall in any of the provisions of the Customs Act, much less under section 19(ibid). On the parity of reasoning, he submitted that regulatory duty cannot be equated with the surcharge or Iqra Surcharge for, the latter two additional customs duties are on the pattern ofthe one leviable under section 18(1) of the Customs Act, 1969 and hence have no nexus with regulatory duty. It is thus urged by the learned standing counsel that the demand raised by respondents vide later notification of 1st July, 1990, is in accordance with law and cannot be held as without lawful authority or of no legal effect and accordingly the petitioner is liable to pay the same when seeking unbounding of this imported raw material.
6. We have given our serious consideration to the submissions made by the learned counsel for the parties in support of their respective pleas.
7. It will be fruitful if at the very outset we refer to the notification bearing No.S.R.O.No.517(1)/89 dated 3rd June, 1989 in order to comprehend the arguments pro and contra advanced on behalf of the parties in relation thereto and consequent developments in the form of imposition of regulatory duty under subsection (2) of section 18 of the Customs Act. It states:-- "In exercise of the-powers conferred by section 19 of the Customs Act, 1969 (IV of 1969) and subsections (1) and (2) of section 7 of the Sales Tax Act, 1951 (III of 1951), the Federal Government is pleased to direct that such raw materials and components as are imported for the exclusive manufacture of goods by recognised Industrial Units located in the approved industrial estate of Gadoon Amazai in the Province of N: W.F.P. Shall be exempted from whole of the customs duties and sales tax leviable thereon subject to the following conditions, namely:-- Need it be mentioned that the conditions enumerated therein are not relevant for the purpose of the decision of the instant case.
8. In the same context, the relevant provisions of section 18 as also section 19(1) of the Customs Act, 1969 seem necessary:-- "18.--(1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule and the Second Schedule or under any other law for the time being in force on-- (a)goods imported into or exempted from Pakistan; (b)goods brought from any foreign country to any customs station, and without payment of duty then transhipped or transported for or thence carried to, and imported at any other customs.
Station; and (c)goods brought in bond from one customs station to another."
(2) The Federal Government may by notification in the official Gazette levy subject to such conditions, limitations or restrictions as it may deem fit to impose a regulatory duty on all or any of the articles specified in the First Schedule at a rate not exceeding hundred per cent. Of the value of such articles as determined under section 25 or as the case may be, fixed under section 25B and may by a like notification levy a regulatory duty on all or any of the articles exported from Pakistan at a rate not exceeding hundred per cent. Of the value of such articles as determined under section 25 or as the case may be fixed under section 25B and may by a like notification levy a regulatory duty on all or any of the articles exported from Pakistan at a rate not exceeding hundred per cent. Of the amount which represents the value of such articles as determined or fixed as aforesaid.
(3) The regulatory duty levied under subsection (2) shall:-- (a)be in addition to any duty imposed under subsection (1) or under any other law for the time being in force; (b)
(4) Any notification issued under subsection (2) shall, if not earlier rescinded, stand rescinded on the expiry of the financial year in which it was issued.
19.--(1) The Federal Government, subject to such conditions, limitations or restrictions, if any as it thinks fit to impose, may, by notification in the official Gazette, exempt any goods imported into, or from any specified port or station or area therein, from the whole or any part of the customs-duties chargeable thereon:'
9. In our considered opinion, controversy boils down to the question -- (a)as to whether regulatory duty leviable under section 18(2) of the Customs Act, 1969 falls within the expression "Customs duty"; (b)if so, (i) whether section 19(1) of the Customs Act, 1969, is applicable to subsection (2) of section 18 as well; and (ii)irrespective of the answer to (i) above, whether regulatory duty is covered by the expression "whole of the Customs duty" as used in the notification.
10. It will be pertinent to note that the customs duty is not defined in the Customs Act, 1969 but there is no denial of the fact that the term custom is usually applied to those taxes which are payable upon the articles or commodities imported into and exported from a country. Black's Law Dictionary defines the duty-- "in its most usual signification as a synonym of imposts or customs, but it is some time used in the broader sense, as including all manner of charges or governmental imposition."
Halsbury's Laws of England, Fourth Edition, Volume 12 at page 65 defined it as:-- "Duties of Customs, or customs duties, in the strict sense, are pecuniary charges or tolls payable upon goods exported from or imported into the country, as contrasted with excise duties which are payable upon goods produced and consumed within the country."
In a case of American Jurisdiction, United States v. Sischo reported as D.C.W. 262, 1001 customs duties means:-- "taxes on importation of commodities, the tariff or tax assessed upon merchandise imported from, or exported to, a foreign country."
According to Corpus Juris Seeundum, Volume 25, page 192:-- "customs duties are tariff or tax assessed upon merchandise imported from or exported to a foreign country."
11. In short what needs to be ascertained, by taking into consideration all the- attending circumstances, is not simply its nomenclature but nature of the charge. For, as is held in the case of Governor-General-in-Council v. Province of Madras reported in AIR 1954 Privy Council 98: - "It is not the .Name of the tax, but its real nature, its pith and substance as it has some time been said, which must determine into what category it falls."
