ABDUR REHMAN KHAN, J.--1. This judgment in W.P. No. 1265 of 1991 (M/s. Diamond Industries (Pvt.)
Limited vs. Government of Pakistan and others) will also dispose of and conclude those other writ petitions which are listed along with it in the Cause List and which arise in similar factual background and present identical legal issues, for determination. The particulars of these writ petitions are us under:- 1 W.P, No. 1314/91 Qamar Zaman. vs.Govt, etc. 2 W.P. No. 1333/91. Al-Razak Synthetic.vs.Govt. etc. 3 W.P. No. 1347/91. M/s. Amazai Textile.vs.Govt. etc 4 W.P. No. 1354/91. M/s. Khyber Exlusion.vs.Govt. etc. 5 W.P. No. 1356/91. M/s. Gadoon Packing. vs Govt. etc. 6 W.P. No. 1357/91. M/s. Hayat Indus, vs. Govt, etc. 7 W.P. No. 1358/91. M/s. Khyber Agro Ltd. vs. Govt. Etc. 8 W.P. No. 1379/91. M/s. Khyber Plastic. vs. Govt. Etc. 9 W.P. No. 1381/91. M/s. Rafi Indus, vs. Govt, etc. 10W.P. No. 1382/91. M/s. Noor Aluminium, vs. Govt. Etc. 11W.P. No. 1468/91. Adil Poly Propylene. vs. Govt. Etc. 12W.P. No. 1509/91. M/s. Mehran Comforts, vs. Govt. Etc. 13W.P. No. 1589/91. M/s. Primer Alliance, vs. Govt. Etc. 14W.P. No. 1604/91. M/s. P .I Appliance, vs. Govt. Etc. 15W.P. No. 1627/91. M/s. Alpha Gama Indus, vs. Govt. Etc. 16W.P. No. 1620/91. M/s. Turkistani Indus, vs. Govt. Etc. 17W.P. No. 1645/91. M/s. Crescent Indus, vs. Govt. Etc. 18W.P. No. 1646/91. M/s. Diamond Corporation. vs. Govt. Etc. 19W.P. No. 1718/91. M/s. Gandaf Steel Indus, vs. Govt. Etc. 20W.P. No. 1756/91. M/s. Gadoon Industries, vs. Govt. Etc. 21W.P. No. 1764/91. Industrial Chemicals, vs. Govt. Etc. 22W.P. No. 1797/91. M/s. Super Star Lorex. vs. Govt. Etc. 23W.P. No. 1790/91. M/s. Mushtaq Silk. vs. Govt. Etc. 24W.P. No. 1865/91. M/s. National Eng. vs. Govt. Etc. 25W.P. No; 1951/91. Yaqoob Industries. vs. Govt. Etc. 26W.P. No. 2022/91. Khyber Spinning, vs. Govt, etc. 27W.P. No. 2194/91. Multiwood & Metal Indus, vs. Govt. Etc. 28W.P. No. 21/92. M/s. Orient Polymera. vs. Govt. Etc. 29W.P. No. 32/92. M/s. Kaghan Mills. vs. Govt. Etc. 30W.P. No. 246/92. M/s. Ashraf Fabrics, vs. Govt. Etc. 31W.P. No. 317/92. M/s. M.B. Yes and Silk. vs. Govt. Etc. 32W.P. No. 375/92. M/s. Dye Chem Industries, vs. Govt. Etc. 33W.P. No. 401/92. M/s. Pak: Muslim Indus, vs. Govt. Etc. 34W.P. No. 485/92. M/s. Havelian Silk. vs. Govt. Etc. 35W.P. No. 525/92. M/s. Margala Packages. Vs. Govt. Etc. 36W.P. No. 620/92. Mairaj Industries, vs. Govt, etc. 37W.P. No. 745/92. M/s. Shiraz Industries. vs. Govt. Etc. 38W.P. No. 1078/92. M/s. Muhammad Shafiq, vs. Govt. Etc. 39W.P. No. 1097/92. M/s. Pak. Mineral W ater, vs. Govt. Etc. 40W.P. No. 1 182/92. Tawakkel Industries. vs. Govt. Etc. 41W.P. No. 41/93. Ice Land Electronics. vs. Govt. Etc. 42W.P. No. 189/93. M/s. Al-Rehman Steel. vs. Govt. Etc. 43W.P. No. 287/93. Abson Industries, vs. Govt, etc. 44W.P. No. 296/93. Alpha vinyl Indus, vs. Govt, etc. 45W.P. No. 393/93. Royal Textile Mills. vs.Govt. Et.
