MRS. KHALIDA RACHID, J.---The prayer for a writ is made under the following circumstances:--- By Notification No 48401)/92, dated 14-5-1992 issued under section 19 of the Customs Act, 1969 and under section 13 of the Sales Tax Act, 1990, the Federal Government notified to exempt such plant and machinery, which is not manufactured locally and imported during the period commencing from 1st December, 1990 and ending 30th June, 1995 for setting up new units and for expansion or balancing, modernization and replacement of the existing units in the areas other than specified in Table-I, from whole of the customs duty and sales tax leviable and chargeable thereon in the industrial estates specified in Table-II, from so much of customs duty and sales tax leviable and chargeable thereon as is specified in column No,3 of the said Table. By Notification No,SRO 978, dated 4-10-1995, in exercise of powers conferred by section 19 of the Customs Act, 1969 and subsection (1) of section 13 of the Sales Tax Act, 1990, the Federal-Government was pleased to exempt customs duty and sales tax in excess of twenty-five per cent, of the duty and sales tax on plant and machinery as is not manufactured locally, used for setting up new units, the expansion, balancing, modernization, and replacement of existing units, the letters of credits of which were opened prior to 30-6-1995 and were intended to be cleared under Notification No,SRO 484(1)/92, dated 14-5-1992 since expired and subject to the fulfillment of conditions set out therein.
2. In view of the aforesaid exemptions, M/s, Lucky Cement Ltd., petitioner herein, undertook and planned to set up a cement plant at Pezu, District LakkiMarwat. The petitioner accordingly applied to Ministry of Industry and Production (respondent No,5) for the issuance of N.O.C. (No-Objection Certificate), in respect of the machinery not manufactured locally through Application No,LCL 8/93/L/005-A, dated 22-6-1993 with appended list of required equipment's (Annexure-C), Ministry of Industry and Production (respondent No,5) vide Office Memo. No,3(69) of 1993-Dev, dated 7-7- 1993 (Annexure-D) expressing No-Objection allowed the petitioner to import the machinery and equipments and directed the Chief Controller of Imports and. Exports. Islamabad to take necessary action in the matter accordingly. Central Board of Revenue (respondent No,1) in its letter No,78-79- Mach, 1/73, dated 11-7-1994 addressed to the Collector Customs, Karachi and Collector Customs, Lahore (Annexure E) while referring to aforesaid Memo. Dated 7-7-1993 confirmed that certain items imported by the petitioner were not manufactured locally. The Ministry of Commerce (respondent No,4) also in reference to Application No,LCL/12/93/L/193, dated 28-12-1993 submitted by the petitioner, issued N.O.C. Dated 20-1-1994 (Annexure F).
3. After acquiring the necessary N.O.Cs., the petitioner opened L.C. No,TSU-930737, dated 5-12-1993 with the Citibank (Annexure G) and L.C. No .0001/01/46/0571-DA, dated 31-5-1994 with Muslim Commercial Bank Ltd. (Annexure GI). The Board of investment on the basis of Office Memo. No, IPB/CH/Cement/Policy/93, dated 21-2-1995 addressed to Secretary (Machinery) C.B.R. Revalidated the earlier recommendations sent to Ministry of Industries (Annexure H).
4. The trouble began when State Engineering Corporation through a Memo. Dated 26-1-1995 (Annexure J) addressed to Ministry of Industries (respondent No,5), referring to the decision of the Economic Coordination Committee of the Cabinet, held on June 28, 1993, requested that Machinery and Equipment for cement plants up to 4000 TPD (Tons per day) capacity were being manufactured locally, therefore, Ministry of Commerce/C.B.R. May be directed not to allow the import machinery/items of cements plants up to 4000 TPD under the concessionary duties and taxes in pursuance of Commerce Circular No,24 (2)/94-Imp., dated May 15, 1994 (Annexure H). In pursuance thereof, Ministry of Industries and Production (respondent No,5) issued Office Memo.
Dated 7-2-1995 (Annexure K) to C.B.R. And Collector Appraisement, Karachi directing to ensure that the machinery and equipments of cement industry, manufactured locally, not be allowed to be imported duty free and at concessionary rate of duty. In continuation of Office Memo. (Annexure K) the Ministry of Industries and Production (respondent No,5) in an urgent letter, dated 14-3-1995 (Annexure M) informing C.B.R. (respondent No,1) that Letter No,7-2-1995 (Annexure K) shall not apply to the importers of cement plants and equipment who had been issued certification letters by the Ministry itself (respondent No,5) and had already opened LCs on or before 14-3-1995.
