' ABDUL GHANI KHAN KHATTAK, L-This Constitutional petition by Charsadda Sugar Mills Ltd., Charsadda (a public Limited Company) against the Federation of Pakistan (respondent 1), Central Board of Revenue Government of Pakistan Islamabad (respondent No, 2), Collector of Central Excise and Land Customs, Peshawar (respondent, 3), and the Secretary, Food Department Government of N.-W. F. P. Civil Secretariat, Peshawar, (respondent No, 4) arises out of the following facts t
2. The petitioner, manufactures sugar from sugarcane and beet. Sugar is an exerciseable item and the petitioner-Company is required to pay excise duty leviable under the Excise Duty on Production Capacity (Sugar) Rules, 1972 (hereinafter to be called the Rules). The capacity of the petitioner- Mills determined under the Rules is fixed at 2600 tons per annum. These Rules were made by respondent No, 2 under subsection (4) of section 3 read with section 37 of the Central Excises and Salt Act, 1944 (as amended) published on 12-10-1972. Rule 3 of the Rules reads as under .- "3.--(1) The production capacity of the plants and machinery in each factory shall be determined with reference to-
(a) the manufacturer's declarations about the production capacity of his-factory made to Government in any connection t
(b) the daily-rated capacity of the factory for the crushing of sugarcane and beet
(c) the percentage of the yield of sugar from sugarcane and beet;
(d) the quantity of sugar produced by remelting gur, Khandsari or jaggery powder ; and Rule 4 of the Rules provides for a situation where a factory concerned can apply for abatement. It reads "4. If in a financial year, the actual production of sugar of a factory, for reasons which, in the opinion of the Central Board of Revenue, were beyond the control of the manufacturer, falls short of its production capacity to such extent as the Central Board of Revenue I considers to be substantial, the Central Board of Revenue may, its discretion but with the prior approval of the Federal Government grant abatement of duty leviable under rule 3 at such rate and to such extent as it may consider proper."
3. The petitioner, as per Annexure 'A' claimed abatement of 3498.69 tons Involving duty to the extent of Rs, 29,03,912.70. The petitioner's claim was partially accepted per Annexure 'C'. This order was challenged In a previous Writ Petition (No, 512/75) in which the following order was passed by this Court on 4-11-1975 :- "By consent, this petition is dismissed subject to the condition that the impugned order passed by respondents would stand nullified and they would now afford to petitioner an opportunity of being heard whereafter they should pass whatever order is required on the bag, of evidence and other material.
(Sd.) Chief Justice. (Sd.) Judge."
' Respondent No, 2 passed the impugned order on the 5th of February 1976. (Annexure E) as follows :- "Government of Pakistan Central Board of Revenue Order No, 7-Sugar/76. Islamabad dated 5th February 1976.
' Subject : Abatement claim of Messrs Charsadda Sugar Mills Limited, Charsadda for the year 1973.74. the abatement claim for the year 1973-74 filed by Messrs Charsadda Sugar Mills Ltd., Charsadda under rule 4 of the Excise Duty on Production Capacity (Sugar) Rules, 1972 was partially accepted by the Central Board of Revenue with the prior approval of the Federal Government vide Order No, 4/Sugar/74, dated the 20th January 1975, and the amoant of Rs, 7,10,000 (Rupees seven lac ten thousand only) was allowed as abatement from duty. Aggrieved by this order Messrs Charsadda Sugar Mills Ltd. Charsadda filed Writ Petition No, 512/75 in the Peshawar High Court who have been pleased to declare the Board's order aforesaid to be without lawful authority and of no legal effect on the ground that no hearing was granted to the petitioners before disposal of the abatement claim.
(2) In pursuance of Honourable High Court's judgment Messrs Charsadda Sugar Mills Ltd., Charsadda were afforded an opportunity of being heard and their representatives Messrs Muhammad Sardar Khan and Abdul Aziz Khan, Advocates appeared before the Member, Central Board of Revenue on 10-1-1976 and urged that Central excise duty on the entire shortfall suffered by the Mills during the year 1973-74 be abated.
(3) After considering all the arguments advanced by the Mill's representatives the Central Board of Revenue considers a shortfall to the extent of 855.53 tons as substantial and for reasons beyond the control of the manufacturers, and duty on this shortfall amounts to Rs, 7,10,089.90 (Rupees seven lac ten thousand eighty-nine and ninty paisa only).
