1. JUDGMENT MUSHIR ALAM, J.- Through this common judgment, I proposed to dispose of the afore- mentioned suits involved similar questions of facts and law.
2. Brief facts, as are relevant for deciding the controversy in above suits are, plaintiffs in all suits for their commercial pursuit indulged in manufacturing activity and or trading venture, invariably import and or export raw material, goods, machinery plant and equipments through Province of Sindh by air or sea routes. Through instant suits, plaintiffs have challenged the vires of Sections 9 and 10 of Sindh Finance Act, 1994, as amended, from time to time and the Rules, bye-laws including, Sindh Development Maintenance of infrastructure Fee Rule, 1994, and all notification issues thereunder, in many cases refund of Fee or Cess collected, is also prayed for. In all the suits, it is common ground that impugned enactment is beyond legislative competence, un- Constitutional, ultra vires and void ab initio, it is averred that, the movement of goods entering and leaving province from outside the country through air or sea cannot be restricted by imposing impugned levy, being against the freedom of Inter Provincial Trade as guaranteed under Article 151 of the Constitution, it was pleaded that levy of impugned fees imposed through impugned legislation was successfully challenged in Suit No. 764/1999 M/s. Rahim & Sons Vs. Province of Sindh and another (SBLR 2002 Sindh 1324). Such levy and "Section 9 of the Sindh Finance Act, 1994 as amended by Section 5, Sindh Finance Act, 1996 alongwith Section 9-A of the latter and consequential order, notifications, rules, demands, notices and drives for recovery were.Declared to be un-Constitutional and drives for recovery were declared to be un-Constitutional ultra vires, unlawful, void ab initio, of no legal effect and thus struck down. Permanent injunction was also granted restraining the defendant from effecting the recoveries under the provision have been declared to be ultra vires.
3. It appears that after the pronouncement in the above suit on 27.5.2000, amendment was made in the impugned legislation through Sindh Finance (Amendment) Ordinance, 2001, dated 24.2.2001.
4. Whereby, Sections 9 and 9-A of Sindh Finance Act, 1994 were substituted, validating earlier enactment "notwithstanding any thing contained in any law, rules or judgment, order or decree of any Court". Said reenactment was again challenged, through suits in hand. However, during pendency of present suits, Sindh Finance Act, 1994 was once again amended vide Sindh Finance (Second Amendment) Ordinance, 2001, dated 15.5.2001, whereby, sub-section (1) to Section 9, explanation No. 1 and sub-section (3) were also added. Such amendments in the Finance Act have been impugned in most of the suits by seeking amendment.
5. To appreciate the contentions of both the parties, it will be advantageous to give summary of legislative history of the impugned legislation. 0n 17.7.1994, Sindh Finance Act, XIII of 1994 was promulgated where under a fee was imposed under Section 9 thereof, which reads as follow:-- "Section 9. There shall be levied and collected fee for services rendered in respect of development and maintenance of infrastructure on the goods entering or leaving the Province, from or for outside the country, through air or sea at the rates and in the manner as may be prescribed."
6. Consequently, to carry out the object of above enactment, on 22.8.1994 Sindh Development and Maintenance of Infrastructure Fee Rules, 1994 were framed on 22.8.1994 providing for the fee payable on goods entering and goods leaving Province for outside the country.
7. Section 9, in the Sindh Finance Act, 1994 was substituted by Sindh Finance Act (XV of 1996) on 14 July, 1996 substituted provision reads as follows:-- "(1) For Section 9, the following shall be substituted:
9. Infrastructure Fee on goods.- There shall be levied and collected infrastructure fee on the movement of goods entering or leaving the Province from or for outside the country, through air or sea at the rates and in the manner as may be prescribed.
8. Explanation.- For the purposes of this section, the word "infrastructure" includes roads, streets, bridges, culverts, lights on passages, plantation on passages, beaches, by passes, first and centre road side rest house, safety and protection on rail roads and construction of connected roads to railway stations, regulation and control of traffic for smooth flow and movement of goods, public order, police force, patrol for safety of goods, stands for loading and unloading of goods, markets and development, improvement, maintenance and protection of such matters.
9. 9-A. Validation.- Anything done, action taken, assessment made and collected, order passed, or purported to have been done, taken, made, assessed collected or passed on or before the coming into force of this section or on or after the enforcement of the Sindh Development and Maintenance of Infrastructure Fee Rules, 1994, by the authority specified in the said rules shall be deemed to hcive been validly done, taken, made, assessed, collected or passed and shall have and shall be deemed always to have effect accordingly."
10. Certain minor amendments as to the rate at such fee to be collected were revised in the rules as well last mentioned amended provision were considered in M/s. Rahim & Sons case (supra), it was declared as ultra vires and void ab initio. However, through Sindh Finance (Amendment) Ordinance No. XII of 2001, dated 24.2.2001, Section 9, of the Sindh Finance Act was again substituted as follows:-- "9. Levy of Cess for special maintenance and development of iinfrastructure.
(1) There shall be levied and collected a cess fot special maintenance and development of infrastructure for smooth and safer movement of goods entering or leaving Province from or for outside the country, through air or sea at the rates and in the manner as may be prescribed.
11. Explanation.- For the purposes of this section, the word "infrastructure" includes, roads, streets, bridges, culverts, lights on passages, plantation on passages, beaches, public parks, place of public recreation and convenience, eating places, landscape, forests, fisheries, delta conservation lakes, breeding places of aquatic life, wildlife and its sanctuaries, public schools, vocational and technical training centres and projects, libraries, museums and similar institutions controlled and financed by the Province, control of traffic for smooth flow and safer movement of goods, public order, police force, patrol for safety of goods, stands for loading and unloading of goods, parking places, markets, water supply, hospitals and dispensaries and development, improvement, maintenance and protection of such matters.
(2) The proceeds of the cess shall be utilized for special maintenance and development of infrastructure and other activities ancillary thereto in such manner as may be prescribed.
3. Validation.- Notwithstanding any thing contained in any law, rule or judgment, order or decree of any Court-
(i) The infrastructure fee levied, assessed, charged and collected in pursuance of Sindh Finance Act, 1994 before coming into force of this Ordinance shall be deemed to have been validity levied, assessed, charged or collected as Cess and
(ii) Anything done, action taken assessment and collection made, order passed or purported to have been done taken under Section 9 of the Sindh Finance Act 1 994 and Sindh Development and Maintenance of Infrastructure Fee Rules, 1984 in relation to Infrastructure fee before coming into force of the Ordinance shall be deemed to have been validly done, taken, made or passed in relation to Cess and shall have and shall be deemed always to have effect accordingly."
4. Jurisdiction barred.- No provision of this Ordinance or any order made thereunder shall be called in question by or before any Court.
12. It may further be observed that to undo the effect of the judgment rendered in M/s. Rahim & Sons case (supra), validation cover, barring clause under Sections 3 and 4 was also provided, to the infrastructure fee/levy assessed and collected under the Sindh Finance Act, 1994. Above legislative amendment led to the filing of present suits. During pendency of suits further amendments in the Sindh Finance Act> 1994 were made in Section 9. Section 1, was substituted, Explanation, thereto was retained, another explanation No. 2 was added after the amendments brought about to the Ordinance, dated 15..2001. The final version of the impugned legislation reads as follows:-
(1) This Ordinance may be called the Sindh Finance (Second Amendment) Ordinance, 2001.
(2) it shall come into force at once and shall be deemed to have taken effect from 24th February, 2001.
13. "Section 9. (1) There shall be levied and collected a case for maintenance and development of infrastructure on goods at rate of 0.5 percent of their value for carriage by road and smooth and safer movement in the Province upon entering or before leaving the Province from or for outside the country, through air or sea, in the manner as may be prescribed."
14. Explanation-1. - For the purposes of this section, the word "infrastructure" includes, roads, streets, bridges, culverts, lights on passages, plantation on passages, beaches, public parjcs, place of public recreation and convenience, eating places, landscape, forests, fisheries, delta conservation lakes, breeding places of aquatic life, wildlife and its sanctuaries, training centres and projects, libraries, museums and similar institutions controlled and financed by the Province, control of traffic for smooth flow and safer movement of goods, public order, police force, patrol for safety of goods, stands for loading and unloading of goods, parking places, markets, water supply, hospitals and dispensaries and development, improvement, maintenance and protection of such matters.
15. Explanation-ll. - For the purposes of this section, the value means C&F price of goods to the owner upon their their entering in and using the infrastructure of the Province; and for other goods the price disclosed in the shipping documents.
(2) The proceeds of the cess shall be utilized for special maintenance and development of infrastructure and other activity ancillary thereto in such manner as may be prescribed.
(3) No refund of the cess claimed to have been paid or over-paid through inadvertence error or misconstruction shall be allowed, unless such claim is made within three months of the date of payment of qpch cess."
3. Validation. - Notwithstanding any thing contained in any law, rule or judgment, order or decree of any Court-
(i) The infrastructure fee levied, assessed, charged and collected in pursuance of Sindh Finance Act, 1994 before coming, into force of this Ordinance shall .Be deemed to have been validly levied, assessed, charged or collected as Cess and
(ii) Anything done, action taken assessment and collection made, order passed or purported to have been done taken under Section 9 of the Sindh Finance Act, 1994 and Sindh Development and Maintenance of Infrastructure Fee Rules, 1984 in relation to Infrastructure fee before, coming into force of this Ordinance shall be deemed to have been validly done, taken, made or passed in relation to Cess and shall have and shall be deemed always to have effect accordingly."
4. Jurisdiction barred. -- No provision of this Ordinance or any order made there under shall be called in question by or before any Court.
16. For the purpose of convenience above enactment in the sequence of order of promulgation are referred to as First, Second, Third and Fourth version.
17. Above legislative transformation of Section 9 of Finance Act in the present form is under challenge in all above suits. Defendants were served, Province of Sindh filed written statement, raising preliminary objections as to very maintainability of suit, inter alia, on the ground of bar under Sections 42, 56 of Specific Relief Act and Section 9, C.P.C. Beside bar to challenge legislative proceeding of Provincial Legislature in terms of Art. 169 read with Art. 127 of the Constitution of Pakistan, 1973. On merits, it was claimed that Province of Sindh is in incurring huge expenditure on the development and maintenance of infrastructure or welfare of the people of Sindh, to meet such exigencies requires finance, which will be met by levy, subject-matter of suits, it was averred that such levy is imposed beyond the customs barrier and is neither imports nor export tax. It was further averred that it is a levy on movement of goods using the infrastructure of the Province of Sindh. It was specifically pleaded that, matter relating to "carriage of goods by road" has been excluded from entry No. 24 of the Federal Legislative list of Fourth Schedule; therefore under Article 142(c) exercising residuary authority Province is competent to legislate on left-over subject, it was further demand that free movement of goods guaranteed under Article 151 is impeded as alleged in the plaint.
18. On 28.5.2002 by consent following issues were framed:-
(1) Whether the Sindh Finance Amendment Ordinance, 2001 and the Sindh Development and Maintenance of Infrastructure Rules and Notifications issued thereunder are unconstitutional, void and of no legal effect?
(2) Whether the demands raised under the above Enactment, Rules, Regulations and Notifications un constitutional?
(3) Whether the plaintiff is entitled of the refund of the amount already paid to the Excise & Taxation Department, Government of Sindh?
(4) What should the judgment and decree be?
19. All the counsels also agreed that, above legal issues could be heard and decided on the basis of material available on record and no evidence is required to be led by any of the party.
20. Accordingly, all the cases were heard extensively at great length.
21. Dr. Farough Naseem led the arguments on behalf of the plaintiff's counsel, it was inter alia, urged that under Part V of the Constitution of the Islamic Republic of Pakistan, 1973 legislative competence of the. Federation and Province have been outlined in respect of the various subjects.
22. According to him, the "infrastructure fee" now termed as cess', in fact is a custom duty and or import/export tax, which is within the legislative competence of the Federal Legislative list cover the subject. Secondly, that Inter Provincial Trade in terms of Article 151 of the Constitution, 1973 is 'Free'.
23. Impugned levy negate such freedom, was successfully challenged in M/s. Rahim & Sons case (supra). Judgment has attained finality. No appeal was filed. According to Dr. Farough, under the new legislative measure 'fee' has been substituted by 'cess'. He therefore, contended that, by whatever name such levy is called, it remain beyond the legislative competence of the Province. As authority to levy a cess as per entry No. 54 enumerated in the ^th Schedule include levy of fee mere re-enactment of the same legislation with minor modifications will not validate something, which suffers from inherent lack of legislative competence, in support he has relied on Mirpurkhas Sugar Mills Limited Vs. District Council, Tharparkar through Chairman and 3 others (1991 MLD 715
(722) Molesses Trading & Export (Pvt.} Vs. Federation of Pakistan (1993 SCMR 1905 (1920).
24. According to him, there is no change in the charging section impugned levy, does not withstand the test laid down in the Constitution as well as law expounded by the Courts of law.
