Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Petitioner: MUHAMMAD SALEEM BIKIYA through Attorney and 14 others VS Respondent: PAKISTAN through Secretary Ministry of Commerce and another
Court Name: Sindh High Court Judge(s): Omar Sial, Munib Akhtar Title:MUHAMMAD SALEEM BIKIYA through Attorney and 14 others vs PAKISTAN
through Secretary Ministry of Commerce and another Case No.: C.Ps. Nos. D-4780 to 4782 and 2605 of 2017 Date of Judgment:2018-02-19 Reported As: 2018 PTD 2026 Result: Petitions dismissed Judgment ORDER MUNIB AKHTAR, J.---These petitions arise under and in relation to the Anti-Dumping Duties Act, 2015 ("ADD Act"). The authority that acts under and in respect of the ADD Act is the National Tariff Commission ("NTC"), which is a statutory body set up under its own statute, the National Tariff Commission Act, 2015 ("NTC Act"). The petitioners are aggrieved by two sets of proceedings/complaints initiated under the ADD Act. In one the final, and in the other a provisional, determination has been made and the petitioners challenge both. The grounds of attack, which are two, are the same in all cases and may be stated at the outset in broad terms. Firstly, it is contended that the anti-dumping duty is a tax, and inasmuch as it is determined and imposed by the NTC acting under the ADD Act, there has been an impermissible delegation of legislative power. The second ground is that the import data that underpins and forms the basis of the complaints, and which has admittedly been provided to the complainants by NTC, has been made available in violation of law. Reliance in this regard is placed on section 155H of the Customs Act, 1969. Hence, the very foundation on which the complaints rest is said to be unlawful and fatally compromised. The complaints and the determinations must therefore, according to the petitioners, fail and be set aside. Relief is sought accordingly. Needless to say, learned counsel for the complainants and NTC strongly contest the case sought to be made out for the petitioners. 2. Learned counsel for petitioners, referring to section 50 of the ADD Act which provides for mandatory imposition of anti-dumping duty, submitted that the duty was nothing other than a tax and that, therefore, it came within the competence of the legislature which alone could impose the duty. Learned counsel contended that the NTC could not be conferred any such power. Learned
---
## Page 2
counsel referred to the preamble to the ADD Act which specifically provides that the Act has been placed on the statute book to give effect to Pakistan's obligations under Article of the General Agreement on Tariffs and Trade, 1994 and to the Agreement on the Implementation thereof. The purpose of the ADD Act and the Agreement were to provide protection to local industry in the country on import on account of any dumping and the injury caused thereby. Referring to section 3 of the Act learned counsel submitted that subsection (1) used the word "anti-dumping measures" in the plural. Thus, according to learned counsel, there could be different measures adopted to achieve the purpose of preventing the dumping which causes injury to local industry. One of these measures was imposition of an anti-dumping duty. Learned counsel submitted that though the anti-dumping duty was a price control mechanism, such mechanisms could take different forms one of which was to control price by the imposition of a tax or duty. There could be other measures adopted in this regard also. However, the one chosen by the ADD Act was to impose price control by way of a tax. Learned counsel submitted that the anti-dumping duty imposed thereby was a compulsory exaction and therefore came squarely within the well-known description of a tax. But, and this constituted the core of his submissions on the first ground, since the anti-dumping duty was a tax it could only be imposed by the legislature and could not be delegated to the NTC in the manner as laid out in the Act. Learned counsel submitted that the anti-dumping duty was a special kind of tax. It was submitted that the Agreement also recognized this aspect and reliance was placed in particular on footnote 12 to Article 4.2 of the Agreement. This footnote provides as follows: "As used in this Agreement "levy" shall mean the definite or final legal assessment or collection of a duty or tax". Thus, according to learned counsel the anti-dumping duty was nothing but a tax as understood by and in the jurisprudence of this country. Learned counsel submitted that this interpretation accorded with the manner in which anti-dumping duty was regarded in other jurisdictions. Reference was made to EU law and to a certain Council Regulation as also some decisions of the European Court of Justice. Learned counsel also relied on certain academic literature in this regard. Learned counsel submitted that the anti-dumping duty was in its essence a customs duty and submitted that the ADD Act was structured in such a way that the essential legislative function had been delegated to the NTC. It was submitted that this was an impermissible delegation of legislative power and learned counsel referred to various cases in this regard. Thus, it was contended that the ADD Act could not be given any force or effect in the manner as enacted, although learned counsel fully accepted the need to implement the Agreement within the municipal law of Pakistan. As we understood him, his grievance was not with the imposition of an anti-dumping duty as such but rather with the manner in which this exercise had been carried out by the legislation currently in force. 