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Petitioner: FECTO BELARUS TRACTOR LIMITED VS Respondent: GOVERNMENT OF PAKISTAN through JUDGMENT
Court Name: Supreme Court of Pakistan Judge(s): Iftikhar Muhammad Chaudhry, Rana Bhagwan Das, Shakirullah Jan Title:FECTO BELARUS TRACTOR LIMITED vs GOVERNMENT OF PAKISTAN through
JUDGMENT
Reported As: PLJ 2006 SC 472 Result: Petitions dismissed Judgment JUDGMENT Iftikhar Muhammad Chaudhry, J.--Petitioner seeks indulgence of the Court for initiating suitable action for contempt of Court in accordance with law against the persons or any other person is mentioned in the list appended with the application or against any one else, who is involved for violating the judgment dated 19th February 2001 passed in Civil Review Petition No, 80 of 1999 by this Court. 2. In view of the importance of the matter, we consider it appropriate to look into the background of the case. It is significant to note that as far back as 1994 the Government of Pakistan launched as scheme for providing tractors to the agriculturists/farmers under the Awami Tractor Scheme, through Agricultural Development Bank of Pakistan, at subsidized rates. To achieve the object, the payment of Customs Duty and Sales Tax was exempted in terms of SRO No, 921(1)/1994 dated 22nd September 1994 and SRO No, 1189(1)/1994 dated 11th December 1994. Accordingly the scheme was implemented and on the accomplishment thereof, the SROs referred to herein before were substituted with SRO No, 388(1)/1996 and SRO 414(1)/1996 dated 13th June 1996 respectively in pursuance whereof 10% Customs Duty and 18% Sales Tax on the import of Tractors were imposed. Subsequent thereto the Government of Pakistan launched Awami Tractor Scheme No, II for importing 10,000 Tractors. As the petitioner succeeded in fulfilling the specified conditions for the import of Tractors including the one to sell a Tractor at a price of Rs, 2,30,000/-, therefore, the letter of authorization was issued to it on 26th June 1996 by the Ministry of Food, Agriculture and Livestock Government of Pakistan [herein after referred to as `MINFALl. The contents of letter expressly provided that all concession provided under the first phase of scheme would be available to the
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petitioner as well and directions were issued to it to open letter of credit before 30th June 1996. This letter was followed by another letter dated 27th June 1997, issued by the "MINFAL", by way of a corrigendum, stating therein that the authorization letter issued in favour of the petitioner for the second phase of Awami Tractor Scheme was subject to amendment to the extent that the fixed price of the Tractor would be enhanced in the event of any fluctuation in the Exchange rate of US Dollars over Rs, 35.72. Further more, it was clarified that price of Rs, 230,000/- as agreed upon by the petitioner, was on the assumption that no Sales Tax had been imposed and that concession provided under SRO No, 921(1)/1994 dated 22nd September 1994 would continue in favour of petitioner for the import of the Tractors. It was the case of the petitioner that despite clear directions noted herein above Ministry of Finance imposed upon it Sales Tax at the rate of 18%. Customs Duty at the rate of 10% and the Service Charges at 2% respectively, therefore, it invoked the jurisdiction of learned Lahore High Court for the redressal of its grievance, by filing Constitutional Petition No, 21972 of 1996, but could not get relief as the petition was dismissed having become infructuous in view of the statement made by learned Deputy Attorney General, representating the Government of Pakistan that the matter in issue was examined by the Economic Co-ordination Committee (herein after referred to as "ECC") and the attention of the Court was drawn towards the approval granted by the competent authority whereby certain adjustment had taken place for the Awami Tractor Scheme. Leaving the petitioner at liberty to file fresh petition to question the adjustment made by the ECC, the High Court disposed of the petition vide order dated 24th February 1997. 3. Petitioner preferred ICA, which was allowed on 4th August 1997 declaring that petitioner was entitled to avail all concessions like exemption from the payment of Customs Duty and Sales Tax, in the same manner and to the same extent, which were made available under the original Awami Tractor Scheme qua the import of 10,000 Tractors by it under the authorization letter dated 26th June 1996 and Respondents Nos, 1 and 2 were restrained from withdrawing or amending the same to the disadvantage of the petitioner. 4. Against the order of ICA Bench, the respondents approached this Court by filing petition for leave to appeal Being No, 1084-L of 1997 wherein on 9th October 1997, leave was granted and finally the appeal was accepted on 1st September 1999, Contents of the concluding para read as under thus:- - "In the result, there appears to be force in the contentions raised by the learned Attorney General, Resultantly, the appeal is allowed and the judgment of the High Court is set aside. There will, however, be no order as to costs in view of the questions raised by the parties". 