5. The real trouble started when Central Board of Revenae (respondent No,1) addressed Memo.
No,78-79 Mach.1/13, dated 25-4-1995 (Annexure N) directing all Collect orates of Customs to take necessary action against six units of cement including the petitioner, for the realization of the Government dues on the components/machinery confirmed by State Engineering Corporation to be locally manufactured. It was further directed for the withdrawal of all letters issued by the Central Board of Revenue and BOI after February, 1994. Thereupon Letter No,SI/Misc./03/95 ACA VI, dated 30-4-1995 (Annexure 0) was issued by Assistant Collector of Customs Appraisement VI with copy to the D.C. Customs, Karachi, A.C. Customs Appraisement I & II and the Traffic Manager KPT, Karachi for detention of machinery equipment of 22 cement units, including the petitioner, pending issuance of NOC from ACA VI or PA VI.
6. Distressed with Notifications (Annexure N) and (Annexure 0), the petitioner invoking Constitutional jurisdiction under Article 199 approached this Court through the instant petition.
7. Mr. Muhammad Sardar Khan, learned counsel for the petitioner, opening his arguments, submitted that before descending into the business of cement industry, the petitioner had studied the feasibility report, considered economic viability and took into account the concessions allowed by the Government; and that it was on the assurane and understanding extended in the shape of NOCs from Central Board of Revenue, Ministry of Commerce and Ministry of Industries and Production (respondents 1, 4 and 5 respectively), the petitioner opened L.Cs. (Letter of Credits) on 5-12-1993 and 31-5-1994 (Annexures G and G-1) and entered into agreement with the foreign suppliers in October, 1993 for the import of machinery/plants not locally manufactured; that when respondent issued impugned Memos. Dated 25-4-1995 (Annexure N) major portion of such machinery reached Pakistan, and 30-4-1995 (Annexure 0) without affording any opportunity to the petitioner of being heard or show-cause notice which is against the principle of Natural Justice. It was further urged that the afore-mentioned NOCs issued by the competent authorities have been given effect to and decisive step has been taken, therefore, the respondents/Government could not invoke the rule of locus poenitentiae. It was contended that since the NOCs has been acted upon, the petitioner has acquired vested and valuable rights which cannot be taken away, rescinded or withdrawn unilaterally, to be destructive of those rights. It was also argued that the issuance of NOCs have created promissory estoppel against the respondents, therefore it is not open to the Government to backtrack on it.
8. On the contrary, Mr. Abdur Rauf Ronaila, Advocate appearing for the respondents Nos. 1 to 3 and 6 to 8, contended that Ministry of Industries and Ministry of Commerce were not the competent authorities to issue NOCs. It was the sole discretion of the Central Board of Revenue, under section 19 of the Customs Act, 1969, to determine that macinery/plants were locally manufactured or not. It was submitted that on an enquiry to examine the goods in question were locally manufactured or not, it was revealed that numerous components shown to be imported, being not locally manufactured, were in fact being manuactured locally. It was maintained that since Economic Coordination Committee in its meeting held on 28-6-1993 decided that cement plant/machinery being manufactured locally should not be allowed to be exempted in terms of SRO 484(1)/92, dated 14-5A992, therefore, the L.Cs. Opened on 5-12-1993 and 31-5-1994, after the decision of Economic Coordination Committee (ECC), would have no effect. It was asserted that one of the directors i,e, Anwar Saifullah Khan, being a Federal Minister for Petroleum at the relevant time, had managed to procure aforesaid NOCs and that now on the certification of M/s. Heavy Mechanical Complex, a unit of State Engineering Corporation, that the goods were being locally manufactured that Memos. Impugned herein, were issued. It was next argued that establishment of L.Cs does not clothe the party with the vested rights as duty/taxes are determined at the time of presenting the bill of entry as per section 30 of the Customs Act: It was also argued that exemption extended by virtue of SRO 484 has not been withdrawn but since the petitioner failed to fulfill the requirements of SRO qua acquiring necessary NOC from the competent authority with regard to the import of machinery, he cannot claim exemption available under SRO 484. It was, lastly, argued that present petition is not maintainable as the impugned Memo. Dated 30-4-1995 (Annexture 0) has been issued by Assistant Collector Appraisement regarding detention of machinery at Karachi, only Sindh High Court has the territorial jurisdiction to hear the petition.
9. We have considered the arguments of the learned counsel for the parties and carefully scrutinized the record.
10. The objection of the territorial jurisdiction and maintainability of the writ petition, though taken at the tail end of the arguments by the learned counsel for the respondents, we deem it appropriate to consider and decide the same at the very first instance.