3. With regard to the second ground of attack, learned counsel placed reliance on section 155H of the Customs Act. This relates to the confidentiality of trade information gathered by the Customs Department during the clearance of goods. Referring to the complaints on the basis of which the NTC had taken action and commenced proceedings under the ADD Act, learned counsel submitted that such complaints were based crucially and essentially on the customs data provided to the complainants by NTC. Learned counsel submitted that this was unlawful, as such data was protected as confidential information in terms of section 155H. Learned counsel submitted that insofar as the ADD Act itself was concerned, there was as such no provision therein for the providing of data to a person by the NTC in order to enable such person to make a complaint under the Act, and reference was made to sections 31 and 35. Thus, according to learned counsel, the information and data that formed the basis of the complaints had been unlawfully acquired and it was submitted that information obtained in this manner could not support any lawful action. Furthermore, learned counsel submitted, when the petitioners had sought to obtain the same data and information from NTC, their request had been declined. Thus, it
---
## Page 3
was submitted, NTC had acted in a clearly discriminatory manner which further compounded the illegalities that had occurred in the entire exercise that had been and/or was being carried out. Learned counsel submitted that on both these grounds, the proceedings and determinations challenged ought to be quashed and prayed accordingly. 4. Learned counsel for the complainants, i.e. the private respondents, submitted that there were two challenges mounted by the petitioners. Firstly, what was the nature of anti-dumping duty and secondly, whether there had been any violation of section 15511. On the first question learned counsel submitted that the anti-dumping duty was not a tax. It was, in fact, a regulatory charge or a penalty. In this regard learned counsel submitted that the ADD Act had not been passed as a Money Bill but as legislation in the ordinary course. It was submitted further that the amounts recovered under this head were classified as non-tax revenue by the Federal Government and finally it was contended that the anti-dumping duty was a person specific levy which was particularized in the manner as provided for under the ADD Act and it was subject to appeal. Thus, it was not a tax at all. Learned counsel submitted that the nature of the anti-dumping duty as a regulatory charge or penalty meant that it was relatable to entry Nos. 3, 27, 32 and 56 of Part-I of the Federal Legislative List. However, primarily reliance was placed on entry No.27 which, inter alia, provides for the legislative competence of import and export across customs frontiers and trade and commerce with foreign countries. Learned counsel submitted that the purpose of the anti- dumping duty was to regulate international trade. 5. Amplifying his submissions as to the nature of the anti-dumping duty, learned counsel submitted that in addition to the well-known categories of "tax" and "fee" there was another sort of charge that could be imposed by the legislature being a regulatory charge and that the antidumping duty squarely fell in this category. Reliance was placed primarily on a judgment of the Supreme Court of Canada reported as Westbank First Nation v. British Columbia Hydro and Power Authority [1999] 3 SCR 134. Referring to various passages from the judgment, learned counsel submitted that they aptly described the nature of a regulatory charge and were fully applicable to the anti-dumping duty imposed under the ADD Act. Reference was also made to a decision from South Africa in which the Canadian decision was followed and applied. Learned counsel submitted that the primary purpose of antidumping duty was not to raise revenue. Rather, it was to regulate the international movement of goods so as to discourage exporters from engaging in dumping and to disincentivize such acts or practices. Learned counsel submitted that this aspect was amply demonstrated in the Act itself which provided that if the anti-dumping duty imposed was successful, then there would be no amount received in terms thereof, i.e., that no revenue would be raised. Referring to the nature of antidumping duty as a penalty, learned counsel submitted that it was relatable to entry No.56 of the Federal List. Thus, according to learned Counsel the conduct that was proscribed by the ADD Act was dumping as therein defined and the consequence of such dumping was the penalty that had to be paid in terms of the duty. Learned counsel submitted that entry Nos.3 and 32 of the Federal List also came into play because admittedly the position was that the ADD Act had been enacted in order to give effect to an international treaty. Learned counsel submitted, in the alternative, that even if the anti-dumping duty was a tax, i.e., that it was a customs duty (which was not accepted) even then Article 77 of the Constitution was not contravened. Reliance was placed on certain case law in this regard. 