1. ' WAJIHUDDIN AHMED, J.--The above Constitution Petitions involved, more or less, similar question of fact and law, and accordingly, were disposed of through a short common order, reasons where for are recorded herein below: ' The goods covered by these petitions are lawn-mowers. The petitioners have urged that such goods, falling under PCT heading 84.33, were exempted from regulatory duty under SRO 702(1)/90 dated 1-6-1990 and that the exemption continued in the year 1991 through SRO 605(1)/91 dated 1-7- 1991. To be precise, the contention has been that lawn mowers fall within the category of rotary cutters at Item No,4 of the exempted items mentioned in the referred Notifications. For facility of reference the applicable entry in SRO 702(1)/90, materially common to the two Notifications, is reproduced below:-- {{TABLE}} Heading/Sub-headingDescription ofRate of. Regulatory Nos. in the FirstGoodsduty Schedule to the Customs Act (IV of 1969)
2. 84.33All items other than80% ad vat. - the following:---
(1) Cutter binder
(2) Potato/onion digger
(3) Potato harvester
(4) Rotary cutter {{TABLE}} ' There seems to have been an on-going but a somewhat muted controversy, as reflected in these petitions, whether or not within the category of Rotary cutters stood included the concept of lawn- mowers which, if that was not the case, regulatory duty of 80% imposed through the quoted Notifications, would be applicable to Lawn-mowers. Still not much prior to the disputes covered by the petitions, it is a position admitted at all ends that, upon the interpretation then prevailing with the Customs, even pursuant to the latest Notification dated 1-7-1991 Lawn-mowers were being routinely imported and correspondingly cleared, as falling in the excepted concept of "Rotary cutters".
3. ' However, this did not come to transpire without some very pertinent objection being appropriately raised. Thus during the intervening period, as hinted above, on 11-2-1991 the Collector of Customs under the subject title of, "Regulatory Duty on Lawn-mowers" addressed a communication by name to Muhammad Mobeen Ahsan, Member (Customs), Central Board of Revenue, wherein, referring to the then applicable Notification, on the subject dated 1-7-1990 (actually 1-6-1990) it was recounted that, until recently, consignments of Lawn-mowers, classifiable under PCT heading 84.33, had been cleared by the Custom House without charging any regulatory duty, the reason being that Lawn-mowers incorporate in-built rotary cutting devices and the importers employed the simple stratagem of terming them "Rotary-cutters". It was observed that the Custom House, having examined the position, was of the opinion that a Lawn-mower was an independent article and that mere use of in-built rotary discs or devices did not change its status. Besides, in such view, Rotary cutters fall in the category of agricultural implements while lawn-mowers could not be construed to be agricultural implements. The interpretation thus far adopted being erroneous, it was proposed to raise demands on the consignments already inadvertently cleared without recovery of regulatory duty. As regards' the possibility of the importers seeking refuge under "Past practice", it was stated that such position as well was examined and the concision was that, while regulatory duty was chargeable, the Collectorate had simply failed to recover it, there having been no formal decision to treat Lawn-mowers as exempt or Rotary-cutters and Lawn-mowers being one and the same thing. Confirmation of such views was, therefore, sought through the referred letter dated 11-2-1991. In response, Muhammad Ibrahim Vighio, Second Secretary, Central Board of Revenue, wrote on 11-3-1991 to the Collector of Customs (Appraisement) Custom House, Karachi, saying that the matter of charge of regulatory duty on Lawn-mowers had "been examined in the Board. The catalogue provided by the importers states that a rotary-mower slices through the grass blades with a horizontally revolving blade securely mounted behind a steel safety shield. The dictionary meaning of rotary cutter is that it is a device used to cut tough or fibrous materials by the shear action between two sets of blades, one set on a rotating holder, the other stationary on the surrounding cases. The explanatory notes to H.S. Heading 84.33 also state that Lawn-mowers may have a cutter bar, like an agricultural mower with rotary blades, which cut the grass against a fixed horizontal blade, or a roating disc with knives on the outer edge. Thus Lawn-mowers having rotary cutting mechanism fall within the description of the term rotary cutter. "It was concluded that Lawn-mowers were, accordingly, "excluded from the levy of regulatory duty". As a result, Lawn- mowers continued to be treated as exempt from regulatory duty, having in such manner been found to be classifiable under the category of Rotary-cutters.
