KARAMAT NAZIR BHANDARI, J. -- According to the assertions made in this petition, the petitioner is the only manufacturer of alcoholic products like beer, in the Province of Punjab. It is asserted that number: of taxes and duties stand imposed and together these taxes amounted to 50% of the ex- factory price. The only other such manufacturers are Beach Brewery Ltd., Karachi and Quetta Distillery Ltd., Quetta. It is claimed that 70% of the product of the petitioner is exported to other Provinces. Vide notification dated 20th October, 1997, issued in exercise of the powers conferred by Section 31 of the Punjab Excise Act, 1914 (I of 1914) (hereinafter referred to as Act) the Governor of the Punjab has been pleased to direct levy and recovery of export duty at the rates stated therein on a Pakistani Manufactured Foreign Liquor (PMFL) and Beer meant for export to other Provinces. It is this notification, which is called in question in this petition.
2. On 6.11.1997, this petition was heard in motion, this Court directed delivery of copy of the petition to learned Assistant Advocate General for instructions and comments. As regards interim relief it was directed:- "in the mean time petitioner as well as respondents both are directed to keep the record of the export tax so collected pursuant to the impugned notification."
3. On 9.12.1997 after hearing the learned Law Officer this petition was formally admitted to full hearing. The plea for suspending the operation of the impugned notification was declined. It was, however, ordered -- "in the circumstances, I direct the respondents functionaries to maintain a complete record of the export tax collected from the petitioner, which in the event of success of the writ petition would be restored".
4. It has been argued by Mrs. Nasira lqbal, Advocate, learned counsel for the petitioner that the impugned notification is violative of Article 151(3)(b) of the Constitution. It has also been argued that as the petitioner is already paying excise duty, levied under the same provision, the Governor has no power to direct levy and recovery of another duty by the name of Export Duty. It has further been argued that the impugned duty is oppressive and has rendered the petitioner incapable of competing with the rival manufacturers in the country.,
5. Mr. Fauzi Zafar, learned Assistant Advocate General has contested this petition by controverting the above submissions. Apart from reiterating that the respondent-Government has the power to impose the export duty under Section 31 of the Act, it is argued that mere imposition of duty is not a restriction upon free trade, which is prohibited by Article 151 of the Constitution.
6. Provisions of Article 151 of the Constitution of Islamic Republic of Pakistan, 1973, are relevant and are reproduced for ready reference:- Article 151. "Inter-Provincial trade. -- (1) Subject to clause (2), trade, commerce and intercourse throughout Pakistan shall be free.
(2) [Majlis-e-Shooral (Parliament) may by law impose such restrictions on the freedom of trade, commerce or intercourse between one Province and another or within any part of Pakistan as may be required in the public interest.
(3) A Provincial Assembly or a Provincial Government shall not have'power to--
(a) make any law, or take any executive action, prohibiting or restricting the entry into, Or the export from, the Province of goods of any class or description, or
(b) impose a tax which, as between goods manufactured or produced in the Province and similar goods not so manufactured or produced, discriminates in favour of the former goods or which, in the case of goods manufactured or produced outside the Province discriminates between goods manufactured or produced in any area in Pakistan and similar goods manufactured or produced in any other area in. Pakistan.
(4) An act of a Provincial Assembly which imposes any reasonable restriction in the interest of public health, public order or morality, or for the purpose of protecting animals or plants from disease or preventing or alleviating any serious shortage in the Province of an essential commodity shall not, if it was made with the consent of the President, be invalid."
7. It will be seen that Article 151(1) lays down that subject to clause (2), trade, -commerce and intercourse throughout Pakistan shall be free. Article 151(2) empowers the Parliament to impose restriction on the above freedom as may be required in the public interest. Article 151(3) is in negative form and prohibits the Provincial Assembly or a Provincial Government to do the things mentioned in clauses (a) and (b). For the case, the relevant provision is that Provincial Government shall not have power to impose a tax, which, as between the goods manufactured or produced in the Province and similar goods manufactured or produced in any area in Pakistan, tends to discriminate in favour of the former. In other words by opposing the impugned duty the respondent-Government had discriminated between the goods produced by the petitioner and the goods pr oduced by rivals in Sindh and Baluchistan. However, this discrimination does not seem to be in favour of the petitioner and as such May not be hit by Article 151(3)(b). The impugned levy impugned upon the freedom, as enshrined in Art. 151(1). Reliance of Mrs Nasira, Advocate on Mirpurkhas Sugar Mills Ltd. Vs. District Council, Tharparkar and 2 others (1990 MLD 317) and Sayphire Textile Mills Ltd. And 9 others Vs. Government of Sindh and others (PLD 1990 Karachi 402) is correct.
