IRSHAD HASAN KHAN, J.---This appeal with leave of the Court is directed against the judgment of the High Court of Balochistan, Quetta, passed in Civil Petition No,69 of 1993.
2. Leave was granted in the above appeal to consider whether the exemption available to the petitioner's industry situated in the Industrial Estate, Hub Tehsil, Province of Balochistan, under Customs Notification No,S.R.O.1284(I)/90, dated 13-12-1990, could not be withdrawn in view of the Protection of Economic Reforms Act, 1992? The notification, dated 13th December, 1990 is reproduced below for ready reference:-- Government of Pakistan Ministry of Finance NOTIFICATION Islamabad, the 13th December, 1990.
CUSTOMS S.R.O. No,1284(I)/90.--In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), subsection (2) of section 2 of the Finance Ordinance, 1982 (XII of 1982) and section 31 of the Sales Tax (Amendment) Act, 1990 ( VII of 1990), the Federal Government is pleased to exempt such plant and machinery as is not manufactured locally and is imported during the period commencing on the 1st December, 1990 and ending on the 30th June, 1995, for setting up new units and for expansion or balancing, modernization and replacement of existing units,--
(a) in areas other than mentioned in Table-I, from whole of the Customs Duty, surcharge and sales tax leviable or chargeable thereon under the First Schedule to the Customs Act, 1969, or, as the case may be, the Finance Ordinance, 1982, or the Sales Tax (Amendment) Act, 1990, and
(b) in the areas specified in Table-II from so much of the customs duty leviable thereon under the First Schedule to the Customs Act, 1969, as is specified in column 3 of the said Table and whole of the sales tax chargeable thereon under the Sales Tax (Amendment) Act, 1990, subject to the conditions set-out below, namely:-
(1) For the purpose of this notification, machinery shall mean--
(i) machinery operated by power of any description, such as is used in any industrial process including mining and extraction of timber,
(ii) apparatus and appliances, including metering and testing apparatus and appliances specially adopted for use in conjunction with machinery specified in item (I) above;
(iii) power generating plant for operation item (I) above;
(iv) mechanical and electrical control and transmission gear adapted for use in item (I) above; and
(v) component parts of machinery as specified in items (i), (ii), (iii) and (iv) above, identifiable as for use in or with such machinery.
(2) The importer shall, at the time of import of machinery, make a written declaration on the bill of entry to the effect that the machinery has been imported for a project located in areas other than those specified in Table-I or for the areas specified in Table-II, as the case may be.
(3) The importer shall furnish an indemnity bond in the Form set-out below to the extent of customs duty, surcharge and sales tax exempted under this notification. The said indemnity bond shall be discharged subsequently on the production of a certificate from the Assistant Collector, Customs and Central Excise, to the effect that the plant and machinery imported for setting up new units or expansion or balancing, modernization and replacement of existing units located in the areas enjoying benefit of concession under this notification, have been duly installed in the aforesaid areas.
(4) The certificate of installation referred to in condition (3) shall be submitted to the Collector of Customs not later than one year from the date of importation of the plant and machinery to which it relates.
(5) The plant and machinery released under this Notification shall not, within a period of eight years from its importation, be used in any area which is not eligible for the same concession. In case this condition is violated the amount of customs duty, surcharge and sales tax exempted under this Notification and penalties that may be imposed in this behalf shall be recovered under section 202 of the Customs Act, 1969 (IV of 1969).
TABLE-I Sr. No, Area
1. The Municipal or Cantonment Board limits of Karachi and 40 kilometres area around these limits.
2. The Municipal or Cantonment Board limits of Lahore and 30 kilometres around these limits.
3. The existing limits of Municipal Corporations, Municipal Committees and their Cantonment Boards and 10 kilometres areas around Municipal Corporations and their Cantonment Boards, in Provinces of Sindh and Punjab excluding Bahawalpur, D.G.Khan, Sukkur and Larkana Divisions.
4. Areas falling within the limits of Islamabad Capital Territory and HubTehsil in the Province of Balochistan.
TABLE-II FORM [See condition (3) ] (On appropriately stamped non judicial paper)
INDEMNITY BOND
3. The Government of Pakistan, Ministry of Industries, vide Circular No,6(12)90-Policy, dated the 17th December, 1990 announced a new package for rural industrialisation with a view to make it more comprehensive and broad-based. It inter alia offered tax incentives and concessions to encourage industrialisation in rural areas and to promote industrial development and growth in areas in some distance away from large cities, towns and municipal centres. The definition of rural areas is given in paragraph 1 of the Circular which reads thus:-- Definition of Rural Areas:
(1) Rural Areas in the context of Rural Industrial Development Incentives shall mean all Rural Areas excluding:--
(a) Major Industrial Estates of Hub, Nooriabad, Chuunian, Hattar and Gadoon and areas up to 10 Kilometres outside their limits.
4. The Hub Industrial Estate was outside the prescribed distance from the concerned Municipal Corporation/Committee. However, Economic Coordination Committee of the Cabinet while its meeting held on 31-3-1992 took the decision for including the Hub Industrial Estate in the definition of rural area.
5. Details of incentives and concessions approved by the Government are incorporated in Paragraph 3 thereof. Sub-paragraphs (i) and (ii) relevant to the controversy in hand are as under:- "(i) Five years income-tax holiday will be available to all industries set up in Rural Areas provided such industries are set up between 1st December, 1990 td 30th June, 1995. These concessions will be applicable only to income generated from that particular industry.