25. Mr. Munib Akhtar, appearing in another set of similar cases, while adopting the arguments of Dr. Farough Naseem, outlined the legislative competence of Federal and Provincial Assembly under the legislative list. According to him, when 'subject' is not enumerated in the Federal or concurrent Legislative list it is only then, a Province could invoke residuary power to legislate. He relied on Ellahi Cotton Mills Ltd. Vs. Federation of Pakistan (PLD 1997 S.C. 582) at page 622-624). To augment his arguments as to the basic principal of taxing statute he relies on Government of Pakistan Vs. Hashwani Hotel Ltd. (PLD 1990 S.C. 68) (page 74-75). He took me through the impugned enactment from the date of promulgation (i.e. 17th July, 1994) and all four amendments made upto date (i.e. 15th May, 2001). Whereunder, impugned levy was imposed and had undergone transformation from fee to cess. According to him, transformation of 'Fee' into cess does not change the incident of charging section, even in the third version of enactment basic element, as to the liability and the burden was not fixed. He urged that, successive amendment did not remove the inherent defect, it was urged that impugned legislation is incolourable exercise of legislative power, which-are, otherwise, not possessed by the Provincial Legislator. He contended that similar question arose while interpreting Rawangi Mahsool or export taxes, said provisions were struck down in cases reported as Kotri Association of Trade and Industry Vs. Government of Sindh (1982 CLC 1252), Mirpurkhas Sugar Mills Ltd. Vs. District Council, Tharparkar (1990 MLD 317) and Sayphir Textile Mills Ltd. Vs. Government of Sindh (PLD 1990 Karachi 412). He urged that impugned levy is against the guaranteed Free Inter-Provincial Trade, in term of Article 151 of the Constitution same could be struck down on such score above, reliance was laid on Mirpurkhas Sugar Mills Ltd. Vs. Distt. Council, Tharparkar (1991 MLD 715). He also objected to the validation clause and so also the ouster of jurisdiction clause, it was urged despite ouster clause this Court is within its jurisdiction to examine the vires of the legislator, in support he relies on Megh Raj and. Others Vs. Allah Rakhia and others (AIR 1942 F.C. 27 (32). Mr. Munib Akhtar, without conceding to the validity of such infrastructure fee made alternative arguments based on the stand taken by the defendant in the written statement that "the levy is imposed on goods which cease to be imported goods or have not yet become exported goods and when they become or still remain an "integral mass" the local goods", it was therefore, contended by Mr. Munib, in a situation, it was therefore, urged, when there remains no distinction between two type of goods then such levy is hit by Article 25 of the Constitution. As it is not based on intelligible classification, thus liable to be declared as void ah initio in terms of the dicta laid down in I.A. Sharwani and others Vs. Government of Pakistan through Secretary, Finance Division, Islamabad and others (1991 SGMR 1041 (1086). t Mr. Munib, further contended that, impugned legislation is nothing, but, colourable legislation, the Provincial legislation had no authority over the subject, . In the garb of residuary authority such legislation cannot be sustained to support he relied upon Federation of Pakistan Vs. Shaukat Mian (PLD. 1999 S.C. 1026 (1056).
26. Ms. Sana Minhas, appearing in another bunch of cases supplemented the arguments of Dr. Farough Naseem and Mr. Munib Akhtar, she inter alia, contended impugned legislation is hit by (i) Doctrine of occupied field (ii) No resources of the Province are being availed, (i.e) it is prospective legislation, (iv) Any amendment made in the Legislation declared void ab initio, ipso facto is also void.
27. Elaborating her first ground of attack regarding "Doctrine of occupied field" Ms. Sana contended that Provincial Legislature could only embark upon a subject in terms of Article 142(c) only in cases where the Federal Legislature in terms of Article 142(a) had no authority to legislated on the subject and secondly, and alternately it was urged that such legislation could only be permitted had the Federation, earlier not legislated on the subject, it was urged that, impugned legislation in fact is an attempt to take place of Import and Export Control Order, 1950 and Import Fee Rules, 1993 (1993 PTCL (ST) 1108), that are in field. She further cited National Highway Authority Act, 1991 (PLD 1991 (CS)
28. 386 and Territorial Water and Maritime Zones Act, 1976 (PLD 1977 (CS) 37), such Acts, according to her were already in field therefore, no room was left for impugned legislation. According to her, since there are already legislation on the subject field was occupied. No parallel legislation either by Federal or Provincial legislator could be promulgated. According to her doctrine of occupied field is protracted under Article 143 of the Constitution of Pakistan, 1973. It was urged that the test prescribed for such doctrine is fully applicable on the present case, in support of her first contention she has relied on "Interpretation of Statute" by N.S. Bindra (9th Edition! Pages 1225-1226.
29. Fundamental Law of Pakistan by A.K. Brohi [1958] pages 249-255. Constitution of the Islamic Republic of Pakistan, 1973 by Justice Muhammad Munir [Vol. 1] pages 892, 693, 697-702.
30. Constitution of India - An Analytical Approach. By H.K. Saharay [2nd Edition] pages 595.
31. 'Vol.IX Quetta Textile Mills Ltd. V. Province of Sindh C.L. 4 ?9 {Mushir Alam, J.i in support of her second contention, it was primarily urged that impugned levy it not a tt x, it is imposed on use of infrastructure of the Province is being used. Extending her argument on same score, it was contended that, amount of levy is in excess of service rendered. There is no quid pro qua.
32. To argument of her second ground of attack she contends, that such charge or levy otherwise, are discriminatory and not justifiable. To elaborate, she suggested a situation, where two trucks of steel proceeded from Lahore to Karachi. One enters the KPT gate and other, the Shipyard gate, both traveled the same distance, used same infrastructure, one entering the gate of KPT is to be charged, while the other truck entering the shipyard for the local consumption, is not charged with impugned levy, is nothing but discriminatory. Her arguments are more in line with the arguments of Mr. Munib Akhtar, challenging impugned levy on the ground of discrimination. She next contended impugned levy is not based on rational yardstick. She explained her arguments by illustrating that, if a person carries or precious stone or metal enters through designated route by air and leaves for other province, then for such entry or ext from the Province as well outside Pakistan by air will not involve use infrastructure of the Province. Same is the position in respect of the goods that are carried across the border by Railway, Highway or through Water, all such channel of communication/transportation are regulated under the respective enactment by the Federal Government. To further expound her arguments she points out Highways are regulated under the National Highway Authority Act, 1.991.
33. Water Navigation is regulated under the "Territorial Water Zone Act, 1997' the Railway, under the Railway Act. According to her all above infrastructure are regulated under the Federal Legislation. According to her, any attempt by the Province to enter into the field of the Federal Government is beyond its legislative competence as the field is already occupied.
34. As regard the 3rd ground, according to her, last manifestations of the impugned levy (i.e. Fourth version) came into effect from 24.2.2001. According to her, in view of dicta laid down in Molasses Trading & Export (Pvt.) Limited Vs. Federation of Pakistan and others (1993 SCMR 1905 (1923) such levy could only be prospective, therefore, it cannot be levied with retrospective effect.
35. Last ground of her attack was that, the impugned levy was declared to be void ab initio. No validation could be given to the levy which has been declared void ab initio and not merely void.
36. She had drawn distinction between void and void ab initio legislation. She urged that legislation could be void for number of reasons unless, hurdle is removed it cannot be re-enacted. Once legislation is declared void ab initio no degree of amendment could validate it. In support of her contention, reliance was placed on .The Province of East Pakistan and The Secretary, Finance and Revenue (Revenue) Department, East Pakistan, Dacca Vs. MD. Mehdi AH Khan and others (PLD 1959 S.C. 387 (412 and 446) Saiyyid Abul A '1a Maudoodi Vs. The Government of West Pakistan and others (PLD 1964 S.C. 673 (735ff 785jjj), Shukar Din (Naik No. 411) and others Vs. Major Abaidur Rehman's Second-in- Command and M.I.C., Sutlej Rangers and others (PLD 1965 Lahore 522 (para 527), Haji Ghulam Rasool and others Vs. The Chief Administrator of Auqaf, West Pakistan (PLD 1971 Lahore 376 (380 para 11).
37. Mr. Abdul Ghafoor Mangi supplemented by contending that impugned levy amounts to double taxation which is violative ot Constitutional protection.
38. All the other counsels for the plaintiffs adopted the arguments of M/s. Dr. Farough Naseem, Munib Akhter and Ms. Sana Minhas.
39. Mr. Rasheed A. Akhund learned counsel for the defendant, Province of Sindh, at the very outset objected to large number of suits i.e. Suits Nos. 445/2001, 289/2001, 291/2001, 294/2001, 346/2001, 356/2001, 357/2001, 353/2001, 362/2001, 420/2001, 421/2001, 422/2001, 669/2001, 621/2001 and 291/2001, on the ground inter alia, that same have been filed by unauthorized person. Suits filed by the corporate bodies are without Board Resolution, in suit filed by Partnership Firms, no registration certificates in terms of Section 69 of the Partnership Act have been filed. All suits suffering from such infirmities, according to him, are to be returned to the plaintiffs to be submitted again after curing the defect, in all such suits, defendant has already filed applications under Section 151, C.P.C, raising such objection. Secondly Mr. Rasheed A. Akhund contends that, (i) No cause of action is disclosed against the impugned levy, (ii) Present suits are, nothing, but academic exercise. He also urged that, many plaintiffs who have earlier filed writ petitions have withdrawn the same, without permission to file fresh proceeding, which according to him cannot be allowed in view of the dicta, laid down in Pir Sabir Shah Vs. Shad Muhammad Khan, Member, Provincial Assembly, N.W.F.P, and another (PLD 1995 S.C. 66 (230). However, such ground of attack was not pressed. Mr. Akhund did not pressed other preliminary objections as were raised in written statements. He conceded that vires of legislation could be challenged through suits.
40. Therefore, I will not advert to objections as raised in written statement. He further urged that, the entries in the 4th Schedule of the Constitution relied upon by the plaintiffs be not at all attracted in the instant case. According to him, subject of impugned legislation is not covered by any item either on Federal or Concurrent Legislative List. He referred to Entries Nos. 24, 27, 43 and 54 relied upon by the plaintiff. He added Entry No. 53 is also relevant. He urged "that carriage of goods by road" do not find mention in any of the entry in the 4th' Schedule. He therefore, contended that even Octroi a local tax, did not find mention in any of the legislative list was competently levied by the Provincial Legislature.
41. He contended that, the question as urged in the instant suits were neither raised nor, decided in earlier suits. He maintained that, authority or legislative competence to impose levy, on the carriage of goods, by road, through legislative enactment is by implication and in exercise of residuary power available to the Province.
42. Responding to the arguments advanced by Dr. Farough Naseem that, no restriction could be imposed on the movement of goods as it is violative of Article 151 of the Constitution, in term whereof, Free movement of goods inter se Province is guaranteed. Mr. Akhund contended that free movement does not main free for ail intent and purpose "Free" in terms of Article 151, means that there should be no physical restrain. Mr. Akhund, otherwise argued that restrain could be imposed in public interest. Imposition of any tax, according to him, does not impair the very movement of goods. Impugned Legislation is regulatory and compensatory. Article 151 of Constitution of Islamic Republic of Pakistan is in pari-materia with Articles 301 to 307 of the Indian Constitution. The cases from Indian jurisdiction having persuasive value are relevant. Mr. Akhund urged no restriction on the movement of the goods either, for bringing or takings out have been imposed. He distinguished the cases of Katori Association of Trade & Industry Vs. Government of Sindh (1982 CLC 1252) and Mirpurkhas Sugar Mills (1991 MLD 715) (supra) cases relied upon by the plaintiff.
43. As to attack on the ground of discrimination, Mr. Akhund, contended there is no discrimination, impugned levy is imposed on movement of all goods, either originating from outside or within the Province of Sindh, imposition is levied indiscriminately on carriage and movement of such goods.
44. Rebutting argument as to occupied field, Mr. Akhund, urged impugned legislation has in fact filled the void. According to him, there is no Federal law on the subject, covered by impugned legislation.
45. Mr. Akhund attempted to distinguish the purport of various Federal laws referred to by Ms. Sana, as occupying the field. He cited Import of Goods (Development Surcharge) Ordinance, 1984 (PLD 1984 (Central Statute) 77). Whereby the development surcharge on certain goods, imported through Karachi Custom Port, was imposed to reimburse KPT under Section 2 thereof for the cost of such bridge.
46. Mr. Akhund pointed out that, Entry No. 27, in the Federal Legislative List, is not at all attracted.
47. Impugned levy is neither, on import nor on export. According to him, incident of impugned levy is on carriage or movement of goods only. He stressed that the impugned levy is neither, Custom Duty nor, the Import and Export Duty. According to him, entries in the legislative list are to be given wider and liberal constructions.
48. Mr. Rasheed Akhund on merits contended that taxing incident is Sovereign Act. To exercise such Sovereign authority no reason are to be assigned for imposing such levy. According to him, taxing event in impugned levy is for the carriage of goods by road and for smooth and safer movement in the Province, such levy, according to him, is on the goods that, enter or, leave the Province from or for outside the country through air or sea. Mr. Akhund argued that the impugned levy is not retained either by Federal Legislative list or Provincial Legislative list, therefore, in terms of Article 142(c) of the Constitution, 1973, impugned legislation is within the domain of Provincial legislation. He further points out in terms of Article 161 of Constitution natural resources of a Province are exploited by the Federation in respect of Gas & Electricity Generation but benefit is passed on to the respective Province. According to him, Province of Sindh has been bestowed with natural resource in the form of Seaport and International Airport. There is no restriction in the Constitution that may forbid Province to exploit such port to meet its financial contingencies and to generate much needed revenue for the requirement of Provincial infrastructure. According to him, Constitution is to be interpreted as a living organism and the exigencies of the situation demand dynamic treatment and interpretation of Constitutional provision. Any narrow approach may degenerate the very purpose of Provincial autonomy, which a Province is entitled to exercise. New taxes are to be imagined to meet the present and future resource requirement.
49. Replying to arguments of Ms. Sana, that there is no quid pro qua and non-use of Provincial resource. He contends that for safe movement of goods innumerable resources of Province used, it is not always possible that only Highway are used, all connecting streets, culverts, street lights and other infrastructure enumerated in th|B explanation to Section 9 are extensively used. To maintain such infrastructure resources are needed.