11. The present petition has been moved by the petitioner by invoking provision of Article 199 of the Constitution which reads as under:--- "199.--(1) Subject to the Constitution, a High Court may, if it is satisfied that no other adequate remedy is provided by law,----
(a) on the application of any aggrieved party, make an order--
(i) directing a person performing, within the territorial jurisdiction of the Court, functions in connection with the affairs of the Federation, a Province or a local authority, to refrain from doing anything he is not permitted by law to do, or to do anything he is required by law to do, or
(ii) declaring that any act done or proceeding taken within the territorial jurisdiction of the Court by a person performing functions in connection with the affairs of the Federation, a Province or a local authority has been done or taken without lawful authority and is of no legal effect; or ----------------------------------------------------------------------------------------- ------------------------------------- ----------------------------------------------------------------------------------------- ------------------------------------- ----------------------------------------------------------------------------------------- ------------------------------------- (5 In this Article, unless the context otherwise requires,- "person" includes any body politic or corporate, any authority of or under the control of the Federal Government or of a Provincial Government, and any Court or Tribunal, or other than the Supreme Court, a High Court or a Court or Tribunal established under a law relating to the Armed Forces of Pakistan;..........
12. It is clear from the above-quoted provision of Article 199 that the High Court is vested with the powers to issue a writ against a person performing functions in the Province in connection with the affairs of the Federation or Provinces or local authority. The term "person" explained in clause (5) above includes anybody, politic or corpora', any authority of or under the control of Federal Government or of a Provincial Government.
13. To determine the territorial jurisdiction of this Court, it is to be seen whether the authorities arrayed as respondents herein are amenable to the jurisdiction of this Court. The cardinal respondents in this writ petition are Central Board of Revenue Government of Pakistan, Pakistan through Secretary, Ministry of Finance, Secretary, Ministry of Industries and Production, Secretary, Ministry of Commerce, Government of Pakistan. Central Board of Revenue (respondent No,1) is, no doubt, a person, body or authority within the meaning of clause (5) above. It is set up by the Central Government for whole of Pakistan. It performs functions in relation to the affairs of the Federal Government in all the Provinces. Similarly, respondents 1, 2 and 3 are the functionaries/authorities of the Federal Government and perform functions in connection with the affairs of the Central Government. In the instant petition, the petitioner has challenged the action of the above respondents issued in the form of impugned Memos.
Therefore any order passed or proceedings done or action taken by the respondents in relation to any person in any of the Provinces of Pakistan would give the High Court of Province, in whose territory, the order, C proceeding or action would affect such a person, jurisdiction to hear the case.
Identical question has been raised before the superior Courts on numerous occasions. There is a rich case-law on the subject. The following are the few judgments which directly support the view taken by us.
14. A dispute arose between Messrs Al-Iblagh Ltd., Lahore and Sayyed Haider Farooq Maumoodi about the copy right in respect of series of cassettes containing the lectures and sermons delivered by late Maulana Abul Ala Maudoodi. The application for the registration of the petitioner- company was dismissed by the Registrar, Copyrights Karachi. The appeal was also dismissed by the Copyrights Board. The order of the Board was challenged in writ petition before the Lahore High Court, Lahore. The petition was dismissed on the preliminary objection that it had no jurisdiction because the offices of the Registrar and Copyright Board were located at Karachi and only Sindh High Court had the territorial jurisdiction to hear the petition. In an appeal, the august Supreme Court (1985 SCM R 758), held that Copyright Board having been set up by Central Government for whole of Pakistan, performs function in relation to affairs of Federation in all the Provinces. Any order passed by such Board or proceedings taken by it in relation to any person in any of the four Provinces of the country would give High Court of the Province in whose territory order would affect such a person jurisdiction to hear the case. It was thus declared that Sindh High Court and High Court in whose territory order affects a person would, therefore, have concurrent jurisdiction.
15. Likewise, in the case, of Asghar Hussain v. Election Commission of Pakistan (PLD 1968 SC 387), decision given by the High Court of East Pakistan that it had no jurisdiction to issue writ td Election Commission of Pakistan having its main Offices in the Secretariat located in West Pakistan was set aside by the Supreme Court with the following observations:--- "The Election Commission is a person or authority which exercises in the Province of East Pakistan functions in connection with the affairs of the Centre, namely, election to the office of President, National Assembly and the Provincial Assemblies and for holding referendum as provided, in the Constitution. In that the Commission is subject to the jurisdiction of the High Court under Article 98(2)(i) notwithstanding that its main Offices or Secretariat are located in the Province of West Pakistan."
