' SABIHUDDIN AHMED, J.---These four petitions involving similar questions of fact and law are being disposed of by this common judgment.
2. Briefly speaking the admitted facts are that the petitioners owned industrial undertaking located in the Industrial Trading Estate in the Province of Balochistan and had imported certain machinery for their plant during 19921993. The machinery of the kind imported, which was admittedly not being manufactured in Pakistan, was at one time altogether exempted from custom duty through notification issued under section 19 of the Customs Act pursuant to a policy decision of the Government in providing incentives for industrialization in rural areas. However, when the petitioners imported such machinery it was subjected to a levy of custom duty at the rate of Rs,10% ad valorem in terms of S.R.O. No,484(1)/92, dated 14-5-1992 (hereinafter mentioned as the impugned notification). The petitioners have called in question the aforesaid levy of customs duty through these petitions.
3. Mr. Syed Sharifuddin Pirzada, learned counsel for the petitioners in Civil Petition Nos.129, 2064 and 2696 of 1993, has pressed before us a two-fold contention i,e,:--
(i) That the impugned notification is ultra vires, section 6 of the Protection of Economic Reforms Act, 1992, in so far as it is repugnant to S.R.O. No,1284(1)/90, dated 13-12-1990 and is, therefore, of no legal effect:--
(ii) I have in any event the impugned notification was amended by S.R.O. No,1056(1)/93, dated 1-11- 1993, and as a consequence of the aforesaid amendment total exemption from customs duty was extended to industries in the Hub Industrial Trading Estate. The amendment being beneficial was required to be given retrospective effect and covered imports made by the petitioner.
4. Giving chronological perspective of the exemption from customs duty Mr. Pirzada pointed out that in accordance with the policy of the Federal Government to provide incentives for industrialisation in rural areas S.R.O. No,1284(1)/90 was issued on 13-12-1990, the relevant provisions whereof read as under:-- ' "S.R.O. No, 1284(1)/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, modernisation 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 Sthedule 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:-- TABLE- 1 Sr. No.Area 1.
2.
3.
4.The Municipal or Cantonment Board Limits of Karachi and 40 Kilometres area around these limits.
The Municipal or Cantonment Board limits of Lahore and 30 Kilometres around these limits.
The existing limits 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 Division.
Areas falling within the limits of Islamabad Capital Territory and Hub Tehsil in the Province of Balochistan.
TABLE- II S. NO.Area Extent of Exemption 1.
2.
3.All approved industrial estates in the following areas: Hub Tehsil in the Province of Balochistan; District of Mianwali and Bhakkar and Tehsil of Khushab, in the Province of Punjab and District Tharparkar and Dadu (excluding Taluka of Kotri) in the Province of Sindh.
All approved industrial estates in the Following areas: Islamabad Capital Territory Lahore District and Tehsil of Ferozewala, Gujranwala, Sialkot, Faisalabad, Multan and Rawalpindi in the Province of Punjab.
Talukas of Kotri and Hyderabad in the province of Sindh.
All approved industrial estates located in the areas other than those mentioned at Table-I and Serial Nos. 1 and 2 above excluding Karachi Division.Whole One-half (1/2) of the leviable customs duties Three-forth (3/4) of the leviable Duties
5. It may be seen that under para. (a) of the aforesaid notification machinery for units located in areas other than those specified in table I were totally exempted from custody duty, surcharge and sales tax. However, units located in areas mentioned in table H were only granted specific exemption from such taxes to the extent mentioned in column (iii) of the aforesaid table. In practical effect since Hab Tehsil figured at serial No,4 in table 1 industries located therein could not qualify for total exemption in terms of paragraph (a). Nevertheless since the approved industrial estates in Hub Tehsil were mentioned at Serial No,1 in Table II, the petitioners' unit qualified for exemption in terms of paragraph and the extent of exemption stated in column (iii) was the whole of customs duty and sales tax. In other words, for whatever reasons total exemption from customs duty and sales tax was made available to industrial units located within the Hub Industrial Trading Estates and not any other part of the Hub Tehsil.