43.16 tons of sugar which was in process at the close of beet season has been included in the actual production and the shortfall admissible for abatement has been worked out accordingly.
(4) Now therefore, the Central Board of Revenue in exercise of the powers conferred by rule 4 of the Excise Duty on Production Capacity (Sugar) Rules,, 1972, and with the prior approval of the Federal Government, has been pleased to allow Rs, 7,10,089.90 (Rupees seven lac ten thousand eighty-nine and ninety paisa only), as abatement from Central Excise duty leviable under rule 3 of the aforesaid Rules on account of shortfall in production suffered by the mills during the year 1973-74 for reasons beyond the control of the manufacturers.
(Sd.) Mumtaz Ali, First Secretary (PC0), Tele. 2'822." the reason for not accepting the entire claim of the petitioner is contained in parawise comments of respondents Nos, 1 and 2 which reads "19. It may be stated here that shortfall up to an extent of 10% has not been considered by the Board as beyond the control of the mill, prosduction does not depend merely on raw material like sugarcane beet, electricity, labour etc. But also on the efficiency of management. Enterpreneurship is an important factor of production. Management in Pakistan has not been at very high standard.
There is great room for improvement and if it is improved production will surely improve. The basic idea behind capacity taxation is to encourage and improve production in the fields where capacity has been introduced. The Central Board of Revenue therefore considered that shortfall up to an extent of 10% of annual production capacity was not beyond the control of the management. If it had tried to be more efficient it could have increased production by at least 10%. This policy has been adopted as an encouragement/inducement to the mills to maintain a high level of efficiency.
' The question that falls for determination is whether it is in accord with law that abatement of 10% of annual production capacity is denied to the petitioner ?
4. Mr. A. K. Brohi, Advocate, learned counsel for the petitioner ,contended that the impugned order passed on the above formula of 10% is a blanket order which excludes from consideration all those factors which vary from time to time and therefore it is not a decision in law and under the law within the meaning of Article 77 of the Constitution, which reads:- "No tax shall be levied for the purposes of the Federation except by or under the authority of Act of Parliament."
' The argument is that in the Rules, the formula of 10% is nowhere mentioned which having been applied in all cases tantamounts to the exercise of discretion in an arbitrary manner not in conformity with the dicision of the superior Courts that no reason is shown in the impugned order for the application of 10% formula, therefore, the order is not speaking one, that even if the formula is accepted to be valid, but when the 'shortfall' exceeds 10% of capacity production then in that eventuality, the petitioner is endued to fall abatement including the 10% of capacity production which ordinarily is denied in normal conditions. This contention is highlighted in paragraph No, 19 of the petition in the following terms 1- "19. That the respondents have disallowed abatement to the extent of 2643.16 tons on a formula basis and not on account of any objection, just and/or reasonable considerations They have disallowed abatement of 10% of the production capacity fixed being 26000 tons. This formula has been followed by respondent No, 2, in case of other mills, who claim similar abatements. This also tantamounts to penalising the petitioner for no fault of its own."
' The contentions mentioned above, boil down to this that the application of 10% formula is not in accord with justice and the impugned order by adopting this formula is consequently irrational, arbitrary and oppressive and of no legal effect. This aspect of the objections is proposed to be taken up after discussion of the case-law cited in support of the contentions.
5. Reliance is placed on M. M. Ispahani Ltd. v. Hail Muhammad ,Sultan (1) which reads at page 87 A Judge has to decide a case according to law regardless of the consequences which his decision might entail. The learned Judge
(1) PLD 1955 Sind 78 has admitted that the hands of the defendants had not been entirely Olean and that their conduct had not been above board. He admits that they knew of the notice of eviction served on J. Tutor and yet they purchased this running concern with open eyes. Clearly, therefore, the defendant was a trespasser in the eye of law and should have been treated as such by the learned Judge. It is for the Government to consider the humanitarian points of view and not the Court of Law. Discretion has always to be exercised in a judicial manner, and not in an arbitrary manner as has been done in this case. Let us take the case of a young man who is the only son of his aged parents and the only bread-winner of the family. Suppose he commits a brutal and savage murder and the prosecution prove the case against him. Will a Judge then be entitled to say, for instance, that "On the strictly legal aspect the accused is guilty of a very brutal murder but because he is the only bread winner of the family and the only child of his aged parents, if I convict him the entire family will be ruined and will be thrown on the steet, I will therefore let him go." In Maxwell on the Interpolation of Statutes, the following passage occurs on 123 under the Chapter "Discretion" t- 'Where, as in multitude of acts, something is left to be done according to the discretion of the authority on whom the power of doing it is conferred, the discretion must be exercised honestly and in the spirit of the statute, otherwise the act done would not fall within the statute. 'According to his discretion' means, it has been said according to the rules of reason and justice, not private opinion, according to law and not humour; it is to be, not arbitrary, vague and fanciful but legal and regular, to be exercised, not capriciously, but on judicial ground and for substantial reasons .
