MUNAWAR AHMAD MIRZA, J.- Petitioners are limited companies incorporated under the Companies Ordinance, 1984. Each Company is engaged in the business of manufacturing and producing sugar. Main grievance of the petitioners relates to levy of sugar cane development cess and subsequent increase of its rate. In order to regulate purchase of sugar cane by the sugar manufacturing factories within the Province, control its purchase price and incidental matters. The NWFP Sugar Factories Control Act (Act XXII of 1950) . (PLD 1950 NWFP Acts and Notifications 98) after approval of the provincial Assembly was promulgated on 11th April, 1950. This enactment was subsequently adopted and extended by means of West Pakistan Sugar cane Control Act (Act III of 1963).
2. If may be seen that under the provisions of aforementioned enactment the Cane Commissioner in consultation with the Board had declared reserved areas for supplying the cane to particular factories/sugar mills during crushing season, or other period, subject however, to alteration and variation, when so required. Purchase of Sugar cane for the reserved areas was thus regulated in accordance with demand and requirements of law.
3. The West Pakistan Finance Act, 1964 (Act XXXIV of 1964), which came into force from lst July, 1964, levied Sugar Cane Development Cess under section 12 of the said enactment (PLD 1964 West Pakistan Statute 315 at 318) reproduced below:-- "12. Sugar cane Development Cess.-- (1) With effect from the first day of July, 1964, there shall be levied a cess, called the Sugar Cane (Development) Cess, on sugar cane crushed by Sugar Mills, at the rate of twelve paisa per manned of sugar cane.
(2) The incidence of the cess shall be shared equally by the Sugar Mill and the person selling the sugar cane to the Mill: Provided that in the case of sugar cane obtained from the Sugar Mill's on farm, the cess, at the ate of twelve paisa per maund, shall be paid by the Mill.
(3) The cess payable under this section shall be collected and paid to Government by the Sugar Mill in such manner as may be prescribed.
(4) The proceeds to cess shall be utilised for:---
(i) special maintenance and development of roads and special plant protection services in the areas comprising the Mill Zones; and
(ii) other activities directed towards the development of sugar cane production."
(iii)
Subsequently aforementioned section 12 was amended with effect from lst July, 1968 through West Pakistan Finance Act, 1968 (Act III of 1968) (PLD 1968 West Pakistan Statute 152 at 153), as under:-- "6. Amendment of section 12 of W.P. Act XXXIV of 1964.-- In section 12 of the west Pakistan Finance Act, 1964 (XXXIV of 1964), for subsection (4) the following subsection shall be substituted, namely:-- "(4) The proceeds to the cess shall be utilised for.
(i) special maintenance and development of roads and bridges and special plant protection services in the areas comprising the Mill Zones;
(ii) Maintenance and development of the such roads Government, are primarily used for sugar- cane traffic, and
(iii) Other activities directed towards the development of sugar-cane production."
4. Later Punjab Finance (Amendment) Ordinance 1978 (Ordinance XI of 1978) (PLD 1978 Punjab Statutes 63) introduced a change by fixing levy of cess on the basis of 20 paisa per maund instead of 56 paisa per 100 Kilogram or part thereof. The amending Ordinance for convenience and ready reference is reproduced belows:-- "ORDINANCE XI OF 1978 PUNJAB FINANCE (AMENDMENT ORDINANCE, 1978.
An Ordinance to amend the Punjab Finance Act, 1964.
[Gazette of Punjab, Extraordinary, 27th May, 1978] No. Legis. 3(ll)/78.~ The following Ordinance by the Governor of the Punjab is hereby published for general information:- Preamble.- Whereas it is expedient to amend the Punjab Finance Act, 1964 (Act No. XXXIV of 1964)' in the manner hereinafter appearing.
And whereas the Governor of the Punjab is satisfied that circumstances exist which render immediate legislation necessary; Now, therefore, in pursuance of the proclamation of fifth day of July, 1977 read with the Laws of the Punjab is pleased to make and promulgate the following Ordinance:--
1. Short title and commencement.-(1) This Ordinance may be called the Punjab Finance (Amendment) Ordinance, 1978.
(2) It shall come into force at once.
2. Amendment of section 12 of Act, No. XXXIV of 1964.- In the Punjab Finance Act, 1964, in section 12:-
(i) in subsection (1) for the words "twenty paisa per maund", the word "fifty six paisa per hundred kilogram or part thereof" shall be substituted; and
(ii) in the proviso to subsection (2) for the words "twenty paisa per manned", the words "fifty-six paisa per hundred kilogram or part thereof shall be substituted."
