ZAHID KURBAN ALVI, J.---By a common order we shall dispose of #TBE Methanol as intoxicant/intoxicating substance and raised a demand of 'Vend fee' and 'Permit fee'---Plea raised by the petitioners was that the Methanol was not a liquor and no such fee could be charged--- Validity---Methanol was not liquor and by mere definition through a notification the authorities could not change the basic essential of commodities---Such act of the authorities would tantamount to declaring through a notification a man as an animal and a woman as a man---Such notifications would not be acceptable and it would not only be beyond any reasoning but would be against the basic concept of the creation of an individual or commodity or a living being---Once the basis of the scomposition of Methanol was understood and accepted then the provisions of Sindh Abkari Act, 1878, would not be applicable---Levy of 'Vend fee' and 'Permit fee' could not be justified by the authorities-Fee was always-associated with a service rendered and it was distinguishable from other types of levies and specially duties---In this case no such service had been defined or described which could justify the authorities in claiming 'Vend fee' from the petitioners in connection with Methanol---Declaration and the notifications to this effect were unlawful and were set aside by High Court---Demands of Vend/Permit fee on Constitutional Petitions Nos.1406, 1411, 1412, 1407, 1408, 1409, 1410 of 1996 & 2021 of 1999 and 76, 189, 157, 183 of 2000 in which common question of facts and law are involved.
2. Briefly the facts 'of the matters as enumerated in the petitions are that the petitioners are by and large manufacturing Formaldehyde and Formaldehyde based products. The petitioners procures methanol which is a byproduct in petroleum refinery distillation from foreign refineries primarily Kingdom of Saudi Arabia. The liquid methanol is shipped in tankers which are offloaded into the approved bonded storage tanks, wherefrom it is cleared and loaded into road-tankers (lorries) for onward transmission thereof to the petitioners' factories. In 1986, an issue arose as to whether any 'Vend Fee' or 'Permit fee' was payable by the petitioners. The matter was referred to the respondent No.2, who categorically directed that the requisite permission be issued to the petitioners whilst the subsequent matter is referred to the Law Department. In the given circumstances, the aforementioned query was referred to the Law Department and the same was decided in favour of the petitioners. This fact was duly confirmed vide letter dated 2-12-1987 of the respondent No.2 bearing their reference No.DG.3(235)/84-Excise/2213, addressed to the petitioners wherein the petitioners were accordingly informed that the issue of charge of 'Vend fee' and 'Permit Fee' has already been decided. The export of methanol to other Provinces should be subject to the execution of export and bond and no 'Vend Fee' and 'Permit Fee' has been levied thereon. In the year 1990 the same issue was reopened afresh and the petitioners were again informed that the issue was being referred to the Law Department. Thereafter the petitioners were allowed to export/transit methanol to their Factory against an undertaking that petitioners would pay 'Vend Fee' and 'Permit Fee' by complying with the orders of the Law Department. The foregoing position remained till a demand was made by the respondents demanding excise duty from the petitioners albeit the fact that the goods (Methanol) were only in transit from the terminals at Karachi to the petitioners' factory at Hub Chowki. With reference to this demand the petitioners were constrained to move several Constitutional Petitions which were decided in favour of the petitioners. All of a sudden the Law Department, the respondent No.2 vide its letter dated 5-6-1995 made a demand retrospectively commencing from 1990 from the petitioners and demanded a sum of Rs.13,04,81,788, failing which they threatened action under section 32 of the Sindh Abkari Act, 1878 (hereinafter referred to as the 'Act, 1878'). As a consequence of the demand correspondence took place between the petitioners and the respondents wherein the petitioners emphasized and reiterated that the demand was untenable in law.