In the first case the export tax imposed by Zila Council on the Sugar produced by the petitioners therein was declared as violative of the Constitutional provisions. In the second case also the export duty imposed upon the products of the petitioners-Mills was not upheld on the touchstone of Article 151 of the Constitution. Learned counsel also relied on Atiabari Tea Co. Ltd. Vs. The State of Assam & others (AIR 1961 SC 232) and on perusal of the judgment the reliance again :seems to be correct. I, therefore, hold that impugned imposition of export duty is violative of Article 151(1) of the Constitution.
1 8. This should be enough to dispose of this petition but it would be appropriate if the existence of power available to the Government under Section 31 of the Act may also be examined and determined. Section 31 for the sake of convenience is reproduced- Section 31. Duty on Excisable articles. -- A duty at such rate or rates as the Provincial Government shall direct, may be imposed, either generally or for any specified local area, on any excisable article--
(a) imported, exported or transported in accordance with the provisions of Section 16; or
(b) manufactured or cultivated under any license granted under Section 20; or
(c) manufactured in any distillery established, or any distillery or brewery licensed under Section 21: Provided as follows:-
(i) Duty shall not be so imposed on any article which has been imported into Pakistan and was liable on importation to duty under the Tariff Act, 1894 (VIII of 1894) or the Customs Act, 1969 (IV of 1969).
(ii) Omitted by A.O., 1937.
Explanation:- Duty may be imposed under this section at different rates according to the places to which any excisable article is to be removed for consumption, or according to the varying strengths and quality of such article."
9. The section enables the Provincial Government to impose on any excisable article a duty, at such rate or rates as the Provincial Government shall direct, on such excisable article being imported, exported or transported in accordance with the provisions of Section 16 or manufactured or collected under any license granted under Section 20 or manufactured in any distillery established or any distillery or brewery licensed under Section 21. It is to be seen that clauses (a), (b) and (c) are disjunctive. The word 'or' separates all the three clauses, which would indicate the intention of the legislature that the duty can be imposed either under (a) or (b) or (c) but cannot be imposed under (a) and also under (b) and (c). As I understand this section it does not authorise the Government to impose the duty twice on an excisable article. In other words if an excisable article has been subjected to duty under (b) or (c) it cannot again be subjected to duty under (a). This interpretation is supported by language of Section 16, which lays down that intoxicants shall not be imported, exported or transported except after payment of any duty to which it may be liable under this Act. The word 'or' separating the three clauses cannot be read as 'and'.
10. In this case undisputedly the petitioner pays the duty on the intoxicant manufactured or brewed when it is taken out of the brewery or factory premises. In fact Mrs. Nasira, Advocate claims that Rs.
30,000/- per month is spent by the petitioner on salaries of the excise staff posted by the respondent-Government as its brewery. The break down of the various taxes and duties being paid by the petitioner, is stated in para 3 of the petition. In its parawise comments, the respondents have admitted the contents of para 3. This means that the petitioner is paying Still Head Duty at the rate of 82% of Ex-Distillery price and under the impugned notification is now required to further pay the export duty. In other words the respondent-Government is imposing duty under clause (b) of Section 31 and also levying export duty under clause (a). This it cannot do as Section 31 does not authorise the Government to impose and recover both.
11. For the above reasons this petition is allowed. As noted this Court declined suspension of the impugned notification at the time of preliminary hearing but directed the respondents to maintain a complete record Of the export duty collected, which is to be restored to the petitioner in the event of success. As the petitioner has succeeded, respondents are directed to restore the amount collected under the impugned notification, not later than eight weeks from the date of this judgment. Parties are left to bear their own costs.