(ii) Imported machinery for Rural Industries would be totally exempted from the payment of customs duty, sales tax and import surcharges, provided such machinery is not manufactured locally. Import licence fee has also been reduced from 6 per cent. To 2 per cent. For all such industries established in the rural areas.
Paragraph 3 provides that the abovementioned incentives will be available from the date, necessary S.R.O. Has been issued by the concerned Ministries/Divisions.
6. The appellant claims concessions and exemptions on the basis of the statutory Notification No,S.R.O. 1284(1)/90, dated 13-12-1990 on the ground that his unit is situated in the Hub Industrial Trading Estate in Hub Tehsil. However, the above notification of 13-12-1990 was superseded by S.R.O.
50(1)92, dated 28-1-1992 whereby the tax exemption made available under the first notification in respect of the units located in the Hub Industrial Trading Estate were continued. It is also pleaded that the machinery and plant imported by the appellant continued to remain exempt from the whole of the customs duty and sales tax. Later the surcharge was abolished. The second notification was superseded by S.R.O. 484(I)/92, dated the 14th May, 1992, hereinafter referred to as the third notification, whereby machinery which is not locally manufactured and is imported for installation in a unit in the Hite remains exempt from customs duty in excess of 10% ad val and whole of sales tax.
7. The appellant pleads that acting on the policy framed by the Government and the first notification, it decided to avail the benefit accruing thereon, applied for licence which were issued in their favour on payment of 2% import license fee. In consequence, the appellant executed contract with foreign supplier and established letter of credit in their favour to import the machinery under the B.M.R. Scheme. It is pleaded that when the machinery and equipments imported by the appellant for the expansion/balancing of its plant imported against the abovementioned import licences arrived at Karachi, they filed a Bill of Entry for placing the goods into Bond, sought benefit under the notifications, in that Hite was within a rural area. Their claim was, however, rejected by the Principal Appraiser, respondent No,5 herein, vide order dated 18-3- 1993 with the following grounds:-- "The benefit of S.R.O.484(I)/92, dated 14-5-1992 cannot be extended to rural area as Hub is not covered under rural area. Therefore, if approved the party may be asked to pay duties/taxes accordingly."
8. Needless to observe that the Economic Coordination Committee took notice of the summary, dated March 18, 1992 submitted by the Ministry of Industries and took the following decisions:- "The E.C.C., in the light of clear rules on the subject, did not consider it proper to modify its earlier decision taken in the meeting of 27th January, 1992 and directed that the prescribed distance from the outer boundary of the Municipal Corporation may be defined by the concerned district administration where so required.
The E.C.C. Agreed that the industrial estates of Hub, Nooriabad, Chunnian, Hattar and Gadoon may be included in the definition of rural areasprovided they fall outside the prescribed distance from the concerned Municipal Corporation/Committee limit.
The E.C.C. Also approved the proposal contained in para. 7 (c) of the summary.
The E.C.G. Further directed that for the purposes of bringing clarity to the instructions on the subject, the Chairman, C.B.R. Would, in supersession of all previous instructions, prepare a master statutory notification/circular and get it cleared from the Diputy Chairman, Planning Commission and the Law Justice Division before issue."
9. Mr. S. Sharifudding Pirzada, learned Senior Advocate for the appellant has also drawn our attention to the following documents on record:--
(i) O.M. No,6(100/90-Policy, dated 13-5-1992 whereby in view of the revised definition of rural area and confirmation by the Chief Secretary, Balochistan, by telex/fax message No,S.O.I.(I.N.D.)/2-2/92, dated the 11th and 12th May, 1992, took the view that "Hub Industrial Estate is not located in the limits of Municipal Committee limit and falls in the Rural Areas".
(ii) Letter dated 17-5-1992 from Government of Balochistan wherein it was confirmed that Hub Industrial Estate falls outside the prescribed distance from the concerned Municipal Corporation/Committee limits.
(iii) Certificate of the Deputy Commissioner, Lesbella is to the following effect:-- TO WHOM IT MAY CONCERN As confirmed by the Secretary, Local Government in his letter, dated 26th May, 1993, the Town of Hub does not have a Municipal Committee or a Municipal Corporation. The Hub Industrial Trading Estate and Gatron (Industrials) Limited. Plot No,M-2. S.E.C-M H.I.T.E. Main R.C.D. Highway. Hub Chowki, Lesbella District are Located beyond ten kilometres prescribed distance of Municipal Committee/Municipal Corporation in Balochistan for the purpose of rural area. Further, the nearest Municipal Committee from H.I.T.E. And Gatron is Khuzdar which is 380 Kilometres away and the nearest Municipal Corporation from H.I.T.E. And Gatron is Quetta which is also 700 Kilometres away.'
(iv) Unsigned parawise comments filed on behalf of the respondents. Mukhdoom Ali Khan, Advocate Supreme Court also appeared in the High Court has made a statement at the bar that the above comments were filed by the Deputy Attorney-General wherein, with reference to paragraph 3 of the writ petition it was avered:- "Yes. However, the decision of the E.C.C. As well as circular of the Ministry of Industries dated 2-3- 1992 stipulated that these Industrial Estates would be treated as rural areas provided they fall outside the prescribed distance from the concerned Municipal Committees limits. Revenue Division was of the view that the Government of Balochistan was taking into account the limits of Municipal Corporation/Committee of the Province of Balochistan whereas the measurement of distance of Hub Industrial Estate should be taken from the periphery of Karachi Municipal Corporation, which is 20 Kilometres and, therefore, does not qualify for treatment as rural area.'