3. The petition was filed and notice was served on the respondents. Comments have been filed by them through a statement of the learned Additional Advocate-General Sindh. The comments were prepared and answered by the Excise and Taxation Officer. We have noted that in the comments, the respondents have denied the allegations made in the petition. According to them the demand which is impugned is a valid demand. It has been made under the delegated powers conferred upon them through the proviso (i) to section 12 and section 30 of the Act, 1878. According to them 'Vend Fee' and 'Permit Fee' was payable in accordance with the paragraphs 31 and 31-It of the Act, 1878, which was promulgated 'in view of sections 12, 30 and 35 of the Act, 1878. The 'Vend Fee' and 'Permit Fee' is applicable before removal of the intoxicant declared to be the liquor. A Notification No.1341/70-Excise/1273, dated 18- 3-1972 was issued where methanol was declared to be liquor.
4. It was further contended that the petitioner had been granted licence to use the same for manufacturing of methanol products. Since a licence was granted, therefore the petitioners were entitled to import methanol from abroad. As methanol was declared liquor, therefore, the petitioner was bound to pay 'Vend Fee' and 'Permit Fee'. They have further stated that 'Vend Fee' and 'Permit Fee' was imposed on denatured spirit becauSe the Government has power to impose, abolish or regulate any duty dr tax. According to the respondent service was provided and that is the reason why 'Vend Fee' and 'Permit Fee' was levied. They denied that they have not acted within law.
Accordingly all actions taken were as provided under the Act, 1878. They justified the levy of 'Vend Fee' and 'Permit Fee' as according to them 'it is different from another duty. A fee is indeed payable for the services rendered and according to them they are rendering services and facility. They have denied that any export tax is. Being levied and by virtue of the decision of Sindh High Court that export taxes cannot be recovered. According to. Them 'Vend Fee' and 'Permit Fee' is different. They insisted that the demand raised was not all of a sudden but was based on the fact that the petitioners had given an indemnity bond and they also knew that the respondents were seeking legal opinion. They were aware that if the legal opinion was given against them then the amount shall become due and payable. In conclusion they insisted that the amount claimed is under the Act, 1878 by virtue of the fact that methanol was declared to be liquor. Therefore, the demand.So made was well within the law and was not arbitrary or capricious. They have admitted that methanol is highly poisonous and dangerous when applied externally.
5. All the petitions were heard and disposed of by a Division Bench of this Court vide order dated 1- 2-2001 whereby the petitions were allowed and it was specifically declared that methanol is not an intoxicant/liquor for the purposes of the Sindh Abkari Act. The reasoning which prevailed with the learned Division Bench was that in view of section 4 and section 6 of the General Clauses Act, the original notification dated 18-3-1972 could not be revived by the subsequent notification dated 17- 12-1974 whereby the notification dated 4-9-1974 was rescinded which had done away with the original notification dated 18-3-197.2.
6. The Government of Sindh/ respondent being aggrieved and dissatisfied with the aforesaid judgment filed Civil Appeals Nos.2697-2706 of 2001 and Civil Petitions Nos.277-K and 278-K of 2002 before the Honourable Supreme Court and the same were disposed of vide common order dated 22-3-2002 whereby the matter was remanded back to this Court for decision afresh on the issue whether a notification which had been repealed by a subsequent notification and later on the repealed notification was also repealed by another notification then whether the original notification would stand revived because in the repealed notification intention was not shown that on its repeal the original notification will not be revived.
The above proposition was based on the judgment reported as Bhagat Sindh Hira Singh v. State of Patiala AIR 1954 (Pepsu) 174 and Ammer-un-Nissa Begum v. Mahboob Begum AIR 1955 (SC) 352 alongwith para.319 of Crawford's Statutory Construction Interpretation of Laws .(Ed.1988). A further such consideration for remand was that the petitioners (respondents before. The Honourable Supreme Court) had expressed a desire to obtain a decision on the merits of the case as well as to amend the petition in order to impugn the latest notification dated 14-2-2002 which had been issued by the Government' of Sindh after filing of the appeals before the Honourable Supreme Court.
7. The matter was heard by us and arguments were advanced by both the sides. At the very outset.
Mr. Raja Qureshi, the learned Advocate-General of Sindh, wished to record a legal clarification-on the subject of Notifications. He was of the view that the petitions were allowed and it was held that methanol was not a intoxicant/liquor for the purposes of Act, 1878. Such declaration was recorded by this Honourable Court on the premise that no fresh notification had been issued declaring methanol to be liquor for the purposes of Act, 1878 or specifically reviving the Notification dated 18- 3-1972 as revival was necessary under the provisions of General Clauses Act.
