1. ' MRS. MAJIDA RAZVI, J.---The petitioner is a private limited company and is in the business of producing poultry and cattle feed. It placed an order with an American Company for supply of machines and mechanical appliances (4 Nos. Complete silos with humidity and temperature control system and standard accessories). The value of the imported goods at the relevant time was US $ 145,890.49. The petitioner opened LC No,SBL-03011/96/LHR/01, dated 14-1-1996 through Soneri Bank Ltd. Lahore. The goods were shipped on the vessel 'Dubai Bay' against Bill of Lading No,HL Custl 960400270, dated 16-4-1996. At the relevant time the goods were entitled to concessionary rate of customs duty and complete exemption of Sales Tax under SRO No,657(1) of 1995. The said SRO No,657(1) of 1995 was withdrawn by the respondents through WO No,228(1) of 1996, dated 4-4-1996 and as such the exemption of sales tax granted to the goods under the said S.R.O. Stood withdrawn. When the consignment of the petitioner reached Karachi Port the Customs Authorities refused to release the said consignment without payment of sales tax leviable thereon.
2. The petitioner aggrieved of this action of the respondents filed the present petition.
3. ' The contention of the learned counsel for the petitioner is that at the time when the L.C. Was opened and the order was placed to the foreign buyers for supply of goods i,e,, 14-1-1996 the said goods enjoyed the concessionary rate in payment of customs duty and complete exemption from payment of sales tax as such the effect of the said withdrawal cannot be given retrospective effect.
4. He relied on Article 4 of the Constitution which guarantees right of individuals to be dealt with in accordance with law and on a recent judgment of the Supreme Court in the case of M/s. M.Y.
5. Electronics Industries (Pvt.) Ltd. v. Government of Pakistan and others 1998 SCM R 1404, as well as Crescent Pak Industries v. Government of Pakistan 1990 PTD 29, Ahmed Investment v. Federation of Pakistan 1994 PTD 575 and Al-Samrez Enterprises v. Federation of Pakistan 1986 SCM R 1917.
6. ' According to the learned counsel once a vested right is created the same cannot be taken away through an executive order or secondary legislation. He also relied on the case of Molasses Trading Export (Private) Limited v. Federation of Pakistan 1993 SCM R 1905.
7. ' Mr. Mamnoon Hasan, the learned Dy.A.-G. Submitted that to overcome the effects of Al-Samrez case section 31-A was introduced in Customs Act. In the present case after amendment in section 6 of the Sales Tax Act, 1990 through Finance Act, 1998 section 31-A of Customs Act, 1969 was inserted thus, making the section operative retrospectively. According to him, the decision of the Supreme Court given in M/s. M.Y. Electronics (Pvt.) Ltd. Can be distinguished as in that case the notification, dated 8-5-1991, withdrawing the exemption itself provided that the same will not be applicable to past transactions that were concluded before 8-5-1991 while, in the present case no such proviso is available.
8. ' After hearing the parties the question which arises is: ' Whether after insertion of section 31-A of the Customs Act, '1969 in section 6 of Sales Tax Act, 1990 through Finance Act, 1998 the dictum laid down in the cases of Al-Samrez Enterprises, Crescent Pak.
9. Industries (Pvt.) Ltd. And M/s. Ahmed Investment will be applicable in the present case?
10. ' In all the three cases exemptions were granted through Notification and were withdrawn without any act of legislature. In the present case also the exemption was granted and withdrawn through notification but while the case was pending amendments have been made through Finance Act, 1998 by inserting section 31-A of the Customs Act, 1969 in section 6 of the Sales Tax Act which after the said insertion will be read as under: "6. Time and manner of payment.---(1) The tax in respect of goods imported into Pakistan shall be charged and paid in the same manner and at the same time as if it were a duty of customs payable under the Customs Act, 1969, including section 31-A thereof."
11. ' This insertion in section 6 of Sales Tax Act covers the word 'tax' as well as 'duty' as used in the two Acts. In both the cases that is Crescent Pak. Industries and Ahmed Investment (supra), the learned Division Bench of this Court relied on the word 'tax' used in section 31-A and held that: "Nowhere in that provision (section 31-A of the Customs Act) the word 'tax' is found to be employed and throughout the tenor of the provision the legislature has and obviously on purpose, chosen to use the expression duty or duties by which nomenclature is underscored a limitation to specify duties only and not to any tax going by that name, such as Sales Tax. This also stands to reason as the protection against vested rights, if otherwise lawful, was considered in the context of the Customs Act only which deals with specific duties alone. For this reason, cover was not intended to be extended to any other rights falling under a different statute not mentioned in section 31-A. It is manifest, therefore, that section 31-A has no nexus with Sales Tax levied under Sales Tax Act, 1951, and as such it was held that on the above rationale, the dictum of the Supreme Court of Pakistan in Al-Samrez Enterprises' case and the principle of underlying the same unescapably applied to this case and it was observed that "withdrawal of exemption under section 7 of the Sales Tax Act w,e,f, 26th June, 1988 could not be given effect to retrospectively so as to infringe petitioner's right which on payment opening of L.C. Had duly been established."
