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Petitioner: SALAHUDDIN VS Respondent: FEDERATION OF PAKISTAN and others
Court Name: Sindh High Court Judge(s): Muhammad Mujeebullah Siddiqui, S. A. Sarwana Title: SALAHUDDIN vs FEDERATION OF PAKISTAN and others Case No.: Constitutional Petition No,D-548 of 2000 Date of Judgment:2001-03-27 Reported As: 2002 CLC 1275 Result: Order accordingly
JUDGMENT
JUDGMENT ' MUHAMMAD MUJEEBULLAH SIDDIQUI, J.--- The facts giving rise to this petition as gleaned from the memo. Of petition are as follows:-- ' The respondent No,1, Federal Government announced Import Policy, 1999 vide Notification No,S.R.0.895(1)/99, dated 3rd August, 1999. Under the said import policy, import of construction machinery and equipment including second hand machinery was allowed.. The petitioner purchased an old and used Dump Mazda Truck, from Sharjah and imported the same to Faisalabad via Karachi Port. The vessel carrying the Dump Truck entered Karachi Port on or about 4th March, 2000 and the petitioner submitted the documents for its release/clearance including the Bill of Entry on 8-3-2000 which was received by the Authorized Officer of respondent No,3. After submitting the documents, the petitioner pursued his case for duty free release of clearance of the Dump Truck in accordance with section 18 of the Finance Act, 1999. It is provided in section 18(1) of the Finance Act, 1999, that notwithstanding the provisions of subsection (1) of section 18 of the Customs Act, 1969, customs duties shall be levied at the rates specified in the table given in the said section 18. The rate of duty on Dump Trucks is specified in subsection (1) of section 18 of the Finance Act, 1999 at the 0%. However, a Notification S.R.0.116(0/2000, dated 7-3-2000, was issued by the respondent No,1, whereby amendments were made in Table III of section 18 of the Finance Act, 1999. Serial Nos.1, 2, 3 and 4 and the entries relating thereto in column No,2, were omitted, with the result that the customs duty as leviable under section 18(1) of the Customs Act, 1969, became applicable. The respondent No,3, therefore, refused to release the Dump Truck free of duties and taxes on the plea that the petitioner is liable to pay the customs duty and sales tax etc. The petitioner contended that he had acquired vested right to import duty/tax free old and used Dump
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Truck in question under the import policy, dated 3rd August, 1999. The contention was not accepted and therefore, this petition has been filed with the plea that the concession/ exemption earlier granted could not be withdrawn and the petitioner is entitled for the exemptions and concessions available before the issuance of notification dated 7-3-2000. It is contended that the rate of duty is to be determined on the duty of "Manifest" which was delivered on 4-3-2000 and that the provisions of S.R.O. 116(1)/2000, dated 7th March, 2000, are not applicable to the import made by the petitioner. It is further, contended that the concession was available under subsection (5) of section 18 of the Finance Act, 1999, to the goods imported between 1st July, 1999 and the 30th June, 2000 and the concession/exemption cannot be withdrawn as the petitioner has acted under the assurance/guarantee of the earlier S.R.O. The petitioner has prayed for a declaration that he is entitled to concession and exemption of customs duty and sales tax in respect of the old and used machinery Dump Truck in question under the provisions of S.R.O. 895(1)/99 and the petitioner cannot be deprived of the vested rights created in the said S.R.O. Further declaration has been sought that the actions and acts of the respondents detaining the said truck for the purpose of determining the customs duty and sales tax are illegal, unlawful, without jurisdiction and mala fide, having no legal effects in the eyes of law. The petitioner has further sought declaration that the provisions of S.R.0.1/2000, dated 7-3-2000 are not applicable to the import of truck in question by the petitioner. 2. The respondents have filed comments in reply to the contentions raised on the memo. Of petition. In their comments the respondents have stated that the petitioner imported Dump Truck which arrived at Karachi Port vide I.G.M. No,362/2000, dated 4-3-2000. The petitioner filed Home Consumption Bill of Entry bearing Machine No,HC/27707 on 8-3-2000 for seeking release of said Dump Truck, on which date the imported goods were subjected to customs duty and sales tax at statutory rate in terms of S.R.O.