1. AMIR-UL-MULK MENGAL, J.--The petitioners have challenged in the present Constitutional petition the action taken by the respondents particularly respondent No. 2 who is an Octroi Contractor for Municipal Corporation, Quetta, whereby he started recovery of Octroi on the goods purchased by the petitioners in public auction held within Ordnance Depot, Quetta Cantonment Board.
2. 2.Facts briefly stated are that the Chief Ordnance Officer, Ordnance Depot, Cantt. Intended to dispose of non-usable items like transport vehicles, blankets, leather , scrap and many other such- like goods.' For the aforementioned purpose a Government Auctioneer was appointed, who issued a public notice in various daily newspapers.
3. 3.The petitioners participated in the auction and being highest bidders they purchased goods in lots in the following manner.
4. Petitioner No.1 1 lot.
5. Petitioner No.2 2 lots.
6. Petitioner No.3 1 lot.
7. Petitioner No.4 2 lots.
8. Petitioner No.5 2 lots.
9. Petitioner No.6 1 lot.
10. Petitioner No.7 2 lots and Petitioner No.8 1 lot."
11. Petitioner No. 1 purchased the lot sold to him in auction for the sum of Rs.13,30,000 and made payment of the earnest money of Rs.3,50,000. The remaining amount was paid by him on 16-2- 1994. Resultantly the Commandant, Ordnance Depot, Quetta Cantt. Specified the old vehicles which have been sold to petitioner No. 1. Since the petitioner No.1 wanted to dismantle the said vehicles into scrap in order to transport the scrap to Rawalpindi, Punjab or Sindh, therefore, the vehicles were dismantled and scrap was filled in a truck. When the loaded truck moved out of the back gate of the Ordnance Depot and was yet standing before the said gate, a representative of the respondent Contractor appeared and forcibly obliged the driver to take the vehicle to the Octroi Post situate at Samugli By-Pass, Quetta. According to the petitioner No. 1 his attorney Ghulam Nabi protested but the contractor claimed charging octroi as according to him these goods were liable to octroi, therefore, the said truck would not be released unless octroi is paid. To this the attorney of the petitioners submitted a representation to the Chief Officer, Quetta Municipal Corporation requesting for a permit Rahdari for the goods to be taken to Rawalpindi as their octroi would be paid there. The Chief Officer wrote on the application "take action under the Rules of Octroi". It is the case of the petitioner that truck was continued to be held until 3 o'clock when the petitioner was obliged to pay a sum of ks.4,500 as demanded by representative of octroi contractor. The Chief Officer of Municipal Corporation directed the petitioner to pay the octroi as the goods are liable to octroi which have been auctioned at Ordnance Depot under Rule 131 of the West Pakistan Municipal Committees Octroi Rules, 1964 (hereinafter referred to as the "Rules"). It may be added that on 27-3-1994 the petitioners sent a telegraphic request for the release of the truck. Thus the petitioner was compelled to make a payment of Rs.4,500 under protest as according to him the contractor was acting in concert and collaboration with staff of Quetta Municipal Corporation.
12. On 9-3-1994 a representation was made by the petitioners to the Administrator, Quetta Municipal Corporation for not charging octroi duty on the grounds that goods had been sold within the Municipal Corporation limits and that too on enhanced rates. It was contended that neither the goods have been imported within the limits of Quetta Municipal Co-operation nor consumed or sold within such limits. But the Quetta Municipal Corporation through Octroi Officer contended that under Rule 137 of the Rules, the auctioned goods are liable for payment of octroi. It was secondly contended that Ordnance Depot where the goods were sold does not lie within the limits of Quetta Municipal Corporation and that the auctioned goods can only be transported in the original shape and that if those are not transported in original shape as sold, then the goods are liable for payment of octroi.
13. Hence, all the petitioners who had purchased goods in the auction held in Ordnance Depot, Quetta have challenged the action of the respondents in this Constitutional petition.
14. Heard Mr. Basharatullah, Advocate for the petitioners, Mr.H.Shakil Ahmad, Advocate for respondents Nos.1 and 2 and learned Standing Counsel for respondent No. 3 We now proceed to examine the points urged before us in this Constitutional petition. First of all, it will be proper to dispose of the preliminary objection raised regarding the maintainability of the petition. Learned counsel for respondents argued that since a right of appeal under Rule 216 of the Rules is available to the petitioners, therefore, the petitioners cannot directly invoke the Constitutional jurisdiction of this Court, without first availing the alternate remedy. This objection, appears to us, devoid of force, as it has been held time and again by superior Courts that an aggrieved party can invoke Constitutional jurisdiction, if it can be, shown that action taken, or order passed, are without jurisdiction. Also that the alternate remedy is not efficacious or adequate.
