1. ' SAIDUZZAMAN SIDDIQUI, CJ.---The Collector of Customs and Central Excise, Government of Pakistan, is seeking leave to appeal against the judgment of a learned Division Bench of High Court of Sindh, dated 28-4-1999, whereby Special Customs Appeals Nos.27 to 42 of 1998 filed by the Collector of Customs and Central Excise under section 36-C of the Central Excises Act, 1944 were dismissed and the order passed by the Appellate Tribunal (Customs, Excise and Sales Tax), Karachi, was maintained.
2. Relevant facts of the cases are that under S.R.O. 560(I) of 1882 dated 14-6-1982, the Government allowed exemption from payment of excise duty on the sugar manufactured in a factory during the financial year which exceeded the average production in the preceding 2 years in that factory. It is an admitted position that this S.R.O. Was withdrawn on 3-6-1989. The Collector of Customs and Central Excise, Government of Pakistan, accordingly demanded payment of central excise duty on the stock held by the respondents on 3-6-1989 namely, the date on which exemption notification was withdrawn. The respondents and others challenged the demand of excise duty in the High Court and having failed to get relief, approached this Court and the decision given by this Court on the above controversy is reported as Army Welfare Sugar Mills Ltd. v. Federation of Pakistan (1992 SCM R 1652). On the contention raised by the respondents before this Court in Army Welfare Sugar Mills Ltd v. Federation of Pakistan (supra) that having acted on S.R.O. 560(1) of 1982 dated 14-6- 1982, the respondents were entitled to enjoy the exemption, this Court observed as follows:-- "53. We are inclined to hold that the above S.R.O. 560(1)/82 contained standing representation to the effect that if a factory would manufacture sugar in a financial year exceeding from the average production in that factory for the preceding two years, such an excess quantity of sugar shall be exempt from the payment of excise duty. The above representation could have been rescinded before it was acted upon or if it was acted upon, its effect could have been nullified by a statutory provision like section 31-A of the Customs Act (ibid) and not by an executive act. In the present case, the appellants acted upon the above representation before it was rescinded, to their detriment as, according to them, they went on with the production of sugar even when the recovery of sucrose from the sugarcane was comparatively low on account of change in the climate and thus, they had acquired vested right before the issuance of one of the two impugned S.R.Os, However, if the appellants had passed on the additional burden of the excise duty after the two impugned S.R.Os. Were issued, they are not entitled to press into service the doctrine of promissory estoppel as it will be inequitable to deny the State excise duty on the excess quantity of sugar referred to hereinabove, in terms of section 3-C of the Act. We may observe that doctrine of promissory estoppel has been evolved by the Courts as an equitable doctrine with the object to pre-empt suffering of any. Loss by a promise and was not designed or intended to provide a windfall profit to him, though Bhagwati, J., in the case of Motilal Padampat Sugar Mills (supra) had held that it was not necessary in order to attract applicability of doctrine of promissory estoppel, that the promise, acting in reliance on the promise, should suffer any detriment, but this view was contrary to the Indian Supreme Court's earlier view and also to the subsequent view taken by Bhagwati, as CJ., in the case of Union of India v. Godfrey Philips India Ltd. (supra). It may be pertinent at this juncture to refer to a passage from Law of Contract by D.W. Grieg and J.L.R. Davis (supra) on the above aspect, at pages 165 and 166, which reads as follows:-- "Promissory estoppel is based upon equitable principles. (a) Founded in equity.
2. ' When, first as counsel in Salisbury (Marquess of) v. Gilmore (1942) 2 KB 38, and then as a judge of first instance in Central London Property Trust Ltd. v. High Trees House Ltd. (1947) KB 130 Lord Denning sought some means of escaping from the straight jacket of consideration, he found it in the relatively narrow confines of equitable estoppel, enunciated as he saw it in Hughes v.
