IFTIKHAR MUHAMMAD CHAUDHRY, J.--The petitions titled hereinabove have been filed for leave to appeal against the judgment dated 31st July, 2000 passed by Lahore High Court, Rawalpindi Bench. Concluding para. Therefrom is reproduced hereinbelow:-- "... ..... Consequently it is held:--
(a) That the notification withdrawing exemptions from payment of customs duty and sales tax would not operate retrospectively and all exemptions would be available indiscriminately to the petitioners on the import of machinery and equipment for Power Generation Projects under the policy under Notification SRO No,279(I)/94 dated 2-4-1994 till it was amended on 1-7-1995.
(b) The regulatory duty being recoverable in addition to the customs duty only for the specified financial year in which it is issued, the exemption of such duty in absence of a specific notification would no more be available at the expiry of financial year.
(c) Since the notification of withdrawal of exemptions in customs duties and sales tax would not operate retrospectively, therefore, the importers would be entitled to claim refund of the payments made in connection with such duties and taxes which were not chargeable on the date of issue of notification of withdrawal. These writ petitions are accordingly disposed of in the above terms with no order as to costs."
2. Because Federation of Pakistan has also assailed the same judgment by instituting petitions noted hereinabove, therefore, we intend to dispose of all the petitions by instant common judgment in view of similarity of the questions, which have been agitated by both the sides.
3. The facts of the case are that the Federation of Pakistan vide SRO 279(1)/94, dated 2nd April. 1994 allowed tax exemption to implement the policy and packages of incentives for private power generating companies in Pakistan. The contents of the notification are reproduced hereinbelow:- "Notification No,SRO 279(1)/94, dated 2nd April, 1994.--In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), subsection (1) of section 13 of the Sales Tax Act, 1990, and subsection (2) of section 5 of the Finance Act, 1985, the Federal Government is pleased to direct that the machinery and equipment, including coal mining equipment as listed in SRO.525(I)/89, dated 3rd June, 1989, not manufactured locally, shall be exempt from the whole of the Customs duty leviable under the First Schedule to the Customs Act, 1969, regulatory duties leviable under subsection (2) of section 18 of the Customs Act, 1969, Sales Tax and Iqra Surcharge chargeable thereon, if imported for setting up or for balancing modernization and extension of power generation i,e, oil gas, hydel, coal wind and wave energy projects, including under construction projects subject to the conditions set out below, namely:
(1) The importer shall, at the time of import submit a detailed packing list of machinery and equipment specified below in Explanations (i), (ii), (iii), (iv) and (v) and shall also make a written declaration on the bill of entry to the effect that the machinery and equipment and spares have been imported for the aforesaid projects.
(2) The importer shall furnish an indemnity bond in the form set out hereinbelow to the extent of customs duty, regulatory duties, sales tax, and Iqra Surcharge exempted under this Notification. The said bond shall not be discharged till the expiry of one year after the commissioning of the project indicated in the sanction or approval letter of the concerned Ministry, and after due verification by the Assistant Collector of Customs and Central Excise in whose jurisdiction the project is located. Such certificate of verification would clearly state that machinery and equipment imported for the purposes specified in the bill of entry have been duly installed or the machinery and equipment imported temporarily have been duly reexported.
(3) In the event of non-production of such certificate by the importer to the Collector of Customs shall enforce the indemnity bond and proceed to recover Government dues under section 202 of the Customs Act, 1969, and the rules made thereunder.
(4) Spares and maintenance parts not locally manufactured required for the project after its commissioning would be subject to customs duty at the rate of twenty percent ad val.
