' JAVED IQBAL, J.---These two appeals: with leave of the Court, are directed against the judgment, dated 21-1-1996 passed by learned Lahore High Court, Lahore, whereby Writ Petitions bearing Nos.1052 and 1053 of 1995 were accepted.
2. The said appeals are being disposed of by this common judgment as similar question of law and facts are involved.
3. Leave to appeal was granted vide this Court order, dated 24-7-1996 which is reproduced hereinbelow to appreciate the legal and factual aspects of the controversy:- ' "This order will dispose of both the captioned petitions as they seek leave to appeal against the same judgment of the Lahore High Court whereby two writ petitions filed by the respondent- company have been accepted on similar grounds and orders of Central Board,of Revenue and of the authorities below declared to be without lawful authority and of no legal effect.
(2) Rupali Polyester Limited, respondent No,1 is a public limited company which manufactures Polyester Chips, Polyester Fiber and Polyester POY/DTY Yarns. It is an admitted position that the respondent-company had been paying the sales tax on Polyster Chips although it had disputed the payability of the said tax claiming that the product in question was exempted from the levy of the sales tax. The dispute was finally resolved by the Central Board of Revenue vide its Memorandum dated 15-11-1998 in which it was clarified that the Polyester Chips were exempted from the payment of sales tax vide Notification No,S.R.O.666(1)/81, dated 25th June, 1981, After this clarification, the respondent claimed the refund of Rs,7,451,848 paid by it as sales tax during the period April, 1987 to November, 15, 1988. The .Respondent-Company also claimed the adjustment/refund of yet another amount of Rs,12,288,717 which it had paid as sales tax on the Texturised yarn from 26-6-1988 to 11-2-1989. This latter claim was based on the Notification. Dated 22-1-1989 issued by the Federal Government exempting the manmade yarn from the levy of sales tax with effect from 26-6-1988. It appears that the Deputy Collector, Central Excise and Sales Tax issued a notice dated 29-3-1990 calling upon the respondent-Company to show-cause as to why its claim for the refund of the sales tax be not rejected in view of the provisions of section 30-A of the Sales Tax Act, 1951. Respondent No,1 submitted a reply to the show-cause notice stating that section 30-A of the Sales Tax Act was not applicable to this case. Deputy Collector by his order, dated 20-4-1993 rejected the claim of the respondent-Company. The company took the matter in an appeal but with no better result as the same was dismissed by the Collector and its revision petition before the Federal Government also bore no fruit.
(3) Feeling aggrieved, the respondent-Company invoked Constitutional jurisdiction of the High Court in two separate petitions viz. Writ Petitions Nos.1052 of 1995 and 1053 of 1995. Learned Judge in the High Court allowed both the writ petitions through a single judgment, impugned herein, holding that by virtue of the proviso to subsection (4) of section 3 of the Sales Tax Act, 1951, the sales tax is collected as if it is an excise duty and that being so, all the provisions of the Central Excises and Salt Act, 1944 and the rules made thereunder become applicable notwithstanding the provision of the Sales Tax Act and consequently, the claim for refund of the sales tax had to be processed under the Excise Laws and not under section 30-A of the Sales Tax Act.
(4) We have heard the learned counsel for the petitioner as also the learned counsel appearing for the respondent-Company. The former contended that even though the sales tax was collected as if it was an excise duty, the matter of refund claimed by the respondent-Company could well be decided with reference to the provisions of section 30-A of the Sales Tax Act. Learned counsel submitted that the Sale-tax is an indirect burden whereof is immediately passed on the consumers. In his submission the manufacturer collects the sales tax on behalf of the Federal Government and any tax collected by him has to be paid to the Government. Learned counsel pointed out that under section 30-A of the Sales Tax Act, any amount collected by way of sales tax which in fact was not payable as tax or which was in excess of the tax has to be paid to the Federal Government. Learned counsel contended that the respondent-Company had in fact collected the sales tax from the consumers and, therefore, it was not entitled to any refund on the ground that it was not liable to pay the tax becuase the products in question were exempt from the levy of the sales tax. It was further submitted by the learned counsel that the respondent-Company did not specifically deny in the reply to the show-cause notice that it did not collect the sales tax from the consumers of the goods in question.
(5) Leave to appeal is granted in both the petitions to examine, inter alia, the afore-noted contentions of the learned counsel for the petitioners.
(6) Operation of the impugned judgment of the High Court is suspended subject to the condition that if the petitioners do not ultimately succeed in their appeals, they shall refund/pay the amount in dispute to the respondent-Company together with interest at the rate of 15% with effect from the 1st of July, 1996."