16. Similarly, in the case of Flying Kraft Mills (Pvt.) Ltd. v. Central Board of Revenue, Islamabad (1997 SCM R 1874), the Honourable Supreme Court while dealing with preliminary objection of maintainability of writ petition that Rawalpindi Bench of Lahore High Court had no jurisdiction in the case as order impugned was passed by the Collector of Customs and Central Excise functioning at Peshawar, held:- "Not only the order of Collector of Customs and Central Excise Peshawar was in question in the petition but relief was also claimed against the Central Board of Revenue which functions at Islamabad. High Court at Peshawar and Rawalpindi Bench of Lahore High Court had the concurrent jurisdiction in the matter." This rule has also been adhered to by this Court in recent judgment in the case of Mian Nisar Ahmad v. HBFC (W.P. No,776 of 1992). The petitioner, an employee of HBFC had challenged his dismissal order passed by the Chief Manager HBFC, Karachi. A preliminary objection as to the jurisdiction of this Court was raised by the respondent that misconduct was committed at Karachi, charge-sheet and show-cause notice were formulated at Karachi, disciplinary proceedings were held at Karachi and above all, final order of termination was passed at Karachi, therefore, the territorial jurisdiction laid with Sindh High Court in terms of Article 199(1) (a) (i) (ii) of the Constitution. The plea of the respondent was dismissed for the reason, the HBFC is a statutory body established far the purposes of providing financial facilities for building of houses in the towns and villages in whole of Pakistan, therefore, this Court had the jurisdiction to hear the petition. Ghulam Haider Badini v. Government of Pakistan through Ministry of Information and Broadcasting and others (1995 CLC 1027) is yet another case where preliminary objection of the territorial jurisdiction of the High Court (Balochinstan) was raised. The objection of competency of the Constitutional petition filed by the employees of Pakistan Television Corporation, Quetta claiming grant of 20% Secretariat allowance on the ground of discrimination against the Pakistan Television located at Islamabad was dismissed on the plea that Pakistan Television Corporation though located at Islamabad is performing its function in Baluchistan relating to the affairs of Baluchistan. Similar view was taken by the Lahore High Court in case of Nawabzada Muhammad Shahabuddin v. Chairman, Federal Land Commission (1996 CLC 539). It was held that writ could be issued against the Chairman Federal Land Commission at Lahore who had passed verdict adverse to the petitioner's declaration, who is a resident of N.-W.F.P. And the disputed property is also situated in the N.-W.F.P, on the plea that the Chairman, Federal Land Commission is a Federal institution operating within the territories of whole of Pakistan.
17. Besides, it may be noted that order of interim relief granted on 31-5-1995 assailed before the august Supreme Court wherein the question of jurisdiction was specifically agitated by appellant/Central Board of Revenue. The C.P.L.A. Was held to have become infructuous in view of the statement of Attorney-General informing the Court that interim relief had been confirmed by this Court on 22-11-1995 and order, dated 31-5-1995 merged in the order, dated 22.11-1995 which was never challenged before the Supreme Court. It suggests that the respondents had abandoned their plea of jurisdiction. Furthermore, as per section 20, C.P.C. An appropriate writ can be claimed from High Court within the territorial limits of which the cause of action wholly or in part has arisen.
In the present case cause of action, no doubt, has accrued to the petitioner in Peshawar, this Court has the jurisdiction to hear petition. In this context, we may refer to recent judgment of this Court in the case of M/s. Gul Cooking Oil v. Pakistan through Secretary of Ministry of Finance (W.P. No,1298 of 1999).
18. In the result, the objection of territorial jurisdiction is held to be misconceived and is accordingly repelled. Before going ahead with the contentions of the learned counsel for the parties on merits, it may be advantageous to refer and reproduce the relevant memos./letters, mentioned hereinabove. ANNEXURE D No,3(69)/93-Dev, II, Islamabad, the 7th July, 1993.
OFFICE MEMORANDUM SUBJECT: ESTABLISHMENT OF CEMENT PLANT AT PEZU, BANNU, N.-W.F.P.--NO-OBJECTION FOR IMPORT OF MACHINERY. The undersigned is directed to forward herewith a copy of M/s.Lucky Cement Ltd. Letter No, LCL/8/93/L/005A, dated the 22nd June, 1993 alongwith its enclosures on the above subject which are self-explanatory. The Appendix 'B' i,e, list of items to be imported by the firm has been examined in this Ministry and it is confirmed that except the following items, the machinery/equipment's enlisted in Appendix 'B' are not being manufactured in the country:--- S.No, Table No, Item No,
1. ..........................................
2. ..........................................
3. ..........................................
(2) As per detail above, this Ministry has no objection to allow the import of machinery, equipments and appliances which are not being manufactured locally to M/s. Lucky Cement Ltd. It is, therefore, requested to kindly take necessary action in the matter accordingly.