Explanation.--For the purpose of this notification, 'machinery an equipment' shall mean--
(i) machinery and equipment operated by power of any description, such as is used in the generation of power;
(ii) apparatus and appliances, including metering and testing apparatus and appliances specially adapted for use in conjunction with machinery and equipment specified in item (i) above;
(iii) mechanical and electrical controls and transmission gear adopted for use in or with item (i) above;
(iv) all machinery and equipment imported temporarily for the construction, erection, installation and end- completion of the project including specified equipment for hydel and thermal power and specialized vehicles (4 x 4 non-luxury), but excluding passenger vehicles; and
(v) component parts of machinery and equipment as specified in items (i), (ii), (iii) and (iv) above, identifiable as for use in or with such machinery imported for the project and equipment, including spares for purposes of the project." Stibsequent to above notification on 1st July, 1995 Notifications being SRO No,584(1)/95 and 773(1)/95 dated 1st August, 1995 were issued amending the above notification in the following manner:- "Notification SRO No,584(I)/95.--In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and subsection (1) of section 13 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendments shall be made in this Ministry's Notification No,SRO No,279(I) dated the 2nd April, 1994, namely:-- In the aforesaid Notification, in the preamble after the word 'projects', occurring for the second time, the commas, words and letters', 'but excluding those which have not signed power purchase agreements with WAPDA or KESC,' shall be inserted' ."
"Notification SRO No,773(I)/95.--In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and subsection (1) of section 13, of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendments shall be made in this Ministry's Notification No,279(I) dated the 2nd April, 1994, namely:-- In the aforesaid Notification, in the preamble after the commas, words and letters', 'but excluding those which have not signed power purchase agreements with WAPDA or KESC,' the words and comma 'which entered into an implementation agreement with the Government of Pakistan', shall be substituted."
4. Besides the above amendment the Federation of Pakistan promulgated another Notification being SRO No,585(I)/95 dated 1st July, 1995 in pursuance whereof the Federal Government was pleased to direct that the machinery and equipment including coal mining equipment, not manufactured locally, shall be exempt from customs duty in excess of 10% leviable under the First Schedule to the same Act if imported for setting up or for balancing, modernization and extension of power generation through oil, gas, coal wind and wave energy projects etc. For convenience this notification is also reproduced hereinbelow:-- Notification SRO No,585(I)/95, dated 1st July, 1995.---In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the machinery and equipment, including coal mining equipment, not manufactured locally, shall be exempt from customs duty in excess, of 10% leviable under the First Schedule to the same Act, if imported for setting up or for balancing, modernization and extension of power generation through oil gas, hydel, coal, wind and wave energy projects, including under- construction projects subject to the conditions, namely:-
(1) The importer shall, at the time of import submit a detailed packing list of machinery and equipment specified below in Explanations (i), (ii), (iii), (iv) and (v) and shall also make a written declaration on the bill of entry to the effect that the machinery and equipment and spares have been imported for the aforesaid projects.
(2) The importer shall furnish an indemnity bond in the form set out hereinbelow to the extent of customs duty exempted under this Notification. The said bond shall not be discharged till the expiry of production of installation certificate from the Assistant Collector which shall be produced within one year, from the date of importation of plant and machinery and after due verification by the Assistant Collector of Customs and Central Excise in whose jurisdiction the project is located. Such certificate of verification would clearly state that machinery and equipment imported for the purposes specified in the bill of entry have been duly installed or the machinery and equipment imported temporarily have been duly reexported.
(3) In the event of non-production of such certificate by the importer to. The Collector of Customs shall enforce the indemnity bond and proceed to recover Government dues under section 202 of the Customs Act, 1969, and the rules made thereunder, and
(4) Spares and maintenance parts not locally manufactured required for the project after its commissioning would be subject to customs duty at the rate of twenty percent ad val.
Explanation.--For the purpose of this notification, 'machinery and equipment' shall mean--
(i) machinery and equipment operated by power of any description, such as is used in the generation of power;
(ii) apparatus and appliances, including metering and testing apparatus and appliances specially adapted for use in conjunction with machinery and equipment specified in Explanation (i) above;
(iii) machinery and electrical controls and transmission gear adopted for use in or with Explanation (i) above;
(iv) all machinery and equipment imported temporarily for the construction, erection, installation and end- completion of the project including specific equipment for thermal power and specialized vehicles (4 x 4 non- luxury), but excluding passenger vehicles; and
(v) component parts of machinery and equipment as specified in Explanations (i), (ii), (iii) and (iv) above, identifiable as for use in or with such machinery imported for the project and equipment, including spares for purposes of the project."
