1. SYED HAIDER ALI PIRZADA, J.--The petitioner has through this petition claimed the following reliefs:- "(a) Declaration that the demand of the petitioner in respect of goods cleared prior to the budget speech of the Finance Minister on 3-6-1989 does not attract any imposition of sales tax as sought to be recovered by the respondents. That such recovery would be destitute of jurisdiction, absence of lawful authority and to no legal effect.
(b) A prohibitory injunction do issue to the respondents restraining them from effecting recovery of the impugned levy, alternatively, in case recovery as transpired, the respondents by a mandatory injunction be directed to effect full refund to the petitioner in respect of the subject amont.
(c) Any other order deemed fit and proper alongwith cost of the petitioner.
2. ' The facts leading to the filing of the petition are that the petitioner is a public limited company and in the course of business process cotton fabrics in their mills. The said product prior to June 1989 was not subject to any sale tax. It was, however, brought to such charge by corresponding provisions contained in the respondent's budget for 1989. The imposition was covered by SRO 566 (1)/89 dated 3-6-1989.
3. ' The case of the petitioner, as set out in the petition, is that it received from the subordinate functionary of respondent No,3 letter dated 30-7-1989 requiring the petitioner to effect sale tax of processed fabrics. The petitioner replied thereto vide its letter dated 1-8-1989. This was followed by a second letter dated 16-8-1989 addressed to the petitioner requiring payment of the demanded tax. The petitioner in turn replied thereto vide their letter dated 22-8-1989 disclaiming the liability.
4. The respondent, however, persisted in making their demand which is further evident by their letter dated 28-10-1989. The petitioner responded thereto by their letter dated 26-11-1989 denying the liability. The of was further served with a show-cause notice by the subordinate of respondent No,3 dated 6-3-1990. The petitioner replied to the said show-cause notice by letter dated 19-3-1990. The petitioner received from the said functionary sale tax order in Original No, 04/90 requiring the petitioner to pay the sum of Rs, 5,08,070 within 15 days. The petitioner being aggrieved filed an appeal before the respondent No,3 assailing the demand. The petitioner in the meanwhile petitioned the respondent No,2 for exempting the petitioner from the payment of the demanded tax vide representation dated 3-6-1990. The respondent No,2 vide order dated 22-7-1990 ruled that the petitioner was required to effect payment as demanded. It is the case of the petitioner that in view of the apex decision, the pending appeal became infructuous and the revisional remedy also inconsequential. The petitioner has been making representations thereafter to the then Minister of Finance but to no avail. Hence the present petition.
5. ' The Superintendent, Central Excise, Central Factory Circle, Hyderabad, filed counter-affidavit on behalf of the respondents. He has stated that prior to 3rd June 1989, processed fabrics were exempt from the whole of sale tax vide Notification No,SRO 666 (1)/81 dated 25-6-1981. However, the said Notification No,SRO. 666 (1)/81 was superseded vide notification No, SRO 566 (1)/89 dated 3-6- 1989. No exemption on processed fabrics was notified under SRO 566 (1)/89 dated 3-6-1989 and then processed fabrics were to pay sales tax from 3-6-1989. The respondents contended that if the said appeal has not yet been decided and/or if revision application has not been filed in terms of Sections 35 and 36 of the Central Excises and Salt Act, 1944, this petition is premature and not maintainable under Article 199 of the Constitution as legal remedies are yet to be exhausted.
6. ' Mr. Nasim A. Faruqi, learned counsel appearing for the petitioner raised the following contentions:-
(1) Demand of sales tax is illegal and in excess of jurisdiction because the goods had not been paid but the goods had already been removed from the factory.
(2) Excise duty had already been paid.