(SAJJAD HAIDER BHATTI), Section Officer, Ph. 829474 The Chief Controller, Imports and Exports (Mr. Saif R. Khan), Islamabad. Copy forwarded alongwith enclosures for information and necessary action to:---
(1) M/s. Citybank, State Life Building. Chundrigar Road, Karachi.
(2) M/s. Lucky Cement Ltd. No,8 St. 62, F-7/4, Islamabad.
(Sd.)
(SAJJAD HAIDER BHATTI), SECTION OFFICER.
ANNEXURE-E GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE C.No, 78-79-Mach. 1/73/Islamabad, the 11th July, 1994. From: Ali Muhammad Shaikh, Secretary. To The Collector of Customs, (Appraisement) Custom House,Nabha Road Karachi.
The Collector of Customs, Custom House, Nabha Road, Lahore. Subject: ESTABLISHMENT OF CEMENT PLANT AT PEZU, BANNU, N.-W.F.P.--NO-OBJECTION FOR IMPORT OF MACHINERY. The undersigned is directed to enclose a photo-copy of OM. No,3(69)/93-Dev. II, dated the 7th July, 1993 received from Ministry of Industries and Production (Industries Wing) on the above subject wherein it has been confirmed that certain items imported by M/s. Lucky Cement Ltd., are not being manufactured locally.
2. You are advised to take action at your end. End: As above.
(Sd)
(ALI MUHAMMAD SHEIKH), SECRETARY (MACHINERY). Copy of M/s. Lucky Cement Ltd., H. No,8, Street 62, F-7/4, GPO Box 2967, Islamabad.
(Sd.)
(ALI MUHAMMAD SHEIKH), SECTRETARY (MACHINERY)
Ph.No,215314 ANNEXURE F No,16(7)/88-Imp.1 GOVERNMENT OF PAKISTAN MINISTRY OF COMMERCE The Chief Executive, M/s. Lucky Cement Limited, No, 8 Street 62, F-7/4, G.P.O. BOX 2967, Islamabad. Subject: NOC FOR INSTALLATION OF CEMENT MACHINERY Dear Sir, Please refer to your Letter No, LCL/12/93/L/193, dated 28th December, 1993 on the above subject.
2. It has been decided to authorize M/s. Lucky Cement to open L/C for import of machinery for installation of Cement Plant at Pezu, District LakkiMarwat, N.-W.F.P., against foreign exchange resources arranged by themselves, without creating any burden on National Exchequer for the items enlisted in the enclosed list (duly attested) except those which have been deleted. Encl:9.9.
(Pages 42)
Yours faithfully.
(Sd.)
Muhammad Afzal, Section Officer.
ANNEXURE H Prime Minister's Secretariat Board of Investment Karachi Office (Implementation Directorate) IPB/CH/Cement/Policy/93, Karachi, dated the 21st Feb., 1995.
Office Memorandum Subject: Request for issuance of No Objection for import of cement plant machinery. The undersigned is directed to forward herewith a copy of M/s. Lucky Cement Limited Letter No, LCK/IMP/001, dated February 4, 1995 on the subject cited above alongwith its enclosure and to say that the recommendation of BOI, Karachi was earlier sent to Ministry of Industries. However, since Ministry of Industries vide their U.O. No,3 (25) of 1994 Dev.II, dated 18-12-1994 had stated that "BCI is being advised to directly report to the C.B.R, certifications in respect of cases which already stand referred to it." Therefore, these recommendations are revalidated and being sent to C.B.R.
Encls. (* *) (Akhlaq Ahmed Malik), Director (IMPI) for Director General, BOI Secretary (Machinery), Central Board of Revenue, Islamabad.
(1) C.B.R Letter No,78-79-Karachi 1/731, dated 11-7-1994.
(2) Ministry of Industries and Production (Industries Wing). O.M. No,3(69)/93-Dev. II, dated 7-7-1994 Alongwith list of equipment and parts. ANNEXURE K No,3(4)/95-DEV. II Government of Pakistan Ministry of Industries and Production (Industries Wing)
Islamabad, the 7th February, 1995.
OFFICE MEMORANDUM SUBJECT: LOCALLY MANUFACTURED MACHINERY CEMENT PLANTS. The undersigned is directed to forward a copy of letter received from the Chairman, State Engineering Corporation and of a letter jointly submitted by M/s. Heavy Mechanical Complex, M/s. DESCON and Karachi Shipyard and Engineering Works on the above subject. The list of components/machinery of cement plants was prepared by this Ministry and circulated to all concerned including C.B.R. For strict compliance. The points raised by the State Engineering Corporation may kindly be looked into and instructions issued in this regard so as to ensure that the equipment/machinery of cement-plants manufactured locally is not allowed to be imported duty-free/concessionary rate of duty.
