RANA BHAGWAN DAS, J.- Petitioners limited company through this petition have called in question the respondents' action in levying and charging octroi on the transit of their goods purely meant for export purposes as illegal, without lawful authority and contrary to Octroi Rules and prescribed procedure.
2. Petitioners are a limited company with Head Office at Lahore and Branch Office at Karachi. They are duly registered as Exporters with the Chief Controller of Import and Export Karachi. They received a Letter of Credit dated 13.1.1990 with regard to ah indent for exporting 2000 metric tons of Ethyle alchohal. Accordingly, they obtained a licence from the Excise and Taxation Officer Karachi West for this purpose and executed relevant securities, it is the case of petitioners that vide letter dated 20.1.1990 they applied for issuance of octroi pass to the respondents as their goods were to remain in temporary retention within the octroi limits awaiting Ocean Ship at the bonded warehouse. They submitted relevant documents alongwith their application for exemption to the respondents with a view to demonstrate their bona fides whereupon they were asked to furnish certain particulars which were duly conveyed to the respondents alongwith a bank guarantee in the sum of Rs. 50,000/-. The goods were transported from Bhalwal (Punjab) to Keamari Terminal and the petitioners submitted a declaration with each truck to the effect that such goods were intended for export and were not meant for consumption, use or sale within the octroi limits of KMC.
It is averred that despite receiving such declaration and information that the goods were excise duty free and no octroi was leviable thereon they started collecting octroi on the goods of the Petitioners at the rate of Rs. 90/- per ton amounting to Rs. 51,854/- vide annexures 'M-T to 'M-5T.
They approached the respondents for refund of Octroi as their goods were not subject to levy of octroi which could not be realised but with no positive response, hence this petition.
3. Respondents in their counter-affidavit did not dispute the material facts but urged that since the petitioners were not registered with them as temporary retainers in terms of procedure provided under Rule 83(e) of the Sindh Municipal Committee (Octroi) Rules, 1964, (hereinafter referred to as 'Octroi Rules'), therefore octroi pass was not issued to them. Another ground urged by the respondents in their counter- affidavit is that the petitioners did not claim Transit Pass in respect of goods under Rule 35(e) of the Octroi Rules, therefore the Octroi was rightly levied and recovered in accordance with Rule 36 of the Octroi Rules. On legal score, it was urged that since the petitioners failed to exhaust the remedies available to them under the Rules, this petition, being premature, was liable to dismissed.
4. An affidavit-in-rejoinder was filed on behalf of the petitioners controverting the points raised in the counter-affidavit of the respondents.
5. At the hearing, learned counsel for the petitioners with reference to the power of the Local Councils to levy taxes in terms of Section 60 of the Sindh Local Government Ordinance, 1979, referred to the definition of 'octroi' as contained in Rule 2(m) of the Octroi Rules which "means a tax on the import of goods for consumption, use or sale within the octroi limits" vehemently urged that Undisputedly petitioners' goods were not imported within the octroi limits of the respondents for consumption, use or sale. He submitted that such goods were essentially brought to Karachi for the sole purpose of export in terms of the Letter of Credit established by the petitioners and were not chargeable with octroi. Indeed, there appears to be no controversy with regard to this aspect of the case as the facts and circumstances narrated in the petition in this regard have not been disputed in the counter-affidavit. We feel that the contention raised on behalf of the petitioners can not be validly controverted and the goods of the petitioners were, in fact, exempt from the payment of octroi within the octroi limits of the respondents. We say so as there is amply unimpeachable documentary evidence on record in support of the view that the goods were brought to Karachi for export out of the country.
6. On the other hand, learned counsel for the respondents faintly submitted that the goods were directly imported by the petitioners within the octroi limits of KMC through Super Highway without prior registration for temporary retention of such goods; and as no declaration was filed by the petitioners at the Octroi Post in terms of Rule 35(e) of the Octroi Rules respondents had lawfully charged octroi on such goods. The argument on the face of it is devoid of any substance for the reason that in paragraph 12 of the memo of petition it was specifically pleaded that after transporting the goods from Bhalwal to Keamari Terminal petitioners submitted a declaration with each truck that the goods were intended to be exported and were not meant for consumption, use or sale within octroi limits and that these were meant for temporary retention and ultimate export to foreign country. This assertion was not disputed by the respondents. Petitioners filed* a proforma of declaration, annexure-"L" with the memo, of petition which remained unrebutted. As the respondents did not dispute this material fact of vital importance they can not be permitted to agitate that no declaration was filed by the petitioners, therefore the goods were rightly subjected to payment of octroi, in order to appreciate the argument o the learned counsel in its proper perspective Rules 35 and 36 of the Octroi Rules may be reproduced hereunder with advantage: "35. When goods liable to Octroi are presented at an Octroi Post, the person-incharge of the goods shall declare whether the goods are intended for;
(a) consumption, use, or sale within the Octroi limits;
(b) consumption, use or sale within the Octroi limits for a purpose for which an exemption is to be claimed;
(c) consumption, use, or sale within the Octroi limits by a party with which Octroi has been compounded, or from which Octroi is to be charged through a bill;
(d) consumption, use or sale within he Octroi limits when the goods are imported under an import pass;
(e) immediate export;
(f) temporary retention within the Octroi limits and ultimate export.