The amount of Cess payable on the Sugar cane was further enhanced through Punjab Finance (Amendment) Ordinance, 1983 (Ordinance XX of 1983), which read thus:-- "ORDINANCE XX OF 1983 PUNJAB FINANCE (AMENDMENT) ORDINANCE, 1983.
An Ordinance further to amend the Punjab Finance Act, 1964.
[Gazette of Punjab, Extraordinary, 14th December, 1983] No. Legis. 3(20)/83.- The following Ordinance by the Governor of the Punjab is hereby published for general information :~ Preamble.-- Whereas it is expedient further to amend the Punjab Finance Act, 1964 (Act XXXIV of 1964).
Now, therefore, in pursuance of the Proclamation of 5th day of July, 1977, read with the Laws (Continuance in Force) Order, 1977 (C.M.A. Order No. 1 of 1977), and the Provincial Constitution Order, 198l (C.M.L. A Order No. 1 of 1981), the Governor of the Punjab of pleased to make and promulgate the following Ordinance:--
1. Short tile and commencement - (1) This Ordinance may be called the Punjab Finance (Amendment) Ordinance, 1983.
(2) It shall come into force at once and shall be deemed to have taken effect from lst July, 1983.
2. Amendment of section 12 of Act, No. XXXIV of 1964.- In; the Punjab Finance Act, 1964, in section 12 after subsection (2) the following new subsection (2-A) shall be inserted:- "(2-A) Notwithstanding anything to the contrary contained in subsections (1) and (2), the rate of cess mentioned therein shall, for the financial year, 1983-84, be 3.5 per cent, and, for the financial year 1984-85 and onwards, be 5 per cent of the sugarcane price rounded to the nearest paisa."
5. Mr. Hamid Khan, ASC, appearing for petitioners in CPLAs No. 788 and 789 of 1998, has raised following contentions:--
(i) Under a policy decision in 1987-88 restriction on Sugar cane growers to supply sugar cane within their respective zones was removed and growers were at liberty to sell sugar cane at their on choice to any mill or factory. Therefore, on the abolition of zones; levy of Cess was not warranted by law.
(ii) The increase rate as regards levy of sugar cane development cess has been effected through Ordinance XI of 1978 and Ordinance, XX of 1983. Under Article 128 of the Constitution on expiry of three months same had automatically lapsed, therefore, demand raised in pursuant thereof is devoid of lawful Authority.
(iii) The aforesaid Ordinances XI of ,1978 and XX of 1983 the Constitution, therefore, the conclusions drawn by the High-Court for affording protection to said enactment suffers from legal infirmity.
(iv) The rate of sugar case development cess in NWFP is much less than payable by the Sugar cane growers in Punjab, therefore, it causes imbalance on the inter provincial trade. It is obligatory for. The State to provide competitive rates so that inter-provincial trade is smoothly regulated without leaving adverse economic effect. Reliance was placed on the observations in cases (i) AIR 1988 SC 567 (Indian Cements and others v. State of Andra Pradesh) and (ii) AIR 1983 SC 656 (Lakshman and others v. State of Madia Pradesh).
(v) Development cess leviable contemplated by Item 49 of Federal Legislative List (Fourth Schedule), therefore, imposition of cess on the growers of sugar cane by amending Finance Act' referred supra is beyond competence of the Province, PLD 1980 Peshawar 137(Haji Multan Zareen v.
Government of NWFP).
6. Mr. Mahmood A. Qureshi, AOR, for petitioners in CPLA Nos. 806 and 807 of 1998, did not add any other legal point for consideration.
7. Miss Yasmin Sehgal, Additional Advocate General Punjab, opposed the petitions contending that Ordinance, XI of 1978 and XX of 1983 were existing law and, therefore, under Article 270-A of the Constitution the objections were without any substance. It was further argued that Item 49 of the Federal Legislative Lists (Fourth Schedule) postulates imposition of taxes regarding sales and purchase of goods and by no stretch are relatable to Cess levied for specific purpose falling within the domain of Provincial Legislative Authority.