8. According to him what needed to he examined was that if a notification has been repealed by a subsequent notification and later on repealed notification was also repealed by another notification then. Whether the original notification would stand revived because in the repealed notification intention was not shown that on its repeal the original notification will, not be revived.
9. Whilst the matter was subjudice before the Honourable Supreme Court of Pakistan, the respondents had issued a fresh Notification No.S0(Excise)/E&T/1- (414/96) in pursuance whereof 'Methanol was declared to be liquor' for the purposes of Act, 1878, which had not been challenged by the petitioners either before this Honourable Court or before the Honourable Supreme Court of Pakistan.
10. According to Mr. Raja Qureshi the matter was remanded but the petition was not amended nor the new notification has been challenged. Since both have not been done therefore the controversy in question stands settled. He has further stated that in the event the repealed notification if not reflecting the intention that on its repeal the original notification will not be revived. Hence, absence of such intention has by operation of law revived the original notification declaring methanol as liquor for the purposes of Act, 1878. Even otherwise the Notification dated 14- 2-2002 independently continues to hold the field for the present period coupled with the revival of the original notification by operation of law, as per legal principles mentioned herein above.
11. In support of the petitions Mr. Qadir H. Saeed has submitted firstly that there is no need to specifically challenge the latest notification dated 14-2-2002 since it is ab initio void, not sustainable and of no legal effect as a matter of law. On the merits of the case learned counsel has submitted firstly that a bare perusal of the Sindh Abkari Act would show that it relates to the import, export, transportation. Manufacture, sale and possession of liquors and intoxicating drugs in the Province of Sindh. In this respect learned counsel has referred to section 3(7)(a) which defines liquor to include spirit of wine, methyalated spirit, spirit, wine toddy, beer and all liquids consisting of or containing alcohol etc., whereas per subsection (b) liquor includes any other intoxicating substance which the Provincial Government may declare as such.
Finally per section 3(8) country liquor also includes all liquor produced and manufactured in Pakistan. Hence learned counsel has argued that upon a plain reading of the preamble to the Act as well as sections 3(7) and 3(8) it would be quite clear that a liquor or intoxicating substance as envisaged under the Act is one which is fit for human consumption. Per learned counsel as admittedly Methanol is a poison and thus not fit for human consumption, it could by no stretch of imagination be called a liquor or intoxicating substance. Similarly learned counsel has submitted that the proviso to section 7(b) of the Act whereby any other intoxicating substance can be declared to be a liquor has to be read with section 7(a) in which liquor has been defined and which necessarily assumes that the types mentioned therein are fit for ' human consumption. Hence per learned counsel the impugned notification dated 18-3-1972 as well as the other notifications as also the latest notification and corresponding documents which seek to impose vend fee/permit fee upon methanol cannot be sustained.
12. Mr. Qadir Saeed has referred to the cases of Sapphire Textile Mills Ltd. v. Government of Sindh PLD 1990 Kar. 402, Mirpurkhas Sugar Mills v. District Council Tharparkar 1990 MLD 317 and Collector of Customs v. Sheikh Spinning Mills 1999 SCMR 1402, whereby it has been held that excise duty cannot be levied on imported goods which are being transported from the Province of Sindh to another Province as the same would be violative of Article 151 of the Constitution which provides for free inter provincial trade. Hence per learned counsel as admittedly the petitioners goods viz. Methanol was lawfully imported into Pakistan and is to be used for the purposes of industrial manufacture in the petitioners factory located at Hub, Balochistan, it cannot be taxed under the Sindh Abkari Act.