5. The companies dealing in private power generation projects assailed the notifications bearing SRO Nos.584(I)/95, 585(1)/89 dated 1st July, 1995 and SRO 773(1)/95 dated 1st August, 1995 by instituting writ petitions before Lahore High Court, Rawalpindi Bench which have been ,disposed of vide impugned order. Concluding para. Therefrom has been reproduced hereinabove. As such instant petitions have been filed.
6. Before dilating upon merits of the case it is appropriate to note that the Power Generating Companies who have opened letters of credits before 1st July, 1995, they will not be affected by the amendment incorporated in Notification SRO No,279(I)/94 dated 2nd April, 1994 in view of the impugned judgment, therefore, some of the companies having filed CPLAs No,1484/2000, 1486/2000, 1488/2000, 1489/2000, 1491/2000, 1493/2000, 1523/2000 and 1524/2000 did not press the petitions on merits. As such, those petitions have been disposed of separately vide order of even date with some observations made therein. As far as the present petitioner-companies are concerned they have opened letters of credits after 1st of July, 1995 as per the statement made at the bar by the learned counsel.
7. It is contended on behalf of petitioner companies that as the Notification No,SRO 584(I)/95, dated 1st July, 1995 has been found discriminatory, therefore, it cannot be applied/enforced against the petitioners with its prospective effect in view of Articles 8 and 25 of the Constitution of Islamic Republic of Pakistan.
8. A perusal of impugned judgment indicates that the amending Notifications i,e, SRO 584(1)/95 dated 1st July, 1995, has been declared discriminatory qua the Companies, who have opened letters of credits or submitted bills of entry before the date of issuance of notification, thus holding that it will have no effect retrospectively but prospectively. The conclusion so drawn by learned High Court is entirely in consonance with the law laid down by this Court from time to time that a notification cannot operate retrospectively and benefits and advantages if already accrued in favour of a party during subsistence of the notification shall be available to it until the notification is amended or rescinded as held in M/s. Army Welfare Sugar Mills Limited and others v. Federation of Pakistan 1992 SCM R 1652; Taj Mahal Hotel Limited v. Karachi Water and Sewerage Board 1997 SCM R 503; Hashwani Hotels Limited v. Federation of Pakistan and others PLD 1997 SC 315; Messrs Elahi Cotton Mills Limited and others v.
Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and 6 others PLD 1997 SC 582; Federation of Pakistan v. Shaukat Ali Mian and others PLD 1999 SC 1026. At this juncture another important aspect of the retrospectivity of notification may also be noted that if the notification has been used for the benefit of the subject then it can be made operative retrospectively but if its operation is to the disadvantage of a party who is the subject of the notification then it would operate prospectively. This point has been elaborately discussed by this Court in the judgment pronounced in the case of M/s. Army Welfare Sugar Mills. Limited and others 1992 SCM R 1652.
9. There is yet another important aspect of the notification dealing with the fiscal matters between the parties. In such case the notification is required to be construed strictly like other fiscal laws duly promulgated by the competent authority. Thus having observed so, next question crops up for consideration is, as to whether the competent authority had no jurisdiction to promulgate, amend or rescind a notification on basis of which some incentives in payment of taxes etc. Were extended to an importer of machinery for generating power in private sector for all the times to come, and if earlier beneficial notification is amended or withdrawn; whether a company who had not yet availed its benefits can put up a case of discrimination or violation of Articles 8 and 25 of the Constitution of Islamic Republic of Pakistan, 1973. First of all in this behalf it is to be seen that in fiscal statute element of discrimination cannot be pleaded nor such statute can be struck down at the touchstone of Article 25 of the Constitution of Islamic Republic of Pakistan. This Court in number of cases while interpreting question of discrimination between the persons placed in like situation and circumstances has also held that different laws can be promulgated to deal with various types of persons, however, subject to reasonable classification. Ready reference may be made to the case of I.A. Sherwani and others v. Governmem of Pakistan 1991 SCM R 1041; Government of Balochistan through Additional Chief Secretary v. Azizullah Memon and 16 others PLD 1993 SC 341.
The principles discussed in these two judgments on the question of classification with regard to equality of citizens have been reaffirmed in the case of Mehram Ali and others v. Federation of Pakistan and others PLD 1998 SC 1445.