6. In so far as section 155H was concerned, learned counsel submitted that there had been no violation of this provision and drew attention to clauses (c), (d) and (e) thereof. Learned counsel submitted that the data that was provided to the respondents in order to enable them to file their complaints was general and generic in nature and did not provide the details of particular importers or exporters as such. The data provided, according to learned counsel, was concerned only with the quantities imported and the prices declared. Reliance was also placed on the
---
## Page 4
National Tariff Commission Rules, 1990 and learned counsel submitted that Rule 3 thereof could be read along with section 155H. Reference in this regard was also made to a Division Bench judgment of this Court. 7. Learned counsel for NTC submitted that there were three issues before the Court. Firstly, whether the anti-dumping duty was a tax or otherwise; secondly, whether the subject matter of the ADD Act was within the legislative competence of Parliament; and thirdly, whether there had been any breach or violation of section 155H of the Customs Act. As regards the first issue learned counsel submitted that anti-dumping duty was entirely different from a tax. A tax, according to learned counsel, was levied or imposed for purposes of raising revenue. The purpose of the anti-dumping duty was to guard against unfair trading practices. It was submitted that anti-dumping duty could be avoided altogether by the simple expedient of goods not being sent to this country at an "export price" that was lower than the "normal price". Thus, there was no element of taxation in the imposition of anti-dumping duty. Learned counsel submitted that imposition of a tax was a commercial or fiscal policy measure whereas no such policy could be ascertained in the imposition of anti-dumping duty. It was simply a trade remedy measure. Learned counsel submitted that there was no compulsory exaction in the imposition of anti-dumping duty and in this context referred to the "price undertakings" envisaged by Part XII of the ADD Act. Learned counsel submitted that under the WTO system customs duties in the context of international trade had to be imposed on an MFN (most favored nation) basis which principle was one of the twin pillars supporting the international trade system. The MFN principle required that tariffs of duties be imposed without discrimination. The anti-dumping duty made permissible by and in terms of the WTO system was a recognized and accepted derogation from this freedom of trade, allowing exporter and/or country specific action to be taken in case there was any dumping and injury. Learned counsel submitted that while customs duty under the WTO system could not be imposed beyond the bound tariffs, the anti-dumping duty constituted a charge over and above the said tariffs, which again showed that it was not a tax. . 8. Continuing with his submissions, learned counsel submitted that the true nature of anti- dumping duty was that it was a trade protection measure, which could also be described as a deterrent and/or a remedial measure or a price control mechanism. Learned counsel submitted that the ADD Act was covered by entry Nos. 3, 27, 32 and 59 of the Federal list, but placed principal reliance of entry Nos. 3 and 32. Learned counsel submitted that the term "anti-dumping duty" was just a label and the form of the matter could not override the substance thereof. Once the legislative competence of Parliament to enact the ADD Act had been established (which, learned counsel contended, was indeed the case) then what the measure was called was not relevant. Learned counsel also submitted that it was well settled that the Court should not too readily conclude that a statute was ultra vires the Constitution. As regards section 155H of the Customs Act, learned counsel referred to various provisions of the NTC Act including in particular section 10(3) thereof and submitted that when these provisions were read with the National Tariff Rules, 1990, there was more than ample power available with NTC to provide information and data to any party in order to enable it to file a complaint under the ADD Act. In this regard reference was also made to section 20 of the latter statute. 9. Learned counsel for respondent No.3 in C.P.D-4780/2017 referred to Article 77 of the Constitution and submitted that the anti-dumping duty was a regulatory charge to regulate the conduct of foreigners exporting goods to this country. Learned counsel submitted that anti-dumping duty was neither a tax nor a fee but a third kind of levy, i.e., regulatory charge. Learned counsel submitted that in its pith and substance the ADD Act was relatable to entry No.27 of the Federal list and placed reliance on a decision of the Lahore High Court reported as D.S. Textile Mills Ltd v. Federation of Pakistan PLD 2016 Lahore 355. Learned counsel referred to several passages from this judgment.