4. ' It has been the case of the petitioners in these petitions that this state of affairs continued for sometime when the Custom House, in spite of the reproduced ruling of the CBR, started demanding regulatory duty also on Lawn-mowers. Representations were made by some of the petitioners individually as well as collectively through the Pakistan Hardware Merchants'
5. Association to the CBR. In response, the same Muhammad Ibrahim Vighio, Second Secretary in the Board, on 29-3-1992 informed the Pakistan Hardware Merchants' Association that the matter of duty free import of Lawn-mowers was "under consideration and decision in the matter is expected soon". Shortly thereafter, pursuant to individual representations and in particular the letter dated 16-2-1992 of M/s. Nizamuddin Faridul Haq, petitioners in four of the above petitions, a copy of telex dated 15-4-1992 was forwarded on 19-4-1992. Such was a telex addressed to the Collector of Customs (Appraisement) Custom House, Karachi, and proceeded on These terms: "Subject: REGULATORY DUTY ON LAWN-MOWERS.
6. ' I AM DIRECTED TO REFER TO YOUR LETTER NO.SI/MISC/02/92-SHED-13 DATED 13-1-1992. ON THE SUBJECT (.) MATTER REGARDING LEVY OF REGULATORY DUTY ON LAWN-MOWERS HAS BEEN RE- EXAMINED (.) IN VIEW . OF THE . LITERATURE PROVIDED BY THE APPARISEMENT COLLECTORATE IT HAS BEEN DECIDED THAT LAWN-MOWERS ARE. CHARGEABLE TO REGULATORY DUTY AT 80% UNDER SRO 605(1)/90 DATED 01-7-1991 (.)
2. IT HAS FURTHER BEEN DECIDED THAT LAWN-MOWERS IN RESPECT OF WHICH BILLS OF ENTRY FOR HOME CONSUMPTION OR FOR EX-BOND WERE FILED ON OR AFTER11-3-1991 TILL 14-4-1992 SHALL NOT BE CHARGEABLE TO REGULATORY DUTY (.)"
7. ' Now, the petitioners, on the one hand, have said that the interpretation accorded by the board is incorrect and contrary to law and on the other contend that the same is in derogation of "past practice" and even mala fide, involving inequitable and discriminatory treatment to the petitioners alone. It has also been suggested, albeit somewhat faintly, that the doctrine of Promissory Estoppel may be in vocable in the situation.
8. ' As to the alleged discrimination and mala fides, facts with regard to which are central to these disputes, it has been pointed out that whereas the petitioners, who bonded their goods in anticipation of a just and termination at the level of the Board and have, correspondingly, in terms of telex dated 15-4-1992 been made to suffer the obligation to pay up the regulatory duty, those who had already got their goods cleared for home consumption or had lodged ex-bond entries between 11-3-1992 and 14-4-1992 stand benefited retro-actively by the ruling because "the sudden and discriminatory decision also facilitates those . Importers who had personal contacts with the respondent" (see para. 13 or its equivalent in the memos. Of petitions). While the respondents filed a separate counter-affidavit in leading Petition No,D-3035/1992 on 8-7-1993 (and none in connected Petition No,D-3036/1992) the quoted allegation did not occasion any denial therein (see para. 15 of the counter-affidavit). However, another version of the respondents, through a counter- affidavit submitted on 14-9-1993 in Constitutional Petition No,D-252 of 1993 directly in Court, as reflected in the following excerpt therefrom, postulates this:-- "It is vehemently denied that benefit has been given to some importers who had personal contacts.
9. All the bills of entry filed between 12-3-1991 and 14-4-1992 were assessed without levying Regulatory duty in view of clarification from the Central Board of Revenue. After that date all such consignments have been subjected to R.D. The petitioners could have filed ex-bond bill of entry during the aforesaid period but they preferred to file the same on 9-5-1992, hence were not entitled to the relief granted by CBR."