8. We have considered arguments advanced by learned counsel for the parties in the light of relevant law.
Firstly, we may notice that policy decision of 1987-88 referred by learned counsel for petitioners showing removal of restrictions on sugar cane growers regarding supply of sugar cane with in respective zones has absolutely no linkage or nexus with finance Act. The powers of Sugar Cane Commissioner about creation of ones and regulating supply of sugar cane are specified by the provisions of Sugar Cane factories Control Act. Whereas development cess was introduced by West Pakistan Finance Act, 1964 and later rates were enhanced through Ordinance, XI of 1978 and Ordinance XX of 1983. In any case, it would be pertinent to mention here that objects of development cess prescribed under the law are not restricted to territorial limits or zones; therefore, variation in policy, removal of zones or any such changes are inconsequential.
9. Now looking to the other limb of the arguments concerning lapsing of Ordinance XI of 1978 and XX of 1983, it may be seen that same was promulgated during Martial Law period on the strength of proclamation dated 5th July, 1977 whereby the Constitution was held in abeyance. On the revival of the Constitution validity was given to all laws, including Ordinances, enacted during specified period, by virtue of Article 270-A of the Constitution. For authority reference can be made to following observations in cases (i) Sapphire Textile Mills Ltd. V. Collector (1990 CLC 456 at pages 477 and 478) and, (ii) Sally Textile Mills Ltd. V. Collector of Customs (1991 SCM R 721 at pages729 and 730):--
(i) 1990 CLC 456: "By proclamation of Martial Law the Constitution was kept in abeyance. The Law (Continuance in Force) Order provided that subject to this Order and any other order made by the President and any Martial Law Regulation or Martial Law Order made by the Chief Martial Law Administrator the country was to be governed as nearly as may be subject to the Constitution. Article 7 of this Order provided that an Ordinance promulgated by the President or the Governor of a Province shall not be subject to the duration as provided by the Constitution. This provision was applicable to those Ordinances also which were in force before the commencement of this Order. Therefore, limitations as to duration prescribed by Article 89 did not apply to the Ordinances. When Provisional Constitution Order 1981 was promulgated by Article 2 it made certain provisions of the Constitution enumerated therein as part of this Order (PCO) Originally Article 89 was not included in it but by Provisional Constitution (First Amendment) Order 1981. Art. 2 was substituted by a new Article in the same terms except that some more Articles of the Constitution were added to it. By this amendment Article 89 was added in the list of Articles made part of P.C.O. Article 2 of P.C.O, provided that the Articles of the Constitution enumerated I it were to have effect subject to Provisional Constitution Order, Laws (Continuance in Force) Order and any Order made by the President or Chief Martial . Law Administrator. Therefore, Article 89 was made applicable subject to Article 7 of Laws (Continuance in Force) Order. Thus, the limitation as to the duration of Ordinance prescribed by Article 89 was not- applicable.
The contention that as Laws (Continuance in Force) Order was impliedly repealed by promulgation of P.C.O, the bar of Article 7 was not applicable is not tenable. Both these Orders existed side by side. The learned Dy. Attorney-General has pointed out that both these Orders were repealed by Proclamation of Withdrawal of Martial Law on 30.12.1985. In this view of the matter the question of implied repeal does not arise.
It is true that after the restoration of the Constitution the Finance Ordinance, 1982 was not placed before the National Assembly but it was not required to be done. Article 27-A has validated all Ordinances made between 5.7.1977 and 30.12.1985 which were affirmed, adopted and declared to have been validly made by competent authority and all Ordinances which Were enforce on 30.12.1985 were to continue in force until altered, repealed or amended by the competent authority.
The Finance Ordinance, 1982, is thus a law validly made and will remain in force till it is repealed.
The learned counsel for the petitioners have stated that they have not challenged the legality of Eighth Amendment of the Constitution which they would raise in other appropriate proceedings.
We therefore do not wish to express any opinion on this law.
(ii) 1991 SCM R 721: "The object was never to take it beyond the curing of the competency and the validity of-the legislative instruments specified therein. It is also correct that for laws which are to continue after the revival of the Constitution have to conform to the other Constitutional provisions and must satisfy that test. However, on the strength of such an interpretation of Article 270-A, it cannot be said that on revival of Article 89 of the Constitution by the Provisional Constitution order, 1981, such a contrariety came into existence, as to repeal paragraph 7 of the Proclamation Order of 1977 dispensing with the limitation with regard to the duration of the validity of the Ordinance. The Provisional Constitution Order, 1981 did not accomplish even by implication the repeal or displacement of paragraph 7 of the Proclamation Order. The to could subsist as they did when the proclamation itself was made. If Article 89 had not been in the field or is not in the field, paragraph 7 of the Proclamation Order would to be necessary and merely because Article 89 is revived, it cannot be argued that it became unnecessary or got repealed impliedly. The to are made to co- exist, paragraph 7 modifying or controlling Article 89. Paragraph 7 of the Proclamation Order cannot exist unless Article 89 is in the filed. Besides, on no principle of Constitutional interpretation it can be said that the revival of the Constitution had the effect of reviving something which was not in existence immediately before the revival of the Constitution i.e. Need of placing an Ordinance promulgated before the revival of the Constitution before the Assembly within four months of its promulgation after which period it ceased to have effect. Such revival of the Constitution certainly will prospectively bring to life such requirement but would not revive for past matters the requirement which was not in existence immediately before the revival of the Constitution. Such a result is sustainable on the strength of Article 264 of the Constitution.