46W.P. No. 578/93. M.Y. Electronic, vs. Govt, etc. 47W.P. No. 830/93. Azad Petro Chemicals. vs. Govt. Etc. 48W.P. No. 915/93. M/s. United Multi Indus, vs. Govt. Etc. 49W.P. No. 1 197/93. M/s. S.S. Furance (Pvt.), vs. Govt. Etc. 50W.P. No. 175/94. M/s. Rana Enterprises, vs. Govt. Etc. 51W.P. No. 1 181/92. M/s. Tawakal Polyster . vs. Govt. Etc. 52W.P. No. 716/93. M/s. Bilal Indus, vs. Govt, etc. 53W.P. No. 661/93. M/s. Zeenat Manufacturers. vs. Govt. Etc.
2. The history of the events which led to the controversy enumerated in the instant writ petition No. 1265 of 1991 is that the inhabitants of the area called as 'Gadoon Amazia' in District Swabi previously cultivated 'Poppy' originally a source of intoxicant opium which was the only cash crop on which they entirely depended for their needs. However, with the introduction of heroin and its considerable and excessive use in Pakistan and in the Western countries and particularly in the U.S.A, the-Government of Pakistan was obliged to destroy the standing Poppy crops by force and to ban its future cultivation. This obviously resulted into total loss of income and jobs to the people of the area which rendered them complete destitute. It was, therefore, decided by the Government to set up an Industrial Estate in the said area so as to provide the people of the locality with job opportunities. In order to attract the investors to establish industries in this remote and backward area, a certain package of incentives in form of exemptions from payment of customs duties, sales tax on the machinery, raw materials and components were also provided. It is also stated in the writ petition that the petitioner-company was almost the first to respond to the call of the Government to install an industry in the area. The Chairman and Managing Director of the petitioner-company addressed a letter (annexed 'B') to the Central Board of Revenue to verify the factum of exemption over the raw material to be used in Industrial Estate of Gadoon Amazia and its reply by the C.B.R, was: "It is confirmed that customs duty, sales tax and Iqra shall be exempted on the raw material to be used in the Industrial Units after they are installed in Gadoon industrial area of Swabi."
It was also mentioned in the letter that the procedure regulating exemption will be notified in due course. It was on 3.6.1989 that Notification No. SRO 517(I)/89 exempting raw material and components meant for the industries in Gadoon area from whole of customs duties and sales tax was issued. Petitioner was than able to obtain 'NOC' from the Government of N.W.F.P, for Foams and Plastic Goods etc. And after getting loan facilities at the concessional rate, obtained letter of credit and imported machineries and installed the same. The industries of the petitioner were operating in full swing that the impugned Notifications rescinding the earlier various exemptions granting Notifications, were issued. It has been maintained in the Writ Petition that inspire of assurance of the then Chief Minister and the Ministry of Law and Justice that the concessions would not be withdrawn, the impugned rescinding Notifications were still issued. The petitioner approached the Prime Minister and the Minister for Finance and Commerce, the Interior Minister and Chief Minister of N.W.F.P! For redress but with no success. It was stated that the unanimously passed Resolution of the N.W.F.P. Assembly dated 29th November, 1990 in support of continuance of the concession was not heeded to. The colossal financial loss to the industries, employees and all other affecters was further highlighted. In the writ petition the validity of the withdrawn Notification was challenged on these grounds:--
(1) The principle of locus Poenitentiae in law is available to the said respondent only till a decisive step is taken. But as effective steps had already been taken in the matter, therefore, no such power was available to them now.
(2) provision of Section 21 of the General Clauses Act would not be attracted when vested rights had already accrued.
(3) Promissory estoppel was pleaded against the respondents.
(4) These Notifications would lead to undoing everything which has been done so far.
(5) The impugned Notifications are mala i.e in nature.
(6) Respondents No. 1 and 2 are bound in law and morality to the inhabitants of the locality to keep intact the Notifications as they had been given the undertaking that they shall be 'provided with alternative means of livelihood.
(7) Unanimous resolution of the NWFP Assembly should have been honoured.