' And it must be exercised within the Limits to which an honest man competent to the discharge of his office ought to confine himself, that is. Within the limits and for the objects intended by the Legislature. These dicta may be summed up on the statement of Lord Esher that the discretion must be exercised without taking into account any reason which is not a legal one. If people who have to exercise a public duty by exercising their discretion take into account matter which the Courts consider not to be proper for the guidance of their discretion, then in the eyes of the law they have not exercised their discretion. Moreover, if a public authority bases its exercise of discretion on a misinterpretation of the statute which it purports to administer, the Court has jurisdiction to interfere."
' Similar remarks occur in the book "Justice and Administrative Law" by William A. Robson at page
400. It is further said there.
"The idea of a discretion which is to be exercised, not in a capricious and impetuous way, but in a disciplined and responsible manner, is a conception which has had a wide application in English Law and politics."
In Sunannah Sharp v. Wakefield and others (1) the following passage occurs.
'An extensive power is confined to the justices in their capacity as justices to be exercised judicially ; and 'discretion' means when it is said that
(1) (1891) App. Case. 173 something is to be done within the discretion of the authorities that that something is to be done according to the rules of reason and justice, not according to private opinion ; according to law, and not humour. It is to be, not arbitrary, vague and fanciful but legal and regular. And it must be exercised within the limit, to which an honest man competent to the discharge of his office ought to confine himself. Where justices thought proper not to enforce the law because they considered that the act in question was unjust in principle, the Court of Queen's Bench compelled them by a peremptory order to do the act which nevertheless the statute had said was in their discretion to do or leave undone."
6. The next case quoted was the case Syed Hadi All v. The Government of West Pakistan etc. (1). It was held :- "That even in respect of purely administrative acts there is a duty to act justly, fairly, and reasonably, and if the order impugned be one which could not possibly have been passed by a person acting justly, fairly and reasonably, the order will be invalid in law. Moreover although a show-cause was not necessary in all oases where an executive order was passed, the duty to act justly, fairly and reasonably necessitated in this case the grant of an opportunity of explanation to the petitioner by the Provincial Government before passing the order in dispute."
' This authority requires a brief introduction by reproducing relevant portion which is indicative of the context in which the above pronouncement was made :- "By a notification the Punjab Government, in exercise of their powers under section 10(d) of the Punjab Town Improvement Act (IV of 1922) removed the petitioner from membership of the Board of Trustees of the Lahore Improvement Trust on account of his having flagrantly abused the powers of a "trustee", the allegation being that he had got his name put on a sub-committee which was to deal with an offer of purchase of shop-sites, made by the Trust to the Pakistan Cloth Market Federation, a body of which the petitioner was the President. No notice to show cause against his removal was given to the petitioner. In fact, such a notice was not prescribed by the Act."
' At page 831, it is laid down :- "The contention on behalf of the respondents is that the power granted to the Provincial Government for removing a member under section 10(d) is altogether unfettered. The only condition of the exercise of that power is the opinion of the Provincial Government No procedure and no inquiry is prescribed for the formation of this opinion. There is no duty to act judicially and there is no occasion for the application of any principle of natural justice. It is also pointed out that in some other analogous enactments there is a provision for notice and the inference from the omission to provide for any notice is that no notice was intended .
"(at page 832)- ' It must be kept in mind, when we begin consideration of the extent of
(1) PLD 1956 Lah. 824 a judicial control over an executive act, that whenever the question of such control arises before a Court the true question to be answered is whether the act is in accordance with law. If it be in accordance with law, there is no power in the Court to declare it invalid. When we talk of some principle of justice governing the acts of the executive it is only because we regard that principle implied in the relevant law so that the breach of the principle would make the act illegal. The point to be decided always is whether the order is within the powers that have been granted. It is not necessary, however, that conditions to which the exercise of power is subject should be express.