50. As to double taxation, Mr. Akhund claims that no taxation had been levied on movement of goods through any other prior enactment therefore, question of double taxation does not arises.
51. Responding to challenge pitched on the ground of void and void ab initio, it was contended that, by virtue of deeming clause such defect was removed. He otherwise, contends that infirmities in earlier enactment as were subject-matter of the previous suit were effectively removed. Taxing event is on "the movement of goods" by road and "on safer movement in the Province" upon entering or leaving the Province in support of his contention he has relied upon Kotri Association of Trade and Industry Vs. Government of Sindh and another (1982 CLC 1252 (1272 and 1273), Mirpurkhas Sugar Mills Ltd. Vs. District Council, Tharparkar and 2 others (1990 MLD 317 (321), Mirpurkhas Sugar Mills Limited Vs. District Council, Tharparkar through Chairman and 3 others (1991 MLD 715), G.K. Krishnan etc. Vs. State of Tamil Nadu and another etc. (1975 AIR S.C. 583), M/s. International Tourist Corporation, etc. Etc. Vs. State of Haryana, etc. Etc. (1981 AIR S.C. 774).
52. Manmohan Viq and others Vs. The State of Haryana and others (AIR 1981 S.C. 1035), M/s. Video Electronics Pvt. Ltd. And another Vs. State of Punjab and another (1990 AIR S.C. 820), Amrit Banaspati Co. Ltd. Vs. Union of India and others (AIR 1995 S.C. 1340), Nawabzada Muhammad Shah Khan through his'attorney Haji Sharfuddin Khan Vs. Federal Land Commission, Islamabad and 6 others (1991 SCMR 732), Mian Muhammad Nawaz Sharif Vs. President of Pakistan and others (PLD 1993 S.C. 473 (601), Pir Sabir Shah Vs. Shad Muhammad Khan, Member Provincial Assembly, N.W.F.P, and another (PLD 1995 S.C. 66 (192-225).
53. Mr. Akhund, therefore, urged that issue framed is to be answered in favour of defendant, suits are liable to be dismissed with cost.
54. Exercising right of rebuttal on the preliminary objections raised by Mr. Rasheed A. Akhund, it was contended by Mr. Munib Akhtar that the contentions that where either the seaport or airport or for that matter custom frontier end the Province begins is against the very concept of the Constitution and Federal integrity of Pakistan. He urged that KPT well as Airport are within the geographical limits of the Province of Sindh, it cannot be exploited for the Province of Sindh such concept are in negation of Article 252. He urged that the collection of tax is matter of convenience of the State agency. He relied on in the matter of the Central Provinces and Bearer Sales of Motor Spirit and Lubricants Taxation Act, 1938 (AIR 1939 F.C. 1). He illustrated his argument by saying that the employer at source could deduct income tax of employee. He illustrated that in recent part income tax was collected by adding the same in the electricity bill. He distinguish the lew of octroi as for levy of the octroi, point of entry was irrelevant, whereas, in the instant case entry or exit of the goods for and from the Province is relevant. He urged that the goods either imported or taken out are not from the Province but from the Pakistan, therefore, such classification is merely illuscrv. He reiterated that impugned levy is within the exclusive domain of the Federation in terms of entry 27 of the Fourth Schedule. With reference to Article 151, it was urged that, the quantum and miniscule amount is not a relevant consideration, Free Trade and commerce and Provincial Intercourse are but a Constitutional mandate and cannot be impaired by imposing such levy. Regarding challenge to cause of action by Mr. Akhund, he urged that, any levy that effects any person give cause of action. As regard authorization and competency of suits. He urged that, large number of cases have been filed. Issues were settled. No such objection was raised, therefore, it matter little even if some case suffers some defect. Fact remains that other cases are there and decision even in one case will be of same consequence.
55. The plaintiffs and defendants extensively argued case. Since issue involved related to the legislative competence of Provincial Legislature, it was all along vehemently contended that the Province had encroached upon the jurisdiction of Federation Notices to Attorney-General were repeatedly issued, Syed Zaki Muhammad, appeared on behalf of Attorney-General for Pakistan. On instruction made a statement at bar that, Federation leaves the matter to the Court for decision. He was requested to assist the Court on the issues but, strangely he chose to keep away. Such conduct of learned DAG was indeed not befitting his1 office. As a Law Officer it was his duty to assist the Court on the issue of vital importance, in which duty, I regretfully record he failed.
56. ISSUE NO. 1: When vires of any statute is challenged, strong presumption as to legislative competence and validity of statute is always attached. Burden is on the person, challenging the vires of any statue to show that, the impugned statute is beyond the legislative competence or, is in violation of any Constitutional Provision or guarantee or, in negation of rights guaranteed under the Constitution.
57. [See Shrin Munir v. Government of Punjab (PLD 1990 SC 295), Amrit Banaspati Co. Ltd. v. Union of India (AIR 1995 SC 1340)].
58. To appreciate contentions of both the learned counsels, it will be beneficial to understand the Constitutional scheme, defining domain, distribution of legislative authority and jurisdiction of the Federal and Provincial Legislature, over the subject-matter, fields, topics or the activities, which fall under their respective legislative competence, limitations and the territorial bounds of application of. Laws framed by them.
59. Government of India Act; 1935, provided for, threefold distribution of legislative power between the Federation (Union) and Federating Units (States) i.e. Provinces, which scheme has been retained in the Constitution of India as adopted in 1949. First Constitution of Pakistan, 1956 had three fold distribution, in 1962 Constitution reverted to one legislative list only, under present 1973 Constitutional Scheme, we have two-fold distribution of Legislative power between the Federations and the Provinces.
60. Dispensation of Legislative authority between the Federation and the Provinces, in 1973 Constitution, is conceded through the Federal and Concurrent Legislative List. Both the Lists are appended to the Fourth Schedule of the Constitution (Article 70(4)). Enumerated entries, in both the lists are not to be mistaken for the power of legislation but he subject- matter, topic or nature of activities on which respective legislature can frame laws, enforceable and applicable within their respective territorial bounds.
61. Part V of the Constitution of Pakistan, 1973 deals with dispensation of Legislative authority. Power and manner to legislate, in terms of Article 142 is conferred, subject to the Constitution, on the Federal as well as Provincial Legislature. Both the Legislatures, exercises jurisdiction and authority to legislate on the subject- matters, fields, topics, or activities allocated to them, as per two written Legislative Lists, as mentioned above and one unwritten list in Constitutional parlance called Residuary List, which embraces all the subject-matter, fields, topics and activities that fall out of both, the Federal and Concurrent Legislative List. For the purpose of present controversy, Article 142 of the Constitution is relevant. For the benefit of appreciation it is reproduced as follows:--
142. Subject-matter of Federal and Provincial laws. - - Subject to the Constitution: -
(a) Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to any matter in the Federal Legislative List.
(b) Majlis-e-Shoora (Parliament) and a Provincial Assembly also, shall have power to make laws with respect to any matter in the Concurrent Legislative List.
(c) A Provincial Assembly shall and Majlis-e- Shoora, (Parliament) shall not have power to make laws with respect to any matter not enumerated in either the Federal Legislative "List or the Concurrent Legislative List; and
(d) Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to matters not enumerated in either of the List for such areas in the Federation as are not included in any Province.
62. Above Article, lays down clear-cut parameters for the Federal and Provincial Legislature to exercise their respective exclusive, as well as, concurrent domain over the subject-matter, topics and activities as well as the territorial boundaries, over which, laws framed and or legislated by them may have applicability.
63. Federal Legislature / e. Parliament is authorised to legislate exclusively or subject-matters, topics and activities enumerated in the two Part, Federal Legislative List and matters incidental or ancillary thereto, in all, there are 59 Entries in Part 1 and 2 Entries in the Part II. Federal Legislature, in Pakistan enjoys exclusive legislative domain over the subject- matter, topics and activities not enumerated in either of the two Lis*8 but, only to the extend and within trie confines of Federally Administered Areas only (see also Muhammad Shafi v. Wealth Tax Officer (PLD 1989 Kar. 15).
64. The Provincial Legislature enjoys exclusive Legislative authority over the subject-matter, topics, and activities not enumerated in either of the two Legislative Lists. (See also Pakistan Floor Mills Association v. Government of Sindh (S3LR 2002 S.C. 183, 2003 SGMR 162 at page 172, 2003 PSCC
(Pak) 314). It may not be out of place to mention that, despite all care and caution taken by the framers of the Constitution of 1973, Entries in both the Federal and the Concurrent Legislative List, appended to the Fourth Schedule of the Constitution are not exhaustive. Diversity of topics and theme that could be focus of legislation may be gauged' from the fact that, in Indian Constitution, such legislative subject-matter, fields, topics and activities are enumerated in three comprehensive and independent Legislative Lists i.e. List No. 1 or Union List (equivalent to Federa1 Legislative List), it carries 97 entries. List No. II or State List (equivalent to Provincial Legislative List), it holds 66 entries, and List No. Ill or Concurrent List embraces 47 entries. Despite such comprehensive list, the Hemachal Pradesh Assembly (Constitution & Proceedings) Validation Act, 1958 (Jadab v.
65. H.P. Administration (1960) 3 S.C.R. 755, the Gift Tax Act (Second G.T.O. v. Hazareth (AIR 1970 S.C. 999), the Commission of Inquiry Act, 1952 (Karnataka State v. Union of India (AIR 1978 SAC 68) are but some of the subjects and topics, over which the Union of India, exercised its residuary authority and jurisdiction as conferred under Article 248 of the Indian Constitution. Even in Pakistan, Agricultural Produce Act, 1939 (SBLR 2002 SC 183) was framed under residuary authority by the Province of Sindh.
66. It will be paradoxical to presume that, a particular subject-matter, topic or activity is not covered by any Entry in either of the Legislative Lists or that the Legislature is bereft to legislative competency or deprived of legislative authority on left over subject- matter, field, topic or activity.
67. To legislate is ionerent right of any independent State. Without such authority, a Sate cannot meet and address its day-to-day exigency or situation that need to be addressed, regulated, managed and or controlled. To tackle such contingency, Article 142(c) and Article 142(d) confers exclusive Residuary Jurisdiction and Authority on the Provincial Legislature and Federal Legislature respectively, over and within their respective territorial confines. Diversified subject-matters, topics or activities that are not comprehended or covered by any of the Entry in either of the two Legislative Lists, in Constitutional parlance referred to, as Residuary subject-matter, topic and or activity. The jurisdiction or authority so exercised is referred as Residuary Jurisdiction or Authority.
68. Object of conferring residuary jurisdiction and authority on a legislature is purposeful. Otherwise, it is not humanly possible to, comprehend and conceptualize a situation, subject-matters, topic and or activities that may spring out or emerge from ever-changing, vibrant, evolving and progressive society necessitating to be addressed, regulated, controlled and managed through appropriate legislative measure. Such was only possible by conferring residuary jurisdiction on appropriate legislature to meet such challenges or exigencies of the situation and not to allow any void on the legislation.
69. The residuary jurisdiction or authority is to be exercised as a last resort and only when all the Entries in both the Lists are exhausted and the subject-matter of legislation cannot be included, encompassed or comprehended by any of the Entry in either of the two Legislative Lists, Legislative incompetence of the Federal Legislature must be clearly established before Provincial Legislature could claim residuary jurisdiction over any subject-matter, field, topic or activity. (See also Subramaniyan v. Muthuswa mi (AIR 1941 F.C. 47), International Tourist Corpn, v. State of Haryana (AIR 1981 SC 774 para 7). It will be of interest to note that, in the Indian Constitution, Provincial (State)
70. Legislature do not enjoys any residuary jurisdiction, it enjoys exclusive jurisdiction on 61 Entries specifically enumerated in List No. II (State List) in addition to concurrent jurisdiction over 47 subjects enlisted in the List No. Ill, of the Seventh Schedule to the Indian Constitution. Residuary jurisdiction, in the in India is vested in the Union of India.
71. Under Constitution of Pakistan, 1973, matters enlisted in Concurrent Legislative List carrying 47 Entries, both the Legislature enjoys similar, coextensive and equivalent legislative competence, jurisdiction and or authority to frame laws on subjects covered by Concurrent Legislative List (Art. 142(b) of 1973 Constitution.
72. The Federation, exercises jurisdiction and authority to legislate for whole or any part of Pakistan, includes laws having extra territorial operation. As against this, the Provincial Legislature has domain over and within the bounds of the Province. The subject-matter, field, topic or activity on which legislature can embark, must therefore, fall within its respective legislative competence and territorial confine, in case of conflict between the Federal and Provincial Law covered by Entries enumerated in the Concurrent List, to the extent of repugnancy, the Federal Law prevails (Art. 143).
73. Under the scheme of Constitution of Pakistan, 1973, no tax can be levied for the purpose of the Federation, except as authorized by the Act of the parliament and, for the purpose of the Province by or under the authority of Provincial Legislature (Art. 77 read with Art. 129 ibid).-the authority to tax is also confined to subject-matter, fields, topics or activities covered by the Entries allocated to each of the Legislature within their respective domain as defined under Article 142 ibid. Further, in matter relating to Inter-Provincial Trade, authority and jurisdiction of the Federation and Province is further circumscribed by the limitation imposed under Article 1*51 ibid. There is nothing wrong for the Legislature to claim taxing power under residuary authority, provided it is shown that, either Federal Legislative or Concurrent Legislative List does not comprehend subject-matter, topic or the activity taxed. (See International Tourist Corporation v. State of Haryana (AIR 1981 SC 774 para 7).