7. ' On the other hand Mr. Muhammad Naimur Rehman, learned Standing Counsel submitted that demand of sales tax is not illegal and is not in excess of jurisdiction. It is in accordance with the provisions of notification. We have considered the contentions of the learned counsel carefully. In order to appreciate the contentions of the learned counsel, it is advantageous to reproduce Section 5 of the General Clauses Act, 1897 which reads as follows:-
5. Coming into operation of enactments.--(1) Where any Central Act is not expressed to come into operation on any particular day, then it shall come into operation on the day on which it receives the assent--
(a) in the case of a Central Act made before the twenty-third day of March, 1956, of the Governor- General; and
(b) In the case of a Central Act made after that date, of the President. Xxxxxxxxxxxxxxxxxxxxxxxxxxx
(3) Unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement."
8. ' Subsection (1) of Section 5 of this Act provides that where any Central Act is not expressed to come on any particular day, then it shall come into operation on the day on which it receives the assent. According to clause (b) of subsection (1) of Section 5 of the Act, where any Central Act is not expressed to come into force on a particular day, then in the case of Central Mt made after the commencement of the Act X of 1897, it shall come into opera' ion on the day on which the assent thereto of the President. Subsection (3) provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement.
9. ' A Bill does not become law unless, it goes through the legislative process as in Chapter 2 of the Constitution. Article 70 of the Constitution provides for introduction and passing of Bills by the .Houses of Parliament, subject to the special provisions in respect of Money Bills. Clause (1) of Article 73 provides:- "73.--(1) Notwithstanding anything contained in Article 70 a Money Bill shall originate in the National Assembly and after it has been passed by the Assembly it shall, without being transmitted to the Senate, be presented to the President for assent.
10. ' Articles 74 of the Constitution provides: "74. A Money Bill or a Bill or amendment which if enacted and brought into operation would involve expenditure from the Federal Consolidated Fund or withdrawal from the Public Account of the Federation or affect the coinage or currency of Pakistan or the constitution or functions of the State Bank of Pakistan shall not be introduced or moved in Majlis-e-Shoora (Parliament) except by or with the consent of the Federal Government."
11. ' Article 75 provides for assent to Bill by the President.
12. ' The Finance Bill of 1989 was a Money Bill and required to be passed under the prescribed procedure, before it was to become the Law of the Land. The Bill was duly perused by the National Assembly, received the assent of the President on April 29, 1989 and was published for general information in the Gazette of Pakistan, Extraordinary on July 1, 1989. The Act contained the profound amendment in the Sales Tax Act in the identical form as in the Bill.
13. ' Although the Bill did not become an Act until June 29, 1989, the Federal Government was entitled to make provisions operative with immediate effect, except subsections (3), (4), (5), (6) and (7) of Section 3 and subsections (1), (2), (6) and (10) of Section 5 under powers conferred upon it by the Provisional Collection of Taxes Act,,1931. The aforementioned Act was passed, as its preamble shows "to amend the law providing for the immediate effect for a limited period of the provisions in Bills, relating to the imposition or increase of duties of customs or excise or sales tax". Sections 3, 4 and 5 of the Act provide as follows:- "3. Where a Bill to be introduced in the Central Legislature on behalf of Government provides for the imposition or increase of a duty of customer or excise, or sales tax, the Central Government may cause to ' be inserted in the Bill a declaration that it is expedient in the public interest that any provision of the Bill relating to such imposition or increase shall have immediate effect under this Act.
14. 4.-- (1) Subject to the provisions of subsection (2), a declared provision shall have the force of law with immediate effect as if enacted on the day on which the Bill is introduced.
(2) A declared provision shall cease to have the force of law under the provisions of this Act--- ' when it comes into operation as an enactment, with or without amendment, or
(b) when the Central Government, in pursuance of a motion passed by the Central Legislature, directs, by notification in the official Gazette, that it shall cease to have the force of law, or
(c) if it has not already ceased to have the force of law under clause (a) or clause (b), then on the expiry of the sixtieth day after the day on which the Bill containing it was introduced.
15. 5.--(1) Where a declared provision comes into operation as an enactment in an amended form before the expiry of the sixtieth day after the day on which the Bill containing it was introduced, refunds shall be made of all duties or tax collected which would not have been collected if the provision adopted in the enactment had been the declared provision: Provided that the rate at which refunds of any .Duty or tax may be made under this subsection shall not exceed the difference between the rate of such duty or tax proposed in the declared provision and the rate of such duty or tax in force when the Bill was introduced.