4. It is mainly contended by Mr. Izharul Haq, learned Advocate Supreme Court on behalf of the appellant that respondents' claim of refund was not only illegal but inequitable and has rightly been rejected by the forums available in the hierarchy of tax laws as the sales tax being an indirect tax and respondents having received the same from the consumer had no locus standi whatsoever to claim for its refund as the sales tax was never paid by the respondents. It is further contended that in view of the provisions as contained in section 30-A of the Sales Tax- Act, 1951 (hereinafter referred to as the Sales Tax Act) no claim regarding refund of any tax could be made and the bar imposed in the said section cannot be removed by invoking certain provisions of the Central Excises Act, 1944 (hereinafter referred to as Excise Act) and Central Excise Rules, 1944 (hereinafter referred to as the Excise Rules) which would have no beairng whatsoever on the provisions as contained in section 30-A of the Sales Tax Act. It is conceded that in view of the provisions as contained in subsection (4) of section 3 of the Sales Tax Act the sales tax was collected as if it was an excise duty but simultaneously it is contended that section 30 of the Sales Tax Act has provided its own mechanism and, therefore, the entire Excise Act could not be made applicable in the cases of refund and the claim for refund of the sales tax is to be processed under the relevant provisions of the Sales Tax Act. It is also pointed out that under section 30-A of the Sales Tax Act, any amount collected by way of sales tax which in fact was not payable as tax or which was in excess of the tax has to be paid to the Federal Government and question of any refund does not arise.
5. Syed Ali Zafar, learned Advocate Supreme Court appeared on behalf of respondent and strenuously controverted the view-point as portraited on behalf of appellant contending that in view of the provisions as contained in subsection (4) of section 3 of the Sales Tax Act which was amended vide section 4 of the Finance Ordinance, 1982 (Ordinance XII of 1982) read with Sales Tax Circular No,2 of 1982 the sales tax which was collected as excise duty under the Excise. Act as such the provisions contained in Sales Tax Act would have no application and the question of refund could only be dealt with under the Excise Act and Rules made thereunder. In this record, a mention has been made about. Rule 11 of the Excise Rules. It is urged with vehemence that the provisions as contained in section 30-A of the Sales Tax Act cannot be invoked in view of the decision as made by Central Board of Revenue and subsequently circulated by means of Sales Tax Circular No,2 of 1982 which aspect of the matter has rightly been dilated upon and considered in the impugned judgment and being well-based, no interference is called for. It is pointed out that all matters including levy, collection and refund of Sales Tax would be dealt with under the provisions of the Excises Act and Rules made thereunder. It is also contended that the respondents erroneously paid the amount in question w.e.f 1st April, 1987 till 15th September, 1988, which should be refunded being a valid claim and refusal thereof amounts to violation of the relevant mandatory provisions as contained in the Excises Act and the Sales Tax Act. It is argued that the sales tax was never collected from the customers on the sale of Polyester Chips but the sales tax was paid as an excise duty by adjustment in an account duly maintained by the Central Excise Authority and accordingly, the claim of respondent does not fall within the realm of section 30-A of Sales Tax Act. Learned Advocate Supreme Court has supported the impugned judgment. In order to substantiate his contentions as mentioned hereinabove reference has been made to cases titled Muhammad Yasin v. Ghulam Murtaza (PLD 1988 SC 163), Mehreen Zaibun Nisa v. Land, Commissioner (PLD 1975 SC 397), Ellahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582), Friends Sons v. Deputy Collector (PLD 1989 Lahore 337), Commissioner of Sales Tax v. Associated Hotels (India) Ltd. (1969 SMCR 281) and Hotel Midway House Ltd., Karachi v. Director-General/Commissioner, Excise and Taxation Department, Karachi (1993 SCMR 1712).
6. We have carefully examined the respective contentions as agitated on behalf of he parties in the light of relevant provisions as contained in the Sales Tax Act, the Excises Tax and Rules made thereunder. We have also perused the order of Collector dated 20-4-1993, order of the Collector (Appeals) dated 28-7-1993 and order of Revisional Authority dated 18-12-1993. We have minutely gone through the impugned judgment. It is an admitted feature of the case that respondent- Company had paid the sales tax on Polyester Chips which was exempted from the levy of sales tax as the dispute pertaining to sales tax was decided by the Central Board of Revenue vide its memorandum dated 15-11-1988 whereby, the Polyster Chips were, exempted from the sales tax by means of Notification No,S.R.O.666(I)/81, dated 15th June, 1981. In view of the said exemption the respondent approached the concerned functionaries of the Central Board of Revenue for refund of Rs,7,451,848 which was paid w.e.f April, 1987 to November, 1988 with further claim of Rs,12,288,717 which was paid as sales tax on the texturized yarn from 26-6-1988 to 11-2-1989. Prior to adjudicating upon the said claim the Deputy Collector, Central Excise and Sales Tax issued a notice, dated 29-3-1990 whereby the respondent was asked to show cause as to why the claim, as put forth should be rejected in view of provision as contained in section 30-A of the Sales Tax Act.