(8) It is mentioned in condition No. 3 of SRO No. 517(I)/89 that when concession is claimed on components, "the manufacturer shall chalk out deletion programme spreading over a maximum period of i.e years within which period he shall achieve a minimum deletion to the extent of 15% of the C&F value of the inputs of the manufactured items, and the continued availability of the exemption under this notification shall be contingent upon (a) the achievement of progressive annual deletion as approved by the Central Board of Revenue or the Ministry of Industries as the case may be and (b) use of locally manufactured deleted items;".
3. Respondents 1, 3, 4 and 5 filed comments to the writ petition wherein they raised, interalia, the following preliminary objections:--
(a) In view of the relevant law 'and authoritative judgments of the superior courts the power of the Government of Pakistan regarding withdrawal of the exemption could not be challenged;
(b) the effect of the concession was to discriminate against all other identical units in other parts of the country. Moreover, similar industries in other area in Pakistan were operating in great disadvantageous position and the continuance of the concession would have resulted in their bankruptcy;
(c) the concessions were mis-used to the disadvantage of the employees, other industries and the Government exchequer and that it was, therefore, in the larger interest of the public-at- large to withdraw the concession.
In respect of the factual aspect of the writ petitions it was stated that the existing concessions are reasonably sufficient and that "the Government will continue to take measure to prevent the illegal cultivation of poppy and provide other beneficial scheme for the area from time to time." It was also averred that the mis-use of concession by the industrialists in every square and field of operation frustrated the very purpose of the concessions.
4. The learned Senior Advocate, Syed Sharifiddin Pirzada, while arguing in support of the view point at the outset referred to the aims and aspirations for the fulfilment of which the Industrial Estate of Gadoon Amazia was established. It was emphasized that the sole object for setting up this Industrial Estate was to compensate the poppy growers on account of ban on its cultivation and to achieve this goal the incentive, encouragement and goad in shape of various exemptions were provided to the Industrialists. He was of the view that no industrialist would have invested his capital because of the absence of infrastructure in the area and also on account of unattractive and remote nature of the area and that these concessions were the only driving force to prompt the entrepreneurs to set up industry. In this context he produced an advertisement which is marked 'AA' on behalf of Sarhad Development Authority in daily 'Nation' dated 15th November, 1987 titled as "A Land Mark in. The Industrial Development of N.W.F.P." wherein 15th November, 1987 was given as a date for laying foundation stone by the Chief Minister and which gives the details of the exemptions and incentive to the industrialists. Another advertisement in Daily 'Muslim' dated 24th November, 1987 was also placed on record marked 'BB' whereby applications from prospective enterprisingness for allotment of plots in Gadoon Amazia Industrial Estate were invited. This advertisement reiterates the exemptions as given in the document marked 'AA'. He contended that the above concessions were not considered enough by the investors till the Government has to issue SRO 517(I)/89 dated 3rd June, 1989 which in fact prompted the investors to make huge investments and that the development of the Industrial Estate Gadoon Amazia in fact commenced flourishing. He then referred in detail to the various Notifications whereby concessions were granted and by which these were withdrawn. It will be appropriate to give necessary particulars of those Notifications: Notifications granting concessions: Imported Machinery 1.Income Tax. Vide S.R.O. 658(I)/81 dated 25th June, 1981.
2.Import Surcharge. Vide S.R.O. 480(I)/88 dated 26th June, 1988.
3.Iqra Surcharge. Vide S.R.O. 481(I)/88 dated 26th June, 1988.
4.Customs Duty Vide S.R.O. 530(I)/90 dated 7th June, 1990.
5.Sales Tax. Vide S.R.O. 530(I)/90 dated 7th June, 1990.
For raw material 1.Customs Duty Vide S.R.O. 517(I)/89 dated 3rd June, 1989.
2.Sales Tax. Vide S.R.O. 517(I)/89 dated 3rd June, 1989 3.Iqra Surcharge. Vide S.R.O. 677(I)/89 dated 28th June, 1989.
4.Import Surcharge. Vide S.R.O. 678(I)/89 dated 28th June, 1989.
Notifications withdrawing the concessions:
(i) S.R.O. 419(I)/91, dated 9th May, 1991 whereby Notification No. 517(I)/89 dated 3rd June, 1989 was rescinded.
(ii) S.R.O. No. 420(I)/91 of even date by which Notification No. 480(I)/88 dated 26th June, 1988 was amended.
(iii) S.R.O. No. 421(I)/91 of even date whereby Notification No. 481(I)/88 dated 26th June, 1988 was modified.