(I)/2000, dated 7-3-2000 read with section 30 and section 31-A of the Customs Act, 1969, as a result of withdrawal of exemption. It is contended on behalf of the respondents that the petitioner was entitled to avail the exemption under the exemption notification as long as, the same was in field regardless of the fact that the appellant had opened a letter of credit or concluded the contract with the foreign supplier. It is averred that the Federal Government has lawfully withdrawn the exemption. In respect of vested right alleged by the petitioner it is contended by the respondents that by virtue of the provisions contained in sections 30 and 31 of the Customs Act, 1969 an importer or exporter is liable to pay Customs Duty on the date referred to in sections 30 and 31 of the Customs Act and in case of import on the date on which a Bill of Entry is presented under section 79 for home consumption and in case of goods cleared from a warehouse under section 104 on the date on which a Bill of Entry for clearance of such goods is presented. 3. We have heard Mr. Chaudhary Abdul Rasheed, learned counsel for the petitioner and Mr. Raja Muhammad Iqbal, learned counsel for the respondents. Mr. Ch. A. Rasheed, has submitted that a vested right was acquired by the petitioner with the import of Dump Truck in pursuance of the import policy announced by the Federal Government and the exemption allowed under section 18 of the Finance Act, 1999, which was applicable to the goods imported between the 1st of July, 1999 and 30th June, 2000. He has submitted that the Dump Truck was imported on the vessel which entered the Karachi Port on 4th of March, 2000 and with the submission of I.G.M. On 4-3-2000 a vested right was created. He has further contended that with the presentation of Bill of Entry on 4- 3-2000 it was manifested and, therefore, the S.R.O. 116(1)/2000, dated 7-3-2000, withdrawing the exemption allowed under section 18 of the Finance Act, 1999 was not applicable to the import made by the petitioner. He has submitted that the S.R.O. Withdrawing exemption shall have no retrospective effect. In support of his contentions he has placed reliance on the following judgments:-
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"(1) Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026, (2) Messrs Tharparkar Sugar Mills Ltd. v. Federation of Pakistan 1996 M LD 1221, (3) Messrs Polyron Ltd. v. Government of Pakistan and others PLD 1999 Kar. 238, (4) Messrs Flying Kraft Paper Mills (Pvt.) Ltd. v. Central Board of Revenue and others 2000 SCM R 945 and (5) Collector of Customs and others v. Ravi Spinning Ltd. And others 1999 SCM R 412." 4. On the other hand Mr. Raja Muhammad lqbal, learned counsel for the respondents has submitted that there is no dispute pertaining to the import policy. He has stated that the respondents have no objection to the import of Dump Truck. He has submitted that the point for consideration is whether the exemption claimed is available to the petitioner on the date the Bill of Entry was manifested. Mr. Raja M. Iqbal, has submitted that the exemption was allowed under subsection (1) read with subsection (5) of section 18 of the Finance Act, 1999. However, under subsection (7) of section 18, the Federal Government was empowered to amend the table (i), (ii), (iii) and (iv), so as to add any entry thereto or modify or omit any entry therefrom. In exercise of the powers conferred by clause (b) of subsection (7) of section 18 of the Finance Act, the Federal Government made further amendments in table (iii) of the said section whereby in Column No,1, Serial Nos.1, 2, 3 and 4 and the entries relating thereto in Column No,2 were omitted. Mr. Raja M. Lqbal, further contended that the plea taken on behalf of petitioner that the Bill of Entry was manifested on 4-3-2000 is contrary to the averments in the memo. Of appeal. He has drawn our attention to contents of para.4 of the petitioner which reads as follows:- "That the said vessel entered the Karachi Port on or about 4th March, 2000 and the petitioner submitted the documents for its release/clearance of the said Truck including the said Bill of Entry on 8th March, 2000 which were received by the concerned Authorized Officer of the respondent No,3." 5. The petitioner has produced photocopy of the Bill of Entry as Annexure "P/3", a perusal whereof shows that machine number was allocated to the Bill of Entry on 8-3-2000. Mr. Raja M. Iqbal, has referred to the provisions contained in section 30 and section 31-A of the Customs Act, 1969. It is provided in section 30 that the rate of duty applicable to any imported goods shall be rate of duty in force, in case of goads cleared for home consumption under section 79 on the date on which a Bill of Entry is manifested under that section. The explanation to section 30 contains that for the purpose of section 30 "manifest" means that when a machine number is allocated to Bill of Entry and is registered in Customs record. It is provided in section 31-A that notwithstanding anything contained in any other law for the time being in force or any decision of any Court, for the purposes of sections 30 and 31, the rate of duty applicable to any goods shall include any amount of duty imposed under section 18 and the amount of duty that may have become payable in consequence of the withdrawal of the whole or any part of the exemption or concession from duty whether before or after the conclusion of a contract or agreement for the sale of such goods or opening of a letter of credit in respect thereof. Mr. Raja M. Iqbal, vehemently argued by placing reliance on the above provisions that no vested right is created before a Bill of Entry is manifested as defined in section 30 and therefore, the plea on the point of retrospective operation of S.R.0.116(I)/2000, dated 7-3-2000 is misconceived and not tenable. 