There may be a condition of the exercise of power implied in the discretion granted and a non- compliance with such condition will as such in all date the act as the breach of an express condition. On a careful consideration of the matter, I am of opinion that it is not possible to support the proposition that in respect of purely executive acts the discretion of the executive is not subject to any consideration of justice, reason and fairplay. The Legislature, while it grants power to pass an order, wants it to be exercised fairly, reasonably and cautiously. It cannot be urged that the Legislature supports caprice, malice or wanton action. These are evils and evil the Legislature cannot intend. Of course, I do not mean that In every case of exercise of executive power the Court will itself determine what is proper order to be passed and so substitute judgment for that of the executive. That would be usurping the functions of the executive. If the order is one that could possibly have been passed by a person acting, justly, fairly and reasonably, the Court has no further concern in the matter. These are the limits of the inquiry by the Court."
' In the ease of Dr. Muhammad Ismail v. Deputy Commissioner, Jhang and another (1), it was observed at page 759 : It is well settled that persons performing judicial functions must give reasons in support of their orders. See Ghulam Mohl-ud-Din v. Chief Settlement Commissioner (Pakistan), Lahore and others PLD 1964 SC 829 where the Chief Settlement and Rehabilitation Commissioner passed an order by simply countersigning the report or the note of his subordinate and it was held that it was an order without lawful authority, inasmuch as, it did not show as to whether the Chief Settlement and Rehabilitation Commissioner had applied his independent mind to the factual and legal controversy arising in the case. In that case the office report or note was a speaking one whereas in the instant case there did not exist anything of that kind either, and all that the Assistant Commissioner had stated was that he had sealed the property in dispute in pursuance of the orders of the Deputy Commissioner which if reviewed will be given due effect. In these circumstances, the order of the learned Deputy Commissioner "seen, file" is no order in the eye of law on the points of fact and law brought to his notice by means of the application under examination.
7. In the case of S. S. Miranda Ltd. v. Chief Commissioner, Karachi and another (2), the following is instructive on the proposition :- "This, however, does not mean that the exercise of discretion by the Collector or Commissioner can be arbitrary and fanciful and that if
(1) PLD 1976 Leh. 758 (2) PLD 1959 SC (Pak.) 134 it be so Courts cannot interfere. The following observations of Lord Greene, in M. R. Associated Provincial Picture Houses Ltd. v. Wednesday Corporation ((1948) 1 K B 223 at pp. 228, 229 and 233) with which I with respect agree are instructive as to the scope of interference by Courts with the exercise by the executive of the discretion vested in them by the Legislature : ' When an executive discretion is entrusted by Parliament to a body such as the local authority in this case, what appears to be an exercise of that discretion can only be challenged in the Courts in a strictly limited class of cases. As I have said, it must always be remembered that the Court is not a Court of appeal. When discretion of this kind is granted the law recognizes certain principles upon which that discretion must be exercised, but within the four corners of those principles-the discretion, in my opinion, is an absolute one and cannot be questioned in any Court of law. What then are those principles? They are well understood. They are principles which the Court looks to in considering any question of discretion, there is to be found expressly or by implication matters which the authority exercising the discretion ought to have regard to, then in exercising the discretion it must have regard to those matters. Conversely, if the nature of the subject-matter and the general interpretation of the Act make it clear that certain matters would not be germane to the matter in question, the authority must disregard those irrelevant collateral matters.
' It is true the discretion must be exercised reasonably. Now what does that mean ? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what ho has to consider. If he does not obey those rules. He may truly be said, and often is said to be acting 'unreasonably'. Similarly there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington, L. J. In Short v. Poole Corporation (1926) Ch. 66, gave the example of the red-haired teacher, dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith ; and, in fact, all these things run into one another.
' The Court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters, which they ought not to take into account, or, conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may be still possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the Court can interfere.
' The power of the Court to interfere in each case, is not as an appellate authority to override a decision of the local authority, but esa judicial authority which is concerned, and concerned only, to see whether the local authorities have contravened the law by acting in excess of the powers which Parliament has confided in them.
8. Two things emanate from the order of 14.5-1975 passed by this Court on the consent of the parties. The petitioner could do no more than to agree to the dismissal of its petition when the respondent offered to be heard in respect of its grievance. It, however, remained with the respondent to lend hearing and consider evidence or other material while hearing the petition. It is true, as suggested by the learned Advocate-Genera?, that the rules are silent about taking of evidence ; but what about other material on the basis of which the respondents do not deny the fact of the shortfall being substantial these were not considered to weigh the merits of the claim and make allowances therefor, on the short ground that it was not permissible under the formula.