(v) Letter No,PS/SECY/L.G/27, dated 12-1-1993 of Local Government Department, Balochistan, whereby it was stated, "The Hub Industrial Trading State and Plot No,B-189 to B-206 were located beyond ten kilometres prescribed distances of Municipal Committee/Municipal Corporation in Balochistan for the purposes of rural area.
(vi) Letter dated 30-8-1993 of the Government of Pakistan wherein under paragraph 3 thereof it was stated that the Government of Balochistan have confirmed that Hub Industrial Estate does not qualify for treatment as 'rural areabecause the Municipal/Cantonment limits of Karachi and 10 Kilometres area around these limits do not fall in the rural area'. In paragraph 6 thereof it is stated with reference to the decision of the E.C.C. That 'Hub Industrial Estate definitely falls outside the prescribed distance from the concerned Municipal Corporation/Committee limit (Lasbella District) as confirmed by the Government of balochistan. The periphery of Karachi Municipal Corporation is not relevant while measuring the distance for grant of fircal concessions etc. In the case of Hub Industrial Estate, which is located in Balochistan Province'.
(vii) Notification No,S.R.O.1056(I)193, dated 1st November, 1993, whereby amendments were made in the Notification No,S.R.O. 484(1)/92, dated the 14th May, 1992 whereby Hub Tehsil in the Province of Balochistan was omitted. This notification was in the nature of corrigendum correcting the earlier notification. It was pleaded that the notification being declaratory, it can be issued retrospectively.
(viii)Order dated 11-2-1998 passed by the Customs Excise and Sales Tax Appellate Tribunal, Karachi Bench in Customs Appeals Nos.K-187-A of 1997 and K-236 of 1997, whereby the ruling of the Board of Revenue with regard to applicability of S.R.O. 484(1)/92 for rural industrialization covering Balochistan was followed. It is to the following effect:- I am directed to refer to your letter-dated the 28th May, 1997 on the subject noted above. The case has been examined in the C.B.R. And it is held that the whole area of Balochistan except Hub Tehsil was exempt from whole of customs duty and sales tax under S.R.O. 484(1)/92, dated 14-5-1992. The condition of Municipal limits and 30 Kilometres around them was not applicable in the Province of Balochistan."
10 Being aggrieved with the order of the Principal Appraiser, dated 18-3-1993, the appellant approached the High Court through a Constitution petition for the redress of grievance. The learned Members of the Division Bench called for comments from the respondents. Counter- affidavit was filed on behalf of respondents. The assertion of the appellant in the writ petition was that the goods and machinery imported by the appellant were locally manufactured. As to the claim of the appellant seeking exemption of whole of the customs duty, on the basis of the bill of entry filed by them for placing the goods in the Bonds, the respondents took the following stance vide paragraph 14 of their counter-affidavit which reads thus:- "Para. No, 14.---As regards the contents of para. 14 it is submitted that plant and machinery imported for setting up new units for expansion or balancing moderanisation and replacement of existing units are exempt from Customs duty in excess of 10% Adv. And whole of sales tax vide Serial No,2(I) of the Table II of S.R.O. .484(1)/92, dated 14th May, 1992. No amendment in this S.R.O. Or a new notification has been issued by the Government till date to the effect of petitioners claim as pleaded in this para. Hence, the action taken by the respondents is legal and with lawful authority.
The respondents are bound to charge duty to the extent of 10% Adv. Under the relevant S.R.O. And the issuance of S.R.O. 484(1)/92 in this regard is a conscious decision of the Government.
As regards petitionersclaim that demand of duty/taxes is contrary to the doctrine of promissory estoppel, it is submitted that the doctrine of promissory estoppel in the instant case is not relevant as it does not operate against a statute or the rules made thereunder for there can be no estoppel against law. The alleged issuance of office memorandum and circular by Ministry of Industries and the Chief Controller of Imports respectively cannot hold field against statute or law. In view of the judgment of the High Court of Sindh in Civil Petitions Nos.D-581, D-1637/ 87 of 1987, promissory estoppel is not applicable in respect of statutes."
11. The learned Division Bench of the High Court, while dismissing the petition, inter alia, took the view that mere policy of the Government as reflected in the notification was not justiciable, unless a legal cover was given to it and that in any case, the policy had been streamlined by the Government of Pakistan in the notification, dated 14th May, 1992, wherein industries situated in Hub Tehsil were excluded from the concession of Tax Holiday etc. It was further observed that Notification S.R.O. 484(1)/92, dated 14th May, 1992, had been issued in exercise of powers conferred on the Government under section 19 of the Customs Act and subsection (8) of section 13 of the Sales Tax Act, 1990. The said notification excluded the benefits of total concession and exemptions in respect of industries established in Hub Tehsil in the Province of Balochistan. It was further observed that in Table-II, Hub Industrial Trading Estate finds mentioning therein but is entitled to the extent of exemption subject to the conditions as laid down therein.
12. The learned High Court also took the. View that the doctrine of promissory estoppel was not applicable in the facts and circumstances of the present case. It was further held that no vested right had accrued in favour of the appellant at the time of execution of contract for import of machinery and that the S.R.O., dated 28-2-1992 had been superseded vide notification, dated 14th May, 1992. It was observed:- "In other words when the petitioner-company executed contract with the foreign seller for importing plant it was the S.R.O.No,484(I)/92 which. Was holding the field and, thus, the petitioner's company can take benefit of only those concessions and exemptions as are stipulated in the impugned S.R.O. We are holding so because no vested right had accured to the petitioner's company till the impugned S.R.O. Was issued."