74. The Courts of law, as living and organic document, have always considered Constitution, it must live and adapt itself to the exigencies of ever' changing, growing, developing and evolving society, in order to preserve the Constitution as an organic, vibrant and living document. Courts have always adopted broad- spectrum, dynamic, progressive and liberal approach. Pedantic, rigid or insular approach will hamper the progress, development and evolution of any society leading to stagnation, chaos, and ultimate collapse of the society. (See also Pakistan Tobacco Co. Ltd. v. Govt, of N.W.F.P. (20O2 PSCC 868).
75. To examine the validity of fiscal statute, on the touchstone of Constitutional provisions, superior Courts have followed and expounded rules of interpretation.
76. In Ellahi Cotton Mills Ltd. (PLD 1997 SC 582) apex Court while examining Sections 80-C, 80 CC and 80-D of the Income Tax Ordinance, 1979 on the touchstone of Legislative Competence of the Federation, at page 622 cited with approval, following passage from Corpus Juris Secundum, Vol. LXXXIV as to power of State to levy tax:-- "Power of taxation rest on necessity, it is an essential and inherent attribute of sovereignty belonging as a matte of right to every independent State or Government.
77. Generally, the power of taxation is as extensive as the range of subjects over which the power of the Government extends. As to such subjects, and except in so far as it is limited or restrained by the Constitutional provisions, a State's power of taxation, if exercised for public purposes, in general, unlimited and absolute extending to all persons, property and business within its jurisdiction."
78. Justice Ajmal Mian, speaking for the full bench, further dilated upon the approach, the Court must adopt, while interpreting the legislative authority outlined in the Constitution Our approach while interpreting the same should be dynamic, progressive, and oriented with the desire to meet the situation, which has arisen effectively. The interpretation cannot be narrow and pedantic but the Court's efforts should be to construe the same broadly, so that it may be able to meet the requirement of ever changing requirement of ever changing society. The general words cannot be construed in isolation but the same are to be construed in the context in which they are employed, in other words their colour and contents are derived from their context."
79. As to the interpretation of the Entries, in the Legislative List, in Para 16 of the above judgment, it was held "The entries contained therein indicate the subjects on whom a particular Legislature is competent but they do not provide any restriction as to the power contained, it can legislate on the subject mentioned in an entry as long as it does not transgress or encroach upon the power of the other Legislature and also does not violate any of the fundamental rights as the legislative power is subject to constraint in the Constitution itself, it is also a well-settled proposition of law that an entry in a Legislative list cannot be construed narrowly or in a pedantic manner but it is to be given liberal construction in this behalf."
80. Rule of Interpretation, as expounded above apply with full force, in relation to residuary subjects.
81. Residuary subjects falling on the lap of the Provincial Legislature are the exclusive territories of the Province. The Federation has no say nor can be allowed to encroach or negate such authority, as it will be against the Provincial Autonomy as endowed in 1973 Constitution.
82. Presumption as to legislative competence and legitimacy of Statute as stated above, is always attached to a statute. However, when the validity of any Statute is questioned, as has been done in the instant case, and two interpretations are possible, one upholding the validity of Statute is always preferred and adopted. All efforts must be directed to save rather than to destroy the law. In event of any ambiguity or doubt as to liability or charging incident the benefit is resolved in favour of the assess (See PLD 1961 SC 119, 1982 CLC 1252, 1989 CLC 1211, PLD 1990 Karachi 342, 1991 SCMR 1041 R, 1999 SCMR 138 F, PLD 2001 SC 499, AIR 1995 SC 1340).
83. In the instant suits, vires of Impugned Statute will be tested, on the strength of (i) Arguments advanced by the learned counsels for the plaintiffs, (ii) The Legislative Authority circumscribed by the Constitution and (i.e) Principals of interpretation of fiscal laws, as enunciated by the superior Courts.
84. To appreciate the arguments, at the cost of repetition main part of the Impugned Statute is reproduced:-- "There shall be levied and collected a Cess for maintenance and development of infrastructure on goods at the rate of 0.5% percent of their value for the carriage by road and smooth and safer movement in the Province upon entering or before leaving the province from or for outside the country, through air or sea, in the manner as may be prescribed."
85. Fiscal statute, generally have certain marked attributes. Firstly, charging incident or event.
86. Charging incident discloses what subject-matter, topic or nature of activity is the target or on what and on whom, such levy is imposed. Secondly, at what point in time, threshold or on happening or doing of what event/activity the levy is clinched, inflicted or imposed. Thirdly, the yardstick or the manner of assessm ent, quantification and calculation of the levy is given. Fourthly, the mechanism and machinery for the collection of levy is provided, in event the levy, is a Fee or Cess imposed for the services rendered than, the purpose or justification for such levy.
87. Of all the said attributes, the charging incident or event is the crux or key of any fiscal statute.
88. Charging incident, in a taxing statute, in fact create the liability to pay the levy. Substance of charging incident helps to classify and determine against which of the Entry in the Legislative List, it can be comprehended or encompassed and which of the two jurisdiction or authority over it.
89. All the plaintiff counsels were unanimous that, charging incident in the Impugned Statute is "upon entering or before leaving the Province from or out side the country, through air or sea". According to them, Entry No. 27 and Entry No. 43, of the Federal Legislative List encompasses purported charging incident. Entry No. 27 reads: "import and export across customs frontiers as defined by the Federal Government, inter-provincial trade and commerce, trade and commerce with the foreign countries, standard of quality of goods to be exported out of Pakistan". Entry No. 43 runs as: "Duties of customs, including export". Ms. Sana further stretched the Impugned Statute into the realm of the Federal Legislature. She urged that, Impugned Statute is covered by various Entries in the Federal Legislative List, falling within the exclusive domain of Federal Legislature. To rebuttess her arguments, she urged that impugned levy relates to goods imported through sea and air.
90. According to her, Entry No. 20, Entry No. 21 and Entry No. 22 cover both the subjects respectively.
91. Entry No. 20 reads as, "Maritime, shipping and navigation, including shipping and navigation on tidal water; Admiralty jurisdiction". Entry No. 21 covers, "Major ports, that is to say the declaration and delimitation of such ports, and constitution and powers of port authorities therein". Entry No. 2 in respect of "Air craft and air navigation, the provisions of aerodromes regulation and organization of air traffic and of aerodromes". She further asserted that, the movement of goods takes place on National Highways; therefore, it is covered by Entry No. 3, which reads "National highways and strategic roads". According to plaintiff's counsels, Impugned Statute, is colourable exerc:se of jurisdiction, by the- Provincial Legislature and is nothing but, encroachment on the Federal territory as all matters referred to, in the impugned Legislation, are covered by separate and distinct Statutes already framed by Federal Legislature and referred to in the narrative above.
92. To further augment above arguments, it was contended that, the yardstick or tariff for imposing such levy is the valuation of the goods imported or meant for export, it was urged that the tariff employed is substance used for the purpose of determining customs duty and or import export tax, it is therefore, nothing but in pith and substance tax on import and exports of goods.
93. Scope and ambit of such Entries with reference to corresponding Legislation covered by such Entries, as relied upon by the plaintiff's counsel will be examined, while dealing with objection to the Impugned Statute on the ground of "Doctrine of Occupied Field".
94. As discussed above, the Entries in the Legislative List are to be liberally interpreted, assigned widest meaning so as to give maximum latitude to any legislature to legislate on all the aspect of the subject- matter, topic or nature of that could be legitimately comprehended by any Entry. Entry No. 59 of the Federal Legislative and Entry No. 47 in the Concurrent Legislative List, are manifestations of such rule of benevolent and generous interpretation. Such Entries gives free hand to both the legislature to frame laws on subject-matters, topic and activities covered by the entries but also on "Matters incidental or ancillary to any matter enumerated in this part/list". (See also PLD 1950 FCT).
95. To ascertain true intent, purpose and spirit of any Statute, it must be read and examined as organic whole, it would be quite erroneous approach to view the Impugned Statute as a bunch or collection of different subjects or words, it is not at all desirable to dissect and disintegrate each part and word of the Statute, any endeavor to bracket them individually, under different head of Legislative Entries, with object to show that, one or the other part of the Impugned Statute is beyond the legislative competence, thus ultra vires the Constitution, cannot be approve. (See Profulla v. Bank of Commerce (AIR 1946 P.C. 60). In suits in hand, it is exactly what the plaintiffs counsels have attempted to do. They have undertaken hair-splitting exercise, tore apart the Impugned Statute, in bits and pieces. They tried to place each bit and piece of the Impugned Statute under one or the other head or Entry in the Federal Legislative List. The object was to foist one or the other part of the Impugned Statute on the Federal Legislature, such approach, being in negation of rules of interpretation, cannot be approved of.
96. In the above-quoted Impugned Statute, the'charging incident or attribute is highlighted in bold italics i.e. "for the carriage by road and smooth and safer movement in the Province". The targets of levy are the goods, which are either meant for export or are imported. Thrash hold or the point in time, when the levy or the charging incident is crystallized, inflicted or imposed is underlined i.e. "upon entering or before leaving the Province from or for outside the country, through air or sea".
97. The yardstick or the parameter for such Levy is in normal type mode i.e. "at the rate of 0.5 percent of their value". Explanation II, to the Impugned Statutory Provision, also elaborates the yardstick. The mechanism and machinery for the recovery is "as prescribes". Rules framed there-under provide for the machinery for recovery and refund thereof. Lastly, impugned levy, being a Cess, purpose and reason for its imposition is it in italic i.e. "for maintenance and development of infrastructure".
98. Reason, is further elaborated in the Explanation No. I. Explanation to a Statutory Provision, is very much part of the Statute, it elaborates, clarify and explains the intent and purpose of any word or phrase used in the provision itself.
99. Explanation No. I to the Impugned Statute elaborates and defined the word "infrastructure" used therein. On examination of 59 Entries, in the Part I and, two Entries in the Part II of the Federal Legislative List, closest to the substance of the charging incident in the Impugned Levy, is Entry No. 24, in Part No. 1 of the Federal Legislative List, it relates to "Carriage of passengers and goods by sea or air". Said Entry was also heavily relied upon by the plaintiffs to argue that, such field is already occupied by the Federal Legislation. Mr. Akhund, rightly pointed out that 'carriage of goods and passengers by road' is conspicuously absent from said Entry No. 24. There is no Entry in the Concurrent Legislative List that may have any nexus with the activity or charging event encompassed by the Impugned Statute, as highlighted above., it is entirely up to the framers of the Constitution i. e. The Parliament to, confer or retrieve legislative competence. Either, by specifically enlisting any subject-matter, topic or nature of activity in any legislative list and or simply by exclusion, enlarging the residuary jurisdiction of the legislature upon whom such jurisdiction is conferred..
100. In order to ascertain the Legislative competence, on the subject-matter of Impugned Statute, Constitutional history of Pakistan was examined to tap the source of legislative authority. The apex Court in the case of Federation of Pakistan v. Muhammad Saifullah Khan (PLD 1989 SC 166) approves such course, in Al-Jehad Trust v. Federation of Pakistan (PLD 1996 SC 324) apex Court while interpreting Constitutional Provision examined previous state of law since inception of Constitutional documents i.e. From Government of India Act, upto the 1973 Constitution.
101. Accordingly, all the Constitutions, right from Government of India Act, 1935 and Constitutions of Pakistan, 1956, 1962 and 1973 as adopted and amended up to date by the Parliament were examined to track down the Legislative authority over the subject- matter of Impugned Statute.
102. In Government of India Act, 1935, Seventh Schedule, carried three Lists (i) List No. 1 Federal Legislative List, it contained 59 Entries, (ii) List No. II - Provincial Legislative List was seized of 54 Entries and (i.e) List No. Ill, Concurrent Legislative List, was in Two Parts. Part I held 25 Entries and Part II stocked II Entries [i.e. From 26 to 36). Residual powers by the Federal and Provincial Legislature were to be exercised on empowerment by the Governor General.
103. In 1956 Constitution, Fifth Schedule carried (i) Federal List, enumerating 30 subjects (ii) Concurrent List split into two parts. Part I retained four Entries, Part II held 15 Entries and (i.e) The Provincial List, contained 94 Entries. Entry No. 82 provided for "Taxes on goods and passengers carried by road or on inland waterways".
104. 1962 Constitution carried only Third Schedule, enlisting 49 Subjects of Central Legislation. Residuary jurisdiction, however, was conferred on the Province.
105. 1973 Constitution, adopted Federal Legislative List and Concurrent Legislative List already detailed above.
106. In all the Constitutions, including Government of India Act, 1935, power to 'levy taxes or dues on goods and passengers by sea or air' was specifically retained by the Federation. Entry No. 26, in Government of India Act. Entry No. 26, in 1956 Constitution. Entry No. 43(g) in 1962. Constitution and Entry NO. 24 in 1973 Constitution.
107. As could be seen, in 1956 Constitution, the subject- matter or topic encompassing "carriage of goods and passenger by road" was in the coffers of the Province. In the Constitution of 1973, Provincial Legislative List was dispensed with. The makers of the 1973 Constitution, in their wisdom, conferred unfettered residuary authority on the Province in respect of subject-matters, topics and activities not comprehended by either of the Legislative List.
108. In the India, subject-matter of the impugned levy is, explicitly mentioned against Entry No. 56 of the Union List or List No. II. Schedule VII of the Indian Constitution. Entry No. 56 reads as "Taxes on Goods and Passengers carried by Road or on inland water way", it falls exclusively within the Legislative domain of a State in India, (equivalent to Province in Pakistan). Indian Supreme Court was confronted with somewhat similar challenge in the case of International Tourist Corporation v.
