' This judgment shall dispose of Writ Petitions Nos.58, 2934, 2586, 2439 and 2211 of 1992 involving the common question of law and facts.
2. M/s. Pakistan Fruit Juice Company Limited, Khanewal Road, Multan petitioner in Writ Petition No,2439 of 1992 installed a beverages plant producing beverages with the trade name of R.C. Cola and the local made juice with name of Flora. The factory of the petitioner is situated at Khanewal Road, Multan within the limits of Municipal Corporation, Multan.
3. Writ Petition No,3583 of 1992 has been filed by Sh. Fazal Rehman and Sons Limited, a limited company registered under Companies Act, 1984 situated within the limits of Municipal Corporation, Multan, which produces Vegetable Ghee of the Branch of Rose Banaspati Ghee.
4. Writ Petition No,2586 of 1992 has been filed by M/s. Shamim and Company Limited, a registered company situated within the Municipal Limits of Multan which manufactures/produces and exports the beverage, namely 7-Up, Pepsi Cola, Teem, Marinda and Teem Cloudy.
5. Al-Hilal Vegetable Ghee Mills (Pvt.) Limited registered under Companies Act, 1984, situated at Vehari Road, Multan within the limits of Municipal Corporation, Multan manufactures vegetable ghee, the brand of which is "Sultan Banaspati Ghee," has filed Writ Petition No,2934 of 1992.
6. Brooke Bonds Limited, Pakistan, a registered company under Companies Act, 1984 with its Head Office at Karachi and blending factory branch at Khanewal has filed Writ Petition No,2211 of 1992.
7. The petitioners in the above writ petitions questioned the validity of imposition of Export Tax on their products by the Zila Council, Multan and Khanewal.
8. The dispute raised by the petitioners is that the Urban and Cantonment areas have been excluded from a Zila Council as defined under section 3(ix) of the Punjab Local Government Ordinance, 1979. The factories of the petitioners being situated within the Urban and Cantonment areas, not forming part of Zila Council, Multan and Khanewal, the rules framed through the Notification dated 24-4-1990 being inapplicable to them, the imposition of Export Tax on their products is illegal and without lawful authority.
9. The learned counsel appearing on behalf of the petitioners with reference to Rule 5(1) of the Punjab Zila Council (Export Tax) Rules, 1990 contended that the said Rules do not envisage the levying and collection of Export Tax on the goods not produced/manufactured within the limits of a Zila Council. They argued that a Zila Council is permitted only to levy and collect Export Tax on export of goods produced/manufactured within its limit and on the goods which remained in transit beyond the permissible time limit. The goods manufactured/produced not at the places forming part of the Zila Council, when to be exported to some other place, are only liable to pay transit fee and not Export Tax. It has been further argued that the imposition of Export Tax in violation of the Rules is a restriction to the guarantee of free trade and business provided under the Constitution. Reliance has been placed on PLD 1963 SC 137 and 1985 CLC 1843 and 1990 CLC 1367.
10. Learned Additional A.-G. Appearing on behalf of the respondents argued that the petitioners are not aggrieved persons within the meaning of Article 199 of the Constitution of Islanfic Republic of Pakistan, 1973, and that they without availing the remedy of appeal provided under the law have filed these petitions which cannot proceed. He contended that 'Export Tax' in the Punjab Zila Councils (Export Tax) Rules, 1990 was substituted with goods exit tax vide Notification No,SOV (LG) 1- 23/84 dated 20-2-1992 authorizing a Zila Council to levy the Tax in question in terms of Rule 5 of the ibid rules, which, notification was later withdrawn on 15-7-1992. The levy of Export/Exit Tax is on the export of goods out of the limits of Zila Councils and not on the manufacturing or use of the same, and the location of factories, therefore, has no nexus with the levy of Export Tax.
11. The petitioners have questioned the application of Punjab Zila Council (Export Tax) Rules, 1990 to their products without challenging the validity of the said rules, whereas the objection raised by the learned Additional Advocate-General with regard to the competency of writ petitions, without availing the remedy of appeal is not sustainable as remedy of appeal and revision under the relevant Rules is available against the assessment made and orders passed thereto, whereas in the present case the grievance of the petitioners is not that of the assessment or an order passed by an authority but the imposition of export Tax against which there is no provision of appeal or revision before the concerned authorities, therefore, the Constitutional petitions can be entertained with no bar.