6. Mr. Ch. Abdul Rasheed, took a plea that the Notification S.R.O. 116(1)/2000, dated 7-3-2000 was published in the official Gazette on 10-3-2000, and therefore, the said S.R.O. Shall be effective from the date of publication of the S.R.O. In the official Gazette. He submitted that since admittedly the Bill of Entry was manifested on 8-3-2000 and the S.R.O., dated .7-3-2000, whereby the concession/exemption was withdrawn, was published in the official Gazette on 10-3-2000, therefore, it shall not be applicable to the import made by the petitioner. In reply to this contention Mr. Raja M. Iqbal, referred to subsection (2) of section 19 of the Customs Act, which provides that "a notification issued under subsectidn (1) shall be effective from the day specified therein,
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notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day". 7. We have given our anxious consideration to the contentions raised by the learned Advocates for the parties and the facts as well as law placed before us. 8. Before considering the contentions raised by the learned Advocates for the parties, it would be appropriate to reproduce various provisions of law to which reference has been made by the learned Advocates for the parties they are as follows:-- "1. Section 18 of the Finance Act, 1999 (1) Notwithstanding the provisions of subsection (1) of section 18 of the Customs Act, 1969 (IV of 1969) customs duties shall be levied.--- (a) subject to subsections (2) and (3), in respect of goods specified in column (1) of the Table I, at the rates specified in columns (3) and (4) thereof, (b) subject to subsection (4), in respect of the goods specified in column (1) of Table-II, at the rates specified in column (3) thereof, (c) subject to subsection (5), in respect of the goods specified in column (1) of Table-III, at the rates specified in column (2) thereof, and (d) subject to subsection (6), in respect of the goods specified in column (1) of the Table-IV, at the rates specified in column (3) thereof, Table 111 Description of goods Rate of Custom duties 1 2 II, 998 Customs Tariff and Trade Control Part II (1) (2) 4. Construction Equipment Tower Cranes ' 0% ' Batching plants with minimum capacity of 40 cubic meters per hour. Concrete transit mixers. ' Excavators. ' Mobile Cranes. ' Concrete pumps with capacity of 40 cubic meters per hour. Loader with minimum capacity of 2 cubic meters. 5.The goods are imported between the 1st of July, 1999 and the 30th June, 2000. 6. The goods are- 7. The Federal Government may, by notification in the official Gazette,--- (a) specify conditions, limitations or restrictions, for carrying out the purposes of this section, and (b) amend the Tables I, II, III and IV, so as to add any entry thereto or modify or omit any entry therefrom. 2. Section 30 and section 31-A of the Customs Act, 1969 "30. Date of determination of rate of import duty.--- The rate of duty applicable to any imported goods shall be the rate of duty in force, (a) in the case of goods cleared for home consumption under section 79, on the date on which a Bill of Entry is manifested under that section, and (b) in the case of goods cleared from a warehouse under section 104, on the date on which a Bill of Entry for clearance of such goods is manifested under that section: ' Provided that, where a Bill of Entry has been manifested in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is delivered:
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' Provided further that in respect of goods for the clearance of which a Bill of Entry for clearance has been manifested under section 104, and the duty is not paid within seven days of the Bill of Entry being manifested, the rate of duty applicable shall be the rate of duty on the date on which the duty is actually paid: ' Provided further that the Federal Government may, by notification in the official Gazette, for any goods or class of goods, specify any other date for the determination of rate of duty." "31-A Effective rate of duty.