The said notice was contested but with no avail and Deputy Collector by means of his order dated 20-4-1993 rejected the claim of the respondent. Being aggrieved an appeal was preferred which met the same fate by Collector Appeals vide order, dated 28-7-1993. The respondent approached the revisional authority but their revision was also rejected on 18-12-1993. As a last resort the respondents invoked the Constitutional jurisdiction and their petitions were accepted and it was held vide impugned judgment that by virtue of proviso in subseciton (4) of section 3 of the Sales Tax Act, the sales tax is collected as if it is an excise duty and that being so all the provisions of the Central Excises and Salt Act, 1944 and the Rules made thereunder become applicable notwithstanding the provisions of the Sales Tax Act and consequently the claim for refund of the sales tax had to be processed under the Excise Laws and not under section 30-A of the Sales Tax Act.
7. A careful scrutiny of the entire record would reveal that the case of respondents revolves around subsection,(4) of section 3 of the Sales Tax Act read with Sales Tax Circular No,2 of 1982 by ignoring .The provisions as contained in section 30-A of the Sales Tax Act and losing sight of the fact that no identical section such like section 30-A of the Sales Tax Act is available in the Excises Act to deal with such sort of eventualities. It is a misconceived notion that the provisions as contained in Rules 10 and 11 of Excise Rules would be applicable. Insofar as Rule 10 of the Excise Rules is concerned it mainly relates to recovery of duty short-levied or erroneously refunded and leas been coached in such a language which covers a variety of situation and is reproduced hereinbelow for ready reference:-- "10 Recovery of duty short levied or erroneously refunded, etc.---(1) Where by reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short- levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within one year of the relevant date by an officer not below the rank of Superintendent requiring him to show cause why he should not pay the amount specified in the notice.
(2) Where by reason 'of any misdeclaration, false information or collusion, any duty or charge has not been levied or has been short-levied. Or has been errorneously refunded the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date by the competent adjudicating authority, requiring him to show cause why he should not pay the amount specified in the notice and be penalised under the law and the rules.
(3) Where by reason of any false document, counterfeit seal or impression, fraud or any other heinous offence any duty or charge has not been levied or has been short-levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within ten years of the relevant date by the competent adjudicating authority, requring him to show cause why he should not pay the amount specified in the notice and be penalised under the rules.
(4) For the purpose of this rule, the expression "relevant date" means--
(a) in any case where duty has not been levied or has been short-levied, the date on, which clearance of goods is made or the date prescribed for payment of duty for the service rendered or provided.
(b) In case where duty has been erroneously refunded date of the refund."
8. A careful analysis of Rule 10 of the Excise Rules would reveal that its main object seems to provide limitation in different situations arising out of levying and recovery of the excise duty which cannot be made beyond the period of limitation. In this regard we are fortified by the dictum laid down in PTCL 1984 CL 24. It has nothing to do with the claims pertaining to refund but on the contrary it deals with those cases where some erroneous refund has been made and its recovery. It is worth- mentioning that farfetched scholarly interpretation of Rule 10 of the Excise Rules would nothing but an exercise in futility because from whatever angle it may be examined or interpreted it cannot be invoked by the appellant for the redressal of his grievances. The provisions of section 10 of the Excise Rules cannot be made applicable for another reason because it is a total reproduction of the provisions as contained in section 36 of the Sales Tax Act which hardly renders any assistance to the appellant's case and which was never pressed into service and rightly so by the appellant. In such view of the matter how Rule 10 of the Excise Rules would serve the purpose intended to be achieved.
9. We have also examined the provisions as contained in Rule 11 of the Excise. Rules which is reproduced hereinbelow for ready reference:-- "11. No Refund of charges erroneously levied or paid, unless claimed within one year.---No duty which has been paid, or has been adjusted in an account-current maintained with the Collector under Rule 9, and of which re-payment wholly or in part is claimed in consequence of the same having been paid through inadvertence, error or misconstruction, shall be refunded and no abatement in duty shall be allowed unless a written claim is lodged with the proper officer within one year from the date of such payment or adjustment as the case may be."