15. Reference if at all necessary out of the plethora of authorities on the point, may be made to PLD 1982 Karachi 653.
16. Since the question for determination before us, is whether octroi could at all be claimed on goods, which were sold within Quetta Municipal Corporation is a question requiring interpretation of Rules which could not be undertaken or settled finally by such authorities, therefore, we are not inclined to non-suit the petitioners on this ground. Furthermore the petitioners have challenged the authority and jurisdiction of the Q.M.C. To demand Octroi on goods sold in Quetta Ordnance Depot, therefore the Constitutional petition under the peculiar circumstances cannot be dismissed on the question , of availability of alternate remedy which otherwise is not efficacious for determination of paramount question raised in this petition. We, therefore, proceed to adjudicate upon and dispose of this petition on merits.
17. The parties are at lis as to whether Quetta Cantt. Is situated in Q.M.C or is out of its limits. But this question shall be discussed at a later stage of the judgment as admittedly Q.M.C. Acts as Agent of Cantonment Board and it collects Octroi as such, and for the goods imported in its limits pays an amount of 15% out of total receipts to it. However, the real dispute between the parties is that whenever goods are imported on behalf of Federal Government or by the Defence Force, an exemption is claimed under Rule 137 and subsequently whenever such goods are sold, the same are liable to payment of Octroi, because the moment act of sale takes place, the exemption becomes ineffective; whereas the petitioners contend that this interpretation is totally unlawful.
18. Before deciding this question, it would be more desirable to re-produce, the Rules and law under which octroi is charged:-- "Rule 2(m). `Octroi' means a tax on the import of goods for consumption, use, or sale, within the octroi limits.
19. Rule 137. The articles specified in Appendix `C' shall be exempted from payment of Octroi subject to the production of a certificate by the Authority specified therein."
20. So also section 81 of Act No.II of 1924 reads:-- "81. Every person bringing or receiving any goods, vehicles or animals within the limits of any cantonment in which octroi or terminal tax or toll is leviable, shall, when so required by an officer duly authorised by the Board in this behalf, so far as may be necessary for ascertaining the amount of tax chargeable:--
(a) permit that .Officer to inspect, examine or weigh such goods, vehicles or animals; and (b) communicate to that officer any information, and exhibit to him any bill, invoice or document 'of a like nature, which such person may possess relating to such goods, vehicles or animals."
21. Firstly it is to be noted that "Octroi" means a charge received by a Municipality or' Corporation on the import of goods within the limits of Municipality .Or Corporation, if the goods are. So imported for consumption, use or sale within the limits. However, ,tire Rules contain a Chapter providing for exemptions and Rule 137 as quoted hereinabove provides that articles specified in Appendix `C' of the Rule shall be exempted from payment of octroi subject to the production of a certificate by the Authority specified therein. Rule 137 if read with Appendix `C' makes it clear that goods belonging to Central Government of Pakistan subject to a production of certificate signed by a Gazetted Officer of the Department concerned, to the effect that the property belongs to the Central Government and is intended for official use only, shall be exempted from octroi duty. Admitted position being that the goods when imported to Quetta Cantt. Were exempted from the duty as it belonged to the armed forces. It is also not disputed that the goods mostly were used vehicles and leather scrap and such-'like goods which had been used and were being auctioned in the precinct of Quetta Ordnance Depot. There is also no controversy that when these goods were originally imported same were exempted from octroi duty as these belonged to Armed Forces. However, Mr. Shakil argued that as and when these goods were auctioned then exemption as contemplated under Rule 137 Appendix 'C' was no more available and these were chargeable because the Chief Officer auctioned these goods.
22. As stated hereinabove the case of Quetta Municipal Corporation and Octroi Contractor is that the goods were imported into the Cantonment area by the Armed .Forces, therefore, the same were immuned/exempted from octroi duty but these goods were sold in the Ordnance Depot Quetta thus these are chargeable and the Octroi and the exemption is removed. So also the second contention is that these goods were sold in an area falling outside the Quetta Municipal Corporation and since these have been purchased by the petitioners therefore, these are liable for payment of octroi duty if imported in the Quetta Municipal area. The proposition, however, is not so simple in view of the plea taken by Quetta Municipal .Corporation and Cantonment Board. In this petition. It has been specifically mentioned that the goods imported within the limits of Quetta Cantonment Board shall be charged with octroi by Quetta Municipal Corporation which shall act as agent of Quetta Cantonment Board and shall be bound to pay 15% of the total receipt to the Cantonment Board. Apart from the Rules it is the Act, No.II of 1924 which contains provisions regarding imposition of octroi, terminal tax or toll tax. Section 81 of the Act has already been reproduced and requires no further interpretation. But section 83 of the said Act would also be relevant for the purpose of disposal of present petition because it envisages that the Board can lease the octroi with the previous sanction of the Officer Commanding-in-Chief, the Command to lease the collection of any octroi etc. It appears that the same has been leased to the Quetta Municipal Corporation but since this matter is not directly at issue before us, therefore, we proceed on the assumption that Quetta Municipal Corporation has been authorised to receive Octroi on goods imported within the limits of Quetta Cantonment and in turn it is obliged to pay 15% of the total receipt to the Cantonment Board. It is thus clear that Quetta Municipal Corporation could charge octroi on any goods imported in Cantonment area if octroi was leviable under the Rule but admittedly the Quetta Municipal Corporation has not received octroi of the vehicles and other goods auctioned in view of Rule 137 read with Appendix 'C' of the Rules.