109. State of Haryana (AIR 1981 SC 774). In said case, various States levied tax on carriage of goods and passengers passing through the legislating State, it was argued that, the resources of legislating State are not used the highways, are the property of the Union and a Federal subject. States have no legislative authority to tax goods or passengers passing through such State, when neither the goods are loaded nor the passengers are picked up from such States. Supreme Court of India, repelling such contention at page 788 in para-8, observed as follows:- "Entry No. 56 of List II refers to taxes on goods and passengers carried by road or on Inland Waterways, and National Waterways, so declared by law made pursuant to Entry No. 23 and Entry No. 24 of List I. While it is to be noticed that Entry Nos. 22, 23, 24, 25 and 29 specify Railways, national Highways, National Waterways and Maritime Shipping Navigation and Airways respectively, Entry 30 which refers carriage of passenger and goods specifies Railways, Sea, Air and National Waterways only but not National Highways.
110. Again Entry 89 which refers to Terminal Taxes on goods or passenger specifies Railways, Sea or Air but not National Highways. The om.Ssion to refer to National Highways in Entry 30 and Entry 89 is of significant and indicate and subject of passenger and goods carried on National Highways is reserved for inclusion in the State List. A consideration of these several Entries apoears to us to make a clear that, taxes on passengers on goods carried on National Highways also falls directly and squarely within and are included in Entry 56 of List II." \ Above view was reaffirmed in Manmohan Vig v. State of Haryana (AIR 1981 SC 1035).
111. As could be seen from the above discussion under the Indian Constitution, the subject "carriage of goods by road" is specifically provided for under State List, against Entry 56, as discussed in the above cases. Under the Pakistan Constitution, 1973, absence of such entry, in either of the Legislative Lists in the Constitution of Pakistan, 1973 by necessary implrcation means that, the Impugned Statute covering subject- matter or topic, "Infrastructure Cess on goods for carriage by road and smooth and safer movement in the Province" squarely is a "Residuary Subject" consequently; it falls on the lap of Provincial Legislature. Therefore, the Provincial Legislature has exclusive domain by virtue of Residuary Authority and jurisdiction to legislate on such subject- matter, topic or activity by virtue of authority conferred by Article 142(c) ibid. Contentions of learned counsels for the plaintiffs that, charging event or incident in all the four versions of the Impugned enactment is "upon goods entering or leaving the Province, from or for outside the country, through air of sea". Contentions, in view of discussion made above, are misconceived. The attribute, as pointed out by the plaintiffs to be the 'charging event' is in fact, the terminus qua, the threshold or the point in time of the activity, at which, the incident of levy is inflicted, imposed or crystallize.
112. Mr. Munib Akhter argued at great length, to highlight the deficiencies in the earlier versions of the impugned levy. What this Court, at the moment is concerned, is the statutes, legality and competence of the impugned legislation as it stand on the date of challenge and to examine whether it is in any manner deficient and does not qualify the legitimacy and competency test as extensively argued.
113. Plaintiffs heavily relied upon the cases, of Kotri Association of Trade and industry (1982 CLC 1252). In said case Octroi Tax and Rawangi Mahsool (Export Tax) was struck down on the ground that Local Council had no authority to impose such' tax without valid sanction, as required under Section 60(1) of the Sindh Councils (Imposition of Taxes) Rules, 1979. The learned Division Bench, at page 1273, however, found that Export tax or Rawangi Mahsool is not violative of Article 151 of 1973 Constitution.
114. In case of Mirpurkas Sugar Mills Limited (1990 MLD 317), challenge was based more on freedom of Inter- Provincial trade in terms of Article 151 rather than, competency to legislate under Article 142.
115. Petition was allowed, for want of Rules. Necessary directions were issued to do the needful.
116. Another case of Mirpurkhas Sugar Mills Limited (1991 MLD 715) turned on the interpretation of Article 151, in such context, Export Tax outside the local limits of the Local Council was held intra-provincial, thus valid. As far as it, pertain to export to other Province, it was ruled to be in negation of Article 151. It may be pointed out that, in said case levy impugned, was 'Export Tax'.
117. In Sapphire Textile Mills Ltd. v. Government of Sindh (PLD 1990 Kar. 402). The Court was confronted with the vires of Rawangi Mahsool (Export Tax) imposed by a Local Council on export of goods from its local limits viz. (a) within the Province i.e. Intraprovince, (b) out of the Province i.e. Inter-Province and, (c) out of Pakistan. On the touchstone of Article 151 and Article 70 read with Entry Nos. 43 and 49 of the Federal Legislative List. The Court concluded that, only the Intra-Province export tax is within the competence of the Province. As far as it relates to inter-province trade, it is hit by Article 151 and export out of Pakistan is hit by Entry Nos. 43 and 49 in the Federal Legislative, which subject, is within the exclusive domain of the Federation.
118. Adverting to other seemingly formidable challenge, as to vires of legislation, thrown by Ms. Sana, premises on the ground inter alia; (a) Doctrine occupied field, (b) Discrimination, hits Impugned Legislation, (c) Absence of quid pro qua, (d) Amendment in legislation void ab initio is also void, in addition, alternately, (e) Impugned legislation is prospectively in nature. Adverting to above challenge serially.
119. Doctrine of "occupied field" was defined in 'NS Bindra's Interpretation of Statute (9th Edition), (a Butterworths publication), by quoting Isaacs, J. In Cycle Engineering Co. v. Cowburn (1926) 27 CLR 466, 488 in the following words, "If however a competent legislature expressly or impliedly evinces it intention to cover the whole field, that is a conclusive test of inconsistency where another legislature assumes to enter to any extent upon the same field". One of the learned jurist of his time A.K. Brohi, in Fundamental Law of Pakistan (1958 Ed.) at page 251, while expounding Art. 110 of the 1956 Constitution (Contemporary to Article 143 of 1973 Constitution) opioed:- "The doctrine of occupied field as an argument is often pressed in the service of a contention that in the cases of clash between a law passed by the Provincial Legislature, which merely incidentally encroaches upon the forbidden federal field, the Provincial Law be not allowed to be treated as valid law since the forbidden field is not vacant but occupied by the pre-existing law. Once again we see that the doctrine of occupied field, like the doctrine of incidental encroachment, is only another way of discovering what is the pith and substance of an impugned Act. The law would be valid if in pith and substance it falls in the Provincial field but incidentally encroaches upon the forbidden field with the limitation that only to the extent of repugnancy those incidental provisions will be knocked out if they come in clash with the previously enacted law which occupies the forbidden field. The Provincial law will however be fully valid if, in relation to the incidental encroachment upon the forbidden field, it could be said that it has only uenched upon the unoccupied portion of that field. This is precisely what Art. 110 of our Constitution says in respect of conflict between the Provincial laws and the Federal or Existing Laws with respect to matters in the Concurrent List. The controlling words in Art. 110 are that the Provincial law will be void but only to the extent of repugnancy. The pith and substance rule helps us to determine the competence of the legislature, but Art. 110 which deals with repugnant laws being void to the extent of repugnancy helps us to determine what portion of the impugned law becomes void when they clash in the occupied field within the forbidden sphere of the Legislature."
120. Justice Muhammad Munir, in his celebrated Commentary on "Constitution of the Islamic Republic of Pakistan", edited by Mian Bashir Ahmed, at page 693 penned his wisdom as:-- . "The questioned law was made by a Provincial Assembly what has again to be determined is whether it is covered by the If Federal List or that part of the concurrent list on which the Parliament has either legislated or which is covered by existing law. In either case, the Provincial law would be invalid. If however, that is not the case, and the subject on which the Province has legislated neither falls in the Federal list nor the occupied part of the concurrent list, it will be valid unless Parliament subsequently legislate a law on that subject the matter falls in the concurrent list."
121. From the above discussion, what could be deduced is that, doctrine of occupied field comes into play when it is shown that, the subject-matter, topic or activity covered by the impugned law is comprehended by any Entry in the Concurrent Legislative List. The Federal Legislature had already legislated and framed the law on the subject-matter or topic covered by the impugned Provincial Legislation, it is than said; the Law framed by the Parliament already occupies the field and there is no room or space left for the Provincial Legislator to enter. Even, if the field is not occupied, and Provincial Legislature first ventures to legislate, on such unoccupied terrain than also, the Federal Legislation, being by the dominion Legislature, push aside the Provincial Law of the extent ,+ is in conflict with the Federal Law. In such a situation, it could be said that doctrine of repugnancy comes into play and not the doctrine of occupied field. Provincial law on the subject or topic covered by the Concurrent Legislative List always remains subservient to the Federal law irrespective, whether it precedes or succeeds the Federal law. In case, any Provincial Law on matter covered by any Entry in the Concurrent Legislative List overlaps any Federal Law, than, to the extent of contradiction, if, any the Provincial Statute gives way and yield to the provisions of Federal Statute. Such universal rule of propriety and supremacy of Federal Law is enshrined in Article 143 ibid. To knockout a Provincial Statute at the anvil of Doctrine of Occupied Field, it is to be shown that (a) the Impugned Statute is covered by any Entry, in the Concurrent Legislative List, (b) Both the Provincial and Federal Legislature are competent to legislate on the subject (c) Provincial Statute in pith and substance is compatible or in parimateria (on same subject) with the Federal Statute and
(d) The Provincial Law is subsequent to the Federal law.
122. Contention of the plaintiffs counsels that, various Federal Statutes were already in the field, when the Impugned Statute was promulgated. The field was already occupied; therefore, there was no room for the Impugn Provincial Legislation. According to Mr. Akhund, the test to adjudge that, doctrine of Occupied Field applies, pith and substance of rival statute is to be seen. As opined above, the Statute must be examined objectively as a whole, to ascertain its pith and substance and discover its true intent and purpose. Preamble serves as a guiding tool to unfold the true intent and purpose of a statute, it is in fact umbrella of a Statute, which displays what subject-matter, topic or activity is covered and what is the intent and purpose of the Statute.
123. In order to ascertain to what extent, if any, Federal Law/s occupies the field. Whether such Federal Law/s in fact encompasses the subject-matter, topic or activity traded by the Impugned Statute or that, the Impugned Statute in any manner overlaps the Federal Law/s as argued by the plaintiffs.
124. To analyze such objection various Entries in the Federal Legislative List together with corresponding laws as relied by the learned counsels for the plaintiffs were examined.
125. Entry No. 20, is occupied by "Territorial Waters and Maritime Zones Act, 1976". Preamble of the Act 6f 1976, shows that, it provides for the declaration of the territorial waters and maritime zones of Pakistan and for matters connected therewith, it has no nexus with the carriage of goods even by sea.
126. Karachi Port Act, 1886, covered by Entry No. 21, deals with vesting of the Port of Karachi, in a trust and to provide for the management of the affairs of the Port by the trustees appointed under the Act. In terms of Sections 43 and 43-A of the Act, the Board is empowered to levy tolls, dues, rates and charges for the use of its facilities. Such levy though is imposed on the goods that are being imported or exported and in the course of such exercise; the facilities of the Port are availed. Such levy is not to be equated or construed as Customs duty or Import or export duty.
127. Pakistan Civil Aviation Authority Ordinance, 1982, Covered by Entry No. 22, envisages to, establish Civil Aviation Authority (CAE), in order to provide for the promotion and regulation of civil aviation activities and to develop an infrastructure for safe, efficient, adequate economical and properly coordinated civil air transport service in Pakistan. Under Section 16(3), CAA is empowered to levy and collect charges and fee for commercial exploitation of its properties including land and aircraft's. Imports and Exports (Control) Act, 1950 as per Preamble, was enforced to confer power on the Federation to prohibit, restrict or otherwise control imports into and exports from Pakistan through licensing system. Entry No. 27 covers the subject, it may not be out of place of observe that, "Import and Export per se does not fall under Entry No. 27, but it is "Import and Export across Custom frontiers as defined by the Federal Government". Inter-District or Inter- Provincial transport of goods cannot be equated with the import or export across Customs frontiers of the country, in the case of Kotri Association of Trade and Industry (1982 CLC 1252 at page 1273 g), imposition of export tax from one district to another, but within the same Province was held to be a provincial subject. It was followed in Sayphire Textile Mills Ltd. v. Government of Sindh (PLD 1990 Kar. 402 at pages 409 I & J) so also in Mirpurkhas Sugar Mills (1991 MLD 715 at page 721 F).
128. Customs Act, 1969 falls under Entry No. 43. It tends to deal with matters relating to the levy and collection of customs duties and to provide for other allied matters. One of the prime object of the Customs Act, is to check and curb the smuggling, in addition, it is a major source of State revenue.
129. The charging incident or provision is indicated in Section 18 i.e. "on goods imported or exported from Pakistan". Custom duty is imposed before the goods cross Customs frontiers as defined by the Federation of Pakistan. Whereas infrastructure Cess is levied on goods before it leaves the boundaries of the Province of Sindh and at the same crosses the Customs Frontiers and on good, which are imported through designated ports and are carried by road to any destination through Province of Sindh.
130. National Highways Authority Act, 1991 established, National Highways Authority (NHA), for planning.
131. Development, operation and maintenance of National Highways and strategic roads and matters connected therewith. To meet its resource requirement, the NHA, in terms of Section 10(vii) and (viii) is conferred power to levy and collect tolls on National Highways, strategic roads, and bridges under it domain, and to collect license fee on roads under ifs control. The subject is envisaged under Entry No. 34. It is pertinent to note that in terms of Article 149(3) the Provincial Government, if so directed by Federation, is obliged to construct and maintain means of communication that may be declared to be of national or strategic importance.