(Sd.)
(M. ShabanUppal), Deputy Secretary Tele. 820720.
(1) Central Board of Revenue, (Mr. Khalid Naseem), Secretary (Machinery), Islamabad.
(2) Mr. Muhammad RamzanBhatti. Collector (Appraisement), Customs House, Karachi.
ANNEXURE M Most immediate By special messenger Government of Pakistan Ministry of Industries and Production (Industries Wing). SUBJECT: IMPORT OF CEMENT PLANT Reference this Ministry's letter of even number dated the 7th February, 1995, on the above subject.
2. The instructions issued to the C.B.R. Vide this Ministry's letter mentioned above shall not apply to the importers of cement plant/equipment who have been issued certification letters by this Ministry and have already opened L.Cs. On or before 14th March, 1995.
3. It is requested that instructions in this regard may please be issued to all Collect orates of Customs so that the importers do not experience difficulty in getting their consignments released.
4. This issues with the approval of Minister for Industries and Production.
(Sd.)
(M. ShabanUppal), Deputy Secretary, Tele: 820720 C.B.R. (Mr. Muhammad Suleman, Chief, Custom Tariff), Islambad, M/Ind. & Production u/o No, 3(4) of 1995 Dev-II, dated 14-3-1995.
AXXEXURE N GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE C. No,78-79-Mach, 1/73, Islamabad, the 25th April, 1995. From Muhammad Sulaiman, Secretary. To The Collector of Customs (Appraisement/Preventive), Custom House, Karachi. The Collector of Customs, Custom House, Nabha Road, Lahore. The Collector of Customs and Central Excise, Multan, Hyderabad, Quetta, Faisalabad, Gujranwala, Peshawar and Rawapindi. Subject: LOCALLY MANUFACTURED MACHINERY CEMENT PLANTS. I am directed to refer to the subject noted above and to enclose herewith lists of locally manufactured goods confirmed by State Engineering Corporation for six units mentioned below:
(1) Lucky Cement Ltd., dated 11-7-1994.
(2) M/s. Saadi Cement Limited, dated 10-7-1994 and 13-07-1994
(3) HattarCement. Limited, dated 13-7-1994
(4) Khushab Cement Limited, dated 13-7-1994.
(5) Kohat Cement Limited, dated 13-2-1995.
2. For each unit there are two lists as List L-1 and List L-II, List L-1 indicates the machinery/components locally manufactured and List L-II shows parts/components manufactured locally in the column of local scope of supply.
3. You are requested to initiate necessary action for realization of the Government dues immediately on the components/machinery/parts mentioned as locally manufactured of the aforesaid six units. Further orders will also follow.
4. The Board's letters issued after February, 1994, forwarding Ministry of Industries and Board of Investment's letters stating that these are not locally manufactured are hereby withdrawn as on rechecking the above listed items have been confirmed to be locally manufactured. End: As above.
(MUHAMMAD SULAIMAN), CHIEF (CUSTOMS TARIFF).
19. The petitioner through an application, dated 22nd June, 1993 (Annexure C) requested the Ministry of Industries and Production Government of Pakistan, for the issuance of NOC for the import of machinery and equipment for the Cement Plant to be established at Pezu, District Lakki Marwat, N.-W.F.P. Alongwith the application detailed list of machinery/plants which can be fabricated locally as Appendix A and list of machinery/plants to be imported being not manufactured locally as Appendix B, were also provided. It was also requested that copy of NOC alongwith the list of machinery to be imported may be endorsed to Citibank, Karachi where L.Cs.
Were to be opened. The Ministry of Industries and Production after examining the said detailed list of machinery to be imported and after deleting certain items from the list Appendix B, issued Office Memo./letter No,3(69)/93 Dev-II, dated 7-7-1993 (Annexure D), to the Chief Controller Import and Export, Islamabad, expressing no objection to allow the import of such machinery being not manufactured locally. Copy of the same was also endorsed to the Citibank, Karachi, as requested, and the petitioner. This letter was also forwarded to the Central Board of Revenue. The Central Board of Revenue which according to Mr. Rohaila is only the competent authority to issue NOC, vide Letter No,78-79 Mach, 1/73, dated 11-7-1974 (Annexure E) confirming the items to be imported by the petitioner being not manufactured locally, advised the Collectorates of Customs at Karachi and Lahore to take action at their end. Now it does not lie in the mouth of respondents to say that no NOC was issued by competent authority or that C.B.R. Had no concern with the NOCs issued by the Ministry of Industries and Production. The Ministry of Commerce in the Letter No, 16(7) 88-Imp, I, dated 20-1-1994 (Annexure F) had authorized the petitioner to open L.C. For the import of machinery/equipments of the Appendix lists, each page duly attested with further deletion of certain items.