It was submitted that in order to confirm the factual position as appearing in the said two advertisements and the Notifications granting the exemptions the Chairman of the petitioner wrote a letter dated 13th February, 1988 to C.B.R, to get certain clarification. In reply dated 19th February, 1989 from the Second Secretary C.B.R. Islamabad Annexure 'B' the availability of these exemptions were confirmed. He submitted that keeping these assurances in view the petitioner-company was incorporated on 18th June, 1989, the machinery was imported in September, 1989 and the production was started in November of the same year. He submitted that industrialists of Karachi and Faisal Abad started protest against the concessions allowed to Gadoon Amazia Industrial Estates which induced the Government to issue rescinding Notifications detailed above. Syed Sharifiddin Pirzada learned counsel for the petitioners criticised the rescinding Notifications on the ground that these have impaired and demolished the vested rights which had accrued to the investors petitioners. He stressed that no one is competent to adversely affect the rights which becomes vested in someone either by process of law, passage of time or in any other legitimate and recognized manner. He further elaborated this point and argued that these vested rights are protected and to be kept intact by the principle of promissory estoppel. The first judgment which he relied in support of this doctrine was Federation of Pakistan and others v. Ch. Muhammad Aslam and others (1986 SCM R 916). It has been laid down in this judgment that if a contract is legally constituted one and which had given rise and liabilities enforceable by law then such contract created vested rights which are to be protected and' preserved by the aid of the principle of promisson Estienne. He then referred to Al-Samrez Enterprise v. The Federation of Pakistan (1986 SCMR) appearing in the same book on page 1917 whereby the same enunciation of law has been re-iterated and it has been laid down therein that vested rights which had accrued on account of binding contract could not be taken away and the Government is not empowered to do so under section 21 of the General Clauses Act.
The learned counsel for the petitioner then referred to a case Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others (P.L.D. 1991 S.C. 546) in support of his plea of promissory estoppel and pointed out that this doctrine is applicable against the Government in exercise of its executive, public or governmental actions and none of the limitations as laid down in certain judgments and also enunciated in this judgment were attracted so as to bar the applicability of this principle to the present case. He next referred to Messrs Army Welfare Sugar Mills Ltd. v. Federation of Pakistan and others (1992 SCM R 1652) and argued that it contains elaborate and comprehensive discussion on the doctrine of promissory estoppel and that numerous precedent cases have been referred so as to fully explain the circumstances under which this doctrine would be attracted and also those which. Would not attract its applicability. It has been laid down in the judgment that if an exemption from payment of excise duty or any other tax has been granted for a specified period on certain conditions and if a person fulfils those conditions, he acquires a vested right, he cannot be denied the exemption before the expiry of the specified period through an executive instrument like a notification but he can be denied his vested rights by a legislative provision. It was also held therein , that the doctrine of promissory estoppel is available in Pakistan against the Government and its functionaries, subjector, inter alia, following limitations:-
(i) The doctrine of promissory estoppel cannot be invoked against the legislature or the laws framed by it because the legislature cannot make a representation;
(ii) Promissory estoppel cannot be invoked for directing the doing of the thing which was against the law when the representation was made or the promise held out;
(iii) No agency or authority can be held bound by a promise or representation not lawfully extended or given;
(iv) The doctrine of promissory estoppel will not apply where no steps have been taken consequent to the representation or inducement so as to irrevocably commit the property or the reputation of the party invoking it; and
(v) The party which has indulged in fraud or collusion for obtaining some benefits under the representation cannot be rewarded by the endorsement of the promise.
The learned counsel again placed refinance on the following extract from Al-Samrez Enterprise case:-- "The subsequent notification impugned in this case was issued in exercise of statutory power and has the force of a statutory instrument. Accordingly the Rules of a statutory construction are attracted to the interpretation and determination of its legal effect. It is well settled that an enactment which prejudicially affected vested rights or the legality of past transactions, or impairs contracts cannot be given retrospective operation. Thus, Maxwell's interpretation of Statutes, 1962 Edition at page 206 observed: "Every statute, it has been said, which takes away or impairs vested rights acquired under existing laws or creates a new obligation, or imposes a new duty, or attached a new disability in respect of transactions or considerations already past, must be presumed, out of respect to the legislature, to be intended not to have a retrospective operation." Again., "We are, therefore, dearly of the opinion that if a binding contract was conduced between the appellants and the foreign exporter or steps were taken by the appellants creating a vested right to the then existing notification granting exemption, the same could not be taken away and destroyed in modification of the earlier one, on the ground that under section 21 of the General Clauses Ad, the Government could exercise the power of modification."