5. Petitioner preferred a Civil Review Petition Being No, 80 of 1999 wherein following prayer was made:- "It is, therefore, respectfully prayed that the order and judgment dated 1.9.1999 may graciously be reviewed and the appeal of the Respondents may kindly be dismissed. The above noted review petition was allowed vide judgment dated 19th February 2001. Concluding para therefrom reads thus:-- "37. To sum up, it is crystal clear that withdrawal of SRO exempting the payment of customs duties and the sales tax would not be applicable to the second phase of the scheme for the import of tractors because the Government itself after the withdrawal of notification had resiled from it to the extent of the import to be undertaken by the petitioner. Secondly, relying upon Al-Samrez case referred to herein above, the sales tax like the customs duty could not be levied upon the import by the petitioner because the petitioner is protected on the doctrine of estoppel as well as under the Economic Reforms Act, 1992. For the foregoing reasons, we would review the judgment with the result that the judgment of the Lahore High Court dated 4th August 1997 is restored, earlier judgment of this Court dated 1st of
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September 1999 rendered in CA No, 1176 of 1997 recalled and appeal dismissed with costs." 6. It appears that during pendency of the petition for leave to appeal, a request was made by the official respondents that the operation of the judgment 4th August 1997 passed by the learned High Court in ICA No, 84 of 1997 may be suspended. Request so made was allowed by way of granting interim relief in chamber on 1st September 1997. However, while granting leave to appeal on 9th October 1997 the condition of interim order was modified thereby directing the petitioner to furnish Bank Guarantee or Bank Guarantees of a Scheduled Bank to the satisfaction of the Collector Customs concerned within a period of one month or earlier. Accordingly, on acceptance of their Appeal No, 1176 of 1997, the Bank Guarantees were got encashed by them. 7. However, after the decision of Civil Review Petition No, 80 of 1999 vide judgment dated 19th February 2001, petitioner approached the Central Board of Revenue [herein after referred to as `CBR] for refund of the amount, paid towards the Customs Duty as well as Sales Tax and Service Charges. As needful was not done, therefore, petitioner filed instant petition for initiating action for contempt of Court against the respondents. 8. From the above facts following question emanates for consideration:-- Whether respondents have committed contempt of Court by not refunding the. Customs Duty, Sales Tax and the Service Charges to the petitioner in view of the judgment dated 19th February 2001 in C.R.P. No,. 80 of 1999? 9. Learned counsel contended that as a matter of right petitioner was entitled for refund of Customs Duty, Sales Tax and Service Charges amounting to Rs, 493,467,838/- (four hundred ninety three millions, four hundred sixty seven thousand and eight hundred and thirty eight) which were illegally recovered from it by encashing its unconditional bank guarantees furnished by it in pursuance of order of this Court dated 9th October 1997 'but instead of doing needful the Customs Department vide letter dated 11th May 2001, asked the petitioner to submit a certificate from a Chartered Accountant, confirming whether the incidence of Sales Tax has not been passed on to the consumers and reiterated this demand knowing well that the bank guarantee had been furnished unconditionally. However, petitioner without prejudice to its case in good faith obtained a certificate from their Chartered Accountant and submitted the same clarifying that during the period from 1st July 1996 to 30th June 2000, the Sales Tax has not been charged on the invoices raised by the company but surprisingly instead of fulfilling the requirement as aforesaid, the CBR, while defying the order of this Court dated. 19th February 2001, declined to accede to the request of the petitioner on the plea that it had set up a committee to look into the issue i,e, whether the burden of Sales Tax has been passed on or not by the petitioner vide letter dated 9th April 2002. According to him this device was adopted with a view to flout/violate/reverse the judgment of this Court. He emphasized that the CBR had no legal authority to raise such objection for the first time. Though this plea was available to them at the time of hearing of CRP No, 80 of 1999, thus the respondents were estopped from raising this plea. 10.He argued that petitioner furnished bank guarantee equal to the amount of Customs Duty. Sales Tax and Service Charges in pursuance of leave granting order dated 9th October 1997 in Civil Petition No, 1084L/1997, therefore, as soon as the judgment passed in Civil Appeal No, 1176 of 1997 dated 1st September 1999 was recalled on 19th February 2001, the petitioner as a matter of right was entitled to the refund of the amount but CBR on one pretext or the other deferred the payment in clear violation of the judgment passed in Civil Review Petition No, 80 of 1999, dated 19th February 2001. According to him the CBR could not be allowed on any ground, whatsoever, to non- implement the judgment, including the questions which are now being raised for the first time. 11.On the other hand learned Attorney General for Pakistan assisted by Mr. Muhammad Afzal Siddiqui, ASC contended that at the time of hearing of the Review Petition before this Court and even in the earlier litigation there was no question before the Court for determination "whether