10. ' The above is not all. On 16-9-1993 a statement was filed by Mr. Naim-ur-Rehman, the learned Standing Counsel, urging that during the period 11-3-1991 to 14-4-1992, "benefit of the CBR previous ruling of 11-3-1991" being allowed. Lawn-mowers were cleared without charging any regulatory duty. Thus the improved defence of the respondents in the first place is that there were no mala fides and next, but more crucially, that the petitioners, in effect, had no cause of action whatever because till the advent of the latest Board decision, made effective on 15-4-1992, no regulatory duty on Lawn-mowers was being assessed or charged. In support of the above statement dated 16-9-1993 but without making any pointed reference thereto, was attached a table showing some such consignments, which were claimed to have been so cleared. In the short order disposing of these petitions we have already made the under-noted observation on the subject:-- "Today the learned Standing Counsel for the Federal Government has submitted a statement in writing to further argument the case of the respondents and contention based on such statement is that consistently with the ruling of CBR, which became effective on 15-4-1992, regulatory duty on Lawn-mowers was not earlier being charged in view of the then prevailing interpretation of the applicable Notification dated 1-7-1991. With such statement, he has annexed a photo stat copy incorporating the details and numbers of entries with reference to which learned counsel for the petitioners have pointed out that the last 5 are covered by 5 of the Constitutional petitions we are examining here (cleared upon Court orders on furnishing bank guarantees). As to the third and fourth Sr. Numbers in this document Mr. Raja Haq Nawaz has stated that many other consignments of Lawn-mowers were likewise cleared by the Customs and due mention of that fact has already been made in the relevant petitions."
11. ' We would, therefore, at once like to repel the stance that consignments of Lawn-mowers were being, all along and unexceptionally, cleared by the respondents, without charging regulatory duty between the aforesaid dates of the two CBR decisions namely, 11-3-1991 and 15-4-1992. The various documents filed by the petitioners as well as the respondents own earlier version negate the assertion. Thus in C.P. No,D-3035 of 1992 this is what the petitioner said:- "That the consignment arrived by S.S. Kota Alam under IGM No,371/92 dated 24-2-1992 and the petitioner faced with conduct of customs releasing cash Bills of Entry but harassing other importers, reluctantly submitted a Bill of Entry for Bond of 500 cartons. The Customs authorities thereupon imposed 80% Customs duty instead of allowing its release as duty-free; although one consignment of two cases imported against IGM No,37-92 dated 9-1-1992 per S.S. Nord Sun have been released duty free against cash Bills of Entry and copies whereof are submitted hereto marked B&C. In spite of the fact that Bills of Entry for Bond was filed on 11-2-1992 relating to 500 cartons under compulsion, the petitioner filed on 13-5-1992 two Bills of Entry for Ex-Bond for release of 500 cartons of Lawn-mowers but the Customs authorities arbitrarily, maliciously and without lawful authority noted therein: "I.T.P. Of the imported goods is U.S. Dollers 30 with Box. Imported Lawn-mowers are without Box. D.V.
12. U.S. Dollars 17 may be accepted and B/E may be allowed to be processed with charging 80% R.D as per board's telex dated 15-4-1992.
13. (Sd.) 17/5 B/E completed accordingly.
14. (Sd.) 19/5"
15. ' Copies of Bills of Entry for Bond and Ex-Bond are submitted hereto marked of D-1 and D-2."
16. ' Respondents in the counter-affidavit sworn on 8-7-1993 made reply as under:-- "That with regard to para. 9 of the petition, it is submitted that Ex-Bond B/E has been filed by the petitioner under section 30 of Customs Act, 1969 after the receipt of aforementioned clarification of CBR regarding imposition of Regulatory duty on Lawn-mowers and the B/E was assessed accordingly after imposition of R.D. On the said item."