The learned counsel further supported his view by a rule laid down in similar circumstances in a judgment of the Supreme Court of India reported as ALR. 1979 SC 621 (M/S Motilal Padampat Sugar Mills Co. Ltd. Vs. The State of Uttar Pardesh and others). In this judgment the original history of the gradual development of doctrine of promissory estoppel has been traced and finally the circumstances and - parameters which would and those which would not justify invaliding of this principle against the Government have been indicated. It so happened in that case that on appearance of news item in a certain News Paper therein it was stated that the State has decided to give exemptions from sales tax to new industries in the State so as to enable them to have a firm basis at the initial development stager,-prompted the appellant in that case to start an Hydrogenation plant for manufacture of "Vanaspati". The appellant also sought confirmation about the exemptions from the Director of Industries and the Chief Secretary and on their assurance about the concession he managed to get financial assistance and ultimately established the factory. The State Government, however, resiled from the assurance as initially promised concession and ultimately rescinded the concession in toto. The writ petition against the withdrawal of the exemptions failed before the High Court but the Supreme Court of India while allowing the appeal of the appellant found him entitled to the concession promised by the Government on the basis of the doctrine of promissory estoppel. The characteristic and bingling effect of the doctrine was explained in this manner: "It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law. Every one is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned; the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government committed to the rule of law, claim immunity from the doctrine of promissory estoppel? Can the Government say that it is under no obligation to Act in manner that is fair and just or that it is not bound by considerations of" honesty and good faith"?
The learned counsel next claimed entitlement of the petitioner to the relief in the writ petition on the basis of the principle of reasonable expectations and in support of his submission on this point he referred to the judgments in all England Law Reports "Attorney General of Hong Kong v. Ng. Yuen Shiu (1983) 2 ALL ER 346". A brief resume of this decision in the context of the present case is that a person is entitled to a fair hearing before a decision adversely affecting his interest is made by a public official or body, if he has 'a legitimate expectation' of being accorded such a hearing. This principle was further clarified, 'The justification it is-primarily, that, when a public authority has promised to follow a certain procedure, it is in the interest of good administration that it would act fairly and should implement its promise, so long as implementation does not interfere with the statutory duty. The principle is also justified by the further consideration that, when the promise was made, the authority must have considered that it would be assisted in discharging its duty fairly by any representation from interested parties and as a general rule that is correct." It was, therefore, contended that the arbitrary and ex parte withdrawal by the Government of the concession offends against the doctrine of 'legitimate or reasonable expectations'. Last the doctrine of locus poenitentiae was highlighted in order to assert that the petitioner having been induced to act on the assurance and undertaking of the respondent and having actually acted in handling and operating the factory cannot be denied the benefit of the exemptions under this doctrine. Reliance for the proposition was placed on P.L.D. 1970 SC 439 (Collector of Central Excise etc v. Azizuddin Industries Limited). In this judgment too the rule of law that vested rights could not be taken away retrospectively by executive action has been reiterated.
The other learned counsel who pleaded for the petitioner was Mr. Ijaz Hussain Batalvi who also adopted the points raised by Syed Sharifiddin Pirzada and he also commented on the backward nature of the area, cultivation of poppy and the necessity to ban its cultivation and to give incentive for setting up Industrial Estate. He was critical of the Government policy of withdrawal of the concession as according to him this treatment with the domestic investor would definitely discourage the foreign investors and would harm its credibility.
5. Mr. S.M. Zafar represented the respondents and while clarifying the factual position explained that by Notification No. 419 dated 9th May, 1991, the exemptions in customs duties and sales tax on raw materials and component granted by Notification No. 517 dated 3rd June, 1989 were withdrawn while by Notifications No. 420 and 421 dated 9th May, 1991 the concession of import surcharge and Iqra surcharge extended by Notification No. 517(I)/89 dated 3rd June, 1989 were rescinded. He also referred to the exemption of 50% in the electricity bill and the concessional rate of mark up by the State Bank and tax holiday for 10 years and some similar concessions. He wanted to show that those concessions which remained intact are sufficient to put the industries of this area in a better position at the initial stage of development than the industries in the other parts of the country. He also pointed out that no period has been fixed for exemption in any of the exempted Notification with obvious intention that the Government would be free to discontinue the exemption at any time. In this context it was argued that in absence of any specified period of exemption the petitioner could not insist on continuance of the concession for any fixed time. The learned counsel then dealt with the provision of Customs Act, 1969 and pointed out that section 18 of this Act empowered the Government to levy Customs duty while sections 19 and 21-B authorises the Government to exempt any good from whole or any part of the customs duty. He next referred to the preamble of Sales Tax Act, 1951 to show that the purpose of its enactment was to consolidated and amend the law relating to the levy of sales tax and explained that section 3 is charging section whereas section 7 empowers the Federal Government from exempting any goods or any class of goods or person or class of persons under the Act. Section 3(5) was then referred to show that the provisions of Customs Act, 1969 so far as may be and with necessary modification can be applied for the purpose of this Act. He also referred to section 13(3) of the Sales Tax (Amendment) Act, 1990.