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incidence of Sales Tax has passed on to the consumer of Tractors or not". He emphasized that the burden of Sales Tax has to be shared ultimately by the purchaser, therefore, to ascertain the correct position a committee was constituted by the CBR, who had no intention to flout/violate/severe the judgment of the Court, although judgment dated 19th February 2001 contained no directions for the refund of Customs Duty, Sales Tax and Service Charges. Besides, in the meantime, respondents had received evidence that Tractors had been sold by the petitioner at higher rate ranging between Rs, 399,000/- to Rs, 435,000/-, inclusive of Sales Tax, etc. qua the price fixed by the "MINFAL" i,e, Rs, 230,000/- therefore, it had become all the more necessary to probe into the matter. 12.Learned Attorney General also contended that the principle of unjust enrichment is fully invoked in the judicial system of this country notwithstanding the fact whether adjustment of the tax has got the statutory backing or not because if it is established that incidence of Customs Duty and Sales Tax have been passed on to the consumers by the importer, then latter is not entitled to the refund of the same. 13.It may be noted that instant proceedings have been instituted for initiating action for contempt of Court against the CBR and its officers. A careful perusal of the judgment dated 19th February 2001, reveals that on accepting the review petition, the judgment in Civil Appeal No, 1176 of 1997, dated 1st September 1999 was recalled as a result whereof the judgment dated 4th August 1997 of Lahore High Court stood restored. These two judgments do not contain any direction that petitioner would be entitled to refund of Customs Duty and Sales Tax etc. automatically. For' convenience sake concluding para from the judgment of High Court dated 4th August 1997 is reproduced herein below: "18. For the foregoing reasons, we accept this appeal, set aside order dated 24.2.1997 passed by the learned Single Judge and hereby declare that the appellant is entitled to avail all these concessions as regards exemption from the payment of the customs duty, sales tax, service charges and other taxes in the' same manner and to the same extent which were made available under the original Awami Tractor Scheme in relation to import of 10,000 Tractors by it under the authorization dated 26.6.1996 and Respondents Nos, 1 and 2 are hereby restrained from withdrawing or amending the same to the disadvantage of the appellant. The parties are however left to bear their own costs." 14. Learned counsel for petitioner in order to substantiate his plea relied upon the following judgments:-- 1. Hadkinson v. Hadkinson [(1952) 2 All E.R. 5661. In this case it is observed that it was the plain and unqualified obligation of every person against, or in respect of, whom an order was made by a Court of competent jurisdiction to obey it unless and until it was discharged. 2. The State v. Muhsin Tirmizey (PLD 1964 (WP) Lahore 434). In this case Court observed that the remarks made by an authority in this administrative function amounts to contempt of gross kind. In this case respondent Muhsin Tirmizey, the then District and Sessions Judge, Dera Ghazi Khan wrote a letter to the Chief Secretary to the Government of West Pakistan Lahore containing objectionable remarks against the High Court which were not only read by the Chief Secretary but it was also read by the others who dealt with it in the course of their duties, as such respondent was found guilty for the contempt of Court. 3. Dr. AN.M. Mahmood v. Dr. M.O. Ghani VC (PLD 1967 Dacca 67). In this case, the High Court of East Pakistan (Dacca) has held that the object of the discipline enforced by Court in case of 'contempt' is not to vindicate the dignity of the Judge in person, but to prevent undue interference with the administration of justice or the doing of an act the tendency of which is to deprive the Court of an unfettered course with a view to dispense even handed and,