12. The imposition of Export Tax/Goods Exit Tax has been challenged on the following grounds:
(i) That the goods subject-matter of Export/Exit Tax, being manufactured within the territorial limits of Municipal Corporation, Multan and Municipal Committee Khanewal are out of the ambit of the authority of Zila Council, Multan and Khanewal and Rules framed thereon.
(ii) That the Notification dated 24-4-1990 by virtue of which Export/Exit Tax has been imposed on the products of the petitioners did not authorise the respondents to levy Export Tax, on the products of the petitioners.
(iii) The petitioners in Writ Petitions Nos.3583 of 1992 and 2934 of 1992 contended that not the Banaspati Ghee, their products but edible oil is taxable item in the schedule of Export tax of Zila Council.
(iv) The petitioners in Writ Petition No,2211 of 1992 pleaded that he was burdened with the liability of Export Tax without disposing of the objections raised by him and providing him an opportunity of hearing.
' To resolve the controversy it shall be beneficial to reproduce the relevant provisions of Punjab Local Government Ordinance, 1979 and the rules framed thereunder: Section 3 (xvi)
' Local area' means the area under the jurisdiction of a local council. Section 3 (xvii)
' Local Council' means local council constituted under the Ordinance. Section 3 (ix)
' Zila' means a revenue district as notified under the Punjab Land Revenue Act, 1967 (XVII of 1967) but excluding its urban areas and cantonment areas and Section 3 (xi)
'Zila Council' means a Zila Council constituted under the Ordinance. Section 137 Tax to be levied: A local council subject to the provisions of any other law may, and if directed by Government, shall levy all or any of the taxes enumerated in the Second Schedule.
Section 138
(1) All taxes levied by a Local Council shall be notified and shall unless otherwise directed by Government, be subject to previous publication.
(2) Where a tax is levied or modified the local council shall specify the date for the enforcement thereof and such tax or the modification shall come into force on such date.
' The taxes to be levied by a Local Council are provided in the Second Schedule to the Punjab Local Government Ordinance, 1979 and item 7 in Part II of the said Schedule relates to the tax for the export of goods and animals from the Zila. Punjab Zila Council (Export Tax) Rules, 1990 were promulgated vide Notification No,SOV-5 (26)/89 dated 24-4-1990. The definition of Export Tax and goods under the Rules is as under: Rule 2(c) Export from Zila Council limits.
' Export tax schedule means export tax schedule notified by the Government for a Zila Council.
Rule 2(f)
' Goods include animals. Rule 5(1) `Zila Council' shall levy and collect export tax on export of goods produced within its limits or which during their transit through limits of Zila Council beyond the time allowed for the purpose under these Rules.
' An amendment was introduced in this Rule by inserting sub-rule (1-A) vide Notification dated 20- 2-1992 which reads as under: "Zila Council shall levy and collect the goods exit tax only on the export of goods produced within its limit. This Notification was, however, subsequently withdrawn on 15-7-1992."
' The perusal of the provisions of the subject in the Local Government Ordinance, 1979 and Rules framed thereunder show, that the levy of the taxes as specified in the Second Schedule to the said Ordinance including the Tax on B the export of goods and animals at the terminal point of Zila Council, their increase and decrease is within the power and competence of Zila Council within its area.
13. The territorial limits of Zila Council by virtue of section 3(ix) of the Ordinance is the entire revenue district as notified under Punjab Land Revenue Act, 1967 with the exclusion of Urban and the Cantonment areas, thus boundaries of revenue district shall be the outer limit of Zila Council.
14. The question for determination is as to whether the goods produced within the territorial limits of .a local council other than a Zila Council when brought to pass through the territory of Zila Council, are not subject to Export Tax while crossing the terminal point at the outer limit of said Zila Council.
' The Government of Punjab through its Notification dated 24-4-1990 authorized a Zila Council to levy export tax on the goods produced within its limit or during the transit if remained within the limit beyond the time prescribed under the Rules. It shall be seen that the term limit used in the rules in its general accepted connotation means outer boundaries of a city, a district or a local council as the case may be. The word limit has been defined in Black's Law Dictionary as under: "A band, a restriction, a restraint, a circumscription, Boundary, border, or outer line of thing."