3. Metropolitan Rly. Co. (1877) 2 App. Cas. 439 and Birmingham and District Land Co. v. London and North Western Rly. Co. (1888)
40. Ch. d.268. The equitable basis of the doctrine was a convenient means of justifying its common law. Thus, when the High Court finally gave its approval to the new doctrine in Jegone v. Hateley (1983) 152 CLR 406 Mason and Deans, JJ., referred to "established equitable principle" as one of the factors which led them "to conclude that promissory estoppel should be accepted in Australia" (at 345).
4. ' The above approach of the authors is also in consonance with the recent trend obtaining in England, namely, that the doctrine of promissory estoppel is pressed into service in order to prevent the exercise of legal right where it would be unconscionable for the possessor of those rights to do so."
5. ' As a consequence of the above findings, the cases were remanded to the Central Board of Revenue (C.B.R.) by the Court to determine the following 2 questions:-- "55. In the present case, there is nothing on record to indicate, whether factually the appellants had passed on the additional burden to the purchasers under the above section or otherwise. The amount of the public revenue involved is very heavy. We are, therefore, of the view that it is a fit case in which the appeals are to be allowed but the cases are to be remanded to the Central Board of Revenue with the direction to inquire into the following aspect:--
(i) How much quantity of sugar manufactured by the appellants in the financial year in question up to the date of rescission of S.R.O.560(1)/82 on 3-6-1989, exceeded the average production for the preceding two years of the factories under reference ?
(ii) Whether the appellants had passed on the additional amount of the excise duty or apart thereof which become due and payable on the above excess quantity of sugar on account of the rescission of S.R.O. 560 (1)/82, to the purchasers and/or to any other person or persons ?
6. ' If the answer to the above second question is in the negative, the Board of Revenue shall not charge any excise duty on the excess quantity of sugar, as determined in terms of above sub-para.
(i) of para. 55."
7. ' After remand of the case as aforesaid, the Central Board of Revenue came to the conclusion that as the respondents have sold their stock of sugar which was entitled to exemption under the S.R.O.
8. Dated 14-6-1982 at the same rate at which they were selling other stock, which was not exempted from payment of central excise duty, therefore, the price recovered by the respondents on sale of the sugar which was exempted, included the central excise duty which they had passed on to the purchasers and therefore, in terms of the order of the Supreme Court reproduced above, they were not entitled to exemption and the Government was entitled to recover the amount of additional excise duty which they had recovered from the purchasers. The respondents being dissatisfied with the order of C.B.R. Preferred appeals before the Appellate Tribunal (Customs, Excise and Sales Tax), Karachi, where the matter was initially heard by 2 learned members. The learned 2 members, having differed in their opinion in the appeals, the matter was placed before the 3rd member of the Appellate Tribunal and as a result of the opinion recorded by the 3rd member, the majority decision of the Appellate Tribunal was that the respondents have not passed on the burden of excise duty to the purchasers and, therefore, they were entitled to avail of the exemption granted under S.R.O. 560(1)/82 dated 14-6-1982. Being dissatisfied with the judgment of Appellate Tribunal, the Collector Central Excise preferred special customs appeals before the High Court of Sindh but the learned Division Bench declined to interfere with the order of learned Appellate Tribunal. The Collector Central Excise, is, therefore, seeking leave to appeal against the judgment of learned Division Bench of High Court of Sindh. We have heard the learned counsel for the petitioners at length and are of the view that no case for interference with the judgment of the High Court is made out.
9. ' There is no dispute with regard to the stock of sugar held by the respondents on 3-6-1989 which was entitled to exemption in terms of S.R.O. Dated 14-6-1982. The contention of the learned counsel for the petitioners, however, is that as the stock which was admittedly entitled to exemption from central excise duty in terms of the orders of the Supreme Court has been sold by the respondents at the same rate at which other stock was sold on which excise duty is admittedly recoverable, therefore it is quite clear that the respondents have passed on the burden of central excise duty to the purchasers and therefore, they were not entitled to the exemption in terms of the orders of the Supreme Court. We are unable to accept this contention.