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impartial justice in accordance with law. It is a part of our legal system that the Court should call upon the delinquents, if so found, to answer for the impediment which they have caused .to the steady course of judicial administration...." 4. Ekka Tonga Mazdoor Union u. The Aligrah Municipal Board (AIR 1967 Allahabad 93). in this case it is held that the orders of Courts are to be implemented and acted upon with promptitude. If their implementation is unduly delayed, it would amount to showing scant respect to the Court concerned and its judicial process, which would obviously be a serious contempt of that Court, even though the person sought to be injuncted or restrained might have had no intention to flout the order of the Court, for in many cases the very object of obtaining the order of stay or restraint would be rendered nugatory and the thing sought to be enforced or restrained by the Court might be accomplished or completed such as in the case of stay demolition etc. Moreover, considerable delay in carrying out an order of a Court after notice, without adequate explanation for laches, would by itself constitute serious contempt of Court inasmuch as it tends to undermine the prestige and authority of a Court of law and, the efficacy of its judicial process. A person who has obtained an order in his favour from a Court is entitled to instant relief and its delayed implementation would discredit the administration of justice. 5. Syed Aftab Ejaz v. The State (PLD 1978 Lahore 361). In this case the learned High Court held that in a case of contempt of Court the plea of intention, however, good it may be, cannot provide defence for flouting the order of the Court, because the order of the Court is to be strictly complied with and its compliance is a matter of strict liability. 6. Sri Krishna Singh v. Mathura Ahir [(1981) 4 SCC 421]. In this case a decree was passed against the petitioner for delivering the possession of the property to the plaintiff which was maintained ultimately by the Indian High Court, adjudging that the petitioner Sri Krishna Singh and others were trespasser and were directed to be evicted from the property in question but despite of it, possession was not delivered in utter disregard of Supreme Court's order and trying to delay or defeat the Court's decree for delivery of possession by adopting ingenious devices and subterfuges, therefore, proceedings were ordered to be taken against him for contempt of Court. 7. Isaaca v. Robertson [(1984) 3 All E.R. 140)]. It is observed in this case that order made by the Court of unlimited jurisdiction in the course of contentions between orders that are `void' in the sense that they can be ignored with impunity by those persons to whom they are addressed, and orders which are `voidable', in the sense that they may be enforced until set aside, since any order must be obeyed unless and until it is set side and there are no orders which are void ipso facto without the need for proceedings to set them aside. 8. X. Ltd. and another v. Morgan Grampian (Publishers) Ltd. and others. [(1990) 1 All E.R. 616] In this case it is held that right of audience can be declined to contemnor who not only refused to obey the order made by the Court but also rejected the authority of the Court to make an order binding on him. 9. Rana Muhammad Akram Khan v. The State (1993 P.Cr.L.J. 2044). In this case it is held that Disobedience or non-compliance of an order passed by the High Court whether intentionally or negligently and that too by a public functionary amounts to a contempt of Court. 10.Anil Sharma v. Virmani (1996 Cr.L.J. 3137). Learned counsel contended that in this case the Court has held that it is settled proposition of law that the Contempt Court cannot go behind the order. The opposite parties cannot be permitted to judge the merits themselves of an order quashed by the High Court or they cannot be permitted to defy the Court's order on the ground that the order is not correct. If this is to be permitted, the entire Judicial structure will fall down and every person will defy the orders on the ground that the order is
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not correct." Therefore, learned counsel's submission was that in instant case, the CBR had absolutely no authority to appoint a Committee for the purpose of ascertaining as to whether the incidence of burden of Sales Tax has been passed on or not. 11.M.F.M.Y. Industries Ltd. v. Collector of Customs (PLD 1996 Karachi 542). Learned counsel contended that in this judgment it has been held that it is totally unprecedented that a department would await the advice from the administrative agency before the implementation of the order, as it had happened in the instant case that the concerned Collector instead of refunding the amount, approached the CBR to avoid the effect of the judgment, therefore, strictly in accordance with the observation made in this reported judgment instant application has been filed for the proceedings of contempt of Court. 12.Abhijit Tea Company Ltd. v. Terai Tea Co. (P) Ltd. [(1996) 1 SCC 589)] In this case the Court observed that the arms of the Court are long enough to reach in justice wherever it is found, which should be dealt with appropriately. 