' In view of the definition of word limit, it can be said that 'limits' of the Zila Council for the purpose of rule 5(1) and imposition of Export Tax shall mean the outer line and boundary of the Zila Council and not with reference to territorial limits of another local council i,e, Municipal Corporation and Cantonment. If the limits of Zila Council are taken on the basis of measurement and calculation of its territory and total area for the purpose of Export Tax and Rule 5(1) of the Punjab Zila Council (Export Tax)' Rules, 1990 as is contended, there shall be no goods liable to the Export Tax. The goods to be taxed do not mean only goods produced/manufactured, but all goods whether manufactured/produced through a mechanical process or otherwise including animals. All things in artificial are goods, however, goods for the purpose of Export Tax are specified in the schedule.
'The goods' produced within the local limits are not confined to the goods manufactured in local area, rather it shall mean all goods as specified in the schedule including manufactured goods, if brought to the terminal point to cross the outer limit of Zila Council, but not in the transit from another district, shall be liable to Export Tax. The goods in the present case are produced/manufactured at the places situated not outside the boundaries and outer limits of the Zila Council.
15. The term 'Export' used in the Second Schedule to the Punjab Local Government Ordinance, 1979, for the purpose of Punjab Local Council (Taxation) Rules, 1980 and Punjab Zila Council (Export Tax)
Rules, 1990 shall mean taking out the goods out of the limit of a district or any local council whether Municipality or Cantonment but situated within the outer limits of that district for any destination within the Province, therefore, the determining factor for the purpose of charging export duty on the goods specified in the schedule is outer limit of the Zila Council. 'Export' as defined in the Black's Law Dictionary means: "To carry or to send abroad. To send, take or carry an article, of trade or commence out of the country. To transport merchandise from one country to another in the course of trade. To carry out or convey goods by sea. Transportation of goods from one country to another country.
EXPORT TAX.
' Tax levied upon merchandise and goods shipped out of a country. Tax levied upon right to export or upon goods because of fact that they are being exported or intended to be exported.- ' Under the rules framed by the Government, the word export in its ordinary and natural sense means to take out of or away from a particular place. The words used in the statute must be given their ordinary and natural meanings and if the ordinary meanings do not make a sense, the other proper I D meanings are to be discovered. Export of goods in the present case is intradistricts or intra-provincial and not intra-Zila Council and Municipal Corporation or Cantonment areas located within the outer limits of a district. The goods produced in urban area forming part of an urban local council, if transported to an area of rural council within the limits of Zila Council shall not be liable to export tax, but if goods are brought to the terminal point for export to another district shall be subject-matter of Export Tax.
16. Rule 5 of the Punjab Zila Council (Export Tax) Rules, 1990 provides that only those goods which are produced within the local limits, when to be exported shall be liable to tax. This may be in the following manner.
' Goods manufactured and produced in one district, required to be exported to another district and transported through the route crossing the limits of an intervening district. The goods leaving the district shall be liable to Export Tax but Zila Council of intervening district can only charge transit fee. Thus the goods manufactured and produced within the limits of one district when to be exported to another place in the Province the intervening district can charge transit fee and not export tax but the argument that the goods manufactured within the district but in the area forming part of Municipality E and Cantonment shall also be not liable to this tax when brought at the terminal point of the Zila Council for transportation to another district, is not logical to be accepted. The intention was that goods produced within the revenue boundaries of a district when to be exported to another district, shall become liable to the export tax irrespective of the fact that the manufacturing factory or the production process is located in the area not forming part of the Zila Council.
17. 'Produce' does not only mean to manufacture goods through mechanical process or manual labor but it also means to bring into view or notice; to present a play. Thus the word 'produce' in Rule 5(1) of Punjab Zila Council Rules, 1990 has no nexus to the place of manufacturing of the goods whether within or behind the local limits of the Zila Council rather it is a relatable term to be understood with reference to the goods produced at the outer limits of a Zila Council for the purpose of Export Tax, if not in transit from another district.
18. The question of imposition and collection of Export Tax on the goods produced within the limits of district has recently been examined by the Supreme Court of Pakistan in Zila Council, Jhelum v.