17. ' Besides, substantially, it is on record that representations were being made during the latter part of this period (when apparently the brakes were lastly applied by the Collectorate at Karachi) individually and collectively, which if nothing was a miss such representations would not have arisen. What is more, the petitioners could have no reason to in-bond their goods unless and until they had met resistance in the way of a claimed charge of regulatory duty, which manifestly motivated them to in-bond the goods, in anticipation of a favourable verdict at the level of the Board in line with what the same Board had opined earlier on. In context, it is on record that as late as on 29-3-1992 in response to the representation of the Pakistan Hardware Merchants' Association the aforesaid Muhammad Ibrahim Vighio, Second Secretary to the Board, wrote that the matter of Lawn-mowers was "under consideration and decision in the matter is expected soon". We have already indicated in passing that the consignments, subject-matter of these petitions, have only been conditionally cleared under Court orders though for some inexplicable reason all such five consignments have been detailed in the table appended to the statement dated 16-9-1993, suggesting that the clearance without charge of regulatory duty took place as a matter of course.
18. It is the result of a regular contest, therefore, that we have been called upon to dispose of these matters on merits. However, on the basis of the respondents' current stand that Lawnmowers were being freely cleared between 12-3-1991 and 14-4-1993, the petitions warrant to be allowed on that single premise alone. The rest of the matters are being dealt with largely on account of the importance which has come to be attached to them.
19. ' As-to the other contentions from the side of the petitioners, on facts, it has been urged that goods falling under description of Lawn-mowers are covered under the category of Rotary-cutters and are thus exempt from regulatory duty aforesaid. In support, reliance has been placed on Brussels Explanatory Notes and in particular the under-quoted extract therefrom:- "(A) HARVESTING OR THRESHING MACHINERY, INCLUDING STRAW OR FODDER BALERS; GRASS OR HAY MOWERS. These include:
(a) Lawn-mowers, whether worked by hand or motor driven. They may have a cutter bar like an agricultural mower, rotary blades which cut the grass against a fixed horizontal blade, or a rotating disc with knives on the outer edge."
20. ' The extract occurs as sub-heading (A) of PCT Heading 84.33 comprising, "Harvesting or threshing machinery, including straw or fodder balers, grass or hay movers; Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce, other than machinery of Heading No, 8437." It appears to us that the argument advanced on the point, the same as found favour with the Board in its enunciation of 11-3-1991, is a self-defeating one. The reproduced excerpt occurs under Heading 84.33 and, as a rule, regulatory duty would be chargeable to items covered in such Heading. Thus "Harvesting or Threshing Machinery, including Straw or Fodder Balers: GRASS or Hay- Mowers", with minor exceptions, not being exempt, would be subject to Ad Val. Regulatory duty at 80%. Indeed, we are of the view that the construction, which led to free release of Lawn-mowers, in spite of the levy, was totally wrong. In truth, the time for rectification had come, if not earlier, at least in response to the letter of the Collector of Customs (Appraisement), Karachi, to the Board of Revenue dated 11-2-1991, when such question was pointedly taken up. It is unfortunate that in spite of this pointation the Board, through its reply dated 11-3-1991 and also otherwise, treated Lawn- mowers to be exempt from regulatory duty. Is it not, in context, intriguing to note that in rejecting the interpretation of the Collectorate per its letter of 11-2-1991, the Board in its ruling of rejection dated 11-3-1991 expressly relied on the catalogue somehow provided to it by the importers of Lawn- mowers? We are, therefore, disclined to remain content by labeling the circumstance to be merely unfortunate and are of the view that an inquiry should be made, whether the same was based on an honest approach or there were other motivating factors. This, obviously, can be done at the administrative level alone, more so as such is of significance in view of our residuary findings recorded below.