13. The writ petition was dismissed with the observation to allow the appellant to take such benefits as were available under Table-II of S.R.O. 484(1)/92, dated 14th May, 1992.
14. Let us first of all deal with preliminary objections raised by Mr. Yawar Ali, learned Deputy Attorney-General and Mr. Ayyaz Zahoor, learned Advocate Supreme Court for the contesting respondent. The first objection is that a Constitution petition filed by the appellant before the High Court was not maintainable, in that, they failed to exhaust the departmental remedies under the hierarchy of the Customs Authorities. This plea is untenable. The appellant has clearly stated in paragraph 15 of the Constitution petition filed before the High Court that the remedy of appeal and revision was of no use to them as the respondents Nos.4 and 5 therein being subordinate authorities were acting under the dictaion of the respondent No,1 who has issued Annexure Gto the writ petition impugned therein.
15. Be that as it may, it is well-settled that the rule about invoking the Constitution jurisdiction only after exhausting all other remedies, is a rule of convenience and discretion by which the Court regulates its proceedings and it is not a rule of law affecting the jurisdiction. A Constitution petition is competent if an order is passed by a Court or Authority by exceeding its jurisdiction even if the remedy of appeal/revision against such order is available, depending upon the facts and circumstances of each case. In the instant case, the appellant clearly stated in paragraph 15 of the writ petition the reasons for not exhausting the departmental remedies. In any event, the learned Judges of the High Court rendered the impugned judgment on merits of the case after hearing at length the submissions of the learned counsel for the parties. The appellants never pressed any objection as to the maintainability of the Constitution petition before the High Court. Thus, visualized, the discretion exercised by the High Court, in the facts and circumstances of the case, to entertain the petition and decide it on merits does not suffer from any illegality.
In view of the above discussion, the first preliminary objection is over-ruled.
16. The second preliminary objection is to the effect that the dispute raised by the appellant before the Customs Authorities was only with regard to rural areas and not in respect of applicability of the Notification No,S.R.O.1284(I)/90, dated 13-12-1992. To support his plea, Mr. Ayyaz Zahoor, the learned Advocate Supreme Court has drawn our attention to the Bill of Entry presented by the appellant for claiming benefit on the basis of S.R.O. 484(1)/92, dated 14-5-1992 and SRO 500(I)/83 dated 26-1-1988. It was further argued that even in the High Court the appellants did not claim any benefit under Notification No,S.R.O. 484(1)/90 dated 13-12-1990 and the dispute between the parties was basically with regard to the rural area as well as the applicability of doctrine of promissory estoppel, therefore, the appellant cannot be permitted to raise a new point which was neither urged nor discussed by the learned High Court in the impugned judgment.
17. It is true that the question of allowing benefit to the appellant under c S.R.O. 1284(1)/90, dated 13- 12-1990 was not raised before the High Court, nevertheless this Court allowed the appellant to raise this point of law at the time of leave which was accordingly granted to consider the same as it related to the very fundamental of the issues involved therein. Clearly, this was within the competence of this Court. It is well-settled that even *ere leave is not granted on a point, this Court is competent to allow the same to be canvassed in appeal if it is necessary for doing complete justice, in any case or matter, pending before it, as contemplated by clause (1) of Article 187 of the Constitution. It is also well-settled that a pure question of law could be raised at any stage of the,appeal depending upon the facts and circumstances of each case. Refer Haji Abdulllah Khan and others v. Nisar Muhammad Khan and others (PLD 1965 SC 690), wherein it was held that in proceeding before Original and Appellate Courts and not in Revisional Courts whose jurisdiction to interfere is determined by the statute that creates the jurisdiction, a question of law can be raised at any stage. It would be advantageous to produce the following passage from the above judgment: A reference, however, to the judgment of the High Court shows that in the opinion of the learned Judges even a pure question of law could not be allowed to be raised in appeal for the first time.
The learned Judges say; 'to allow the question of law or of fact to be raised in appeal for the first time would clearly prejudice the other party and, thus, defeat the ends of justice.It may be pointed out that it is the duty of the Court itself to apply the law. A party is not bound to engage a counsel, Whatever law becomes applicable on the admitted or proved, facts law has to be given effect to whether or not it has been relied upon by a partv." (The underlining is ours by way of emphasis).
18. Refer Elahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582), wherein one of the questions arose whether there was any conflict between the provisions of the protection of Economic Reforms Act, 1992 and section 80-D of the Income Tax Ordinance XXXI of 1979 which was effected through financial year 1991. A Full Bench of this Court comprising of five Hon'ble Judges allowed to consider this question although it was neither raised nor discussed before the High Court. The relevant portion reads thus:- In order to eliminate multiplicity of litigation and to avert element of harassment to assessees, we have dealt with the legal aspect of the above contention though apparently it was not urged before the High Court as we do not find any mention in any of the judgments under appeal."
19. In the case in hand although the Bill of Entries was not presented on the strength of Notification No,S.R.O. 1284(1)/90, dated 13-12-1990 but the conditions of Notifications Nos.S.R.O. 1284(1)/90, dated 13-12-1990 and S.R.O. 484(1)/92, dated 14-5-1992 and S.R.O.50/92 dated 28-1-1992 are almost identical. The case of the appellant throughout has been to claim total exemption. The Bill of Entry in its specific column shows rate of duty as 'freeand amount of duty as 'nil'. In the above context, 'freemeans "total exemption" which the appellant claimed.