12. ' The above view expressed by the Division Bench of this Court was approved of and upheld in the case of M.Y. Electronics Industries (Pvt.) Limited v. Government of Pakistan (1998 SCM R 1404).
13. ' In the present case by insertion of section 31-A through Finance Act duly passed by the legislature both words 'tax' and duty are included and the effect has been given retrospectively thus, bringing the word 'tax' also in its ambit. It appears that in order to nullify the judgment in Ahmed Investment and Crescent Pak. Industries cases section 6 of the Sales Tax was amended vide Finance Act, 1998.
14. ' In the case of M/s. M.Y. Electronics Industries (Pvt.) Limited (supra), the question was considered whether withdrawal of Customs duty, Surcharge, Iqra Surcharge and Sales Tax on import of raw material, machinery components granted by the Government to Industrial Units located in GAIE could be defended on the strength of the provisions of section 31-A of the Customs Act and after full discussion of dictum laid down in the case of Al-Samrez and, thereafter, modified vide judgment in the case of Molasses Trading & Export (Pvt.) Ltd. v. Federation of Pakistan and others, it was held that "language of section 31-A (ibid) was wide enough to include within its ambit those cases where exemptions have been withdrawn after insertion of section 31-A in the Act as well. It was further held that "even a vested right under an exemption notification which is a time bound could be taken away by legislative measure as held in the case of Army Welfare Sugar Mills Ltd.'s case (supra) wherein it was held: "....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 1988 nullifying the effect of the judgment of this Court in the case of Al-Samrez Enterprises (supra)."
15. ' As held in the case of Molasses Trading & Export (Pvt.) Ltd. In the present case also the provision of section 6 of the Sales Tax Act after insertion of section 31-A through the Finance Act, 1998, section 31-A of the Customs Act is to be treated as a part and parcel of the Sales Tax Act since its enforcement in 1969 and further looking at the language of the said section which begins with the non-obstante clause it is to be given retrospective operation.
16. It is well-settled principle of interpretation of statutes that vested right cannot be taken away save by express words or necessary intendment. It is also not disputed that the legislature which is competent to make a law has full plenary powers within its sphere of operation to legislate laws retrospectively or retroactively and, as such, where laws are legislated with retrospective effect, the same can take away the vested rights as held in the case of Army Welfare Sugar Mills Ltd. However, in the case of Province of East Pakistan v. Sharafatullah (PLD 1970 SC 514) it was laid down that the statute cannot be read in such a way as closed on any facts or events that have already occurred and the following postulation was made: "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 should be said against which the existing law .Provided are not to be disturbed by a general law governing future rights and liabilities unless the laws so intends."
17. Similarly, in the case of Mehreen Zaibun Nisa v. Land Commissioner, Multan (PLD 1975 SC 397), it was observed that "when a statute contemplates that a state of affairs should be deemed to have existed, it clearly proceeds on the assumption that, in fact, it did not exist at the relevant time but by a legal fiction we are to assume as it did exist. " The classic statement as to the effect of a deeming clause is to be found in the observations of Lord Asquith in East End Dwelling Company Ltd. v. Finsbury Borough Council (1952) AC 109) namely: "Where the statute says that you must imagine the state of affairs, it does not say that having done so you must cause or permit your imagination to boggle when it comes to the inevitable corollaries 'of that state of affairs."
18. ' In the case of Molasses Trading & Export (Pvt.) Ltd., it was held "we fully endorse the above discussion on the scope of section 31-A of the Act as we are also of the opinion that though legislature is competent to enact the law giving retrospective or prospective effect but the same will have to be in consonance with the fundamental rights of a citizen and not detriment to the same. We are further of the opinion that when a Government grant certain concession or exemption it automatically attracts business-man to indulge in this regard which amounts to inducement and once such inducement is given to the business community which start its activity in pursuance to such concessions and exemptions the same become vested rights which on any ground once created cannot be taken away. We are further of the opinion that if effect of such legislation is left without fixing certain parameters as to the date from which it becomes effective it will open all the past and closed transactions and the citizens will have no protection whatsoever under any law and will be burdened throughout for such past and closed transactions".
19. Considering the cases decided by the Hon'ble Supreme Court and the High Court of different provinces which were cited before us and the fundamental rights guaranteed under the Constitution, we hold that although section 6 of the Sales Tax Act as amended by the Finance Act, 1998 would operate retrospectively but it will not affect the past and closed transactions.
20. ' In the present case, since the L/Cs were opened on 14-1-1996, much before the notification, dated 4-4-1996, withdrawing the exemptions of sales tax and amendment brought through Finance Act, 1998 inserting section 31-A of Customs Act, 1969 in section 6 of Sales Tax Act giving it retrospective effect, the transaction of the petitioner had become a past and closed transaction which, even in the changed circumstances, could not have the effect of taking away the vested rights of the petitioner.
21. ' In view of the above, the petition was allowed by a short order, dated 8-9-1998.