21. ' The next argument of the learned counsel for the petitioners, was that regulatory duty could not be enforced retrospectively and that the case of Al Samrez Enterprises 1986 SCMR 1917, operated to protect all licences and letters of credit issued and opened prior to the date of implementation of the CBR Ruling dated 15-4-1992. The argument is erroneous because the case of Al-Samrez Enterprises dealt with the operation and effect of withdrawal of exemption under section 19 of the Customs Act, 1969, which was a subject quite apart from imposition of regulatory duty. Even such ratio of the case has been overtaken by an amendment introduced in the way of insertion of section 31-A of the Customs Act, effective from 1-7-1988, though the rule in Al-Samrez Enterprises was subsequently extended, albeit partly, and such insertion was found not to effect past and closed transactions represented by bills of entry, which came to be submitted prior to the date of insertion of the newly-added section: Molasses Trading Import Company Limited v. Federation of Pakistan and others, Civil Appeal No,915-K of 1990. As regards applicability of the principle to regulatory duty, an authority, directly in point, is reported as Government of Pakistan v. Muhammad Ashraf PLD 1993 SC 176, where it has been laid down as under:-- "Therefore, on no principle or rule of law, it can be urged that merely because at one time no regulatory duty was imposed and was in force, when the contract was entered into, any embargo is thereby created upon the delegatee of the legislature to impose the tax at any time irrespective of any transaction entered into on the basis when no such tax was in force. We have not been shown any authority for the proposition that abstention of the Government or non-exercise of delegated authority to impose the tax at a given time under delegated authority, gives a vested right to any one to be exempted from the payment of such tax ipso facto subsequently when such tax is imposed."
22. ' As to the invocation of the doctrine Promissory Estoppel reliance has been placed on Pakistan V.
23. Salahuddin, PLD 1991 SC 546. In context, we can do no better than to recount what the Supreme Court has itself to say on the subject in relation to the subject of imposition of regulatory duty in the case of Government of Pakistan V. Muhammad Ashraf, ibid:-- "In a recent case reported as Pakistan v. Salahuddin PLD 1991 SC 546 the operation of the decline of promissory estoppel is stated to be subject to several limitations, including the one that it cannot be invoked against the legislature or the laws framed by it because the legislature cannot make a representation. If there was any representation extended by the law, it was that under subsection
(2) of section 18 of the Act the Government could impose a duty at any time. Another limitation spelt out by the aforesaid decision was that no agency or authority can be held bound by a promise or representation not lawfully extended or given. It goes without saying that it is difficult to hold that the mere fact that no duty was imposed when the initial Notification was issued imposing duty on other items, it amounted to a valid promise or representation on the part of the Government not to invoke its powers of imposition of the duty, if upon consideration of the relevant and pertinent factors, it became necessary to impose the duty subsequently during the same year.
24. Therefore, reliance on the doctrine of promissory estoppel and on Pakistan v. Salahuddin (supra) is inept besides the facts in that case being distinguished."
25. ' Having disposed of the above objections to the demand, we may now turn to the questions of "past practice" and mala fides, the last already partly treated in passing.
26. It is not unreasonable to assume that "past practice", unless having the sanction of letter of law, is no substitute for law. Still, when practice is based on conscious implementations, enunciations, precedents or rulings of an administrative or quasi-judicial authority, such as the Collectorate of Customs or the Board of Revenue, fixed with duties to administer and implement the law covering a specialised field and at that a taxing statute, a deviation from such practice should not be arbitrary, capricious or fanciful. Above all, if there be change in practice that has always to be consistent with law. Even so, it can never be retroactive. Touching the point, Mr. Raja Haq Nawaz relies upon Nazir Ahmad Taj Din v. Deputy Collector of Customs, PLD 1977 Lahore 1392, from which the under-noted observations may be quoted with advantage:-- "17. It has been admitted by both the parties that previously four consignments of Hacksaw blades were released by the Customs authorities as they were classified under I.T.C. No,82, 02-III, but, for the first time, the Customs authorities most probably on the advisory opinion of the Chief Controller of Imports and Exports, changed the interpretation at the time when the consignment was received at the General Post Office, Lahore. The Customs authorities are supposed to adhere to their own precedents in administering taxing statute involving the very basis of taxation in respect of particular articles. They should not have modified their own previous decision without any lawful justification whether the doctrine of precedent applies in its full vigour to administrative agencies and officers or whether a reasonable latitude should be given to these administrative Tribunals to correct or modify their previous decision is somewhat doubtful but it is desirable that the principal appraiser or the Collector of Customs should not change their minds from time to time in respect of the same article by classifying it in one sub-heading and subsequently giving a radically different opinion. If the Customs authorities are allowed to change their decision frequently it would lead to utter confusion in the very basis and principles of classification and assessment to Customs duty. I, therefore, hold that the Customs authoities are bound by their own precedents in the classification and administering taxing statute involving the very basis of taxation in respect of Hacksaw blades and particularly this change could not be made after the consignment was imported into Pakistan."