132. Federal Statutes were examined to ascertain to what extent such statutes cover the subject- matter of Impugn Statute. On examination, as above, one can safely concluded that, the subject- matter, topic or activity covered by the Impugned Statute i.e. 'Infrastructure Fee' on "the carriage of goods by road" is neither comprehended by any Entry in the Federal Legislative List nor, it overlaps any of the Federal Statute. "Carriage of Goods by Road", as discussed above is conspicuously excluded from Entry No. 24 in the Federal Legislative List. Legislative incompetence of the Federal Legislature is established, therefore, by necessary implication, it is. But a residuary subject. There remains no doubt that, it falls exclusively within the Legislative Competence of the Provincial Legislature.
133. It may be observed that, imposing levy for the services rendered or for maintenance of infrastructure is not some thing that is alien to law. Fees, charges and levies have been imposed and collected. Under the Federal Statutes, Karachi Port Trust Act, 1886, Pakistan Civil Authority Ordinance, 1892 and National Highways Authority Act, 1991, powers are confers on the designated authority to levy and collect charges and fee for the use, maintenance, sustenance and development of its property and infrastructure. The Federal Government imposed even development surcharge on certain goods imported through Karachi Customs Post, to reimburse the Karachi Port Trust for the construction of bridge. (See "Import of Goods (Development Surcharge) Ordinance, 1984 (reported in PLD 1984 Central Statute 77). Even under the West Pakistan Tolls on Roads and Bridges Ordinance, 1962 (PLD 1962 W.P. Statute 276), Provincial Government is authorized to collect tolls on the roads and bridges constructed by it.
134. Supreme Court in Shahtaj Sugar Mills Ltd. v. Province of Punjab (1998 SCMR 2492) had occasion to examine the "Sugar Cane Development Cess" levied under Section 12 of West Pakistan Finance Act, 1962 on Sugar Cane crashed by Sugar Mills. The Act was amended by Act III of 68, adding following sub-section
(4) : "Amendment of Section 12 of W.P. Act XXXIV of 1964. - in Section 12 of the West Pakistan Finance Act, 1964 (XXXIV of 1962), for subsection (4) the following sub-section shall be substituted, namely:
(4) The proceeds of the cess shall be utilized for-
(i) Special maintenance and development of roads and bridges and special plant protection services in the area comprising the Mill Zones;
(ii) Maintenance and development of the such roads and bridges outside the Mill Zones, as in the opinion of Government, are primarily used for sugarcane traffic; and (i.e) Other activities directed towards the development of sugarcane production."
135. Rate of such Cess was revised from time to time, last amendment made in 1983, brought the said Act, for consideration before the Honourable Supreme Court, Apex Court while disapproving the case of Haji Multan Zareen (PLD 1980 Pesh. 137) at page 2501, observed as follows:- "It may be seen that West Pakistan Sugarcane Control Act is Undisputedly a Provincial legislation promulgated for regulating purchase of sugarcane by sugar manufacturing factories/mills within respective Province. The control and management of Sugarcane 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 sugarcane or promotion of its industry. The objection raised by learned counsel for petitioners is clearly misconceived. Since Sugarcane 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 sugarcane production. Therefore, we feel inclined to hold that Provincial Legislative Authority was empowered and enjoyed 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 no 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."
136. I have examined Federal Statutes relied upon by the plaintiffs counsels with reference to the Legislative Entries, it can safely be concluded that (i) Firstly, subject-matter of the impugned statute "Carriage of goods by Road" is not envisaged by any Entry in either of the two Legislative List, (ii) Impugned Statute levying 'infrastructure Cess' on "carriage of goods by roads" is not overlapsed by any of the Federal Statutes, neither the imposition is novel nor alien to the legislature, thus not hit by doctrine of occupied field.
137. Adverting to objections as to discrimination rose by Mr. Munib Akhter, on different score. He had drawn support for his arguments from para 3(b) and (c) of the written statement filed by the Province of Sindh, as already reproduced in the narrative above. According to him, classification is to be pleaded and not implied. He relied upon LA. Sherwani case (1991 SCMR 1041). Mr. Munib urged that, the goods on which the levy is imposed are clearly indistinguishable, as goods once entering into the Province of Sindh, are mixed up with the general mass of the goods as pleaded by the defendants. According to him, Infrastructure Cess is imposed on carriage of goods upon 'entering or before leaving the Province as well as country through air or sea. Mr. Akhund fairly admitted that his pleadings on such score are defective and not reflective of the true intent and spirit of the impugned statute.
138. Fiscal laws are no exception to equal protection and discrimination clause as enshrined in Article 25 of the Constitution of 1973. The Courts could strike down fiscal statute, if it is violative of Article 25 of the Constitution. Proved it is established that, it is discriminatory, agairsl equal protection or is not based on reasonable and rational classification (see PLD 1990 SC 295, AIR 1969 SC^p7, AIR 1961 SC 552). Vires of a Statute is-not resolved, on the strength of pleading or the stance adopted by the relevant Legislative or the Executive Authority in support of vires of statute or competency of legislature. Interpretation of a statute on the touchstone of the Constitution is the sole prerogative of the Courts of law and not that of the executive or legislative authorities. Once the Legislature has framed a law, its function is over, when it comes to interpretation, or to determine the legitimacy or vires of the statute or the legislative competence of the legislature, function of Courts begins.
139. As observed above presumption always leans in favour of Constitutionality of any Statute.
140. Presumption indeed is rebuttable. Burden is on a person who challenges the law on such premise.
141. The pleading should contain (a) the particulars of discrimination, (b) the person or object as between whom the discrimination is meted out are similarly placed and (c) that the classification or selection of the person or goods or activity is arbitrary and irrational. When the vires of a statute is challenged or competency of the legislature is questioned. The Courts are not swayed by the stance taken by the executive, who are responsible to enforce the law. Relevant considerations are
(i) source of Legislative authority, that is to say, whether particular statute is comprehended by any Entry in any of the Legislative List or falls out of it, (ii) Which of the two Legislatures are competent to legislate, (i.e) Whether the Statute has been framed by legislature competent to legislate, (iy)
142. Statute is not in derogation of any of the Constitutional Provision or any superior law and (v)
143. Statute does not impinge any of the rights guaranteed under the Constitution.
144. Considerations, mentioned at serial Nos. (i) to (i.e) have already been discussed above, it has been held that Impugned Statute relating to carriage of goods by road is not comprehended by any of the Legislative Entry, is a residuary subject, therefore, the province has exclusive domain over it. Mr. Munib Akhter and Miss Sana, were not able to show that Impugned Statute is discriminatory and impugns equal protection clause. The incidence of Levy is attracted on "carriage of goods" that are imported through designated Ports by air or sea after it crosses customs frontier and at the same time enters the Province of Sindh but, before it mixes with general mass of goods. Likewise, it is inflicted on carriage of goods meant for export before such goods cross the customs frontiers.
145. Adverting now to the arguments of Ms. Sana, that if goods enter the country as well as the Province of Sindh by air. It are carried out of the Province again by air to other part of the country or, where the goods imported through sea are carried by rail to other part of country no infrastructure of the Province is used. Answer of such illustrative query is simple. Impugns Statute only targets carriage of Goods (imported or meant for export) by road through the Province of Sindh. Carriage of goods by air is covered by Entry No. 24 in the Federal Legislative List, which falls .Within the domain of the Federation. Though Railway itself falls within the domain of Federation by virtue of Entry No. 1 in the Part II of the Federal Legislative List, yet carriage by railway is not covered by any Entry in neither of the two List, it is indeed debatable whether in case of carriage of goods by railway infrastructure of the Province is used or not, even otherwise, such is not germane to the controversy in issue. First remains, no Infrastructure Cess on carriage of goods by railway has been imposed through the Impugned Statute, and such cannot be claimed, demanded or recovered under the impugned enactment.
146. Target of impugned Cess are 'goods' intended for export or are imported into country and at the same time into the Province through air or sea and are carried by road to any destination in any part of the country including any part of Sindh. Charging incident is IVol.IX 'carriage by road'. Learned'counsel for the plaintiffs were not able to demonstrate as to how the Impugned Statute was discriminatory. Infrastructure Cess is inflicted on all classes of goods meant for export out of country originating from any part of the country, including any part of Sindh. Once such goods enter the province and are carried by road to leave the Province of Sindh as well as the country, through air or sea are liable under the Impugned Statute to pay Infrastructure Cess.
147. Likewise, any goods .That enter the country through common frontiers of Province of Sindh by air or sea, and are carried by road to any destination within or outside the Province by using infrastructure of the Province of Sindh, are subjected to Infrastructure Cess. Incident of levy, is neither the import nor the export but carriages by road of goods meant for export or the goods that are imported.
148. Adverting to objection of Ms. Sana premised on the ground of discrimination, and equal protection clause preserved under Article 25 of the Constitution. She illustrated that, same sets of goods loaded on two trucks, originating from other province, say Punjab, are carried by road passes through Province of Sindh, one truck entering the gate of KPT for export purposes. Other enters the gate of Shipyard, for local use or consumption. Both goods travelling same distance, using same route, road and infrastructure, one entering KPT gate is charged with Infrastructure Cess and other entering Shipyard is not, is nothing but discrimination. Arguments in the first sight appeared to be attractive but on appraisal found to be fallacious. Article 25 of the Constitution, guarantees equal jfcotection and like treatment to all placed in a similar situation.
149. Expression "Equal protection of law" envisaged by Article 25 ibid, had always engaged attention of Jurist and Courts of law. History could be traced from coveted last Sermon of Holy Prophet (May peace be upon him) delivered 1400 years back. (For illuminating disaw&sion, see 1991 CLC 13). Such principle more recently echoed in LA. Sherwani case '1991 SCMR 1086). Reasonable classification has always been considered permissible, provided such classification is based on reasonable and rational categorization, it may not be arbitrary or artificial, must be evenly applicable to all person or goods similarly situated or placed.
150. In Ellahi Cotton Mills Ltd. (PLD 1997 SC 582) apex Court after reviewing large number of case-laws and treatises deduced principles of interpretation to be kept in view, while addressing question of discrimination in the context of taxing legislature. Such principles are summarised at page 675 paragraphs 31 (iv) to (viii) as follows:- "(iv) The Legislature is competent to classify persons or properties into different categories subject to different rates of tax. But if the same class of property similarly situated in subject to an incidence of taxation, which result in inequality amongst holders of the same kind of property, it is liable to struck down on account of infringement of the fundamental right relating to equality.
(v) That a State does not have to tax everything in order to tax some thing, it is allowed to pick and choose districts, object, persons, methods and even rates for taxation if it does so reasonably.
(vi) That the tests of the vice of discrimination in a taxing law are less rigorous. If there is equality and uniformity with each group founded on intelligible differentia having a rational nexus with the object sought to be achieved by the law, the Constitutional mandate that a law should not be discriminatory is fulfilled.
(v) That the policy of a tax, in its operation may result in hardship or advantage or disadvantage to individual assesses which are accidental and inevitable. Simpliciter this fact will not constitute violation of any of the fundamental rights.
(vi) That while interpreting Constitutional provisions Court should keep in mind, social setting of the country, growing requirements of the society/nation, burning problems of-the day and the complex issues facing the people, which the Legislature in its wisdom thorough legislation seeks to solve. The judicial approach should be dynamic rather than static, pragmatic and not pedantic and erastic rather than rigid."
151. There is no dispute that impugned levy is on goods that are imported and good meant for export, persons liable are importer and exporter of such goodo. Incidence of levy is on like activity carriage of the said category of goods, by road and on its safer movement, through the Province of Sindh.
152. Impugned cess is levied on same category of goods, collectable from similarly placed persons, charging incident is, similar activity, therefore, it cannot be said that the Impugns Statute impinges equal protection, as enshrined under Article 25 of the Constitution.
153. Adverting to another arguments advanced in the same sequal, that impugned Cess is collected from importers and exporters at the rate, which are a percentage of the value of goods, imported and exported, in pith and substance a tax on the import an'c export of goods.
154. Fundamental character of an imposition cr levy s not to be ascertained by the yarde.Ick )r mode )f measurement or the standard of calculation present od for assessing the amount of liability. Any individual, property or activity may be subject-matter of various charging incident falling within the domain of different legislative entries. Like for instance, goods are comprehended by of various entries but for different purposes and taxing incidence, like Entry No. 24 comprehends carriage of goods by sea or air. Same goods may is subject-matter of import or export across customs frontiers covered by Entry No. 27, then same goods may be liable for duties of customs, export duties in terms of Entry No. 43. Goods may be liable for duties of Excise (Entry No. 44) and as per Entry No. 49, taxes on sale and purchase of goods, imported exported produced, manufactured and consumed may also be levied. Terminal tax on goods carried by rail, sea or air and taxes on their freight could be claimed against Entry No. 53 all in Federal Legislative List. Octroi on goods within local limits is Provincial Subject, by virtue of residuary authority. Merely by employing a yardstick or standard fixed under particular statute does not mean that same yardstick or standard could not be used for other imposition under different enactment. Customs duty, Sales tax, Excise is but few imposition using almost similar standard for determining liability under respective statutes.
155. Any incident or activity in relation to goods not comprehended by any of the Entry in the Federal Legislative List or Concurrent Legislative List falls within the domain of Provincial Legislature, best illustration is "carriage of goods by road" subject-matter of instant suits.
156. In order to appreciate the challenge on the ground of absence of quid pro qua, nature of the impugned levy is to be understood, in fiscal statute imposition of any nature are often described as Tax, Fee, Cess, Duty, Licence or charge such terms, are used quite indiscriminately and interchangeably, though there is subtle difference in application and implication of each term. Such terms in the taxing statute are usually not defined, it is neither the name or label given to any levy nor, the standard of calculation or measurement employed to assess the liability of such levy that determine its true and intrinsic nature. (AIR 1949PC 81, AIR 1968 SC 468(494), AIR 1980 SC 1088 (para 16 and 20). Imposition or levy by whatever name called have received judicial interpretation.