10. ' It is not disputed before us that the selling price of the sugar as determined by the Appellate Tribunal as well as C.B.R before 3-6-1989 and after 3-6-1989 has remained unchanged. In terms of the orders of this Court, the respondents were entitled to the exemption from excise duty on the stock which they held on 3-6-1989. It is also quite clear from the orders of this Court passed in Army Welfare Sugar Mills Ltd. v. Federation of Pakistan (supra) that the C.B.R. Was required to determine whether the additional burden of central excise duty has been passed on to the purchasers by the respondents as a result of the withdrawal of the concession of exemption which was admissible to them under S.R.O. Dated 14-6-1982. Since the respondents, according to record before us, have not enhanced the selling price of the sugar after withdrawal of above S.R.O. And were selling at the same price on which they were selling prior to the withdrawal of the exemption, it cannot be argued that the incident of central excise duty/tax was added to the price and was passed on to the purchasers. The fact that the price of sugar sold by the respondents remained unchanged and that the sugar produced by the petitioners which was subject to the payment of excise duty was being sold at the same price, cannot lead to the conclusion that the incident of tax was added by the respondents while selling their stock of sugar which was subject to exemption after withdrawal of the above S.R.O. We are, therefore, of the view that as the respondents were entitled to the exemption and they had not increased the selling price of the sugar after withdrawal of exemption of excise duty on the stock of sugar, they were covered by the decision of this Court in the case of Army Welfare Sugar Mills Ltd v. Federation of Pakistan (supra) and were entitled to enjoy the exemption which was granted to them under S.R.O. Dated 14-6-1989. No case for interference with the judgment of High Court is made out. The petitions are, accordingly, dismissed and leave is refused.
11. (Sd.)
12. Saiduzzaman Siddiqui, C.J.
13. (Sd.)
14. Wajihuddin Ahmed, J.
15. (Sd.)
16. Kamal Mansoor Alam, J.
17. I respectfully agree and here added a note in further augmentation of the proposed judgment.
18. (Sd.)
19. Wajihuddin Ahmed, J.
20. ' WAJIHUDDIN AHMED, J.---I respectfully agree with the judgment, proposed to be delivered in these petitions by the Hon'ble Chief Justice. However, in order to further augment the position, I have thought fit to add a few lines of my own.
21. ' While the petitions were being argued, I asked the learned counsel, representing the respondent- Sugar Mills, more specifically Mr. Fakharuddin G. Ebrahim, Senior Advocate Supreme Court and Mr. Afsar Abdi, Advocate Supreme Court whether the respondents had cleared income-tax on the excess amount of profit, which obviously accrued on the additional amount of sugar, in contemplation of the exemption granted, per S.R.O. 560(1)/82, dated 14-6-1982, subsequently withdrawn vide S.R.O. 555(1)/89 on 3-6-1989. The question raised largely concerned the excess produce of sugar, as covered by the exemption for the year ending June 30, 1989. The answers were in the affirmative viz. a higher quantum of income-tax was paid for that portion of sugar, which fell within the exempted quantity. This being so, and the mills having paid excess amount of income-tax on the referred quantity of sugar, it would arguably be inequitable and against the spirit of the decision, whereby the matters were remanded, per Army Welfare Sugar Mills Ltd. v.
22. Federation of Pakistan (1992 SCM R 1652), to require the respondents to refund the difference of the gain, inbuilt within the price, recovered for the excess quantity and that representing the conventional excisable goods. In other words, in such a senario the respondent mills would be required to pay the taxes twice over namely, income-tax on the applicable gain, on the one hand and the entire excess itself, purporting to be the equivalent of excise duty, on the other. This is neither permissible nor could possibly be in contemplation of the order of remand. For this additional ground also the petitions must fail.
23. ' However, copies of this order would be forwarded by the Deputy Registrar to the concerned Regional Commissioners of Income-tax for ensuring that due income-tax has been paid by all concerned and reporting' compliance within a period of four months to this Court.
24. (Sd.)
25. Wajhiuddin Ahmed, J.
26. ' No ground is made out for review of the order. The petitions for review' are dismissed.
27. (Sd.)