---
## Page 5
Referring to Article 73(3)(a) of the Constitution, learned counsel submitted that the sort of levies mentioned therein did not constitute an exhaustive list of the categories in which the appropriate legislative competence could be exercised by the concerned legislature. It was submitted that a regulatory charge was well within the scope of entry No. 27 and reliance was placed accordingly. Learned counsel also referred to entry No.54, which allows for the imposition of fees and submitted that this term, when used on the constitutional plane, should be given a broad meaning and that therefore anti-dumping duty could also regarded as a regulatory fee chargeable in terms of entry No. 27. As regards the second ground taken, i.e., with reference to section 155H, learned counsel plated reliance on various provisions of the NTC Act including the aforementioned section 10(3), as well as the section 20 of the ADD Act. It was further submitted that Rule 3 of the Anti-Dumping Duties Rules 2001, in its clauses (f), (g) and (h) covered the objection that had been taken by learned counsel for the petitioners as regards the second ground. The learned DAG adopted the submissions made as noted above by learned counsel for the various respondents. 10. The right of reply was exercised. Learned counsel for the petitioners submitted with regard to the information that had been provided that in the cases at hand it was only provided to the complainants and not to the petitioners when they sought the same treatment from NTC. This, learned counsel submitted, was patently discriminatory. It was submitted that the manner in which NTC had acted in this regard was mala fide and hence without jurisdiction thereby vitiating the entire exercise. As regards the data actually provided to the complainants, learned counsel submitted that, in fact, the data was not in anonymous form as was being claimed but the particulars of specific parties could be established from the same. Referring to the NTC Act and section 10 thereof, learned counsel submitted that the concept of "information" as used therein divided information into various categories and that subsection (3) being relied upon did not apply to "confidential information'. Reference was made to other provisions of the Act as well. Learned counsel further submitted that the power conferred on NTC under section 10(3) was only in relation an "investigated protect" in terms of section 3 of the ADD Act and not otherwise and that therefore even on such basis the information provided in the instant cases was a violation of the law. As regards section 155H, learned counsel submitted that the various clauses thereof soughr to be relied upon to justify the release of information/data did not apply in the facts and circumstances at hand. As regards the decision of the Lahore High Court, learned counsel submitted that it only established the distinction between "fee" on the one hand and "license fee" on the other and therefore did not provide any support for the broad propositions put forward on behalf the respondents. Finally learned counsel submitted that the Canadian decision relied upon could not apply as it would be contrary to the law laid down by the Supreme Court in various decisions already relied upon including in particular Iqbal Zafar Jhagra v. Federation of Pakistan 2013 SCMR 1337. 11. We have heard learned counsel as above, considered the record and material, and the case law cited and relied upon. We may note firstly that both the ADD Act and the NTC Act were preceded by earlier statutes, being respectively the Anti-Dumping Duties Ordinance, 2C00 and the National Tariff Commission Act, 1990. The Anti-Dumping Duties Rules, 2001 ("ADD Rules") and the National Tariff Commission Rules, 1990 ("NTC Rules"), which are continued under the present legislation, were framed under the predecessor laws. Secondly, as is clear from the preambles of both the ADD Act and the predecessor Ordinance, they were enacted to give effect in the municipal law to Pakistan's obligations under the World Trade Organization treaties which have set up the principal system of international trade, the WTO system. In particular, the legislation gives municipal effect to Article VI of the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Implementation of Article VI ("AD Agreement"). A comparison of the ADD Act and the AD Agreement shows that the former seeks to faithfully give effect to the latter. The WTO system was
---
