JUDGMENT ABDUR REHMAN KHAN, J.-This judgment will also dispose of the writ petitions enlisted in schedule marked 'A' to the writ petition. Although the factual aspect of some of the writ petitions is different from some other but in all of them in some way or other the legality, effectiveness and applicability of Notification S.R.O. No. 1050(I)/95 dated 29.10.1995 whereby regularity duty has been imposed on the goods imported into Pakistan, has been impugned. In some of the writ petitions, the imposition of demand of sales tax have also been challenged. The answer to the following three points in respect of the impugned Notification would determine the controversy in these writ petitions:- What would be the consequence of this Notification over the goods which stood exempted through certain Notification from the whole of customs duties and sales tax;
(ii) What would be the effect of this Notification over the letter of credits which have been opened before the date of this Notification;
(iii) What would be the implication of this Notification where letter of credits have been established prior to its issuance and goods have also reached Pakistan before it.
2. In order to appreciate the controversy in its correct perspective, the factual aspect and the legal points raised in one of the writ petition which is No. 1110 of 1995 captioned as M/s. Saif Textile Mills vs. Assistant Collector Customs etc. Is given in detail as that would almost cover the dispute agitated in these writ petitions and would help settling the above formulated points and also the point of sales tax. The said writ petition has been filed for the following reliefs:-
(i) To declare the impugned Notification dated 29.10.1995 ultra vires the law and the Constitution;
(ii) Declare that the demand of regulatory duty is illegal, without lawful authority and of no legal effect; y (iii) Declare that the petitioner is not liable to pay regulatory duty on the raw materials in terms of S.R.O. No. 108 dated 12.2.1995.
(iv) Any other relief deem appropriate in circumstances of the case not specifically asked for may also be granted to the petitioner with costs.
The above reliefs is that the Ordinance, 1984 and its Mills are of Gadoon Amazia of District Swa instal the Industry because of the various concession/exemption announced by the respondents from time to time. In this context, S.R.O. No.517(I)/89 dated 3.6. Been issued under section 19 (hereinafter to be referred as the Act) and Section 7(i) of the Sales Tax Act, 1951 whereby raw materials and components meant for consumption in the recognised industrial units Gadoon Amazia were exempted from payment of whole of customs duties and sales tax leviable thereon.
This notification was later in rescinded on 9.5.1991 and to compensate the industrial units in Gadoon, the Federal Government offered 25% compensation on one time basis for one year.
Petitioner applied for this concession which was allowed to it on 25.7.1992. It was on 12.2.1995 that Government of Pakistan issued Notification No. 108(I)/95 whereby it directed "that a quantity equal to l/4th of imported consumption of such raw materials and components as are imported for the exclusive manufacture of goods by recognised industrial units located in the approved industrial estate of Gadoon Amazia in the Province of North West Frontier except the industries manufacturing goods specified in schedule 'A' of this Notification shall be exempt from whole of customs duties and sales tax leviable thereon for a period of 5 years from the date of issuance of this Notification." Petitioners are qualified for the exemption available in the said Notification as it had not been placed in negative list. When the petitioner wanted to exbond the raw materials for consumption the respondents demanded regulatory duties under Notification No. 1050(I)/95 dated 29.10.1995 even on the l/4th concession allowed through Notification No. 108 dated 12.2.1995.
Although petitioner showed willingness to pay regulatory duty on 75 per cent quantity of their stock but the respondents insisted the regulatory duty even on l/4th quota which is exempted under the S.R.O. No. 108 dated 12.2.1995. Petitioner then in para. 8 of the writ petition referred to the earlier decision of this Court reported as P.L.D. 1992 Peshawar 191 whereby regulatory duty was held to be additional customs duty and the petitioner in that case was not liable to pay it from the date the exemption granting Notification was enforced till the date it was withdrawn. Petition for leave to appeal and the review were dismissed by Supreme Court against the said judgment. The decision of this Court in W.P. No. 106 Of 1993 decided on 20.3.1995 was also referred whereby while relying on P.L.D. 1992 Peshawar 191 which was approved by the Supreme Court, it was held that the regulatory duty is, in essence, customs duty which cannot be levied during the period the exemption granting Notification was operative.
4. In these events the petitioner stressed that on the strength of the above precedent cases and on the basis of exemption granting Notification No.108 dated 12.2.1995 the petitioner is not liable to pay regulatory duty to the extent of exempted quota of l/4th. The reply in the written statement was that the impugned Notification No. 1050 dated 29.10.1995 was valid, that it has been declared by the Supreme Court that the Government is competent to withdraw the exemption. It was also stated that "the provision of law under which the regulatory duty is imposed and the object and reasons for its imposition are altogether different than the provision under which the , earlier exemption under
5. R.O. No.108 was granted."
5. The learned counsel for the petitioner submitted that Notification No. 108(I)/95 dated 12.2.1995 provides: "The Federal Government is pleased to direct that a quantity equal to one fourth of imported consignment of such raw materials and components as are imported for the exclusive manufacture of goods by recognised industrial units located in the approved industrial estate of Gadoon Amazia in the province of North-West Frontier except the industries manufacturing goods specified in schedule VA' of this Notification shall be exempt from the whole of the customs duties and sales tax leviable thereon for a period of 5 years from the date of issuance of this Notification."
Therefore, according to him, the petitioners were not liable to pay any customs duty including regulatory duty. He emphasized that regulatory duty is in essence a customs duty and on the basis of the said Notification the petitioner could not be compelled to pay it. In this context, he referred to a decision of this Court reported in PLD 1992 Peshawar 191, wherein it was declared that regulatory duty is essentially a customs duty and when the petitioner in that case i.e. Gadoon Textile Mills Ltd.