13., Mr. Qadir Saeed has submitted that the concept of fee necessarily implies and connotes the rendition of a service or the grant of a benefit which is admittedly missing in the present case as no such service has been rendered or a benefit granted by the Government of Sindh as far as the petitioners are concerned. In fact, per learned counsel neither the Act nor the rules framed thereunder define the term vend fee and or permit fee and nor is there any indication therein as to whether any services are to be provided by the Government in lieu thereof. Per learned counsel under section 14 licences are only required for the cultivation and manufacture of intoxicants etc. Hence, learned counsel has submitted that the imposition of permit/vend fee was ipso facto in the circumstances of the case, unlawful, unwarranted and hence liable to be struck down as admittedly the petitioners do not manufacture methanol but import it. In support of these submissions learned counsel has relied upon the following case-law; Adbul Majid v. Province of East Pakistan PLD 1960 Dacca 502: Khan v. Government of N.-W.F.P. 1990 CLC 550. Nishat Tek Ltd. v.
Federation of Pakistan PLD 1994 Lah. 347, Government of A.P. v. Hindustan Machine Tools Ltd. AIR 1975 SC 2037, Orissa Cement Ltd. v. State of Orissa AIR 1991 SC 1676.
14. He has further submitted that once the Government had rescinded the notification dated 18-3- 1972 vide notification dated 17-12-1974 thereby excluding methanol as a intoxicating substance which was taxable under the Act then the other notifications whereby the original notification dated 18-3-1972 was resuscitated could not be upheld on the principles of promissory estoppel inasmuch as during the intervening period the goods in question had been imported by the petitioners. Such importation per learned counsel was based on the Government's assurance by conduct that methanol would not be taxed under the Act. In support of this submission learned counsel has relied upon Messrs Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582 and Kohinoor Textile v. :'ederation of Pakistan 2002 PTD 121.
15. Mr. Suleman Habibullah, learned A.A.-G. Has fully supported the arguments of the learned A.-G.
He has further submitted that admittedly the petitioners product methanol contains alcohol and as per section 3(7)(a) of the Act a liquor has been defined as inter alia a liquid which contains alcohol. Further more per section 3(7)(b) a liquor also includes any other intoxicating substance which may be notified as such by the Government in the official Gazette for the purposes of the Act. Hence per the learned A.A.-G. Since methanol has been declared to be a liquor per the notification in question and per section 3(15)(a) an intoxicant has been defined to mean any liquor or intoxicating drug, consequently the import, export and transport per sections 9 and 10 of the Act would be subject to the payment of duties as levied under section 19 thereof. In this regard learned A.A.-G. Has submitted that section 19 does not specify as to how and in what manner such duties are to be levied but only provides the imposition thereof. Consequently, the Government has provided for the duties of vend fee and permit fee which are thus perfectly valid under the law.
16. As far as the merits of the case are concerned it would firstly be seen that the objectives of the Sindh Abkari Act are to consolidate and amend the law relating to the import and export, transport, manufacture and sale and possession of liquor and of intoxicating drugs in the Province of Sindh as well as to promote, enforce and carry into effect the policy of prohibition. Liquor has been defined vide section 3(7) to include:--
(a) spirits of wine, methylated spirits, spirits, wine, toddy, beer and all liquid consisting of or containing alcohol; and 'spirits' means any liquor containing alcohol and obtained by distillation, whether it be denatured or not,
(b) any other intoxicating substance which (the Provincial Government) may by notification in the (official Gazette) declare to be liquor for the purposes of this Act:)
17. Section 3(9) defines an intoxicating drug to mean hemp, Charas, any mixture of the foregoing substances and any other intoxicating or narcotics substance which the Government may by notification declared to be such not being opium, cocoa leaf a manufactured drug as defined in section 2 of the Drugs Act. Additionally an intoxicant vide section 3(15)(a) of the Aci means any liquor or any intoxicating drug.