20. Clearly the mention of a wrong notification in the Bill of Entry presented by the appellant would not deprive the Court of the power and jurisdiction if otherwise the appellant is found entitled to the benefit under Notification No,S.R.O. 1284(1)/90, dated 13-12-1990. The same view was taken by this Court in Mst. Safia Bibi v. Mst. Aisha Bibi (1982 SCMR 494), wherein with reference to the applicability of section 12(2) of the Civil Procedure Code it was held:-- 'The afore-quoted provisions were newly-added by an amendment through an Ordinance in March, 1980. The High Court passed the first order in October, 1980. The amendment, it appears, was not published in the journals within reasonable time. This, it further appears, seems to be the reason why the learned counsel failed to bring it to the notice of the learned Judge when the application for recall of order dated 26-10-1980 was disposed of, This supposition is strengthened by the fact that the provisions of the Civil Procedure Code (unamended) were mentioned in the application submitted by the appellant in the High Court, it cannot be denied that mention of a wrong provision of law in an application would not deprive the Court of the power and iurisdiction if otherwise the same is available under the Um," (The underlining is ours by way of emphasis),
21. In Mst. Baigan v. Abdul Hakeem and another (1982 SCMR 673), it was observed:-- "The hypertechnical objection that the application for restoration should have been made under Order XLI, rule 19 and not under Order IX, rule 9 is also without any force; because mentioning of a wrong provision in a pleading (which otherwise is flawless) would not, normally render it invalid."
22. Refer Ittefaq Foundry v. Federation of Pakistan (PLD 1990 Lahore 121), wherein an objection was taken that no relief could be granted by the High Court in respect of Notification No,S.R.O. 614(1)/88, dated 14-7-1988 and Notification S.R.O.555(l)/89 dated 3-6-1989, in that, these Notifications were not expressly challenged in the writ petition. The objection was overruled with the observations:- the techicalities cannot prevent this Court from exercising its Constitutional jurisdiction and affording relief which otherwise petitioner is found entitled to receive."
In view of the above discussion, the above preliminary objection is also overruled.
23. The last preliminary objection is that the question as to whether Hub Industrial Estate falls under the rural area as amended by the amended policy decision/notification is a disputed question of fact which cannot appropriately be resolved in these proceedings.
24. After hearing Mr. S. Sharifuddin Prizada, Senior Advocate Supreme Court, and learned counsel for the respondents, we are of the view that no factual controversy is involved herein, that, leave has been granted to consider purely a question of law whether the exemption available to the appellant under Customs Notification No,S.R.O. 1284(1)/90, dated 13-12-1990 could not be withdrawn in view of the Protection of Economic Reforms Act, 1992. The last preliminary objection is, therefore, also overruled.
25. We have heard the learned counsel for the parties on merits of the case at considerable length and perused the material on record. It is not necessary to examine the contention of the appellant that a vested right was accrued to them and, therefore, on the principle of promissory estoppel, legitimate expectancy and locus poenitentiae the Federal Government was not entitled to withdraw the exemption granted to them till the expiry of the period for which the exemption was granted. It is also not necessary to examine whether the appellant is qualified to claim exemption on the basis of notification dated 14-5-1992 and that denial of exemption thereof is discriminatory being violative of Article 25 of the Constitution which guarantees equality before law of all citizens and their entitlement to equal protection of law. Clearly, the Government is under a Constitutional duty to ensure enactment of laws in conformity with Article 25 of the Constitution. In the instant case, however, the basic question necessary for the purpose of determining the real question in controversy between the parties is summed up in the leave granting order.
26. The main question for consideration is whether the S.R.O. No,1284(I)/ /90, dated 13th December, 1990 is a protection notification under the Economic Reforms Ordinance and Economic Reforms Act, therefore, S.R.O. No,484(I)/92, dated 14th May, 1992 being repugnant to the Protection of Economic Reforms Ordinance, as well as, the Act, is ultra vires, without lawful authority and void. It will be advantageous to reproduce relevant paragraphs of the Notification No,S.R.O. 484(1)/92, dated 14th May, 1992 which is to the following effect:-- "S.R.O. 484(I)/92.--In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and subsection (I) of section 13 of the Sales Tax Act, 1990, and in supersession of this Ministry's Notification No,S.R.O. 50(1)/92, dated the 28th January, 1992, the Federal Government is pleased to exempt such plant and machinery as is not manufactured locally and is imported during the period commencing on the 1st December, 1990, and ending on the 30th June, 1995, for setting up new units and for expansion or balancing, moderanization and replacement of existing units-
(a) .
(b) in the industrial estates specified in Table-II from so much of the customs duty and sales tax leviable or chargeable thereon under the First Schedule to the Customs Act, 1969, or as the case may be, the Sales Tax Act, 1990, as is specified in Column (3) of the said Table, subject to the conditions set out below, namely:- ................................................................
TABLE-I ................................................................
TABLE-II Sr. No, Industrial Estate Extent of exemption
1. ...................................................
2. (i) Hub Industrial Trading Estate Customs-duty in excess of 10% ad val and whole of sales tax.
The rest of the relevant conditions of the notification are identical with the conditions laid down in the notification, dated 13-12-1990 (supra). It is, therefore, not necessary to repeat the same. It would, therefore, be seen that by virtue of the notification, dated 13-12-1990, the Federal Government was pleased to exempt such plants and machineries from customs duty as was not manufactured locally and was imported during the period commencing on the 1st December, 1990 and ending on 30th June, 1995 for setting up new units and for expansion or balancing, modernization and replacement of existing units. Srial No,1 of Table-II of the notification grants exemption appended to the notification provides that whole of the customs duty is exempted in respect of approved Industrial Estate in Hub Tehsil in the Province of Balochistan and other areas mentioned thereon.