20. The State Engineering Corporation (Pvt.) Ltd. Vide letter, dated 26-1-1995 while referring to the decision of Economic Coordination Committee (ECC) of the Cabinet held on June 28, 1993 (Annexure J) wherein it was decided that machinery/equipment's of Cement Plants being manufactured locally should not allow to be imported, addressed to the Ministry of Industries and Production to request the Central Board of Revenue and Ministry of Commerce not to allow the import of machinery/plants up to 4000 to under the concessionary rates and taxes being manufactured locally. It would be beneficial to reproduce the letter as under:--- ANNEXURE J STATE ENGINEERING Corporation (Pvt.) Ltd.
Ref. Com-015(01)
January 26, 1995 Secretary, Ministry of Industries and Production, Government of Pakistan, Islamabad. Dear Sir, LOCALLY MANUFACTURED MACHINERY--CEMENT PLANTS. Kindly refer to the decision of the Economic Coordination Committee (ECC) of the Cabinet Meeting held on June 28, 1993, in which it was decided that machinery of cement plant and equipment being manufactured locally should not be allowed to be imported. In order to indentify the said machinery a standing committee was set up to prepare list of items which could be manufactured locally. Based on the recommendations of the standing committee and decision of ECC of the Cabinet, Ministry of Commerce issued a directive vide their Circular No,24(2)/94-Imp., dated May 15, 1994, prohibiting import of such items as are locally manufactured (Annexure I). In case the locally produced items are imported, the same are not entitled to concessionary duties and taxes, rather subject to applicable duties and taxes. In accordance with the provision of the circular, DFIs/Banks were advised to consult the list of machinery and equipment which can be manufactured locally, prior to opening of Letter of Credit.
In this regard Central Board of Revenue (C.B.R) and concerned Ministries were also informed to take necessary action. Nonetheless, these instructions are not being complied with. Number of private.Entrepreneur who are in the process of setting up of the Cement plant are finding ways and means of circumventing the Government directive and Indigenisation Policy. For the purpose, they are either showing enhanced capacity of proposed plant, or importing the items which can be locally manufactured, with changed nomenclature. This should not be allowed in the national interest. Firstly, the local engineering industry is deprived of orders, and secondly, the Government suffers loss, as the imports are being made on concessionary rate of duties. It may please be noted that the local manufacturing capability that has already developed over the years for cement plants is beyond 4000 tpd. As at that time most of the cement plants being set up in this country were of 2000-3000 tpd capacity the list only pertains to these modules of cement plants. The local capability of manufacturing cement plants up to 4000 tpd capacity has already been recognized by the Government while issuing CGO No,17/94, dated October 30, 1994 (vide reference item No,94, Annexure II). It may please be noted that the local manufacturers of cement plants have analyzed the list for 2000/3000 tpd cement plants and conclude that the same list, which was prepared jointly by the local manufacturers of cement plant and machinery, is also valid and applicable for 4000 tpd plant as well. We enclose local manufacturers (namely Heavy Mechanical Complex, DESCON and KS&EW letter, dated 24-1-1995, in original, addressed to yourself, in this connection (Annexure III). It is, therefore, requested that the Ministry of Commerce/C.B.R may please be requested to issue necessary directive that the locally produced machinery/items for cement plants up to 4000 tpd capacity would not be imported under concessionary duties and taxes, in pursuance to the Ministry of Commerce circular No,24(2) of 1994-Imp. Dated May 15, 1994.
Yours faithfully, (Dr. M. AKRAM SHEIKH), Chairman. Encl: As above. Signed in his absence (Sd.)
(HUSSAIN A. SIDDIQUI), Director Commercial.
21. As is evident from the letter above that a Standing Committee was set up to identify the machinery to be manufactured locally. The list of such items was never identified by the committee. The Ministry of Industries vide letter, dated 7-7-1993 confirmed and verified the items enlisted in the attached Appendix to be imported being not manufactured locally. Even Central Board of Revenue, vide letter, dated 11-7-1994 and Ministry of Commerce on the basis of letter, dated 20-1-1994 issued NOC verified such machinery/equipment to be not manufactured locally.