One of the principle laid down in these judgments being relevant for disposal of instant matters is reproduced hereinbelow:-- "That equal protection of law does not envisage that every citizen is treated alike in all circumstances, but it contemplates that persons similarly situated or similarly placed are to be treated alike." The facts of the case in hand reveal that Power Generating Companies who have opened the Letters of Credits or submitted Bills of Entry after promulgation of SRO 279(1)/94 dated 2nd April, 1994 fulfilled all the conditions mentioned in the notification for seeking exemption of customs duty, sales tax, regulatory' duty and Iqra Surcharge, therefore, such companies shall be treated to have been placed in similar situation for treating them alike. As far as the petitioner Companies who have not fulfilled the conditions during the subsistence of this notification nor opened Letters of Credit or submitted Bills of Entry of the imported goods till its amendment vide SRO 585(1)/95, dated 1st July, 1995 shall be considered to have not been placed in similar conditions for the purpose of treating them alike with the companies who have already opened Letters of Credit or submitted Bills of Entry. It is also a well-settled principle of law that the Government/competent authority can issue, rescind or amend any notification or legislation which may be less favourable to a party who has not availed the benefits arising out of the earlier notification or legislation for the purpose of generating funds to run the functionaries of the Government etc. Reference in this behalf may be made to the case of Federation of Hotel and Restaurant v. Union of India AIR 1990 SC 1637. Relevant para. Therefrom is reproduced hereinbelow:-- "A taxing statute is not per se a restriction on the freedom under Article 19(1)(g). The policy of a tax in its effectuation, might, of course, being in some hardship in some individual cases. But that is inevitable, so long as law represents a process of abstraction from the generality of cases and reflects the highest common-factor.
Every cause, it is said, has its martyrs. Then again, the mere excessiveness of a tax or even the circumstance that its imposition might tend towards the diminution of the earnings or profits of the persons of incidence does not per se, and without more, constitute violation of the rights under Article 19(1)(g). Fazal Ali, J., though in a different context, in Sonhia Bhatia v. State of U.P. (1981) 3 SCR 239 at p.258: (AIR 1981 SC 1274 at p.1284) observe& "... ... ...The Act seems to implement one of the most important Constitutional directives contained in Part IV of the Constitution of India. If in this process a few individuals suffer severe hardship that cannot be helped, for individual interests must yield to the larger interests of the community or the country as indeed every noble cause claims its martyr." In another case of Commissioner of Agricultural Income Tax, East Bengal v. V.W.M. Abdur Rehman 1973 SCM R 445 this Court while making reference to the observations in the case of Cap. Brandy Syndicate v. Inland Revenue Commissioner (1921) 1 KB 64 held that "in a Taxing Act. One has to look merely at what is clearly said. There is no room for intendment. There is no equity about tax". Similarly the Supreme Court of India in the case of P.K. Kutty Haji and others v. Union of India and others (1989) 176 ITR 481 held "that the judicial approach throughout has been to allow the Legislature flexibility at the joints, particularly when a taxing statute is under attack".
10. It may also be noted that N.S. Bindra in his Book "Interpretation of Statutes, (7th Edition) at page 771 commented as under:-- "In construing a taxing measure for determining its Constitutional validity, the question of reasonableness cannot enter a judicial mind. The only consideration, which is germane, is whether the legislation challenged is permitted by the Constitution. The reasonableness or otherwise of such a state is a matter of legislative policy and it is not for the Courts to adjudicate upon."
Thus we are of the opinion that as the petitioner-companies who have opened E L.Cs: after the issuance of amended Notification No,SRO 584(1)/95 dated 1st July, 1995 and perhaps have also submitted the Bills of Entry are not entitled for the benefit of original Notification SRO No,279(I)/94 dated 2nd April, 1994 because they were not placed in similar circumstances qua the power generating companies who have fulfilled the conditions laid down in the unamended notification and have also filed Letters of Credits and Bills of Entry prior to its amendment.