As regards the contradictions noticed in the Constitution by Mr. Khurshid Anwar, Advocate, the learned counsel has himself resolved it by reference to the definition of 'Act of Parliament' in Article 260 of the Constitution which has been reproduced above. It is possible in a legal document to provide one definition of 'Parliament' and another for 'Act of Parliament'. The to need not be coextensive. They are not in this case co-extensive but they do make good sense to cover a situation where under the provisions of the Constitution an ' Act of Parliament' is not required to be channelized through the Senate."
10. Now adverting to next contention concerning possible adverse economic effect on inter- provincial trade resulting from disparity with regard to sugar cane development cess, in the Provinces of N.W.F.P, and Punjab. Suffice it to observe that absolutely no material or details have been mentioned or placed on record, which may even approximately disclose quantum of sugar- cane transported from one province to another and its consumption in the Sugar Mills/Factories, from difference area. The apprehension of economic imbalance or disadvantage towards inter- provincial trade is apparently based upon probabilities or imagination, therefore, without existence of tangible material and substantial reasons, possibility of loss or damage relating to inter- provincial trade cannot be assumed as basis for violating or affecting any legal right. In an event the imposition of Sugar Cane Development Cess being provincial subject depends upon requirement of respective province for meeting development projects or utilizing it towards statuary objects contemplated by section 12 of the West Pakistan Finance Act, 1964.
11. Mr. Hamid Khan, ASC, for petitioners, relying on the observations of case PLD 1980 Peshawar 137 (Haji Multan Zareen v. Government of NWFP) has contended that Sugar Cane Development Cess did not fall within the competence of Provincial Legislature, because levy of taxes was covered by 'Item 49' Part-1 of Federal Legislative List which reads; "49. Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed". Peshawar High Court in the above referred case has declared development cess on marble chips, imposed by section 7 of NWFP Finance Act (Act X of 1977), as ultra-vires to the powers of Provincial Legislature. Conclusions in aforesaid judgment of Peshawar High Court do not appear to be based on sound footing.
It may be seen that West Pakistan Sugar Cane Control Act is Undisputedly a Provincial legislation promulgated for regulating purchase of sugar cane by sugar manufacturing factories mills within respective province. The Control and management of Sugar Cane Factories Mills is. Not connected with any function contained in the federal Legislative List or concurrent Legislative List. Therefore, by virtue of Article 142-C, only Provincial Legislative Authority is empowered to make laws connected with utilization of sugar cane or promotion of its industry. The objection raised by learned counsel for petitioners is clearly misconceived. Since Sugar Cane Development Cess has been imposed primarily to provide special maintenance and development of roads, bridges and special plant protection services coupled with other activities which are directed towards development of sugar cane production. Therefore, we feel inclined to hold that Provincial Legislative Authority was empowered and enjoined exclusive authority to legislate in that behalf. Thus provision of item 49 of .Federal Legislative List reproduced supra and referred in above quoted judgment of Peshawar High Court has ho applicability as regards imposition of local taxes, cess or matters which are not mentioned or covered by Federal or Concurrent Legislative List. Accordingly, conclusions drawn by Peshawar High Court in above referred judgment are not approved.
12. It is important to notice that amounts received on account of Sugar Cane Development Cess are being credited in non-lapsable public account separately maintained by the Provincial Govern meant for implementing and utilization of amount so collected towards object and purposes specified by law. It may be seen that letter dated 21.10.1977 issued by Government of Punjab, Finance Department, referred in the impugned judgment indicates utilization of more than 90% amount of Sugar Cane Development Cess for implementing the objects such as -plant protection services, construction, maintenance and development of roads or bridges for promoting transportation of sugar cane and improving sugar industry.
5. Legal and factual aspects have been adequately discussed and dealt with in the impugned judgment. We, therefore, find no substance in these petitions, which are consequently dismissed and leave to appeal is declined.