We would like to observe with regrets that people sitting at the helm of affairs in Central Board of Revenue and Ministries of the Government, are so ignorant and unconcerned that they did not bother to know the decision of the Cabinet meeting held on June 28, 1993, and the recommendation of the Standing Committee. The Bol on the basis of Memo. Dated 10-1-1995, authorized by the Ministry of Industries to verify the goods/items which are manufactured locally furnished report to Central Board of Revenue revalidating the recommendation of Ministry of Industries. To be cognizant of hardships and difficulties to be faced by the importers Ministry of Industries in an urgent letter vide Memo. Dated 14-3-1995, of course after reconsidering the matter, directed that letter, dated 7-2-1995 shall not apply to importers of such Cement Plants who have already opened L.Cs. Before 14-3-1995. The L.Cs. By the petitioner were admittedly opened before this date. After this letter, impugned action vide Memo. (Annexure N) and (Annexure 0) was unwarranted.
22. It is observed from the record that in this notification no competent authority has been identified to certify the machinery and equipment's that could not be manufactured locally. Even the Exemption Notification No,484(1)/92, dated 14-5-1992 did not specify the authority/body to authenticate the machinery/plants not to be manufactured locally. While, earlier exemption Notification such as, S.R.O. 286(1)/84, dated April 4, 1984, the Heavy Mechanical Complex Taxila was identified to be the authority to certify those plants and machinery which are not manufactured locally.
23. Adverting to the rule of locus poenitentiae, it is general principle that an authority empowered to issue an order has the power to recall or cancel that order unless it has been carried into the effect. In other words power to rescind could be exercised only if the order had not taken into effect.
Once the order became operative, it could not be withdrawn. Acting on the NOCs issued by the respondents 1, 4 and 5, the petitioner opened L.Cs. On 5-12-1993 and 31-5-1994, entered into agreement with the Chinese Suppliers in October, 1993. In pursuance thereof, some of the machinery had reached Pakistan and the NOCs had been carried into effect, the locus poenitentiae was not left with respondent to initiate actions against the petitioner. It has been held in the case of Shahnaz v. The Crown (PLD 1956 FC 46) and in Lt.-Col. Bhattacharya v. The State (PLD 1964 SC 503) that power to rescind cannot be exercised once the order becomes effective.
24. We are not persuaded to agree with the learned counsel for the respondents that since Exemption Notification No,484 has not been rescinded the rule of locus poenitentiae would not apply. It was not on the basis of Notification No,484, which is general in terms, but the petitioner acting on aforesaid NOCs. Obtained from the competent authority, that L.Cs. Were opened and agreement for supply of goods from foreign country was made. When the machinery reached the country and it was about to install, the NOCs were set at naught by the impugned Memos., which is not only against the principle of natural justice, the petitioner being condemned unheard, but also the vested rights accrued to the petitioner have been transgressed. If it was required that such duty/taxes to be imposed it could have been done after affording reasonable opportunity to the petitioner. The principle of universal maxim of "audi alteram partem" should have been followed. In the case of Chief Commissioner v. Mrs. Dina Sohrab Katrak (PLD 1959 SC (Pak.) 45), it was observed by the Honourable Supreme Court that Maxim "no man shall be condemned unheard" is not confined to proceedings before Courts but extends to all proceedings, by whomsoever held, which may affect the person or property or other right of the parties concerned in the dispute."
25. The Government Ministries/Departments, while issuing NOCs had promised and given understanding that machinery imported would be exempted from customs duty and sales tax.
Now it cannot turn around and claim duties through the impugned Memos. Such assurance and understanding, no doubt, were binding on the Government and its functionaries on promissory estoppel which is an equitable principle evolvedby the Courts for doing justice. It is universal principle in the democratic societies that every one is subject to the rule of law and the Government, is no exception. In an almost identical situation similar view was taken in the case of M.P. Mills v. State of U.P. (A .I.R. 1979 SC 621) and Union. Of India v. Anglo-Afghan Angencies (AIR 196 SC 718).
26. As to the contention of Mr. Rohaila that NOCs were obtained through the influence of Anwar Saifullah Khan. Be that as it may, it is suprising to observe that the Government functionaries gave billion of rupees loss to Government exchequer to please a Minister and no action has been taken against them. If they did so, they could separately be charged under the relevant law.
27. However, it may not be out of place to mention here that Mr. Sardar Khan, learned counsel for the petitioner, stated at the bar that neither Anwar Saifullah Khan is a director of the petitioner- company, nor he was Minister at the relevant time, since he had quitted the slot in 1993 much before the issuance of NOCs.
28. For the above reasons, we allow this petition. The petitioner-company is entitled to the exemptions claimed under the Notification No,S.R.O. No, 484, (1)/ 92, dated 14-5-1992 on the import of machinery/plant through LCs. Opened on 5-12-1993 and 31-5-1994 and under SRO No,978(1), 95, dated 4-10-1995 regarding the machinery/plants which reached Pakistan after 31-6-1995. Parties to bear their own costs.