## Page 6
the culmination of several years and rounds of multi-lateral negotiations known as the Uruguay Round. The member states of the WTO entered into a whole series of agreements relating to different aspects of international trade, which have been given effect in our municipal law either by various statutes relatable to specific agreements (as is the case at hand) or by extensive amendments in existing legislation. Thus, e.g., the Agreement on Valuation was given effect by amendments made in the Customs Act, 1969 and rules thereunder. These have been considered in detail in Sadia Jabbar v. Federation of Pakistan and others PTCL 2014 CL 537 (SHC, DB; herein after "Sadia Jabbar"). An important aspect of the WTO system is an elaborate dispute resolution mechanism. (Reference may be made in this regard to Article 17 of the AD Agreement.) In Sadia Jabbar, the dispute resolution mechanism was explained in the following terms (pp. 565-6):-- "9. ... In order to understand the full significance of the obligations undertaken by member states under the WTO system, it must also be kept in mind that the WTO provides for a detailed formal mechanism for dispute resolution, to which any member state can resort if it is of the view that another member state is not fulfilling its WTO obligations. This mechanism is contained in a separate agreement known as the "Understanding on Rules and Procedures governing the Settlement of Disputes" (generally referred to as the "Dispute Settlement Understanding" or "DSU").... The DSU provides for an adjudicatory mechanism by which binding rulings can be made by "panels" and, on appeal, by appellate bodies. If the defaulting state fails to abide by its obligations, and the relevant panel and/or appellate body find against it, then the aggrieved member state may, if certain conditions are met, impose sanctions (known as "measures") against the former. Thus, the WTO system has a lot of bite in it, and member states must be, and generally are, careful to ensure that they are compliant with their obligations under its various agreements." 12. Before proceeding further, it will be convenient to give a brief description of anti-dumping as understood within the WTO system. In fact, actions taken by governments to protect local industry against dumping long predate the WTO system. The WTO gives the following description on its website (www.wto.org), right at the opening of the webpage relating to "anti-dumping": "If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be "dumping" the product. The WTO Agreement does not regulate the actions of companies engaged in "dumping". Its focus is on how governments can or cannot react to dumping --- it disciplines anti-dumping actions, and it is often called the "Anti-dumping Agreement"." In follow-up webpages, there is an elaboration in the following terms: "Binding tariffs, and applying them equally to all trading partners (most-favoured-nation treatment, or MFN) are key to the smooth flow of trade in goods. The WTO agreements uphold the principles, but they also allow exceptions---in some circumstances. Three of these issues are: actions taken against dumping (selling at an unfairly low price) subsidies and special "countervailing" duties to offset the subsidies emergency measures to limit imports temporarily, designed to "safeguard" domestic industries." "Anti-dumping actions If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be "dumping" the product. Is this unfair competition? Opinions differ, but many governments take action against dumping in order to defend their domestic industries. The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping - it disciplines anti-dumping actions, and it is often called the "Anti-Dumping Agreement".... The legal definitions are more precise, but broadly speaking the WTO agreement allows governments to act against dumping where there is genuine ("material") injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is
---
## Page 7
taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter's home market price), and show that the dumping is causing injury or threatening to do so. GATT (Article 6) allows countries to take action against dumping. The Anti-Dumping Agreement clarifies and expands Article 6, and the two operate together. They allow countries to act in a way that would normally break the GATT principles of binding a tariff and not discriminating between trading partners typically anti-dumping action means charging…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.