The learned counsel then pointed out that the powers of withdrawal of exemption are also available under section 21 of the General Clauses Act and stressed that the vires of the withdrawal Notification and the power of Government to issue such a Notification cannot be challenged but the effect of such Notification can be considered. In this context he referred to Al-Samrez Enterprise v. Federation of Pakistan (1986 SCM R 1917) at page 1925. It was then stressed forcibly that after the addition of section 31- A in the Customs Act, 1969 on 26.12.1988, the effect of the rule laid down in Al- Samrez Enterprise case stands nullified, and, therefore, the benefit of the rule enunciated in the said judgment would not now be available to the petitioner. In this context he referred to 1993 SCMR 1995 (Molasses Trading and . Export (Pvt) Limited v. Federation of Pakistan and others) which reads: "Section 31-A in the Customs Act, 1969 has radically changed the effect of section 30 by including the quantified amount of duty which becomes payable by virtue of the withdrawal of notification.
The language of section 31-A, clearly envisages and stipulates 'that the consequences that follow from the Act of withdrawal or modification of an exemption notification, shall take effect with reference to the date of its issue irrespective of the fact that the contract for the import of goods was entered into or the letter of credit was opened prior to the date of such withdrawal. The insertion of section 31-A materially affected the enunciation of law made in the case of Al- Samrez Enterprise and that the insertion takes back to the time of enforcement of the Customs Act in 1969."
In support of this contention he also relied on P.L.D. 1993 S.C. 176 and 132 and 1993 SCM R 17. On the strength of the rule laid down in these judgments he submitted that after the addition of section 31- A in the Customs Act, the pleas of vested rights, promissory estoppel and locus Poenitentiae and reasonable expectations are no more available and, therefore, after the withdrawal of the exemption Notifications the petitioners are bound to pay the tax. It was also pointed out that the judgments which he has referred in support of his arguments pertain to surcharge and Iqra surcharge which are included in the customs duties whereas the cases cited on petitioners' side are regarding sales tax. It was, therefore, stressed that none of the pleas as argued by the petitioners counsel can be pleaded against the legislative action on account of the addition of section 31-A. He also cited P.L.D. 1989 Karachi 361, P.L.D. 1989 Lahore 58, M.L.D. 1990 914 to highlight the importance of the introduction of section 31-A in the Customs Act and to clarify that the dictum in respect of vested rights, promissory estoppel etc. In the judgments cited by the petitioners" counsel stood destroyed after the addition of section 31-A. In respect of exemption and withdrawal of sales tax it was submitted that under section 3(5) of the sales tax Act it is payable in the same manner as the customs duties in the Customs Act and, therefore, section 31-A of the Customs Act would also be applicable in the same way as it applied to customs duty. In this context section 6 of the Sales Tax (Amendment) Act, 1990 was also referred and the insertion of the word "Charge" was pointed out so as to differentiate it from the corresponding provisions of the Sales Tax Act, 1951 and to attract section 31-A of the Customs Act even to sales tax. The learned counsel also distinguished P.L.D. 1991 S.C. 546 on the ground that it was not a case of customs duty. It was also pointed out that there is no reference of the judgment reported as P.L.D. 1991 SC 546 in the case published in 1992 SCM R 883 and 1993 SCM R 176 as those were not considered relevant. It was also submitted that the rule laid down regarding vested rights, promissory estoppel and principle of Poenitentiae is no more available for the benefit of any litigant as its effects have been eclipsed and upset by addition of section 31-A in the Customs Act. It was also argued that there would be no room for application of equity where specific law governs that field. He also stated that the reasons which prevailed with the Government for withdrawal of exemptions have been detailed in the written statement and that these justified the withdrawal notifications.