10. A bare perusal of the said rule would reveal that it cannot be invoked for the simple reason that neither any duty was paid nor adjusted erroneously in pursuant to Rule 9 of the Excise Rules which provides the mode and manner of payment of excise duty levyable on excisable goods meant for consumption or export and their manufacturing or production. It may be pertinent to mention here at this juncture that the amount in question was never paid through inadvertence, error or misconstruction. For the sake of argument even if it is admitted that the amount in question could be claimed by invoking Rule 9 of the Excise Rules even then the question would be as to whether any application was made for the refund of the amount erroneously paid within a period of one year? The answer would be surely in negative. It must be kept in view that any of tax paid due to some mistake of law/fact or compulsion could not be refunded under Rule 9 of the Excise Rules because mistake of law/fact in inadvertence or error are quite distinct to each other and neither synonymous nor interchangeable. If any authority is needed reference can be made to 1994 CLC
994. Besides that in PTCL 1994 CL 280 it was observed that "Rule 11 of the Central Excise Rules does not apply to a case where the amount of tax is paid under a mistake of law or fact or under compulsion; or the claim of refund of any amount realized without any authority of law, if it is not barred by any specific statutory provision enforceable in law". There is no denying the fact that no provision in nature of section 30-A of the Sales Tax Act, 1951 is available either in Central Excises and Salt Act, 1944 or in Central Excise Rules, 1944, hence it alone would be applicable. Had it not been in existence the position would have been different and subject to all legal exceptions the refund could have been claimed under Rule 11 of the Excise Rules. It was never the case of respondents before the Deputy Collector (North) that the sales tax be refunded in view of the provisions as contained in Rule 10 or 11 of the Excise Rules but on the contrary their main contentions were to the effect that Polyester Chips were exempted from sales tax vide S.R.O.666(1)/81, dated 25-6-1981 read with S.R.O.1034(1)/88 dated 15-11-1988 and further that the scope of section 30-A of the Sales Tax Act is limited to the cases where sales tax is collected by the party as an agent of the Government which cannot be extended in cases where sales tax is paid by the manufacturers on their goods manufactured by them and thus the position is covered by section 27(2) of the Sales Tax Act. It was also their, contention that the burden of sales tax was not passed on the consumers which all were reproduced in the order, dated. 20-4-1993 at length dilated upon and decided by the learned Deputy Collector. The respondents have changed their stance with passage of time which is indicative from the Prayer of the writ petition preferred by respondents which is as follows:- - "(i) The impugned order, dated 30-11-1993 may kindly be declared null and void ab initio.
(ii) the respondents be directed to refund the amount of Rs,12,288,727 collected by the respondents from the petition& as sales tax alongwith the additional payment in terms of section 27-B of the Sales Tax Act, 1951;
(iii) section 30-A be declared as null and void and ultra wires the Constitution;
(iv) any other relief which this Hon'ble Court deems fit in the circumstances of the case may also be granted to the petitioner."
' No mention whatsoever has been made about Rule 10 or 11 of the Excise Rules and entire reliance was placed on section 27(2) of the Sales Tax Act. The Circular No,2 of 1988 was also not pressed into service.
11. We have also examined the provisions as contained in section 3(4) of the Sales Tax Act (now repealed) which is as follows:- "(4) The tax in respect of the goods mentioned in clauses (a), (c), (d) and (1) of subsection (1) and clause (d) of subsection (6) shall be payable on the occurrence of the first of the following events:- -
(i) When the goods are delivered to the purchaser, or
(ii) when the property.In the goods passes to the purchaser, or
(iii) when the goods are sent, consigned or exported to any place outside Pakistan, and for the purposes of this clause the goods shall be deemed to have been sold when they are sent, consigned, or exported to any such place as aforesaid, or
(iv) when the goods are actually used by the manufacturer or producer: ' Provided that, in case of goods mentioned in clause (a) of subsection (1) the tax shall, where the Board so direct, be levied and collected as if it were a duty of excise leviable under section 3 of the Central Excises and Salt Act, 1944 (I of 1944), and all the provisions of the said Act and the rules made thereunder shall so far as may be and with the necessary modifications apply notwithstanding the provisions of this Act.
12. The language employed in the section is free from any ambiguity.
' "Canons of construction and rules of interpretation are directed to one and only one end, namely, towards finding out the intention of the Legislature. When this is clear, there is no room for praying in aid any extraneous principle of interpretation or canons of construction. (Mozzaffar Ahmad v.