Moreover in view of above discussion the powers of competent authority cannot be curtailed and a notification once issued cannot be allowed to remain intact for all times to come notwithstanding the fact that the circumstances had changed and it is not possible for the Government to extend the benefit of exemption of duty to the companies who have not yet decided to instal projects of power generation in the country or intending to do so in new circumstances prevailing after the date of issuance of amended notification after 1st July, 1995.
11. Learned counsel for petitioners referred to the case of Collector, Customs, Excise and Sales Tax, Peshawar and 3 others v. M/s. Flying Kraft Paper Mills (Pvt.), Charsadda, District Peshawar 1998 SCM R 1041 to promote his arguments that the petitioners are entitled for like treatment in view of this judgment. We have gone through the facts of the reported case according to which the respondent-company had acquired an old paper manufacturing factory located at Charsadda, N.-W.F.P. In the year 1992 in insolvency proceedings and started production of writing paper.
Later the respondent-company added certain plant and machinery to existing facilities and started production of sack paper used for packing of cement in 1993. The respondent-company had been paying Sales Tax and Excise Duty on its product since 1993, therefore, it submitted an application for exemption of tax on the ground that excise duty on its product was illegal and violative of all norms relating to levy on such imports because imports because imported product was granted exemption from levy of the excise duty. These facts substantially makes the case in hand distinguishable on facts because exemption on levy of excise duty was given to the importers on the same products, therefore, respondent-company was found entitled for the relief as it was also producing the same product and in this manner both the importers and the respondent-company were found to have been placed in the same circumstances as far as product of sack paper was concerned. But in the instant cases exemption has been given only to those importers who have opened the L.Cs. For installing the project prior to the amendment of notification dated 1st July, 1995. Therefore, the judgment cited by the learned counsel being distinguishable has rendered no help to him. Similarly in another judgment cited by him reported in AIR 1991 SC 1721 the facts are distinguishable because in that case too payment of duty on concessional rates was allowed to the importers who subsequently started importing the goods as they were found entitled to import the same. As such this judgment is also not applicable to the facts of the present case.
12. Thus for these differences we are of the considered opinion that the classification in both the sets of power generating companies appear to be reasonable and no case has been made out for grant of leave by this Court.
13. The Civil Petition filed by Federation of Pakistan details Whereof are given herein below are barred by time:-- S.No, Petition number and title of parties Date offiling Barred by number of days
1. C. P.L.A. No. 1591 of 2000 Federation of Pakistan and another v. Lahore Power Generation Ltd. and another20-10-2000 7 days
2. C. P.L.A. No. 1592 of 2000 Federation of Pakistan and another v. Kohinoor Genertek Ltd. and another20-10-2000 7 days
3. C.P.L.A. No. 1593 of 2000 Federation of Pakistan and another v.Mahmood Power Generation Ltd. and another20-10-2000 7 days
4. C. P.L.A. No. 1594 of 2000 Federation of Pakistan and another v. M/s. Olympia Power Generation (Pvt.) Ltd. and another20-10-2000 7 days
5. C. P.L.A. No. 1595 of 2000 Federation of Pakistan and another v M/s. Anoud Power Generation Ltd.20-10-2000 7 days
6. C. P.L.A. No. 1596 of 2000 Federation of Pakistan and another v. M/s. Gulistan Power Generation20-10-2000 7 days Ltd. and another
7. C. P.L.A. No. 1597 of 2000 Federation of Pakistan and another v. Sapphire Energy Limited and another20-10-2000 7 days
8. C. P.L.A. No. 1598 of 2000 Federation of Pakistan and another v.D.G. Khan Electric Company Ltd. and20-10-2000 7 days
9. C. P.L.A. No. 1599 of 2000 Federation of Pakistan and another v. Kohinoor Generatek Ltd. and another20-10-2000 7 days
10. C.P.L.A. No. 1600 of 2000 Federation of Pakistan and another v. Maple Leaf Electric Company Ltd. and another20-10-2000 7 days
11. C. P.L.A. No. 1601 of 2000 Federation of Pakistan and another v. Ghazi Power Ltd. and another20-10-2000 7 days
12. C.P.L.A. No. 1602 of 2000 Federation of Pakistan and another v. Ellahi Electric Company Ltd. and another20-10-2000 7 days