12. Viewed in the perspective of foregoing, a close reading of section 18 would show that no doubt subsection (1) provides the rates of duty on various items, subject .To the charge of customs duty as prescribed in the First and Second Schedules subsection - (2) provided the levy of what is termed as regulatory duty, if Federal Government considers its imposition necessary. This in its nature, it is nothing but additional customs duty. In fact subsection (3) of section 18 reproduced above lends support to this proposition.
13. Such being the case, we have no hesitation in holding, qua part (a) of the question' posed in para. 9 supra, that regulatory duty falls within the expression "duty of the custom" which in its ,pith and substance is not different at all from what is commonly called Customs duty and that section 19(1) of the Customs Act, 1969 shall accordingly apply equally to subsection (2) of section 18 (ibid) as well.
14. Before proceeding further the arguments of the learned Standing Counsel for the respondents with reference to the imposition of Surcharge and Iqra Surcharge vide Finance Ordinance of 1982 and Finance Act of 1985 respectively needs to be addressed to. His contention has been that both these Surcharges, despite being in the nature of additional customs duty did not ipso facto stand exempted under section 19(1) of the Customs Act and as such necessity for separate notification was felt to achieve this end. On the parity of reasoning, he maintained that the same can be said about the regulatory duty and unless a separate notification of its exemption is issued, the notification in the instant case would not cover the regulatory duty so, imposed.
15. The arguments appear quite fascinating in its ingenuity but a close examination of the matter would reveal that whereas regulatory duty is levied under a provision of the Customs Act itself and, in the Scheme of things, form part of duty in the nature of additional customs duty; both these surcharges were the creation of independent legislation in the matter of annual budgetary provision and were not incorporated in the Customs Act. It was for this reason that specific provisions for the purpose of their exemption in the very statutes was legislatively felt imperative as is evident from section 2(2) of the Finance Ordinance, 1982 and section 5(2) of the Finance, Act, 1985; for, it is an established principle of law that where a specific provision is made to deal with a particular situation it supersedes the general provisions to the same effect. We are, therefore, of the firm view that the argument of the learned counsel for the respondent in this regard is misconceived and has no force.
16. In this context of the matter, it would no more confront us with any difficulty in giving true meaning to the expression "whole of the customs duty" as used in the Notification.
17. Henry Cambell Black in his Law Dictionary, with reference to the case of Clark v. Commercial Casualty Ins. Co. Reported in 107 W.Vs. 380 and 128 S.E. 319, 320; defines the word "whole" as "entire", "complete". The ordinary dictionary meaning as per Chamber's 20th Century, describes it as "containing the total amount, number etc.", "the entire things". ,
18. A bare reading of notification on the other hand gives rise to a legitimate assumption that expression "whole of the Customs duties", referred to, brings in its folds not only the customs duties as mentioned in the First and Second Schedules but also the regulatory duty as far as petitioners are concerned.
19. In the light of the foregoing, we cannot help arriving at an inescapable conclusion that, for the purpose of exemption, the expression "whole of the customs duty", as used in the notification, cannot but in its essence encompasses such additional customs duty as the regulatory duty levied under section 18(2) of the Customs Act, 1969 and we hold accordingly.
20. Otherwise too when we look at the entire exercise of setting up industries in the newly-created Gadoon Amazai Industrial Estate with its well-known background of relieving this area from growth of poppy and affording ample opportunities of employment to the people of the area for which there was felt a dire need to provide insentive to the investors, we feel that insentive given in the form of Notification No.SRO No:517(I)/89 dated 3rd June, 1989 cannot be read in isolation for the purpose of exemption from the duty leviable under section 18(1) of the Customs Act, 1969 alone and not inclusive of the regulatory duty under section 18(2) ibid: For, giving it a meaning other than this would lead to a situation paradoxical in return and contrary to the spirit of the Notification in that it would tantamount to giving something by one hand and taking it back by the other. We hardly feel . Ourselves prone to subscribe to such a proposition.
21. The learned counsel for the respondents have brought to our notice a judgment of the Lahore High Court in W.P.309/90 decided on 8-10-1991 wherein a notification of a similar nature came for consideration and it was found that notwithstanding exemption of customs duties, the Government cannot be estopped to levy regulatory duty. We have gone through the judgment wherein the notification exempting the customs duty, has been reproduced. When compared with the notification issued in the instant case, we find that the latter is materially different. In this view of the matter, the judgment referred to is hardly of any avail to the respondents.
22. Before parting with the case it may be mentioned that the Notification No.517 has since been rescinded. The learned counsel for the petitioner therefore, frankly and fairly conceded that the relief prayed for shall be confined to the period between the issuance and rescinding of the Notification No.STO-517(1)/89.
23. Resultantly while we declare the impugned order/action of respondent No.l as without lawful authority and of no legal effect qua the petitioner in that the petitioner is not liable to pay the regulatory duty between the period of issuance and rescission of notification, we hereby direct that the p payment made in this behalf by the petitioner pertaining to the aforesaid period shall be refunded to it and bank guarantee(s), if any, shall stand released qua the goods duly consumed.
24. This writ petition, therefore, is allowed in the terms indicated above with no order as to costs.