7. A close scrutiny of the aforesaid Rules tends to show that the owner of goods, liable to octroi, is required to submit a declaration at the Octroi Post whether such goods are intended for consumption, use or sale within the local limits and if so, whether exemption is to be claimed from payment of octroi on such goods or whether the goods are imported under an Import Pass, for immediate export or for temporary retention within the Octroi limits and ultimate export. Rule 36 postulates that if no declaration is made, as above, at all, it shall be deemed that the goods are intended for consumption, use or Sale within the Octroi limits. A perusal of annexure-"L" prima facie, tends to show that the petitioners had submitted requisite declaration in respect of goods alongwith each truck carrying the goods at the Octroi Post yet the respondents did not bother to adhere to the provisions of the Sindh Local Government Ordinance, 1979, and the Octroi Rules.
8. The second limb of argument to the effect that the petitioners did not obtain registration for temporary retention with the KMC in order to avail of exemption from payment of octroi is equally of no significance as basically the goods were not liable to payment of Octroi and if that be so, respondents cannot be permitted to be hyper-technical and defeat the ends of justice and the spirit of law on mere technicalities. Surely, the Octroi Rules are deemed to be enacted for the purpose: of generating revenue for a local Council and in order to check and exercise control on avoidance or evasion from payment of octroi on goods imported within the Octroi limits for consumption, use or sale. There being no dispute as to the nature of the goods on which the respondents insisted for payment of octroi and virtually charged the same their contention cannot be accepted. We are fortified in our view by a case from Lahore jurisdiction namely Municipal Committee Multan v. Burma Shell Storage and Distributing Company (PLD 1976 Lah. 726), paragraphs 7 and 8 of the report may be reproduced hereunder for ready reference: "7. Admission by representative of the company acknowledging the liability before the Chairman, Municipal Committee, Lyallpur, would not stand in his way, for, the imposition of duty was not in accordance with law, upon the well known principle of expression facit cessare taciturn. (If doing of a particular thing is made lawful, doing, of something in conflict of that will be unlawful). Reliance is placed on E.A. Evans v. Muhammad Ashraf (PLD 1964 SC 536).
8. The last objection has equally no force, for, if the amount demanded to be recovered has been illegally imposed by an authority not competent to levy the same the realisation of the amount cannot be given effect to, for, if the basic order is wrong the superstructure raised thereon, falls to the ground. Yousuf Ali v. Muhammad Aslam Zia and others (PLD 1958 SC (Pak.) 104) refers."
Similar view was expressed by a Division Bench of this Court in Firdous Spinning and Weaving Mills Ltd. v. KMC (1987 MLD 240) expressing the view that goods in transit could not be kept in ware- house established by a Municipal Committee for more than 60 days, it was ruled that breach of the Rules, would not entail levy of Octroi on such goods, but at the most penal rent could be charged for excess period in accordance with scale fixed by Municipal Committee in that respect. To the same effect is the case decided by an another Division Bench of this Court reported as Muhammad Amin Muhammad Bashir Ltd. Administrator KMC (1993 MLD 849) defining the scope of Rule 35(e) of the Octroi Rules as under: "R. 35(e)--Goods not meant for consumption and use within Octroi limits-Such goods whether liable to octroi--Where goods in question, were not meant for consumption and use within the Octroi limits but were directly exported to Iran under custom bonded facilities, such goods could not be subjected to Octroi- Authority was not empowered to refuse a transit pass under R. 35(e), West Pakistan Municipal Committees (Octroi) Rules, 1964 in circumstances."
9. As to the technicalities in the context of administration of justice, it may be pertinent to reproduce hereunder the view expressed by late Kaikais, J (as his lordship then was) in Imtiaz Ahmed v. Ghulam Ali (PLD 1963 SC 382): "I think the proper place of procedure in any system of administration of justice is to help and not to thwart the grant to the people of their rights. All technicalities have to be avoided unless it be essential to comply with them on grounds of public policy. The English system of administration of justice on which our own is based may be to a certain extent technical but we are not to take from that system its defects. Any system which by giving effect to the form and not to the substance defeats substantive rights is defective to that extent the ideal must always be a system that gives to every person what is his."
This view was followed and re-affirmed in Manager Jammu and Kashmir Estate Property v.
Khudayer (PLD 1975 SC 678); United Bank Ltd. v. Haji Yousuf Noor Muhammad (1988 SCMR 82), Pakistan Engineering Council v. I.A. Osmani (1991 SCMR 654) and Allah Ditta v. Barkat Ali (1992 SCMR 1974).
10. Since act of the respondents is clearly in contravention of law and the statutory rules we are inclined to allow this petition with costs and declare that the act of the respondents in the matter of levy and realisation of octroi on the goods of the petitioners is without any lawful authority and of no legal effect. The respondents are directed to refund the amount of Rs. 51,854,00 with 10% interest unlawfully recovered, on the goods imported by the petitioners.