13. C. P.L.A. No. 1603 of 2000 Federation of Pakistan and another v. Bhanero Energy Ltd. and another20-10-2000 7 days
14. C. P. L.A. No. 1604 of 2000. Federation of Pakistan and another v. D.S. Power Ltd. and another20-10-2000 7 days
15. C. P.L.A. No. 1605 of 2000 Federation of Pakistan and another v. Nadeem Power Generation Ltd. and another20-10-2000 7 days
14. Learned counsel contended that delay in filing of the petitions may be condoned because department has filed Civil Petition No,1526 of 2000 (Federation of Pakistan and another v. M/s. Shadman Cotton Mills Ltd.) within time and instead r of appending separate certified copies of the judgment impugned filed the same in all other petitions bona fide under the impression that the same will also be utilized in all other cases. The explanation offered in the application as well as during arguments is not plausible because as per Order XIII, Rule 3(ii) of the Pakistan Supreme Court Rules, 1980 the leave petition must be accompanied by the judgment, decree, final order sought to be appealed from, one copy of which shall be certified as correct, together with grounds of appeal or application before the High Court, therefore, non-supplying of certified copies alongwith other petitions would give rise to draw presumption that petition has not been filed according to the Rules and time shall not be arrested unless a duly certified copy is placed on record alongwith each petition. Even otherwise the Government functionaries are not entitled for any preferential treatment so far as question of limitation for institution of the proceedings is concerned and it would be treated at par with the other litigants. In forming this view we are fortified with the judgment reported in the case of Government of Punjab through Secretary, Finance Department, Lahore v.
Mabarak Ali and others PLD 1993 SC 375. Thus we are of the opinion that except CPLA No,1526/2000 remaining petitions are not maintainable being barred by limitation.
15. However, contentions put forth by learned counsel for Federation of Pakistan in the case of Shadman Cotton Mills will be examined hereinbelow.
16. Now turning towards the arguments put forward by the counsel for the Federation of Pakistan with regard to the observations of the High Court for making operative the Notification SRO 584(1)/95 and SRO 585(I)/95 dated 1st July, 1995 and SRO 773(1)/95 dated 1st August, 1995 prospectively it is suffice to observe that in view of discussion undertaken hereinabove while discussing the effect of Notification SRO 585(1)/95 there is no need of detailed discussion except observing that all these notifications were on equal footings, therefore, they will not operate retrospectively.
17. Learned counsel also contended that the writ petitions before High Court were bad for non-joinder of WAPDA and KESC, therefore, petitioners were not entitled for the relief claimed for. It is to be seen that no legal proceedings can be terminated for misjoinder or non-joinder of parties in terms of provisions of Order I, rule 10, C.P.C. Besides it the Notification SRO 584(I)/95 dated 1st July, 1995 yet had not taken place as its vires were challenged before the Court and as per available record none of the respondents have been given any relief by learned High Court, therefore, non-impleadment of WAPDA and KESC as, party was not fatal in any manner, therefore, the argument being without any substance is accordingly repelled.
18. As far as question of jurisdiction of the High Court under section 20, C.P.C. Is concerned it depends upon the nature of the relief which has been claimed. Undoubtedly the respondent-companies have not opened letter of credits nor they were contemplating to instal power projects within the territorial jurisdiction of Lahore High Court but they challenged vires of amending Notification No,584(I)/95 dated 1st July, 1995 issued by Federal Government having its offices in Islamabad which falls within the territorial jurisdiction of Lahore High Court, therefore, in view of the judgments reported in the cases of The Collector of Customs and Central Excise, Peshawar and others v. M/s. Rais Khan Limited through Muhammad Hashim 1996 SCM R 83; Sandal Enterprises (Pvt.) Limited v. Central Board of Revenue and others PLD 1997 SC 334 and Flying Kraft Paper Mills (Pvt.) Ltd., Charsadda v. Central Board of Revenue, Islamabad and 2 others 1997 SCM R 1874 the Lahore High Court, Rawalpindi Bench had jurisdiction to adjudicate upon the matter. Thus for the foregoing reasons instant petitions being without substance are hereby dismissed and leave to appeal is declined.
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