6. The aforesaid notification was superseded through S.R.O. No,50(1) of 1992, dated 28-1-1992 and Hub Industrial Trading Estate was mentioned at serial No,2 in Table H and industries located therein continued to remain exempt from the whole of leviable customs duty and sales tax. This notification nevertheless was subsequently superseded by S.R.O. No,484(1)/92, dated 14-5-1992 (the impugned notification, whereby Hub Industrial Trading Estate continued to be listed at serial No,2 of Table II; but the extent of exemption in Column 3, was specified to be "Custom duty in excess of 10% ad valorem and whole of sales tax". In view of the aforesaid stipulation the machinery imported by the petitioner was subjected to customs duty.
7. In support of his first contention, learned counsel for the petitioner drew our attention to the provisions of the Protection of Economic Reforms Ordinance, 1991, promulgated by the President on 9th December, 1991, i,e, when Notification No,1284(1)/90, dated 13-12-1990 had not been superseded.
Section 6 of the Ordinance reads as under:-- ' "The fiscal incentives for investment provided by the Government through statutory orders listed in the schedule or otherwise notified shall continue in force for the terms specified therein and shall not be altered to the disadvantage of the investors."
' The notification impugned above finds place at serial No,2 of the Schedule.
8. This Ordinance was enacted as an Act of Parliament after having received the assent of the President on 23rd July, 1992, wherein the terms of section 6 and the schedule were reproduced verbatim. Mr. Pirzada argued that under the aforesaid statute, the financial incentives granted to investors in terms of the notification acquired statutory protection and section 3 of the Act provided that it would override all other laws including the Customs Act. Therefore, such incentives or privileges could not be withdrawn through a notification issued under section 19 of the Customs Act till 30th June, 1995. As such the impugned notification purporting to levy 10% custom duty was ultravires the powers of the Federal Government available under the Customs Act. In support of his contention Mr. Pirzada relied upon the recent unreported judgment of the Honourable Supreme Court in Gatron Industries limited v. Government of Pakistan and others (Civil Appeal No,223 of 1994), where reversing the judgment of the High Court of Baloshistan the Honourable Supreme Court has held that the exemption under Notification No,S.R.O. No,1284(1) of 1990, dated 13-12-1990 having been granted statutory protection, the same could not be destroyed, through a subsequent notification under the Customs Act.
9. In addition to the above learned counsel contended that in any event through a subsequent amendment in the impugned Notification vide S.R.O. No,1056(1)/93, the impugned notification has been amended to the extent that the words Hub Tehsil in the Province of Balochistan have been omitted from Table I and simultaneously "Hub Industrial Trading Estate" has been omitted from Table II. The effect being that of Industrial Units falling in Hub Tehsil, whether located in the Industrial Estate or otherwise would enjoy total exemption from custom duty and sales tax in terms of paragraph (a). According to the learned counsel this amendment being a beneficial provisions is required to be given retrospective effect. In this context he referred to a recent judgment of this Bench in the case of Polyron Limited v. Government of Pakistan (Civil Petition No,2838-D of 1992), wherein, respectfully following the law declared by the Honourable Supreme Court in Army Welfare Sugar Mill v. Federation of Pakistan (1992 SCM R 1652), we had indeed taken the above view.
10. Mr. S. Tariq Ali, learned Standing Counsel attempted to argue that the impugned notification was issued under proper authority and had not been rescinded so far. Nevertheless, keeping in view the legal position authoritatively settled by the Honourable Supreme Court, we are afraid that the same has to be held void and inoperative to the extent to which it is repugnant to the statutory protection available to the petitioners under section 6 of the Protection of the Economic Reforms Act. These petitions, therefore, must be allowed. The bank guarantees furnished shall stand discharged and the amount deposited by the petitioners shall be refunded to them: We are informed that in Civil Petition No,2064 of 1993 the amount of Customs duty was paid to the respondent which will be refunded to them without mark-up, if the same is paid within 30 days from this judgment and with 14% marked if it is paid thereafter.