(2) Where a declared provision ceases to have the force of law under clause (b) or clause (c) of subsection (2) of section 4, refunds shall be made of all duties or tax collected which would not have been collected if the declaration in respect of it had not been made."
16. ' In order to make the provisional collection of sales tax on processed fabrics effective, it is alleged that prior to June 3, 1989 processed fabrics were exempt from the whole of sales tax vide Notification No, SRO 666 (1)/8l. Dated 25-6-1987. However the said Notification No, SRO 666 (1)/81 was superseded vide SRO 566 (1)/89 dated 3-6-1989. No exemption on processed fabrics was notified under SRO 566 (1)/89 dated 3-6-1989. Processed fabrics were subjected to levy of sales tax at the rate of 12-1/2% ad valorem under SRO 566/89 dated 3-6-1989.
17. ' The petitioner admitted that cotton fabric falling under item No, 08.2 of the First Schedule to the Central Excises and Salt Act, 1944 was exempt from the Central Excise Duty vidt Notification No, SRO 555 (1)/79 dated 28-6-1979 prior to the Budget Speech dated 3-6-1989. Item No, 08.2 at serial No, 27 included in the list of 44 items was not announced on 3-6- 1989 at all. It is the further contention of the petitioner that the list of 44 items at para 7 shown in Central Board of Revenue's letter C. No, 2 (121) 37/88-Part dated 3-6-1989 had come to the knowledge of the public in general on 5-6-1984 by virtue on cotton fabric as well apart from other 43 items.
18. ' The liability of the petitioner to pay sales tax on processed fabrics became an enforcible liability under the Provisional Collection of Taxes Act, A 1931 as soon as the Finance Bill, 1989 was introduced in the Parliament. The notification was issued on 3-6-1989.
19. There is much difference in taxability or libility and its payability. The taxability or liability is created by the Legislature while payability follows to be enforced by the executive authority after quantification. The exemption concerns not the liability but only the payability. It means though assessee is liable to pay, he can be excused payment on account of a power conferred on the subordinate legislative authority. This distinction was considered and accepted by the Superior Courts.
20. The power to grant an exemption also implies the power to withdraw the exemption or vary or amend the same. This is specifically provided in Section 21 of the General Clauses Act, 1897.
21. The provisions of the Act only empower collection of taxes even before the Bill is introduced in the Majlis-e-Shoora (Parliament). Hence liability of petitioner to pay sales tax on processed fabrics became enforceable under provisions of Act as soon as Finance Bill, 1989 was introduced in Parliament. The Finance Bill contains the said declaration and the declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced. In other words, the declared provision would be effective from the mid-night following the presentation of the Bill. Section 4 says that a declared provision shall have the force of law with immediate effect as if enacted on the day on which the Bill is introduced. Subsection (3) of Section 5 of the General Clauses Act says that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement. The declared provision, therefore, becomes effective from the mid-night of 2nd and 3rd June 1989 (PLD 1983 Karachi 480).
22. ' The next question for our consideration is whether the petitioner escapes payment of duty having had succeeded in clearing the processed fabrics without payment of sales tax. In our opinion, sub- rule (2) of Rule 22 of the Central Excise Rules contains a complete answer to this sub-rule (2) which is quoted below:- "(2) No goods shall be removed from a factory or a warehouse on the day appointed for the announcement of the annual or any supplementary budget of the Federal Government."
23. It is amply clear from the said sub-rule that no goods shall be removed from a factory or a warehouse on the day appointed for the announcement of the annual or supplementary budget of the Federal Government.
24. ' The learned counsel cited a number of decisions. It is not necessary to discuss the same in the instant case.
25. ' For the aforesaid reasons, we do not find any merit in the petition. Accordingly we dismiss the same with no orders as to costs.