Anwar Ali PLD 1965 Dacca;296, PLR 1964 Dacca 906, 16 DLR 336 (DB). There is no denying the fact that the Board of Revenue had issued the Circular bearing No,2 of 1982 in exercise of power as conferred upon it under the said section which appears to be a verbatim reproduction of the provisions of the said section and reproduced hereinbelow for ready reference:- ' "The CBR is pleased to direct that sales tax leviable on all goods produced or manufactured in Pakistan shall be collected as if it were the duty of Excise leviable under section 1 of the Central Excises and Salt Act, 1944 and all the provisions of the said Act and the Rules made thereunder shall so far as may be and with necessary modifications, apply notwithstanding the provisions of the Sales Tax Act, 1951."
' A bare perusal would reveal that it was issued-
(a) for a specific and limited purpose i.e, collection of sales tax leviable on all goods produced or manufactured in Pakistan as if it were excise duty;
(b) this collection was to be made in pursuant to the procedure as enumerated in the Central Excises and Salt Act and Rules made thereunder;
(c) the sales tax was kept alive for all the practical purposes. It neither abrogates nor kept the same in abeyance and the application of Excises Act was only for the colleciton of Sales Tax Act as excise duty. No authority would be needed to support the said view as the words "notwithstanding the provisions of the Sales Tax Act, 1951" have been used in Circular No,2 of 1988;
(d) the Circular No,2 of 1988 makes it abundant clear that the levied sales tax was to be collected as excise duty and it cannot be stretch too tar to include the "refund" of sales tax which could never be refunded in pursuant to Circular No,2 of 1988 which is absolutely silent in this regard. No deletion, insertion, amendment or addition could be made in the said section on the basis whereof it could be made applicable to the dispute concerning refund of sales tax;
(e) the CBR is not empowered to evolve any mechanism for the refund of sales tax by virtue of Circular No,2 of 1988 which was for a limited purpose and does not change the nature of sales tax which could be termed as "excise duty" for the purpose of collection only and not beyond that in view of the power as vested in the Central Board of Revenue by virtue of clause (iv) of subsection
(4) of section 3 of the Sales Tax Act, 1951 (III) of 1951). No provisions of the Sales Tax Act could be made inoperative on the basis of circular No,2 of 1988.
13. It hardly needs any elaboration that while interpreting a notification (this circular can also be equated with notification having sanctity of law) "the purpose or purposes for which a notification is issued would be relevant in determining the vires of a notification. One of the practical and effective ways of proliferating the purpose is to see how far the suggested meaning destroys and defeats or promotes the ultimate purpose. In this research the Court is not confined to the literal meaning of the words used in the notification but it has to adopt a rational attitude by attempting to align its vision to that of the draftsman while drafting the notification in question." (Bindra's 'Interpretation of Statutes', 7th Edn., p.833). A careful analysis of circular No,2 of 1988 and its ingredients as mentioned hereinabove would show that it is free from any ambiguity, absurdity or confusion and the language employed therein is so plain which cannot be twisted whatever principles of interpretation may be pressed into service because the question of any insertion, deletion or addition does not arise as it is to be interpreted in such a manner that the object of its issuance is promoted rather than hampered. We are of the considered opinion that while interpreting Fiscal Notifications the only guiding principle should be that no undue advantage could be taken on the basis of far-fetched or scholarly interpretation which the plain language does not imply nor intended to mean. The provisions as contained in section 30 of the Sales Tax Act, 1951 are to be kept in view and no separate meanings can be assigned which are not in consonance with the said Act. It is an admitted feature of the case that the sales tax was recovered from the customers and added to the cost of production. The respondents had admitted in their Letter No,RPL/56 dated 26-2-1989 addressed to the Superintendent, Central Excise and Sales Tax, Government of Pakistan, Sheikhupura wherein it was mentioned as follows:-: "Please note that all rates which we have been charging to our customers were inclusive of sales tax and as such no extra amount was recovered from them." {Emphasis supplied).
14. A bare perusal would reveal that all rates were inclusive to sales tax meaning thereby that the rates must have been fixed on higher side after deduction of the sales tax paid and its burden was certainly shared by the consumer and thus the question of its return to the respondents does not arise. It is worth mentioning here at this juncture that while replying to show-cause notice no spec ific denial has been made that sales tax was not obtained from the customers and it was deposited by the respondents. The sales tax having been collected by the respondents from the customers and for the Government had no locus standi to show cause for its return. In this regard we are fortified by the dictum laid down in case titled Sajjad Nabi & Co. v. Commissioner of Income-tax (PLD 1977 SC 437).
15. In the light of what has been stated above we accept these appeals and accordingly the impugned judgment is set aside with no order as to costs.