6. In rejoinder Mr. Sharifiddin Pirzada, learned counsel appearing for the petitioners submitted that he challenges the validity of section 31-A of the Customs Act on the ground that it is not a valid law as under Articles 141 and 142 of the Constitution it would be the parliament to enact such law and that it could not be brought about through money bill. He also clarified that section 31-A of the Customs Act is for limited purpose and cannot cover the exemption granted under section 19 of the Customs Act. He again referred to 1992 SCM R 1652 (Messrs Army Welfare Sugar Mill Ltd. v.
Federation of Pakistan and others) and 1992 SCMR 605 (A & B Food Industries Limited v.
Commissioner of Income Tax/Sales, Karachi) and stated that section 31-A has been referred therein. He then placed reliance on P.T.D. 1990 page 29 and P.L.D. 1992 Karachi 266 to prove that the introduction of section 31-A in the Customs Act would not take away vested rights under the Sales Tax Act. Mr. Ijaz Hussain Batalvi while exercising the right of rejoinder referred to P.L.D. 1991 S.C. 973 decided on 25th April, 1991 and P.L.D. 1991 S.C. Heard on 9th January, 1991 to show that inspire of introduction of section 31-A in the Customs Act the vested rights and principle oilcups Poenitentiae etc. Have been declared intact and operative.
7. Submissions of the learned counsel for the parties were reproduced in extensive and reference to the relevant enactments and case law cited at the bar was made elaborately so as to appreciate the stand of either side in its correct perspective.
8. It is pertinent to note that the factual background which prompted the Government to set up an Industrial Estate in the remote, backward and economically unviable and unprofitable area of Gadoon has neither been denied in the written statement nor controverted at the time of arguments by the learned counsel for the respondents. The main reason for withdrawal of the exemption as given in the written statement by the respondents and reiterated in the arguments on their behalf was, "furthermore as a result of granting such concession to the industries in Gadoon Amazia Industrial Estate the existing identical units elsewhere in Pakistan were placed in highly disadvantageous position and various industries particularly those based on imported raw material, practical' faced almost complete bankruptcy situation". It is this , admitted fact that the concessions were withdrawn because other industrial units in other parts of country were placed in disadvantageous position and, therefore, the industrialists in those areas protested against the continuance of these concessions. This is, however, very bleak and insipid and rather judicrous reasons. It could not be contested that these concessions were not in form of bounty or charity which could be recalled at the sweet will of the respondents but rather it is admitted position that these were granted and considered due to the inhabitants of the area because of their willingness and sacrifices to stop poppy cultivation and thus to do away with their only source of income and instead to earn their livelihood through sources provided by the industries to be installed in the area. Similarly it could not be challenged that the industrialists not of their own opted to install the industries in this unattractive and far flung area but they were prevailed upon through various promises and incentives to set up industries. In this admitted back-ground it would be very difficult for the respondents to justify on any standard their action of unilateral withdrawal of the concessions. The ground that the industrialists in other parts of the country protested and, therefore, they were unable to carry out the promise solemnly made by it can hardly be a reason for rescission of the Notification.
9. In any case the legal position that emerges from the arguments addressed on both the sides and the relevant provisions of law referred to by the counsel and the judgments relied upon on either side would be as follows:-
(A) The principle of law enunciated in 1986 SCM R 1917 Al-Samrez Enterprise v. The Federation of Pakistan is to the effect:-- "It will be inequitable and unjust to deprive a person who acts upon such assurance of the right to exemption and expose him to unforeseen loss in the business transaction by suddenly withdrawing the exemption after he has made legal commitments. It is in this perspective that a right is created in his favour and a subsequent withdrawal of exemption cannot be given retrospective operation by an executive act to destroy this right"
The same rule was repeated in P.LD. 1991 SC 546 (Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others). It was observed in this judgment that: "The contention of the learned Deputy Attorney General that the doctrine of promissory estoppel does not extend to .
Legislative, executive or sovereign functions of the State is correct to the extent that it does not indeed extend to legislative and sovereign functions, but executive actions are not excluded from the operation of the doctrine."
The principle of vested rights, doctrine of promissory estoppel and locus Poenitentiae was again elaborately discussed in Messrs Army Welfare Sugar Mills Ltd and others v. Federation of Pakistan and others (1992 SCM R 1652). It was laid down therein "The authority competent to make order has power to undo it, but the order cannot be withdrawn or rescinded once decision taken legal effect and certain rights are created in favour of any individual and principle of locus Poenitentiae would be available."