The above bar of 10% formula is not the creation of the statute and the rules made thereunder and it was originated by the respondent. To put it in the words of Mr. A. K. Brohi, Advocate, this was the creature of respondent No, I arising from its mind based on n facts and circumstances of a given case. The application of the formula as rigidly as in this case tantamounts to withholding of discretion, on the grounds having no independent existence in itself. Moreover, rule 4 made by the C. B. R. Is made meaningless by its own maker in redressing a substantial shortfall. The statement of Mr. A. K. Brohi, Advocate made at the bar at the fag-end of his argument that respondent No, 1 has asked the Government for withdrawing the formula was not refuted by the other side is a fact tilting the scales of fairness and justice in favour of the petitioner. The grounds for evolving the formula is subject to variation from place to place and time to time even if managerial skill and enterpreneur remain unaltered. The agents of production will bring about the same result only, if other factors relating to the production also remain unaltered. It has not been denied that during the relevant crushing season, the sugarcane crop was affected by frost, consequently adversely affecting the percentage of sugar. This being so, is admitted by the respondents by its conduct in accepting the abatement partially. This fact was reiterated by the learned Advocate-General in his arguments suggesting that the petitioner could recoup the loss on account of bad sugarcane by the use of Gur. This argument does not arise from the local conditions during the relevant time. The reason is that the price of Guy, is stated to be exorbitant in those days and the entrepreneur of the public limited company would have been ill-advised to take the risk of apparent loss. The argument would have been sound enough if the petitioner were a public utility concern. In support of hill viewpoint, the learned Advocate-General quoted Muzaffar All Shah and others v. Registrar, Cooperative Societies, Karachi and another (1) ; Dr. Abdul Haflz v. Chairman, Municipal Corporation, Lahore and others (2) ; G. Veerappa Pilled v. Raman & Raman Ltd. And others (3) and Dayal Singh College Trust Society v. The Custodian of Evacuee Property, West Pakistan, Lahore and others (4).
The first three cases do not advance the argument of the learned counsel, and the last one rather supports the view of the matter that we propose to take up in this case ; holding ' 'Towers of High Court while "exercising a ppellate or revisional jurisdiction"
(1) PLD 1968 Kar. 422 (2) PLD 1967 Lah. 1251
(3) AIR 1952 SC 192 (4) PLD 1962 Lah. 352 and when dealing with case "in exercise of its writ jurisdiction" Difference-Certiorari-Does not issue unless Tribunal whose order is questioned has refused to exercise jurisdiction it possessed or has exercised jurisdiction it did not possess-Tribunal having jurisdiction to decide question-Has jurisdiction to decide it rightly or wrongly."
' What we have said above, shall have made it clear that by accepting this writ petition, the impugned order is set aside and respondent No, 2 is directed to consider the matter in the light of the above observations. In view of the peculiar circumstances of the case, there shall be no word as to costs.
' SHAH NAWAZ KHAN, J.-I respectfully agree with the conclusion of my learned brother, Abdul Ghani Khan Khattak, J. That the impugned order of the C. B. R. (respondent No, 2), dated 5-2-1976 is liable to be set aside. / would, however, like to add a few more lines further explaining the reasons why this Writ Petition is being accepted and the impugned order of the C. B. R. (respondent No, 2) is being set aside. Rule 4 of the Production Capacity (Sugar) Rules, 1972, postulates two points: (0 short fall for reasons beyond the control of the manafacturer and (II) short fall should be substantial. Negatively stated it does not contain a warrant either expressly or impliedly for any policy or a formula to be applicable to all cases in which abatement is claimed.
2. It also makes clear that it is the discretion of the C. B. R. To say what is substantial short fall, but this power, although discretionary, can only be exercised conformable to the principles of statutory interpretations and there are numerous authorities of the superior Courts to that affect which need not be quoted. Such power is essential objective in nature and cannot be regarded either subjective or arbitrary. What is substantial short fall will be interpreted in the circumstances and facts of each case.