23. From the facts of the present case the question can be seen and resolved from two angles firstly that when the goods were imported into Quetta Cantonment area, the same were exempted from octroi but whether such exemption continues when these goods are sold after use. The second aspect would be that since goods were auctioned in Ordnance Depot which is an area outside the Quetta Municipal Corporation, therefore, if the same were imported to Killi Almo or any other place within the Quetta Municipal Corporation whether-octroi shall be chargeable.
24. Rule 2 (n) of the Rules provides answer to these questions which lays down that the- limits prescribed for the purpose of octroi also includes the limits of adjoining Cantonment or other local area where octroi is collected jointly. Thus bare perusal of this Rule leave no room for doubt that the goods were auctioned within the octroi limits as the octroi limits also includes an adjoining Cantonment. Rule 2 (n) is reproduced for ready reference:-- "2(n). ' Octori limits' means the limits prescribed for the purpose of Octroi and includes the limits of an adjoining Cantonment or other local area where Octroi is collected jointly."
25. This leads us to the conclusion that when initially the goods were imported by Armed Forces these were brought into the octroi limits of Quetta Municipality Corporation because Quetta Cantt. Falls within the ambit of octroi limits of Quetta Municipal Corporation as defined in Rule 2(n). The goods were used by the Armed Forces here. It is not known as to exactly when the goods were brought into the octroi limits. However, these goods when brought were exempted from duty under Rule 137 of the Rules, then the goods were also auctioned within the octroi limits of Quetta Municipal Corporation because Ordnance Depot is admittedly part of Quetta Cantonment, thus within the octroi limits. No question of import of these goods arises because after purchasing the same the petitioners never imported these goods either in the shape of scrap or in their original condition. For the foregoing reasons we see no force in the contention advanced by Mr. Shakil Ahmad that as the goods were brought into Killi Almo a place within Quetta Municipal Corporation or other places within the Octroi limits of Quetta Municipal Corporation these are, therefore, liable to octroi duty.
26. Mr. Shakil then argued that exemption granted to the import of the goods was only confined to the use of the. Goods by the Armed Forces. After when the Armed Forces decided to auction these goods as non-usable items the exemption would be no more available thus on this count, too, octroi duty is chargeable on these goods, which otherwise have lost their original shape and turned into scrap. We have failed to concur with the submission so raised because octroi is levied or legitimate demand for octroi can be made only when the goods are imported within the octroi limits of Quetta Municipal Corporation. This provision cannot be stretched to cover the arguments advanced for the simple reason that either the octroi duty is chargeable at the time of import or exempted at the time of import. No other plausible meaning can be given to the word "Octroi" as defined under the Rules. It has been stated time and again. That exemption was clamed by the Armed Forces and granted accordingly when the goods were imported. Thereafter the goods were used by the Armed Forces till such time these were turned into non-usable items. Thus to contend that when the Armed Forces decided to sell these goods then exemption granted at the time of import shall be removed automatically and the goods became liable to octroi duty. It is not only illogical but totally alien to the definition of Octroi under the Rules.
27. Yet another attempt was made by the learned counsel for Quetta Municipal Corporation that the goods have now been brought is the limits of Quetta Municipal. Corporation in the shape of scrap, therefore, even if it were kept for transitory period for onward transport to Rawalpindi or other places, these are liable for octroi duty. In support of this argument reliance has been placed on PLD 1986 Quetta 225. We have perused the cited authority which is quite distinguishable for the reasons that no question of exemption was involved for bringing coal from the coal mines into the octroi limits of Quetta Municipal Corporation. Furthermore a circular had been issued by the Government of Balochistan. For levying octroi duty of coal which was brought in Quetta for onward transport to the other places of the country. Neither any notification nor any Circular to said effect has been issued by the Government of Balochistan nor the goods auctioned have been brought from outside into the octroi limits of Quetta Municipal Corporation in the instant case. Thus the said case is not beneficial to the respondents. Another distinguishing feature is that no exemption had been granted to the coal as has been granted to the goods in question.
28. It is thus declared that octroi duty is chargeable on import of goods brought into the octroi limits of a Corporation, a Municipality or Committee etc. For the use, consumption and sale and it is the time when these goods are j imported then such duty is chargeable. In the instant case admittedly the goods were exempted from duty when imported into the octroi limits of Quetta Municipal Corporation, thus we have come to the conclusion for the foregoing reasons the Quetta Municipal Corporation was not competent to make a legitimate demand through octroi contractor for payment of octroi duty on such goods. Such a demand has been made without lawful authority and the same thus carries no legal effect.
29. Resultantly the petition is allowed and the action of the respondents is declared as having been made without lawful authority. However, we pass no order as to costs in view of the legal complications involved in the matters.