Here, we are concerned only with Hub Tehsil in the Province of Balochistan. Clearly, the appellant qualifies the above conditions, was therefore, entitled to whole of the exemption for the relevant period, in terms of the notification, dated 13-12-1990 (supra). The appellant was not, however, granted benefit under the said notification by the Principal Appraisal, Customs, vide his order dated 18-1-4983 for the reason that the said notification was superseded vide Notification S.R.O.
484(1)/92, dated 14-5-1992. Under the latter notification,/ the benefit of exemption was extended to rural area alone but Hub was not found to be covered under rural area.
27. Let us now examine the provisions of the Protection of Economic Reforms Act, 1992 (XII of 1992), hereinafter referred to as Act, which was assented to by the President on the 23rd July, 1992 and was gazetted in the Gazette of Pakistan, Extraordinary, Part I, on 28th July, 1992, incorporating the same provisions which were contained in the Economic Reforms Ordinance, 1991 (Ordinance XXXIX of 1991), promulgated on 9-12-1991 to provide for furtherance and protection of economic reforms and protection of immunities were conferred thereby inter alia to provide legal protection to a number of economic reforms in order to create confidence in the establishment and continuity of the liberal economic environment created thereby.
28. It may be pertinent to state that preamble to Act provides as under:-- "Whereas it is necessary to create a liberal environment for savings and investments; and other matters relating thereto; And whereas a number of economic reforms have been introduced and are in the process of being introduced to achieve the aforesaid objectives; And whereas it is necessary to provide legal protection to these reforms in order to create confidence in the establishment and continuity of the liberal economic environment created thereby."
29. Section 1 of the Act gives the title of the Act. Section 2 contains definition. Clause (b) of section 2 thereby defines economic reforms in the following terms:-- "(b) 'economic reformsmeans economic policies and programmes, laws and regulations announced, promulgated or implemented by the Government on and after the seventh day of November, 1990, relating to privatization of public sector enterprises, and nationalised banks, promotion of savings and investments, introduction of fiscal incentives for industrialization and deregulation of investment, banking, finance, exchange and payments systems, holding and transfer of currencies; and."
Section 3 provides:-- "Act to override other laws.- --The provisions of this Act shall have effect notwithstanding anything contained in the Foreign Exchange Regulation Act, 1947 (VII of 1947), the Customs Act. 1969, the Income Tax Ordinance, 1979 (XXXI of 1979), or any other law for the time being in force."
Section 4 confers freedom to bring, hold, sell and take out foreign currency within or out of Pakistan.
Section 5 relates to immunities to foreign currency accounts.
Section 6 provides protection of fiscal incentives for setting up of industries:-- "Protection of fiscal incentives for setting up of industries.--- The fiscal incentives for investment provided by the Government through the statutory orders listed in the Schedule or otherwise notified shall continue in force for the term specified therein and shall not be altered to the disadvantage of the investors."
Section 7 relates to protection of transfer of ownership to private section. Section 8 provides protection of foreign and Pakistani investment. Section 9 guarantees secrecy of banking transaction. Section 10 envisages protection of financial obligation. Section 11 is the rules-making power of the Government.
30. The Schedule under section 6 of the notification gives statutory protection to the following notifications:-- "1. Notification No,S.R.O. 1284(1)/90, dated the 13th December, 1990, issued under subsection (2) of section 14 of the Income Tax Ordinance, 1979 (XXXI of 1979).
2. Notification No,S.R.O./(I)/90, dated 13th December, 1990, issued under section 19 of the Customs Act, 1969 (IV of 1969)."
31. It will also be pertinent to point out that Foreign Exchange (Temporary Restrictions) Act, 1998 (IV of 1998) which was assented to by the President on 25th September, 1998 and was gezetted in the Gazette of Pakistan, Extraordinary, Part I on September 26, 1998, deemed to have come into force on the 28th of May, 1998. Section 2 of Act IV of 1998 places restriction on withdrawal of foreign exchange notwithstanding anything contained in Protection of Economic Reforms Act XII of 1992 or any other law for the time being in force, or in any agreement or contract.
32. Section 3(I) of Act IV of 1998 provides:-- "Subject to the provisions of this Act all the protections and immunities conferred in terms of the Protection of Economic Reforms Act, 1992, (XII of 1992), shall remain unaffected."
33. It, therefore, appears that the provisions of section 6 of Act XII of 1992 continues to hold the field having not been altered, repealed or amended and all the protections and immunities conferred in terms thereof continue to remain unaffected except restrictions on withdrawal of foreign exchange.
34. A bare perusal of section 6 of the Act (XII of 1992) shows that fiscal incentives for investment provided by the Government to the statutory orders listed in the Schedule or otherwise notified shall continue in force for the term specified therein and shall not be altered to the disadvantage of the investors. Notification No,S.R.O. 1284(1)/90 dated 13-12-1990 is mentioned at Serial No,2 of the Schedule. Clearly there was statutory commitment to the beneficiaries of the said notification. The effect of the said notification was that on satisfaction of certain conditions laid down therein, exemption from whole of the customs duty was to be enjoyed by a certain category of approved industrial estate mentioned in the schedule appended thereto. The Executive Authority of the Federation in the exercise of its delegated power under section 19 of the Customs Act, 1969 could not withdraw the exemption to the disadvantages of the beneficiaries. The context, and the impact of section 6 of the Act is clear enough and suffers from no ambiguity. The exemption granted under notification, dated 13-12-1990 (supra) cannot be altered to the disadvantage of the appellant who .Fulfils all the conditions under the said notification. Refer M/s. Zasha Limited (Public) Limited Company, Lahore v. Agricultural Development Bank of Pakistan, Islamabad (PLD 1993 Lahore 914), wherein a learned Judge of the Lahore High Court, (Munir A. Shaikh, J.), (as he then was), observed:-- according to well-settled law which has also been given recognition by section 10 of the Protection of Economic Reforms Act, 1992 the financial obligation could not be altered to the disadvantage of the beneficiary, therefore, the alteration of condition relating to investment of equity, to provide deposit of the amount in cash could not have been made."