13.Naveed Nawazish Malik v. Ghulam Rasool Bhatti (1997 SCMR 193). It is held in this case that to disobey or disregard an order, direction or process of Court which a person is legally bound to obey, willful breach of any undertaking given to a Court, any act intended to or which tends to bring the authority of the Court or the administration of law into disrespect or disrepute and to obstruct, interfere, interrupt or prejudice the process of law or the due course of any judicial proceeding fall within the category of contempt of Court. 14.Al-Jehand Triist v. Federation of Pakistan (PLD 1997 SC 84). In this case this Court held that if all the Executive and Judicial authorities in Pakistan are unable to act in aid of the Supreme Court and judgment is not implemented, then such situation would be open to be construed as impasse or deadlock and would amount to very unhappy situation reflecting failure of Constitutional machinery... 15.Government of Sindh v. Muhammad Hussain (2000 SCMR 1241). In this case the concerned Officer instead of implementing the order thought that filing of review operates automatic stay but this Court observed that the officials concerned, prima facie, found guilty for contempt of Court for having failed to implement the order of this Court. 16.M. Adil Hayat Khan v. Government of Sindh, (PLD 2002 Karachi 131). It is held in this case that the act of justifying the disobedience of the Court's Order, which is very clear and can be understood by any person who has passed the High School Examination in Pakistan reflects his stubborn and unreasonable attitude. 17.Wyatt Tee Walker et al v. City of Birmingham [US Supreme Court Reports (388 US 307)]. In this case it is held that as a general rule, an unconstitutional statute is an absolute nullity and may not form the basis of any legal right or legal proceedings, yet until its unconstitutionality has been judicially declared in appropriate proceedings, no person charged with its observance under an order or degree may disregard or violate the order or the decree with immunity from a charge of contempt of Court; and he may not raise the question of its unconstitutionality in collateral proceedings on appeal from a judgment of conviction for contempt of the order or decree. 15. Learned Attorney General contended that in absence' of a specific direction to refund Sales Tax to petitioner or for that matter Customs duty, no criminal liability of contempt of Court can be imposed upon the CBR or its Officers. He referred to the following judgments:-- 1.Hayat Ahmed Khan v. Bashir Sadiq (PLD 1952 Lahore 48). In this case during pendency of a suit, an order was passed on 14th March 1951 by a learned subordinate Judge, directing to the respondents to take the delivery of the machinery which had arrived at Karachi in presence of the petitioner or his representative or at any rate, after giving sufficient opportunity to the petitioner or his representative to be present. If, in spite of it, the
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petitioner was not present or represented the delivery should be taken after informing the Court. Allegedly, respondent took delivery of the machinery on 25th April 1951, without the order of the Court. Thus it was alleged that the order dated 14th March 1951 had been contravened. Ultimately, a petition was filed on original side before 'the Lahore High Court under Section 3 of the Contempt of Court Act, praying that the respondents be proceeded against and adequate punishment according to law for having committed contempt of Court of the sub- ordinate Judge be passed. In view of these facts, the Court formulated a question "whether in these circumstances can it be said that there was a contravention of any direction made by the learned Judge, such as, could invite penalties of the nature applicable in contempt? The learned Judge answered the question as follows:-- "......In my opinion answer must be in negative. Firstly if contravention of an order is to be visited with penalties of a criminal nature that order may be in clear and precise terms, setting out the obligations resting upon the person affected in clear and unmistakable language. The obligation must not rest upon any implication to be derived from any words used in respect of other matters by the Court, it must be couched in express terms and must be brought directly to the notice of the party" 2. State of Pakistan v. Mehrajuddin [PLD 1959 SC (Pak.) 147]. In this judgment it has been held as follows:-- "It is true that the usual method of enforcing a judgment granting an order of mandamus is by commitment for contempt but such a mandamus must be of an absolute nature. An order directing the reinstatement of a person in a great public Department is not one which can be executed on the instant. It involves a great many considerations such as seniority, suitability, salary, and treatment of the period of absence etc., which are exclusively within the competence of the…
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