157. Tax is compulsory exaction of money by public authority for public purposes enforceable by law (PLD 1977 Kar 742, 1986 CLC 533, 1990 CLC 550, NLR 1994 Tax 114). In contrast, a fee is a sort of consideration for the services rendered, which necessitate that there should be an element of quid pro quo. Therefore co-relationship must exist between the fee charged and services rendered against it like parking fee (PLD 1997 Kar. 60, 1990 CLC 197 and 638, 1999 SCMR 1402). It is, however, not necessary those services mathematically are proportionate or equal with the benefit to the person charged or necessarily is uniform. At the same time it may not be excessively disproportionate. (See 1990 CLC 197, PLD 197 Lah. 748, PLD 1997 Kar. 604). A Cess is a tax confined to local area for specified object or a particular purpose, it is in fact specific of same class to which Tax belong, therefore, no quid pro quo between the services rendered and the imposition is necessary to maintain its validity (AIR 1954 282, AIR 1980 A1. 234, AIR 1960 Mad. 160, AIR 1967 SC 1512, AIR 1990 sic. 55). From the discussion made above it appears that the Cess is an imposition more like tax blended with certain attributes of fee. In the sense that it is imposed for some specified and declared purpose. The imposition is correlated to the object for which it is to be used. The purpose and object either precedes or succeed the imposition (i.e. Cess), for instance Education Cess; (under Section 3 of the Worker's Children (Education)
158. Ordinance, 1972. Tobacco Development Cess (under* Section 11 of Worth West Frontier Province Finance Act, 1998) and Cess for special development of infrastructure for smooth and safer movement of goods (under Section 9 of the Sindh Finance (Amendment) Ordinance, 2001. The tax realized form part of general revenue of the State. Whereas, Cess like fee is imposed for specified object and purpose, is not part of the general revenue, but must be employed for the attainment of the purpose and object of the imposition: (Chief Commissioner v. DCM (AIR 1979 SC 1181 (para 4-5), State of Maharashtra v. Salvation Army (AIR 1975 SC 846). Likewise, is in fact permission to do or carry on any trade, business or activity. Charges are for actual services rendered for example charges for utility services i.e. Telephone, gas, electricity. Duty of Customs, is also a Tax on the importation or exportation of goods (1999 SCMR 1402).
159. Thus from the above discussion it is clear that, an imposition is classified as Cess when it is for some specific purpose and declared object. The object is co- related with imposition, but it does not imply that, the imposition may mathematically, be proportionate with the benefit or advantage. Examining the attributes, of the impugned levy, it is evident that, the object and or purpose i.e. "Special maintenance and development of goods" are defined. The object and purpose of levy is correlated with the Cess.
160. The Federal Legislature in term of subjects listed in Concurrent Legislative List as per Entry No. 54 is competent to impose Tax as well as fee and every imposition falling in-between, in terms of Entry No. 44, in ti Concurrent Legislative List, Provincial Legislature has co-extensive authority with the Federal Legislature l . g exclus'we authority to levy tax and fee and every ievy in-between including Ces'' in respect of subjects falling within its Legis'otive Competence Impugned Cess is levied on the basis of common yardstick, uninformally applied to all the importers and exporter of the goods meant for export or imported that are carried through the Province of Sindh by road, in view of above discussion, objection on the ground of quid pro quo cannot be sustained.
161. Now addressing the vires of the amendment made in impugned legislation. As could be opted in the narrative above, the impugned legislation, as it stands to day in the form of forth version, in the series was amended on 15.5.2001. First version, of the Impugned Statute was promulgated on 14.7.1994. The imposition was levied as Fee. Charging incident was "on the goods, entering or leaving the Province, from or Tor outside the country, through air of sea", in the Second version, dated 14.7.1996, the Fee was named as Infrastructure fee on goods. Charging incident, was "on the movement of goods entering or leaving the province from or for outside the country through air or sea". The First and Second versions were successfully challenged in the case of M/s. Rahim and Sons (2002 SBLR (Sindh) 1324 at page 1336 E. It was held "The impugned levy, though a fee is directly chargeable on the exit or entry of the goods fee/in the Province of Sindh. At page 1337, it was further held Provincial Legislature was not competent to legislate on matter relating to Inter- Provincial trade, which is Federal subject against Entry No. 27 and so also against Entry No. 43, which provides for duties of customs, including export duties. Third version as reproduced in the narrative above, was enforced on 24.2.2001. The Fee was transformed into "Cess for special maintenance and development of infrastructure", in the Third version, cess was levied but without identifying or fixing the burden or target of levy, in the Forth version, already reproduced above and subject to scrutiny in the suits in hand, the discrepancies noted above, have been removed. Charging event, in the First version was "on the goods entering or leaving the Province from or for outside the country", has been substituted "on goods for carriage by road and smooth *and safer movement in the Province upon entering or before issuing the Province from or for outside the country". The target of imposition is identified as "Goods". Charging incident is "for carriage by road and safer movement in the Province" the threshold or point at which liability clinches is "upon entering or before leaving the Province from or outside the country, through air or sea".
162. In the case of Province of East Pakistan Vs. Muhammad Mehdi AH Khan (PLD 1959 SC 387) is said case at page 413 it was observed that:-- "A law void ab initio must be deemed never to have been enacted, and if it -exists on the statue book it has no legal sanction and it essentially of the nature of any unauthorized writing or the statue book. Even if the defect of lack of jurisdiction is removed by subsequent on conferring of the requisite legislative power, the law enacted when no such power existed to continue to be void and will create no right or obligation unless it be reenacted. There is thus a fundamental difference between law that is made by incompetent legislator and law made by incompetent legislator and law made by competent legislature which is in conflict with the fundamental right the former being void on general principal the letter being is void only to the extent of the repugnance in the scenes that it cannot be applied to a particular case. The former remains void unless re-enacted by competent legislator, the letter requires no enactment and as pointed out in the Australian case cited, becomes fully operative when the inconsistency or repugnance is removed by an amendment of the Constitution or the Central law."
163. Above case was followed in case of Abut A'at/a Maudoodi v. Government of West Pakistan (PLD 1964 SC 673 (735) ff), in Shukar Din v. Abaidur Rehman's (PLD 1965 West Pakistan Lahore 522), and in the case of Colony Thai Textile Mill Ltd. v. Superintendent of Central and Land Customs (PLD 1971 (W.P.) Lahore 376).
164. To appreciate the arguments of learned counsels for the plaintiff, it will be beneficial to recapitulate brief history of the impugned Statute, it is not disputed that, Impugned Levy for the first time was introduced, per Section 9, Sindh Finance Act, 1994 (First version). Section 9, was substituted with validation Section 9-A, through Finance Act, 1996 (Second version). Again through Sindh Finance (Amendment) Ordinance, 2001, Section 9, including the Explanation and Section 9-A were substituted (Third version), yet once again, through Sindh Finance (Second Amendment)
165. Ordinance, 2001. Sub-section (1) to Section 9, was substituted and another Explanation II was also added, in Abdul Rahim & Sons case, (supra), it was not that the entire Finance Act, 1994 as amended by Sindh Finance Act. 1996 that was declared ultra vires and void ab initio, it was only to the extent of the Section 9, which was annulled. Therefore, it cannot be argued that the amending provision was engrafted in the enactment that was void ab initio. The very provision i.e. Section 9, in the form it was enforced, was found to be suffering from Constitutional infirmities iike legislative incompetence beside, being violative of Article 151 of the Constitution, 1973. The infirmities, as pointed out and discussed above now stand ratified and corrected in the amended and substituted provisions. There is no bar under the Constitution to re-enact the. Statute or even a provision after remedying and curing the defect.
166. In the instant case, there remains no doubt that Provincial Legislature, from the day one was competent to exercise jurisdiction on residuary subject covered by impugned statute, in the case of Muhammad Shah Khan v. Federal Land Commission (1991 SCMR 732), apex Court \\hile examining the validation provision by Ordinance No. XXII of 1981, in the Settlement of Immovable Property Dispute (Dir and Swat) Regulation, 1972, held:-- "it is one of the fundamental principles of interpretation of Statute that full effect has to be given by extending the scope, if possible, of remedial and curative statute, once the defect sought to be corrected is identified and the nature of correction is not in doubt."
167. Impugned statute was not only re-enacted after ratifying the legislative information, with validation provision. Validating provisions or statute are curative in nature, deeming provisions in built in such enactment, give cover of legitimacy and validity to an enactment, which in its original form was not considered valid or Constitutional.
168. Validation provision and deeming clause are not strange phenomenon in Pakistan's legislative history. Since the very first on slaught on the first Constitution of Pakistan, validation provision and deeming clauses have become a permanent feature of our Constitutional as well as other legislative instruments. Deeming provision are well-known fiction of law, whereby, what is in fact not done or wrongly done, by employing "magic-demand" of deeming clause, it is deemed, presumed and supposed to have been done or rightly and legally done. Section 2 of the Sindh Finance (Second Amendment) Ordinance, 2001 provided "it shall come into force at once and shall be deemed to have taken effect from 24th February, 2001The word "deemed" means supposed, considered, construed, thought, taken to be or presufned. The word deemed refers to what is supposed to be and not what actually is (see A.C. Goeel v. First National Bank Ltd. (1960) 30 Company Cases 317). The manner how legal fiction created by deeming provisions is to be interpreted is well-settled. Courts both in India and Pakistan have followed the approach formulated by Lord Asquith, in the case of Molasses Trading and Export (Pvt.) Ltd. v. Federation of Pakistan (PLD 1993 SC 1905). Apex Court cited with approval following passage from Mehreen Zaibunnisa v. Land Commissioner, s Multan (PLD 1975 375, at page 1923):-- "Where a statute contemplates that a statute of affairs should be deemed to have existed it clearly proceeds on the assumption that in fact it did not exist at the relevant time but by a legal fiction we are to assume as if it did exist. The classic statement to the effect of a deeming clause is to be found in the observation of Lord Asquith, in East End Dwelling Co. v. Finsbry Borough (1952 A.C. 109) namely: "Where the statute says that you must imagine the state of affairs, it does not say that having done so you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of the state of affairs."
169. While examining Section 31-A of the Customs Act, which provision, was added to nullify the dicta laid down in the case of Al-Shamrez Enterprise (1986 SCMR 191). In the case of Hoiasses Trading and Export (Pvt.) Ltd. (supra) Apex Court, also examined validity of statute having retrospective operation. Observation made by the apex Court, in the said case are vary apt to the facts of the suits in hand. At page 1920, it was held as follows:-- " Before considering this question it would be appropriate to make certain general observations with regard to the power of validation possessed by the legislature in the domain of Taxing Statute, it has been held that when a legislature intend to validate a tax declared by a Court to be illegally collected under an invalid law, the cause for ineffectiveness of invalidity must be removed before the validation can be said to take place effectively, it will not be sufficient merely to pronounce in the statute by means of a nonobstinate clause that the decision of the Court shall not bind the authority, because that will amount to reversing a judicial decision rendered in exercise of the judicial power, which is not within the domain of the Legislature, it is therefore necessary that the conditions of which the decision of the Court intended to be avoided is based, must be altered so fundamentally, that the decision would not any longer be applicable to the altered circumstances. One of the accepted modes of achieving this object by the Legislature is to re-enact retrospectively a valid and legal taxing provision, and adopting the fiction to make the tax already collected U. Stand under the re-enacted law. The Legislature can even give its on meaning and interpretation of the law under which the tax was collected and by "legislative fiat" make the new meaning biding upon Court, it is in one of these was that the Legislature can neutralize the earlier decision the Court. The Legislature has within the bound of the Constitutional Limitation the power to make such a. Law and give it retrospective effect so as to bind even past transaction, in ultimate analysis therefore a primary test of validating piece of legislation is whether the new provision removes the defect, which the Court had found in the existing law, and whether adequate provisions in the validating law for valid imposition of tax were made."
170. Apex Court in a very recent pronouncement in the case of Zaman Cement Company (Pvt.) Ltd. v.
171. Central Board of Revenue (2002 PCTLR (SC) 767) again while examining the vires of Section 31 of the Customs Act, at page 324, cited with approval Yasmin Sons v. Federation of Pakistan (PLD 1989 Kar. 361 at page 369) Justice Ajmal Mian, Chief Justice of this Court in his lucid manner expressed the opinion of the Court as follows:- "However, it seems that by now it is a settled law that a legislature which has power to make laws regarding rights of persons can make such laws whether during the pendency of a proceeding before a Court or after decision has been given and that it cannot be urged that the legislature has by exercising such power of the legislature is not affected by the pendency of a proceedings before a Court or existence of a judgment, it is also equally well-settled principle that the legislature may validate a recovery, which the Government could not have at the material time levied and curative and that legislature can legislate any remedial or curative legislation after discovery of defect in an existing law as a result of the judgment of a superior Court in exercise of its Constitutional jurisdiction and that such legislation would not amount to interference with the exercise of judicial power, it may also be observed that the function of the judiciary is not to legislate or to question the wisdom of Legislature in making a particular law nor it can refuse to enforce it even if the result of it to nullify its on decision provided the law as competently made, in this view of the matter unless and until we hold that Section 31-A of the Act is violative of any of the provisions of the Constitution we cannot question its validity on the ground that it would nullify the judgment of the Supreme Court."
172. Its vires can only be challenged being violative of any provisions of the Constitution and not on the ground that it nullifies the judgment of the superior Court.