35. The appellant is, therefore, entitled to the exemption of whole of the custom duty under notification, dated 13-12-1990 (supra), When faced with this, learned counsel for the respondents argued that the question as to whether the appellant fulfils the conditions of the above notifications, is a question of fact which will have to be determined by the hierarchy provided under the Act and not by this Court. There is no cavil with the proposition that ordinarily this is not for this Court to resolve factual controversy arising out of a Constitution petition. In the instant case, however, we find that no investigation into facts is required for resolving the controversy raised herein, inasmuch as, it is not disputed that the plant and machinery imported by the appellant is not manufactured locally and was imported during the period commencing on the 1st December, 1990 and ending on the 30th June, 1995 for setting up new unit and for expansion or balancing, modernization and replacement of existing units of the appellant. Admittedly, the machinery has been imported by the appellant for its project in the approved Industrial Estate in the Hub Tehsil of Balochistan falling under Table-II of Serial No,1 of the Notification S.R.O. 1284(I)/90, dated 13-12-1990.
When faced with this, Syed Ayyaz Zahoor, learned counsel for the Customs Department, argued that the appellant/importer has not furnished indemnity bond in the prescribed form as laid down in Condition No,(3) of the Notification. Mr. Makdoom Ali Khan who also appeared in the High Court has made a statement at the Bar that the appellant did furnish the indemnity bond in conformity with the notification and that in any case, the conditions in all the notifications are the same conditions which the appellant has fulfilled. Syed Ayyaz Zahoor, Advocate Supreme Court, was unable to specifically dispute the statement made at the Bar by Mr. Makhdoom Ali Khan. Be that as it may, if the indemnity bond has not been furnished earlier the same shall be furnished by the appellant forthwith.
36. We are, however, inclined to agree with the learned counsel for the respondents that the right to claim exemption under a notification issued under section 19 of the Customs Act remains available to a party as long as the exemption notification holds the field, as held in the case of Messrs M. Y.
Electronics Industries (Pvt.) Ltd. v. Government of Pakistan (1998 SCMR 1404), relied upon by Mr. Muhammad Yawar Ali, learned Attorney-General.
In the precedent case, following the observations in Army Welfare Sugar Mills Ltd. v. Federation of Pakistan (1992 SCMR 1652), it was observed:-- "Rule that the vested right under the exemption notification could not be taken away by an executive action is applicable only to a case where the Government first granted exemption for a specified period and then attempt to withdraw the same, thus, defeating the vested right through an executive action. However, even vested right under an exemption notification which is a time bound. Could lie taken away by a legislative measure". (The underlining are ours).
The above case is, however, distinguishable. In that case, there was no statutory provision, which protected the grant of concession. Here the appellant has heavily relied upon the statutory provision of section 6 of the Act which grants statutory protection against withdrawal of exemption granted under the notification, in question. Thus, visualized, the appellant has acquired a vested/statutory right of exemption from the levy of whole of the custom duty for the goods, in question, imported by them for the relevant period mentioned in the notification dated 13-12-1990, That statutory right could not, therefore, be Laken away through the subsequent notification purported to supersede the first notification unless it is taken away through a legislative measure.
This is not the case here. The second notification referred above being completely destructive of the right vested in the appellant is, therefore, without lawful authority and of no legal effect in so far as it affects the entitlement of the appellant for exemption from levy of whole of the customs duty for the disputed period.
37. In Messrs Army Welfare Sugar Mills Ltd. v. Federation of Pakistan (1992 SCMR 1652), this Court observed:-- "It may be mentioned that by now, it is well-settled provision of law obtaining in Pakistan 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 right by a legislative provision, like section 31-A which has been incorporated in the Customs Act in 1969 nullifying the effect of the judgment of this Court in the case of AlSamrez Enterprises (supra) as has been held by the author of the above judgment, Zafar Hussain Mirza, J., in a recent unreported majority judgment, dated 24th September, 1991 in Civil Appeals Nos.915-K to 918-K all of 1990 (Molasses Trading and Exports (Pvt.) Ltd. v.
Federation of Pakistan and others, wherein his Lordship observed as follows . "
38. The provision of section 6 has not been modified by a legislative provision andwithout amending the same, the second notification has not achieved the object of defeating the consequences of exemption granted under the first notification
39. It is well-settled principle of interpretation of statutes that vested rights cannot be taken away save by express words and necessary intendment. No doubt that the Legislature, is also competent to amend, vary or repeal the same but the right conferred through statute can only be taken away by legislative enactment and not by an executive authority through notification in exercise of the rule-making power or the power to amend, vary or rescind an earlier order/notification in the purported exercise of powers conferred under section 21 of the General Clauses Act.
40. In Collector of Central Excsie and Land Customs v. Azizuddin Industries Ltd. (PLD 1970 SC 439), ir was held:-- " that the exemption once granted to backward areas could not be taken away even through a Constitutional Amendment."