--- (1) Notwithstanding anything contained in any other law for the time being in force or any decision of any Court, for the purposes of sections 30 and 31, the rate of duty applicable to any goods shall include any amount of duty imposed under section 18, and the amount of duty that may have become payable in consequence of the withdrawal of the whole or any part of the exemption or concession from duty whether before or after the conclusion of a contract or agreement for the sale of such goods or opening of letter of credit in respect thereof. (2) For the purpose of determining the value of any imported or exported goods, the rate of exchange at which any foreign exchange is to be converted into Pakistan currency shall be the rate of exchange in force. (a) in the case of goods referred to in clause (1) of section 30, on the date (immediately preceding the date) referred to in that clause, (b) in the case of goods referred to in clause (b) of the aforesaid section, on the date (immediately preceding the date) referred to in that clause, and (c) in the case of goods referred to in section 31, the dates referred to in that section. 3. Section 19 of the Customs Act, 1969 "19. General power to exempt from customs duties.--- (1) The (Federal Government), subject to such conditions, limitations, or restrictions, if any as it thinks fit to impose, may, by notification in the official Gazette, exempt any goods imported into or exported from Pakistan or into or from any specified port or station or area therein from the whole or any part of the customs duties chargeable thereon. [(2) A notification issued under subsection (1) shall be effective from the day specified therein, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day). 4. S.R.O. 116(1)/2000, dated 7-3-2000. Finance Act, 1999 (Amendment in Table III) Gazette of Pakistan, Extraordinary, Part II, 10th March, 2000 ' S.R.O. 116(1)/2000, dated 7-3-2000.--- In exercise of the powers conferred by clause (b) of subsection (7) of section 18 of the Finance Act, 1999 (IV of 1999), the Federal Government is pleased to direct that the following further amendments shall be made in Table III of the said section, namely:- ' In the aforesaid Table, in Column (1), Serial Nos.1, 2, 3 and 4 and the entries relating thereto in Column (2) shall be omitted." 9. The first point for consideration is, as to when the Bill of Entry in this case was manifested in accordance with the provisions contained in the Customs Act, 1969. As pointed out by Mr. Raja M. Iqbal, learned counsel for the respondents, the petitioner himself stated in pars. 4 of the petition that the vessel carrying the Dump Truck entered the Karachi Port on or about 4th March, 2000 and the petitioner submitted documents for its release/clearance including the Bill of Entry on 8-3-2000 which were received by the Authorized Officer of the respondent No,3. However, during the course of arguments Mr. Choudhary Abdul Rasheed, learned counsel for the petitioner contended that the Bill of Entry was manifested on 4-3-2000. In support of his contention he submitted that according
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to the contents of Bill of Entry the I.G.M. Is dated 4-3-2000. He further contended that the Bill of Entry was presented to the concerned officers of the Customs Department on 4-3-2000 and if it was not manifested till 8th March, 2000, the petitioner could not be held responsible for the same. On the other hand Mr. Raja M. Iqbal, vehemently argued that the petitioner after clearly stating in para.4 of the petition that the Bill of Entry was presented on 8th March, 2000 is estopped from taking any plea to the contrary. He has next contended that even otherwise it is specifically provided in explanation to section 30 of the Customs Act, that for the purpose of section 30 "manifested" means when a machine number is allocated to Bill of Entry and is registered in customs record. He has submitted that the admitted position is that machine number was allocated to the Bill of Entry on 8th March, 2000 and, therefore, the Bill of Entry shall be deemed to have been manifested on 8- 3-2000. On perusal of para. 4 of the petition, the Bill of Entry and explanation to section 30 of the Customs Act, we are persuaded to agree with the submission of Mr. Raja M. Iqbal. It is, therefore, held that the Bill of Entry pertaining to the Dump Truck in consideration was manifested on 8th March, 2000. 10. The second point for consideration is as to when vested right shall be deemed to have been created in favour of the petitioner. For this purpose a question arises as to what is a vested right. This precise question came for consideration before a Division Bench of the erstwhile West Pakistan High Court, Peshawar Bench, in the case of Messrs Mardan Industries Ltd., Sakhakot, Malakand Agency and another v. Government of Pakistan and another PLD 1965 (W.P.) Pesh. 47, and the question was answered as follows:-- "18. A question may arise as to what is 'vested right'. The term`vested right' has not been defined by any statute. The learned counsel for the petitioners invited our attention to the discussion by A.S. Chaudhri, the learned author of Constitutional Rights and Limitations. Among other definitions at page 587 he defined the terms thus:--- 'It is an immediate fixed right of present or future enjoyment, and rights are vested in