173. Examining the impugned statute, in terms of applicability provision, it came into force at once (i.e. On 15.5.2001) and shall be deemed to have taken effect from 24th February, 2001. Validation clai provide deeming protection and validity to the infrastructure fee levied, charged and collected in pursuance of Sindh Finance Act, 1994. Validation, to such imposition shall take effect with reference to the date provided for in the validation clause, in the light of the discussion made above, the infrastructure Cess has since been validated under the Fourth version of the impugned Statute with retrospective effect, there remains no reason, not to give effect to such mandate of law.
174. As held, above, vires of statue can only be challenged being violative of any provisions of the Constitution and not on the ground that it nullifies the judgment of the superior Court. Examining the impugned statute, in terms of applicability provision, it came into force at once (i.e. On 15.5.2001) and shall be deemed to hfve taken effect from 24th February, 2001.
175. Validation clause provide deeming protection and validity to the infrastructure fee levied, charged and collected in pursuance of Sindh Finance Act, 1994. Validation, to such imposition shall take effect with reference to the date provided for in the validation clause i.e. With effect from the date of promulgation of first version of the Sindh Finance Act, 1994 on 17.7.1994. It has been held above, that the Provincial Legislature was competent to legislate and impose Infrastructure Cess on the carriage of goods by road, in the light of the discussion made above the Infrastructure Cess has since been validated under the Fourth version of the impugned statute with retrospective effect, there remains no reason not to give effect to such mandate of law.
176. As regard contentions of Mr. Ghafoor Mangi, that the impugned imposition amounts to double taxation, as same goods are subject-matter of imposition under various Federal Statutes, like Customs Act, Central Excise Duty, Import and Export Tax. As already discussed above, same subject-matter, topic or activity may fall within the tax net under various Entries. Each of such Entry gives independent authority to legislate and tax the subject-matter, topic or activity, for the "Incidence of Tax/Charges" peculiar to that very Entry. Where more than one Legislature enjoys power to levy an imposition. There is no Constitutional bar, on the Legislative authority, to impose levy more than once on same person, goods or activity. Provided, such levy is for the separate Taxing/Charging incident, it falls within the Legislative Competence of such Legislative authority, under more than one Entry (see Avinder v. State of Punjab (AIR 1979 SC 321, para 4) and Cantonment Board v. Western India Theatres (AIR 1954 Bom. 261). Infrastructure Cess on carriage of goods, within the Province, falls within the Legislative Competence of the Province of Sindh under the Residuary Jurisdiction. Federal Leaislature eniovs Dower to tax same goods under different Entries in the Federal Legislative List for different Taxing/Charging Incident. Object, purpose and charging incident of impugned levy is quite distinct form the Federal Levies, therefore, impugned levy cannot be sold to be hit by double taxation.
177. This brings the challenge to the impugned levy pitched on the ground that, it is violative of Article 131, that guarantees trade, commerce and intercourse, throughout Pakistan, shall be free. Free movement of goods inter se the Province as guaranteed in* terms of Article 151 of the Constitution may well be appreciated after browsing Article 151 of the Constitution, 1973, which runs as follows:-
151. Inter-Provincial Trade. - (1) Subject to clause
(2) , trade, commerce and intercourse throughout Pakistan shall be free.
(2) [Majlis-e-Shoora (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 tola) 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,
(c) in the case of goods manufactured or proceed 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) Any Act of a Provincial Assembly, which imposes any reasonable restriction in the interest of public health, public, order 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.
178. Article 151(1) circumstances the exercise of legislative limit both of the Federation (Art. 151(2), as well of the Province (Art. 151(3). Article 151, tends to foster integration of economic unity amongst the Federation units, forming Pakistan, it enshrines the principle that internal geographical barrier, for the administrative reasons, does not impede unity of a State. Protection accorded under the Article is to the lawful trading, commerce and commercial interaction by and between various parts of Pakistan. Phrase "Throughout Pakistan" used in the Article mean freedom of movement, trade and commercial activities throughout Pakistan, not only to Inter-Province but also Intra-Provincial trade and commercial activities. By Inter-Provincial trade and commerce, it means trade, commerce and commercial interaction within the territorial bounds of the Province. Intra-Provincial trade and commerce means trade, commerce and commercial interpretation by and between two and more Province, it is only Inter- Provincial trade that is reserved for the Province to legislate upon. As regard Intra-Provincial trade, it falls out of the domain of the Province. Even the authority of the Federation, over the matter relating to Inter- Province trade, commerce of intercourse is not absolute but, is subjected to "Public Interest" (Mirpurkhas Sugar Mills Ltd. v. Distt. Council Tharparkar (1990 MLD 317).
179. "Shall be Free" as used in Article 151(1) ibid, does not mean stark and bald freedom, regulatory and compensatory matters are excepted (see State of Madras v. Nataraja (AIR 1969 SC 147), measures relating to charging for the maintenance of road are considered to be compensatory. Such measure in fact will facilitate the free movement of trade and commerce between the Province (see also State of Assam v. Lubanya Prabha (AIR 1967 SC 1574 (1578) and Pakistan Tobacco Co. Ltd. v. Govt, of N.W.F.P. (2002 PSCC 868). Apex Court was confronted will the "Tobacco Development Cess" levied on the "movement of tobacco". After taking into consideration, large number of cases including the one relied upon by both the counsels in instant suits, at page 483-F defined "Free" within the context of Article 151, as follows:-- "The above discussion persuades us to hold that liberal and dynamic interpretation of the word "free" does not mean an unqualified freedom at all in the trade, commerce and intercourse between the provinces because unchecked freedom in the trade, commerce and intercourse without any reasonable prohibition and restriction would be lack of discipline and the Provincial administration would not be in a position to control trade and commerce prohibited/contraband articles, therefore, a qualified restriction if imposed up to the trade which has not financially burdened the traders and had also not impeded the flow of trade and commerce, would not be violative of the provisions of Article 151(1 )(3), Clause
(a) of the Constitution, it may also be observed that as far simplicity levy of cess by the Provincial Government (N.W.F.P, on the movement of tobacco outside the Province that would not tantamount to placing any prohibition or restriction on the trade, commerce any intercourse between the Province. However, if the entry of the goods into the Province or export of goods to the other Provinces is completely banned then of course it would amount to placing a complete prohibition, limitation and restriction as it happened in the cases of Arshad Akram & Co. (PLD 1982 Lah. 109) and Star Flour Mills (PLD 1996 Lah. 687). As far as the imposition of development taxes like "Tobacco Development Cess" is concerned, such levy would fall within the definition of compensatory or incidental tax which would not cause hindrance in trade, commerce and intercourse rather such reasonable/nominal tax would facilitate the Provincial Government for the purpose of generating revenue for development etc. It is important to note that clause (b), Sub- Article (3) of Article 151 of the Constitution, itself authorizes the Provincial Government to impose a tax subject to the conditions namely that no tax will be imposed as between goods manufactured and produced in the Province and similar goods not so manufactured or produced to discriminate in favour of the former goods, meaning thereby that if similar goods is brought in the Province, then tax is imposed on it whereas no local tax has been imposed on the goods which is manufactured in the Province because if such nature of tax is allowed then the similar goods which is imported in the Province would not be in a position to compete with the goods which is manufactured in the Province and in this manner there would be discrimination in the latter kind of goods. This Sub-Article further says that no tax shall be imposed on the goods produced outside the Province which discriminates between the goods manufactured or produced in any area in Pakistan and similar goods manufactured or produced in any other area in Pakistan meaning thereby that if any goods is imported (brought in the Province) from a particular Province and tax imposed upon it, whereas similar goods which is manufactured or produced in the Province other than the goods which was imported from the particular Province and then if the tax is not imposed on the goods which is manufactured and produced in other area in Pakistan, it would cause discrimination. Although learned Division Bench of High Court had attended to these aspects of the case but in our opinion it requires no detailed discussion for the reason that admittedly the "Tobacco Development Cess" is recovered on the movement of the Tobacco outside the Province of N.W.F.P, it is admitted that even if the factories, which are manufacturing tobacco products not in the Province of N.W.F.P, they consumed locally produced tobacco instead of bringing tobacco from outside the Province.
180. However, learned counsel appearing for the parties have also not dilated upon this aspect of the case, therefore, we are of the opinion that levy of cess is not causing hindrence in freedom of trade, commerce and intercourse, therefore, the provision of Section 11 of the Act is not violative of Article 151(1)(3) of the Constitution.
181. As regards limitation placed on the part of the Province to legislate, under Article 151 in Pakistan Tobacco Co.
182. Ltd. Case at page 470, it was held:- "Clause (a) of Sub-Article (3) of Article 151 of the Constitution will be examined with reference of definition of phrase "prohibiting or restraining" used therein ordinary dictionary meaning as per Black's Law Dictionary (5th Edition) the origin of the word prohibition is prohibit which means forbid by law; to prevent etc. Similarly in World Book Dictionary by Scoot Fetzer Company Chicaqo, word prohibit has been defined as to or bid by law on authority; to prohibit the sale of alcoholic beverages; picking flowers in this park is prohibited to prevent; hinder. With reference to these definition word 'prohibition' has been used as the act of prohibiting; prohibiting against swimming in the city's reservoirs; a law or laws against making or selling alcoholic liquor.
183. The meaning of phrase "prohibition" defined herein above in two dictionaries persuaded us to infer with reference to the scheme of Section 11 of the Act that if the Government of N.W.F.P, had placed a ban on the export of Tobacco to the other Province then the appellant could have presented successfully the case of complete violation of Constitution."
184. Next important phrase used in clause (a) of Sub-Article
(3) of Article 151 of the Constitution is restriction, it has been defined in Black's Law Dictionary (5th Edition) to be a 'limitation of an imposed in a deed or lease respecting the use to which the property may be put'. Whereas according to World Book Dictionary restriction means some thing that restricts limiting condition or rules; the restriction on the use of the playground; no fighting; no damaging property; the act or fact of restricting or the condition being restricted.
185. After discussion the definition of prohibition and restriction, Apex Court proceeded to examine vires of "Tobacco Development Cess" being charged by the N.W.F.P. Government, which is providing facility on the movement of the goods including* roads, bridges security etc. A situation similar to the suits in hand, where the Province of Sindh, has imposed the Infrastructure Cess through impugned statute, for the development of infrastructure as defined in the enactment itself. The apex Court reiterated its eariier views (expressed in 1992 SCMR 372) at page 485 as follows:- "While dealing with the interpretation of Article 151 of the Constitution, we have held that imposing of "Tobacco Development Cess" by the Provincial Legislature is permissible being not contrary to the provisions of Article 151 (3)(a) of the Constitution and imposition of such tax on the trade and commerce can be considered to be compensatory tax for the purpose of development in the Province."
186. Apex Court, while examining a similar imposition for the development of roads and bridges, in the case of Shahtaj Sugar Mills Ltd. (1998 SCMR 2492). In said case "Sugar Cane Development Cess", imposed by the Government of Punjab, and was under consideration. Said Cess was proposed to be utilized for the development of roads and bridges and special plants protection services in the areas comprising zones and for the maintenance and development of such roads outside the Mill Zone, etc. Again a situation similar to the situation in the instant case. At page 2501 it was held:- "By virtue of Article 142(c), only the Provincial Legislative Authority is empowered to make laws connected with the utilization of sugarcane or promotion of its industry. The objection raised by the learned counsel for the petitioners is misconceived, in the Sugarcane Development Cess has been imposed primarily to provide special maintenance and development of roads, bridges and special [Vol.IX plants protecting services coupled with other activities, which are directed towards the development of sugarcane production. Therefore, we are inclined to hold that the Provincial Legislative Authority was empowered and enjoy exclusive authority to legislate in this behalf."
187. When examining the impugned levy, it is clear that the Infrastructure Development Cess has been imposed on the carriage of goods within the boundaries of the Province of Sindh, for the use of the infrastructure maintained by the Province of Sindh. Such levy by no means restrict nor prohibits entry or exit of the goods for and from the Province, in the case of International Tourist Corp. v. State of Haryana (AIR 1981 774) already discussed above, Indian Supreme Court even approved the imposition of such levy on public carrier who were merely passing through the legislating State and in such course using the infrastructure of the State. Government of Sindh, incurs expenditure and need substantial funds to maintain the infrastructure, including highways other than the national highways, roads, streets, bridges, culverts, parking and halting places, rest areas along Highways, providing lighting, traffic control, halting places for the trucks and other goods carriers, security, police and innumerable infrastructure and facilities as defined in Explanation I, to Section 9 of the impugned enactment. All such infrastructure no doubt confers benefit of all those that uses the same.
188. In view of the foregoing discussion impugned levy falls within the legislative competence of the Province of Sindh, it is neither is violative of any rights guaranteed under the Constitution, nor transgresses the limitation imposes by Article 151 of the Constitution. The issue No. 1 is, therefore, answered in negative.
189. Issues Nos. 2 and 3: in view of the finding recorded on issue No. 1 issues number 2 and 3 are also decided in negative.
190. Issue No. 4: Upshot of the above discussion is that the suits of the plaintiffs are dismissed.
191. Before parting with the judgment, I record my appreciation for Ms. Sana Minhas, Mr. Munib, for their deep understanding and appreciation of law at this young age. Dr. Farough was as usual at his best. Mr. Akhund, known for understanding in Constitutional law was as eloquent as he was when achieve in practice.
192. Since serious and contentions issues were raised, it is matter involving substantial revenue both for the Province as well as the plaintiffs, it is deemed proper to suspend the operation of this judgment for 15 days from today to enable the plaintiff to avail the remedy of appeal if they so chose. The Bank guarantees furnished by the plaintiff may not be encashed till then.
193. Suits alongwith the pending applications stand dismissed. .