Per section 3(15), an excisable article means (a) any alcoholic liquor fit for human consumption;
(b) any intoxicating drug or (c) any medicinal or toilet preparation containing alcohol. Section 9(1) provides that no intoxicant or hemp shall be imported unless the duty is paid under Chapter VI as also permission/conditions are obtained/complied with in this respect. However, such duty is not to be imposed on duty paid articles. Section 10 prescribes similar prohibitions etc. Regarding export and transportation of intoxicants/hemp. Section 12 prescribes that passes are necessary for the import, export and transport of intoxicants and hemp where the quantities exceed the limit prescribed by the Provincial Government such passes are to be issued in accordance with section
13. Vide section 14 of the Act a licence is required for cultivation and manufacture of any intoxicant, hemp, toddy producing tree etc. Correspondingly vide section 14-B possession of any intoxicant or hemp is subjected to only licensed manufactures or vendors upto the quantities thereof provided in their licences. Finally per section 19 of the Act duties on the import, export transport and manufacture may be imposed on any excisable articles which are imported in accordance with section 9(1), exported or transported per section 10 or manufactured under a licence granted in accordance with the provisions of sections 14 and 15 of the Act provided that no duty shall be so imposed on any article on which Customs Duty has been paid upon importation. So also per section 35-A the Commissioner (appointed by the Provincial Government per section 3(3)) may make rules inter alia prescribing the scale of fees payable in respect of any .Privileges, licence, permit or pass or of the storing of any intoxicant or hemp.
18. Reading the foregoing provisions of the Sindh Abkari Act it would be clear in the first instance that the provisions thereof only apply to those liquors or intoxicating drugs which are fit for human consumption. Such a conclusion is readily apparent from the preamble to the Act which contains the objectives behind the same viz. To consolidate and amend the law relating to the import, export, transport, manufacture sale and possession of liquor and of intoxicating drugs and carry into effect the policy of prohibition regarding the same. This conclusion is further supported by the definition of the term liquor and intoxicating drug whidi imply that they are fit for human consumption. Admittedly methanol is a poison and as such unfit for human consumption, and hence in our opinion it cannot by any stretch of B imagination come under the definition of liquor or an intoxicating drug as per the provisions of the . Act. Regarding the submission of the learned A.A.- G. That as methanol has been declared to be liquor per the impugned notification, hence it would come within the purview of the Act in accordance with section 3(7)(b) thereof which provides that a liquor includes any other intoxicating substance which has been declared as such by the Provincial Government, suffice it to say that the provisions of section 3(7)(b) would have to read ejusdem generis with those of section 3(7)(a) of the Act viz. That such intoxicating substance declared per section 3(7)(b) would have a nexus with the substances/liquor defined in section 3(7)
(a). This conclusion becomes even more compelling as section 3(7)(b) provides for any other intoxicating substance which the Provincial Government may declare to be a liquor. By its very definition an intoxicating substance/intoxicani is one which causes the senses to be dulled and hence this presumes that it is fit for human consumption. Admittedly as observed above methanol is unfit for this purpose and consequently the declaration by the Sindh Government treating it to he a liquor cannot be upheld. It would be seen additionally that the charging section of the Act viz. Section 19 provides for duties on excisable articles which have been defined per section 3(15) to mean any alcoholic liquor fit for human consumption, or any intoxicating drug or any medicinal or toilet preparation containing alcohol. This further supports our conclusion that the scheme of the Act is only designed to curtail the import, export, sale and transportation of those liquors, intoxicating drugs and/or hemp which are fit for human consumption or at the most for medicinal or toilet preparation.
19. It would be worthwhile to observe that the petitioners have urged that methanol is not liquor and therefore it would not fall within the purview of the Sindh Abkari Act. They have also stated that as no service had been provided hence no vend fee or permit fee could be recovered and last but not the least that no demand can be made with retrospective effect. On the point of whether the petition needed to be amended by virtue of the new notification the counsel for the petitioner was of the view that such an amendment was not necessary simply because even if the notification stood revived methanol cannot by any imagination be called liquor. It is clear from the available definition of methanol that not only is it not a liquor but the effect of methanol is such that it is an established poison. In fact whenever methanol is sold a sign of poison is put compulsorily on all the containers. The liquor is potable but methanol under any stretch of imagination cannot be. It would also be appropriate' to reproduce the observations of the Pakistan Council of Scientific and Industrial Research, Lahore who have issued a result of the test report dated 11-9-2000: Methanol is entirely different from Methylated Spirit in chemical composition as well as properties."