In the precedent case, the respondent therein was granted permission to establish a factory at Chittagong. The excise duty leviable on excisable goods manufactured or produced in the Chittagong Hill Tracts and other areas was exempted for a period of four years through a notification under Rule 8 of the Central Excuse Rules, 1944. However, as a result, Constitution (First Amendment), 1964, Chittagong Hill Tracts were excluded from the definition of Tribal Areas on 10-1- 1964. In consequence, the exemption enjoyed by the respondent thereby from payment of excise duty on cigaretters produced in the factory of respondnet was withdrawn. This Court while considering the scope of power exercisable under section 12-A of the Central Excises and Salt Act (I of 1944) and section 21 of General Clauses Act by the Authority, inter alia, observed:-- "The respondent had acquired a vested right of exemption from the levy of excise duty on all the goods produced or manufactured by it for a period of four years under the Notification of the Central Government referred to above. That vested right could not, therefore, be taken away being completely destructive of the right vested in the respondent-company was in this view without lawful authority and of nolegal effect."
41, In the case of M,Y. Electronics Industries (Pvt.) Ltd. (supra) this Corut while, inter alia, considering the scope of section 24-A of the Customs Act, 1969, with reference to invocation of doctrine of legitimate expectations held:-- the withdrawal of Notification No,S.R.O. 517(1)/89, dated 3-6-1989 through notification dated 9-5- 1991 was only perspective in operation and could not take away or interfere with any of the vested right of appellants."
42. It would be pertinent to mention the observation made in paragraph 23 of the above-quoted judgment to the following effect:- "Before parting with these cases, we would like to express that we fully share the views of learned Judges of the Full Bench of Peshawar High Court that GAIE being a remote, backward and economically unviable and unprofitable area, it could not have attracted the industrialists and entrepreneurs for installation of new industrial units in the area but for the incentives offered by the Government in the shape of total exemptions from payments of taxes and duties on imports of machinery, raw material and components. It would, therefore, be fair and just that the incentives offered by the Government in the form of exemptions from payment of customs duties, sales tax etc. On iimports of machinery, raw material and components would have been allowed to those industrialists, who have set up their industrial undertakings in GAIE for a reasonable period of about 5 to 10 years from this date their industrial units started production."
43. We are also of the view that the Government was not justified to withdraw the exemption from payment of customs duty on the machinery imported by the appellant who had imported the same pursuant to the statutory incentives offered by the Government in the shape of total exemption from payment of customs duty.
44. In Province of East Pakistan v. Sharafatullah (PLD 1970 SC 514), it was observed:-- "In other words liabilities that are fixed or rights that have been obtained by the operation of law upon facts or events for or perhaps it would be said against which the existing law provided are not to be disturbed by a general law governing future rights and liabilities unless the law so intends."
45. In the light of above principle, it cannot be held that the second notification will effect the past and closed transaction under the first notification or the statutory rights conferred thereon in favour of the appellant. Even the third Notification i.e, S.R.O. 1056(1)/1993, whereby it was stated that Hub Tehsil in the Government of Balochistan shall be omitted, favours the appellant, Mr. S. Sharifuddin Pirzada was right in contending that this notification was corrigendum and corrected the earlier notification was declaratory in nature and could be issued retrospectively.
46. We are of the considered view that in view of the Protection of Economic Reforms Ordinance read with Protection of Economic Reforms Act, 1992 read with Foreign Exchange (Temporary Restrictions) Ordinance VII of 1998 (Act IV of 1998), dated 26th September, 1998, Notification S.R.O.
1284(1)/90, dated 13-12-1990 is protected and nothing could be done in regard thereto, through executive act to the disadvantage of the appellant. The above view finds support from the judgment of this Court in the case of Messrs Ellahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582), wherein it was observed:- "In our view, since the provisions of Act XII of 1.992 are subsequent in time and as they are contained in a special statute, they shall prevail over the provisions of section 80-D of the Ordinance, which was enacted through Finance Act, 1991, which was an earlier statute and which was part of a general statute. In this view of the matter, assessees Who fulfil the conditions of the notifications referred to in the Schedule to section 6 of Act XII of 1992, are entitled to the protection.
The question, as to whether a particular assessee fulfils the conditions of the above notifications, is a question of fact, which will have to be determined by the hierarchy provided under the Ordinance and not by this Court. However, in order to eliminate multiplicity of litigation and to avert element of harassm ent to assessees, we have dealt with the legal aspect of the above contention though apparently it was not urged before the High Court as we do not find arty mention in any of the judgments under appeal."
As observed earlier, no factual controversy is involved herein, it much as, the appellant fulfils the conditions of the notification, dated 1, 3-12-1990.
47. The above appeal was allowed by our short order dated 16-12-1998, in the following terms:- "For reasons to be recorded later, the appeal is accepted, the impugned judgment of the Balochistan High Court, Quetta is set aside and it is declared that the machinery in dispute imported by the appellant is exempted from payment of impugned taxes under Notification No,S.R.O. 1284 (1)/90, dated 13-12-1990, therefore, it is entitled to refund of the amount of taxes deposited by it in the bank under the orders of the High Court which has been withdrawn by the respondent alongwith the profits.
2. Mr. Sharifuddin Pirzada, Senior Advocate Supreme Court, has voluntarily given up the claim for the refund of the profits earned on the said amount in the facts and circumstances. Of this case and states that the same may not be treated as precedent. In this view of the matter, the original amount of Rs,60,50,000 shall be refunded to the appellants within ten days from today positively."
50. The reasons in support of the short order are given above.
…and 69 more citing cases