contradistinction to being expectant contingent." ' Continuing further on the same, page it is observed:-- "It must be a title to the present or future enjoyment of property, or to the present or future enforcement of a demand, or a legal exemption from a demand made by another. " ' The expression "vested right" is defined in Black's Law Dictionary as follows:-- "Vested rights. In Constitutional law, rights which have so completely and definitely accrued to or settled in a person that they are not subject to be defeated or cancelled by the act of any other private person, and which it is right and equitable that the Government should recognize and protect, as being lawful in themselves, and settled according to the then current rules of law, and of which the individual could not be deprived arbitrarily without injustice, or of which he could not justly be deprived otherwise than by the established methods of procedure and for the public welfare. Such interest as cannot be interfered with by retrospective laws, interests which it is proper for State to recognize and protect and of which individual cannot be deprived arbitrarily without injustice. American States Water Service Co. Of California v. Johnson, 31 Cal. App.2d 606, 88 p.2d, 770, 774. Immediate or fixed right to present or future enjoyment and one that does not depend on an event that is uncertain. A right complete and consummated, and of such character that it cannot be divested without the consent of the person to whom it belongs, and fixed or established, and no longer open to controversy. State ex rel. Milligan v. Ritter's Estate, Ind. App., 46 NE. 2d 736, 743. " 11. Now we will examine, whether with the manifest of Bill of Entry, the petitioner acquired a complete right for determination of rate of duty. 12. A perusal of section 30 of the Customs Act, reproduced above shows that the rate of duty applicable to any imported goods shall be the rate of duty in force on the date on which a Bill of
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Entry is manifested. It is, therefore, held that the petitioner acquired a vested right on 8-3-2000, when the Bill of Entry was admittedly manifested. 13. The rate of duty for the purpose of the Customs Act is prescribed in First Schedule or any other law for the time being in force by virtue of the provisions contained in section 18 of the Customs Act. There is no dispute on the point that by virtue of non obstante clause in section 18, of the Finance Act, 1999, it has overriding effect, and therefore, the rate of duty prescribed under section 18 of the Finance Act, 1999, shall be applicable to the imports between the first of July, 1999 and 30th June, 2000, in respect of the goods specified in the Tables I to IV in subsection (1) of section 18 of the Finance Act, 1999, until and unless any conditions, limitations or restrictions, for carrying out the purposes of said section 18 are specified or any amendment is made in the Tables I to IV by the Federal Government. 14. In view of the above admitted position of fact and law, to wit, the Dump Truck in question was imported by the petitioner on 4-3-2000, it was manifested on 8-3-2000 and Notification S.R.0.116(1)/2000 omitting the Column No,1, Serials Nos.1, 2, 3 and 4 in Table III, of section 18 of the Finance Act, 1999, was issued on 7-3-2000, but it was published in the official Gazette on 10th March, 2000, the question for consideration is as to when the amendment made by the S.R.O. Dated 7-3-2000, has taken effect. 15. The contention of Mr. Ch. Abdul Rasheed, is that the Federal Government is empowered under subsection (7) of section 18 of the Finance Act, 1999, to amend the Tables I to IV of section, 18, by Notification in the Official Gazette, meaning thereby that the notification shall be effective from the date it is published in the official Gazette and not from the date of issuance of the notification. In order to meet this contention of Mr. Ch. Abdul Rasheed, it is 'pleaded by Mr. Raja M. Iqbal, learned counsel for the respondents Nos.2 and 3, that subsection (2) was added to section 19 of the. Customs Act, to meet such objection. He submitted that in the wake of provisions contained in subsection (2) of section 19 of the Customs Act, 1969, the notification shall be effective from the date specified therein, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day. 16. We have given our very careful consideration to the contentions raised by the learned Advocates for the parties. After examination of the provisions contained in subsection (7) of section 18 of the Finance Act, 1999 and comparing the same with the provisions contained in sections 18, 18-A, 19(2), 25, 25B, 30, 59(2) and 219(1) of the Customs Act, 1969, section 13(2) and (5) and section 50 of Sales Tax Act, 1990, section 38 of the Central Excises Act, 1944, and section 1(3) of the Sindh Building Control Ordinance, 1979, we are…
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