"Methanol is an established poison and it has been made mandatory by IMCO code to put sign of poison on its containers. It is not liquor, so not potable. It is highly poisonous material whose 'ingestion or inhalation may cause blindness and death. Its main toxic effect is exerted upon the nerves particularly the optic nervous system. Severe exposUre to methanol may cause dizziness, unconsciousness, cardiac depression and eventual death. When the exposure is less severe, the first symptoms may be blurring of vision, photophobia and conjunctivitis followed by the development of eye lesion. There may be headache, gastro- intestinal disturbances, dizziness, etc. Etc.
20. It will be apparent from the report that to bring methanol within the ambit of the Act, 1878, and' to call it liquor is a creation of the department with clear mala fide intention or perhaps it is a clear example of apathy that prevails in all Government Departments where notifications are issued without any consideration whatsoever not only of its implications but even without considering the contents of the said notification(s). The preamble of the Act, 1878, clearly shows that it has been enacted to regulate the laws relating to import, export, transport, manufacture, sale and possession of liquor and of intoxicating drugs and to enforce, permit and carry into effect the policy of prohibition. Liquor has been defined in the said Act as spirit of wine, methylated spirit, spirits, wine, toddy, beer and all liquid consisting of or containing alcohol. It also includes any other intoxicating substance which the Provincial Government may by notification declare to be liquor. From the definition the Provincial Government would have powers to issue a notification in connection with any intoxicating substance which could be declared as liquor. It could be mandatory upon the Provincial Government to issue such notifications only in respect of such intoxicating materials which can be consumed by human beings and would fall within the ambit of and general meaning and concept of liquor. The definition of methanol internationally relates to a chemical which is a highly toxic and poisonous substance.
21. Once it is an established fact that methanol is not liquor and the Act, 1878 cannot be invoked then the question as to whether the notification so issued as far as calling methanol as liquor becomes meaningless. Also the fact that the subsequent notifications so issued would automatically bring the original notification into existence. The basic notification of 18-3-1972 which declared methanol as liquor is in itself illegal.
22. The Advocate-General Sindh whilst bringing on record certain legal clarifications has tried to justify that the petitioner had failed to amend the petition as according to him a fresh notification dated 14-2-2002 has been issued, therefore, the legal objections raised by the petitioner on the issue of revival of the original notification has become meaningless. Be that as it may, it is our view since methanol is not liquor and by mere definition through a notification the respondent cannot change the basic essentials of commodities. It would tantamount to the respondents declaring through a notification a man into an animal and a woman into a man such notifications would not be acceptable and it would not only be beyond any reasoning but would be against the basic concept of the creation of an individual or commodity or a living being. In the case of chemicals and spirits the combination of various compounds can be mixed to create what is known as methanol. This creation of several chemicals cannot be undone or cannot be given a different concept and meaning through a simple notification. It would not be out of place to mention here that the Advocate-General and the Additional Advocate-General, Sindh have also failed to satisfy us whether an item, which is poisonous by nature, can become potable, useful or drinkable. They have failed to satisfy us that the Act, 1878, which was promulgated with the objective of enforcing the policy of prohibition and where liquor has been specifically defined, can the same Act, 1878, be put into action in connection with methanol. The answer simply is no. Once the basis of the composition of methanol is understood and accepted then it falls to reason that the Act itself would not be applicable and, therefore, to try and justify the levy of 'Vend Fee' and 'Permit Fee' fails. It is also to be appreciated that the line of argument put forward by the petitioner holds weight: A fee is and was always be associated with a service rendered. It is distinguishable from other types of levies and specially duties. In this case no such service has been defined or described which may justify the respondents in claiming 'Vend Fee' and 'Permit Fee' from the petitioner in connection with methanol. We would therefore hold that the impugned declaration and the notifications to that effect are unlawful and hence would set aside the same. We would also set aside the impugned demands of vend/permit fee on methanol which are based on such declarations/notifications.
23. Under the circumstances and in view of what has been stated herein above all the above petitions are allowed as prayed.