Stood exempt by Notification from payment of the whole of the customs duties, then it was not liable to pay regulatory duty and its imposition was declared to be without lawful authority and of no legal effect. He pointed out that this judgment was confirmed by the august Supreme Court as petition for leave to appeal No.99-P/92 against it was dismissed on 28.11.1992 and then Civil Review Petition No. 33 of 1993 as reported in 1993 S.C.M.R. 712 was also dismissed. With regard to regulatory duty, it has been observed in PLD 1988 S.C.670 "in essence, therefore, it can have no other sense but that of a customs charge imposed to maintain a proper balance in a fluctuating market although it is described by a different nomenclature which does not make it distinct from customs duty." In the latest judgment of Lahore High Court in W.P.No. 17231 of 1995 titled as M/s. Flying Board & Paper Products vs. Central Board of Revenue, Government of Pakistan etc. Decided on 28.7.1996 the same view that regulatory duty is nothing but additional customs duty was adopted. Keeping in view these precedent cases, it is held that regulatory duty is covered by Customs duty and the raw materials meant for consumption in the petitioners Mills and in the Mills of all other petitioners having been exempted to the extent of one fourth from payment of the whole of the Customs duties and sales tax thereon by Notification No.l08(I)/95 dated 12.2.1995 are not liable to pay the regulatory duty to the extent of the exempted one fourth in terms of the said Notification till this notification is specifically withdrawn. The answer to point No. 1 would, therefore, be that Notification No.l050(I)/95 dated 29.10.1995 would not be effective against the goods which have been exempted by Notifications and which exemption Notifications are still intact lt could otherwise not be shown that the said notification was either ultra vires of the constitution or beyond the competence of the authority which issued it.
6. Points 2 and 3 are interlinked, therefore, these can be disposed of by joint discussion of the legal points. Section 30 of j the Act prescribes the date on which the value and rates of duty ; in respect of the imported goods are determinable. It will be clear j from reading the section as a whole that crucial date. For the j purpose of this section will be the date on which the manifest of j conveyance is delivered and that will be considered as the date of j the import of goods. The relevant^ date for section 30 would, ! Therefore, not be the one on which L.Cs. Are opened and * contracts are entered.
This controversy stands resolved by the rules laid down in PLD 1991 SC 884 wherein it has been declared that regulatory duty being intra vires, therefore, no exception could be taken to it and that "when the Government issues an import licence for the import of certain goods it does not make any representation that it could not levy any customs duty or would not make its rates. In fact there is no nexus between issuance of an import licence and levy of a new customs duty or increase in its annexed rates. Section 30 of the Customs Act, 1969 provides the mechanism for determining the value of the imported goods and the rates of customs duty. Levy of new customs duty or increase in its rates is a normal incident of a business transaction." In PLD 1988 Lahore 563, determining the date for importation of goods and for imposition of rates of duty have been elaborately discussed in these words; "The only question that arises is: when can it be said that goods are imported into Pakistan. The word "import" carried the meaning of "bringing in" or "to bear or carry into" and an imported article was one which was brought or carried into a country form abroad and it did not necessarily entails the entire process of filling bill of entry, discharging the goods from the vessel at a wharf, the assessm ent of the value of the goods and the duty payable on them. No sooner, therefore, the vessel touches a Pakistan port, the goods can be stated to have been imported.
Under section 9 of the Customs Act, the Central Board of Revenue, by a notification, can declare places which can be treated as customs ports or customs airports or land customs stations for the clearance of goods imported. Under section 10 of the Act, the Central Board of Revenue, by notification, can specify the units of any customs port or stations. Under Central Board of Revenue notification S.R.O. No. 108 (I)/83 dated 12.2.1983, the limits of the customs port of Karachi are laid, which extends some miles outside the Karachi harbour. In these circumstances, no sooner a ship enters the territorial waters of the customs port of Karachi, goods can be stated to be imported into Pakistan, irrespective of the fact whether the vessel touches the land mass of Pakistan or discharges its cargo at a wharf. Thus no sooner the goods have entered the territorial waters of the Pakistan customs ports of Karachi, Pasni, Muhammad Bin Qasim, as specified by the Central Board of Revenue under section 10 of the Customs Act, 1969, the goods become chargeable." Again at page 565, it is held "thus, if on the date the goods reach the territorial waters of the customs ports of Pakistan, no customs duty or surcharge is leviable, or if any duty or surcharge is leviable, but the same stands totally exempted, the goods would not be chargeable to duty or surcharge. If, therefore, at a later date the importer submits his bill of entry for home clearance or ex-bonding from warehouse and by this date some customs or regulatory duty is imposed, or the total exemption is partially or totally withdrawn, the importer would not be liable for the payment of any customs or regulatory duty, as the goods initially were not chargeable." In W.P.No. 17231 of 1995 decided on 28.8.1996 by the Lahore High Court the same view was followed. It is, therefore, held that if goods have entered territorial waters of the customs port of Pakistan prior to 29.10.1995 which is the date of the impugned notification then regulatory duty under the said notification cannot be realised. The date of entering into contract or opening of L.Cs. Before that notification would, however, not affect its applicability under the provisions of section 31-A of the Act.
However, the cases of withdrawal of notification in respect of sales tax stands on different footing as in those cases section 31-A of the Act would have no application because this section covers only customs duty under the Act and not sales tax, as in view of the rules laid down in 1986 S.C.M.R.
1917, PLD 1992 Karachi 266, PLD 1989 Lahore 237 and 1994 M.L.D. 1196, the petitioner would be entitled to avail benefit under the earlier exemption granting notification in respect of sales tax notwithstanding its suppression by the impugned notification as vested rights had accrued to the petitioner destroyed by notification from retrospective date. We direct the respondents to return the amount if received by them against whatever we have held in this judgment. Parties are directed to bear their own costs.