27. ' However, as we have reached the conclusion that the current opinion, based on the latest ruling of the CBR is correct the only point, which deserves to be noted here is that such, as said above, had to be given effect prospectively, that is to say, goods already landed in the country could not be hit by the new construction put on the classification. Indeed, the Board seems to have been mindful of such a requirement and ex facie it could be for this reason that an exception from the charge of regulatory duty was made with reference to the bills of entry for home consumption and similar ex- bond entries covered by the period 12-3-1991 to 14-4-1992, when the earlier opinion of the Board had held swa y. It is another matter though that in so doing past and closed transactions, irrespective of any reservations on the part of the relevant importers were revived, opening up an altogether new chapter and consequent loss of revenue to those, who may not have even objected to the recovery of regulatory duty and paid it without demur or reservation.
28. ' Hence the petitioners' contention has been that while the petitioners, who were awaiting a consistent approach from the Board in response to representations made to such Board and in anticipation in-bonded their goods, the benefit was, retrospectively, accorded to those who had already got their goods either cleared for home consumption or presented ex-bond entries between the dates aforequoted. Indeed, as already stated, the petitioners have alleged mala fides, maintaining that this was done to benefit such as had the advantage of personal contacts with those that mattered. While these allegations have been denied very belatedly in the respondents' latest counter-affidavit and the denial, for technical reasons, can be brushed aside, we would still weigh the respective positions. It is obvious that, on the basis of the sweeping indulgence extended by the Board on 15-4-1992, those who had already got their goods cleared either for home consumption or on ex-bond basis were benefited and, in fact, could and may have claimed refunds. In this situation, would it not have been enough for the Board to render its ruling and leave the implications to be taken care of by law? If that was done, those who had cleared their goods upon payment of regulatory duty, without objection, may have had obvious difficulties in retracing their steps by claiming refunds. The current state of the CBR opinion accords benefits to all such interests and, manifestly, the petitioners, who were agitating their rights and in ostensible anticipation had in-bonded the disputed goods have suffered. This clearly is a case of discrimination and inequities treatment attracting the Constitutional guarantees, inter alia, enshrined in Articles 4 and 25 of the Constitution of Pakistan, enjoining protection of law, treatment in accordance with law and equality before law. On this ground alone the petitioners are entitled to relief.
29. ' As to mala fides it is not possible for us to enter inquiry though the allegations ex facie cannot be termed without substance. This may again require examination at the administrative level. There, it must be seen as to how much revenue has thus been lost to the State of Pakistan and who at the relevant level can be pinned with the responsibility. This should be with specific reference to avoidable refunds, if any, which may have been claimed and made.
30. ' Here we may dispose of an objection from the side of the respondents that the petitioners were not entitled to the benefit of the CBR ruling because in terms of section 30 read with section 104 of the Customs Act regulatory duty was chargeable at the rate applicable when the bills of entry for clearance of such goods, warehoused earlier, were presented under section 104. The provision is inapplicable because the same regulatory duty, all said, was, in law, chargeable both at the time of in-bonding and ex-bonding but such, at the time of in-bonding, was not leviable (and yet demanded) in respect of the goods in question because of an erroneous ruling of the CBR which, till 14-4-1992, held the field. Suddenly, however, the past practice was, without any authoritative change of construction, deviated from, leading the petitioners to in-bond their goods. The petitioners had a right in observance of the practice till lawfully changed. They protested and ware-housed their goods. If their point of view was upheld by the Board, they should have been allowed the benefit of the rule applicable when in-bonding at their end, per force of circumstances, took place. This the Board ought to have assured. It did not. The petitioners have, therefore, a vested right for enforcement and sections 30 and 104 ibid do not apply. Upon these findings, if the goods in question have not been released such would be released without any charge of regulatory duty and if already released against bank guarantee(s), the bank guarantee(s) would stand discharged. The relief, however, is confined to in-bonding before 15-4-1992.
31. ' The foregoing were the reasons for the short order dated 16-9-1993 through which we had allowed these petitions. Reasons have been recorded now.