(B) A new section 31-A was inserted in the Customs Act, 1969 with effect from 26th December, 1988, through Finance Act, 1988. This added section provides that irrespective of any provision or any law or decision to the contrary, the rate of duty would remain the same which was payable at the time of withdrawal of the exemption Notification, and it would not matter whether such a withdrawal was (i) before or after the cancellation of contract or agreement (ii) or opening of a letter of credit.
The effect of this section vis-a-vis the principle of vested rights, promissory estoppel, locus Poenitentiae and reasonable expectation as enunciated in Al- Samrez Enterprise case (1986 SCM R 1917) was considered in Molasses Trading & Export (Pvt.) Limited v. Federation of Pakistan and others (1993 SCM R 1905). It was held therein that this section 31-A has binding force and "has the effect of destroying the doctrine of vested rights." It was further clarified in this judgment that the provision of section 19 of the Customs Act and that of Section 21 of the General Clauses Act are covered by Section 31-A and that "non-obstinate clause in section 31-A has effect of setting at naught the effect of Supreme Court judgment in Al-Samrez Enterprise case reported as 1986 SCM R 1917. It was, therefore, declared that "that Courts would, therefore, have to give effect to this withdrawal or modification of concession notwithstanding the decision of Supreme Court in case Al-Samrez Enterprise 1986 SCM R 1917." The same view was taken in P.L.D. 1993 SC 176 . (Government of Pakistan v. Muhammad Ashraf). This dictum was repeated in P.L.D. 1993 SC 132 when it was held "Provisions of section 31-A are intended to eclipse the judgment of Supreme Court in Al-Samrez Enterprise v. Federation of Pakistan." The objection from the petitioners' side that section 19 of the Customs Act or that of section 21 of the General Clauses Act are not affected inspire of the addition of section 31-A of the Customs Act is not tenable because of the decision reported as 1993 SCM R 1905 wherein it is laid down that section 31-A would embrace the said two sections and these sections would come under its purview.
(C) The criticism by the petitioners' counsel that section 31-A is violative of the constitution would not prevail because of the rule laid down in 1993 SCM R 1905 which says "provision of section 31-A; Customs Act, 1969 was not violative of Article 73 of the Constitution of Pakistan." The same view was taken in P.L.D. 1989 Karachi 361 as it was observed that "Section 31-A of the Customs Act is not violative of the Constitution nor it violates tenets of Islam."
(D) The doctrine of promissory estoppel or for that matter of vested rights or legitimate expectation cannot be invoked against the legislature or laws framed by it because the legislature cannot make representation. In other words the bar of none of these principles can be pleaded against legislative actions.
10. To sum up the foregoing discussion we have on one had found that the petitioners have made out a good case for interference in our writ jurisdiction on grounds of vested rights, promissory estoppel and locus Poenitentiae and reasonable expectation but on the other had we have also found that the legislature has since inserted Section 31-A in the Customs Act on 26th December, 1988 and in the presence of the said provision promises made by the Federal Government and the Government of N.W.F.P, in the Chief Minister were not to legally bind down the Federal Government which has the power and authority to withdraw and rescind Notification No. SRO 517(I)/89 dated 3rd June, 1989 on account of Section 31- A of the Customs Act. We have nevertheless to observe that in view of the high promises made by the Government, the 'mahl-e-waqoo' of the Industrial Estate of Gadoon Amazia in the poppy growing area as already discussed in the judgment at different places we would remark that the Federal Government must honour its promises and undertakings. In this context we shall also refer to the components deletion programme to spread over a period of i.e years and so if the exemption of the import duty on raw material is also made to spread over a period of i.e years in gradual deletion and also extended in some minimum exemption on import of raw material for some further period the same would not on one had prove detrimental to the industrial growth in the other parts of the country and would at the same time also prove as a measure of some incentive to the Industrial Estate of Gadoon Amazia. Government may further in its own wisdom after taking into consideration the over all situation of different industries chalk out an exemption programme for certain industries and may withhold the exemption on import duty on raw material of certain other industries if the same are found not in the larger national interests. In the context notice may also be taken of the fact that as many writ petitions were withdrawn on assurances by the Federal Government in extending certain concessions to the investors to the extent of 25% compensation for the industrialist in the Gadoon Amazia Industrial Estate as contained in Government of Pakistan, Central Board of Revenue letter No. 1 (100)S&R-2/90 dated 16th December, 1993. As such our above observations and suggestions are not OF the point.