3. In the instant case the C. B. R. (respondent No, 2) while accepting the claim of the petitioner that there was a substantial shortfall in production, due to reasons beyond the control of mannfacturer, operated on a formula, which in effect says that shortfall is substantially only if it is in excess of 10% of production capacity fixed for the Mill. This formula is not notified in the Gazette and, therefore, it does not flow from law within the meaning of section 38 of the Central Excises and Salt Act, 1944.
The Production Capacity (Sugar) Rules, 1972, do not prescribe the formula. Moreover, no rational basis have been assigned as to why it should be 10% and why not 5% or 15% or more or less. This 10% is being justified as referable to efficiency question. In other words it proceeds on the view that all Sugar Mills in Pakistan are working at reduced capacity hence inefficient.
4. Law or Rules, as indicated above, do not provide for 10% formal as conceived by the C. B. R.
Respondent No, 2 thus acting on a pre-plan formula has failed to exercise its discretion as envisaged in rule 4 ibid. Grounds of shortfall mentioned by the petitioner in Writ Petition (facts mentioned therein) on the basis of which rebate for shortfall is claimed do not appear to have been controverted by the respondent not even in parawise comments. Rule 4 :bid uses the word "may" for the purpose of discretion which must be judicious and not arbitrary. "Abatement" moans "to lessen the burden". The impugned order of the C. B. R. (respondent No, 2) does not contain any reason for the view it has taken in allowing abatement for the shortfall to the extent of 855.53 tons only, except that in the parawise comments it has been stated that the decision is based on a formula which is applicable to all the Mills. Decision made on the basis of a formula is not a decision under the Law, in that, such formula is neither a part of the Act nor of the Rules made thereunder. The exercise of discretion contemplated in rule 4 of the Production Capacity (Sugar)
Rules, 1972, must not be arbitrary, unjust and unreasonable. In the Order of this Court, dated 4-2- 1975 in Writ Petition No, 512 of 1975, the respondent No, 2 was directed to decide the matter on evidence and other material, but the impugned order of the C. B. R. Is a blanket order and, therefore, It cannot be considered as a speaking order.
5. It would be unrealistic that for every shortfall the C. B. R. Would take off 10% by the application of the said formula and then it would fix the rebate on the shortfall in excess of 10% of the production capacity of the concerned Mill by treating it as a substantial short fall due to reasons beyond the control of the manufacturer with respect to which rebate is permissible. Contention of the learned counsel for the petitioner that assuming for the sake of argument that 10% formula is valid and that only if the short fall exceeds 10% of the production capacity that it is to be treated as substantial, on this test basis exemption, if the short fall goes beyond 10%, then the whole short fall becomes qualified for abatement and not the short fall minus 10% appears to be not without force. There is no condition laid down in the Rules as to what percentage of short fall that happens would qualify for abatement. How respondent No, 2 arrived at the conclusion that the petitioner was entitled to abatement of 855.53 tons only, has not been made clear in the impugned order.
6. Under Article 77 of the Constitution, tax is to be levied by law only. This formula has been evolved by the Central Board of Revenue for its own guidance. It was also admitted by the learned Advocate General that this formula is not a part of any Law or the Rules. Therefore, if rebate of short fall is worked out on the basis of a pre-existing formula then where is the discretion of the C. B. R. To be exercised under Rule 4 ibid. Discretion can be exercised keeping in view the facts and circumstances of each case and every case is to be decided on its own merits. The rule provides for the exercise of discretion and not that any formula should be adopted.
7. In exercise of powers under Article 199 of the Constitution, this Court acts as a Court of correction.
We have no doubt in our mind that it is within the exclusive jurisdiction of the C. B. R. To determine how much substantial short fall has occurred in any individual case and it is also within the discretion of the C. B. R. To allow abatement for such short fall. But as indicated above, discretion can be used keeping in view the facts and circumstances of each case. Once a formula is adopted, then it is not the discretion but the formula on the basis of which short fall is worked out and abatement allowed therefor. In the instant case the respondent No, 2 has decided the case on a formula which is not a part of any rule or Act and no discretion has been used much less judiciously as envisaged in rule 4 ibid. The impugned order of the C. B. R. Being not based on law, in that it is in violation of the relevant Rule, which has thus ended in failure of justice, is untenable, hence liable to be set aside. Therefore, in the exercise of its jurisdiction under Article 199 of the Constitution this Court can justifiably interfere. The impugned order of the respondent is, therefore, set aside and a direction is issued to respondent No, 2 (C. B. R.) to consider the matter afresh in the light of above observations.