I.C.I. Pakistan Limited and others 1993 SCM R 454. The principle in earlier judgments reported in PLD 1963 SC 137, 1985 CLC 1243 and 1990 CLC 1367 relied upon by the petitioners in support of their contentions was laid down in different situation and facts but the cases before me, contained different facts, therefore, the said judgments are not applicable to these cases. The question before the Supreme Court in Zila Council, Jhelum v. I.C.I. Pakistan Limited 1993 SCM R 454 was that the goods not manufactured or produced within the limits of the district were liable to transit fee and not the export tax but the precise question involved in the present petitions is whether the goods manufactured/produced in the factories located in the area of Municipality or Cantonment, not forming part of Zila Council, for the purpose of Municipal Administration but falling within the outer limits of district or Zila Council shall not be liable to Export Tax was not decided as such but the Punjab Zila Council (Export Tax) Rules, 1990 being under examination were declared valid. The proposition that the Export Tax cannot be levied on the goods which having the ultimate destination outside the limits of Zila Council while passing through the terminal point is not disputed, but the question as to whether goods not brought from outside the boundaries of Zila Council to be transported to the places beyond the outer limit of Zila Council shall be exempted from Export Tax, is answered in the negative. The case cited from Sindh High Court, jurisdictions are also distinguishable for reason of different facts and rules applicable to them. The dispute in Ijaz Ahmad v. District Council, Sukkur 1990 CLC 1367 was imposition of toll on the export of goods i,e, Rawangi Mahsool by virtue of Peoples District Council Export Tax Rules, 1976. The Rawangi Mahsool or toll is not export tax of the nature provided in the Punjab Zila Council (Export Tax) Rules, 1990 read with schedule to Punjab Local Government Ordinance, 1979 (Punjab Ordinance No,VI of 1979). Toll tax is to be levied by the Union Council under Part I of second schedule to the ibid Ordinance and by the urban local councils under Part III of the said schedule and not by the Zila Councils under Part II of this schedule which relates to the taxes of Zila Councils. Similarly West Pakistan Municipal Committee Octroi Rules, 1964 were adopted for the purpose of Octroi tax in the urban areas, to be imposed by Urban Local Councils. Rule 2(m) of the said Rules defines octroi as octroi means a tax on the import of goods for use or sale within the octroi limits; and limits have been defined under Rule 2(n) of the ibid Rules. Rule 2(i) of the said Rules defines import as under:
19. "Import means import within the octroi limits." There is no mention of levying the export Tax by the Urban Local Councils, thus Export Tax on goods is exclusively a tax leviable by Zila Council on the export of goods at the outer limits. It is manifest that export of goods out of the limits of Zila Council for any destination shall be liable to export tax and not the transit fee otherwise the concept of Export Tax shall be frustrated and the provisions of Export tax in the relevant statute would become redundant for practical purposes and only transit fee shall be left to be charged which is not the intent and purpose of law. In my view this is not a case merely of goods passing in transit through the limits of Zila Council, Multan and Khanewal.
20. The other ground taken by the petitioner in Writ Petition No,2211 of 1992 was that pending disposal of objection of the petitioner invited by the respondents to the notice, published in the Daily "Nawa-i-Waqat", Multan on 18-5-1992, with the proposal to levy Export Tax on the tea, at the rate of Rs,20 per quintal mentioned at item No,50, the Export Tax was levied.
21. In reply, it was submitted on behalf of the respondents that the petitioner was provided personal hearing on 10-6-1992 for the purpose of disposal of the objection and was granted further time on his request but he did not turn up and resultantly the committee was left with no option except to finalize the proposal on 27-6-1992 and placed the same before the House. It shall be sufficient to say that the tax was to be levied and charged from the public and it was not a tax to be imposed only on the products of the petitioner, therefore, even in case of some procedural omission, the validity of the notification is not affected. Thus, the tax liability cannot be questioned on such technical grounds.
22. The contention that tea is brought from outside the country and only is blended in Khanewal for sale, is not liable to export Tax has no substance. The blending and packing for sale through mechanical process shall fall within the definition of use and sale.
23. The other contentions of the learned counsel in Writ Petitions Nos.2934 and 3583 of 1992 that the schedule of Zila Council contains only Khurdani oil (Edible oil) and not Banaspati Ghee as an independent item to be taxed. The products having been not included in schedule was immuned from the tax even if Export Tax otherwise was leviable.
24. The arguments are devoid of force for the reason that Banaspati is vegetable oil products and edible oil which includes vegetable oil with the meaning fit to be eaten as food. Thus Banaspati Ghee, falls within the category of edible oil for the purpose of Punjab Zila Council (Export Tax) Rules, 1990 and includes in Khurdani oil mentioned in the schedule.
25. For the above reasons I hold that the goods of the petitioners are not immuned from Export Tax leviable under Punjab Zila Council (Export Tax) Rules, 1990 and respondent-Zila Councils are entitled to recover it at their pasts on the terminal points. The writ petitions are accordingly dismissed with no order as to costs.