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Petitioner: Messrs AIMNAZ (PVT.) LIMITED VS Respondent: FEDERATION OF PAKISTAN, through the JUDGMENT
Court Name: Islamabad High Court Judge(s): Aamer Farooq Title:Messrs AIMNAZ (PVT.) LIMITED vs FEDERATION OF PAKISTAN, through the
JUDGMENT
Reported As: 2018 PTD 1966 Result: Petitions dismissed Judgment JUDGMENT AAMER FAROOQ, J.---This judgment shall decide the instant petition as well as petitions mentioned in the list attached herewith, as common questions of law and facts are involved. 2. The Petitioners, in all the petitions, are aggrieved of investigations initiated, Preliminary and Final Determinations made by National Tariff Commission (NTC) under the Anti-Dumping Duties Act, 2015 (The Act). In this behalf, the NTC is a body created under National Tariff Commission Act, 2015 (NTC Act) which has been given the power and has statutory duty to inter nlia commence investigation; make Preliminary Determination and also the Final Determination with respect to the complaints made or suo motu proceedings initiated regarding the import of material by the importers at an extremely low price, so as to constitute dumping within the meaning of phrase as provided in the Act. The procedure adopted by NTC in investigating the matter, passing Preliminary and Final Determinations is governed by the Act, as well as NTC Act. As noted hereinabove, the Petitioners are aggrieved of the initiation of the process or passing of order against them inasmuch as they are the importers and complaints have been made against them by Private Respondents/Complainants in the petitions and on the basis thereof, Anti-Dumping Duties have been imposed by NTC. The Petitioners are importers of various items and the same is not confined to any particular product, however, regardless of the fact that the import material is different in the petitions, all the petitions are being decided together since regardless of the material imported the procedure adopted for investigation or making determination and imposition of Duty is governed under the above mentioned law. 3. Munawar-us-Salam, Advocate Supreme Court, led the arguments on behalf of the Petitioners.
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The main thrust of the arguments on behalf of the Petitioners was that the imposition of Anti- Dumping Duty in essence is a tax which cannot be levied and imposed by NTC inasmuch as under Article 77 of the Constitution, it is only within the competence of the legislature i,e, the Parliament with respect to Federal Tax and cannot be done by an Executive act. In the alternative, it was argued that the levy and imposition of Anti-Dumping Duty is a result of excessive delegation by the Parliament which is not tenable under the scheme of the law. Learned counsel contended that all the three pillars of the State are required to observe the limits prescribed on the exercise of their powers by the Constitution without transgressing into the sphere reserved for others. 4. It was further submitted that under Article 77 of the Constitution, no tax can be levied for the purposes of Federation except by or under the Authority of the Parliament/Majils-e-Shoora. Attention was drawn towards Article 260 of the. Constitution which defines taxation as including imposition of any tax or duty whether general, local, or special. In this context, it was submitted that the levy of Anti-Dumping Duty is a tax, which falls within the domain of the Parliament exclusively and the Executive is excluded to impose such a levy. It was argued that the Provisional Determination which imposes the Anti-Dumping Duty being violative of the scheme of the Constitution is liable to be set-aside. 5. Mr. Munawar-us-Salam, Advocate Supreme Court further submitted that in light of the Article 77 of the Constitution Parliament cannot delegate its power to impose tax/duty to the executive, hence, Sections 3, 37, 39, 43, 55 and 63 of the Act which provides for levy of the Anti-Dumping Duty and its determination by. NTC are ultra-vires the Constitution, which needs to be declared so. 6. In the alternative, it was submitted that delegation of the powers to impose Anti-Dumping Duties under the Act are also hit by doctrine of excessive delegation of power without there being any parameters, scope or limits on such power. Learned counsel further contended that NTC has been created under the statute and its functipn is to advice the Federal Government on tariff and other trade measures to provide assistance to the domestic industry and to improve the competitiveness of domestic industry. The provisions of the NTC Act overrides all other laws including the provisions of the Act, hence, the levy of the Anti-Dumping is in sheer violation of Article 77 of the Constitution as well as Sections 8 and 12 of the NTC Act. 7. Learned Counsel submitted that Section 37 of the Act read with Section 43 thereof, empowers NTC to impose Anti-Dumping Duties by way of Preliminary Determination provided as such determination is made within 180 days of the initiation of an Anti-Dumping Investigation. In case the Anti-Dumping Duty has been imposed after the expiry of 180 days the same shall be barred by law and would be without jurisdiction. In this context, it was argued that since the Preliminary Determination has been made beyond the period of 180 days in most of the cases, therefore, the assumption of jurisdiction by NTC upon application of the Complainants! Private Respondents are absolutely without jurisdiction and beyond the scope of the Act. In support of his contentions, learned counsel placed reliance on the precedents from local jurisdiction as well foreign jurisdiction. Reliance was placed on cases reported as "Muhammad Khalid Qureshi v. Province of Punjab through Secretary, Excise and Taxation Department, Lahore and another" (2017 PTD 805), "Messrs Khawer Paper Mart through Proprietor v. National Tariff Commission through Chairman and another" (2011 PTD 2243), "Sh. Abdur Rahim, Allah Ditta v. Federation of Pakistan and others" (PLD 1988 SC 670), "Flying Cement Company v. Federation of Pakistan and others" (PLD 2016 Lahore 35), U.K. Industries Ltd. v. Union of India (UOI)"[2005 (103) ECC 152], "Workers' Welfare Funds, M/o Human Resources Development, Islamabad through Secretary and others v. East Pakistan Chrome Tannery (Pvt.) Ltd. and others (PLD 2017 SC 28), "Engineer lqbal Zafar Jhagra and another v. Federation of Pakistan and others." (2013 PTD 1491), and "Human Rights Case No,14392 of 2013" (2014 SCMR 220). 8. The foreign case law relied upon by the Petitioners was "South African Reserve Bank and another
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v. Mark Richard Shuttleworth and another" [(2015) ZACC 17], "Westbank First Nation v. British Columbia Hydro and Power Authority" [(1999) 3 SCR 134], "State of Rajasthan and others v. Sajjanlal Panjawat and others (AIR 1975 SC 706), "United States v. La Franca" (282 U.S. 568), "United States v. Reorganized Cf and I Fahricators" (518 U.S. 213), and "Leake v. Commissioner of Taxation (State)" [(1934) 36 WALR 66]. 9. The other learned counsel for the Petitioners endorsed the submissions made by Mr. Munawar- us-Salam, Advocate Supreme Court, however, it was added that the investigation period for determining dumping is in contravention of the stipulated time allowed under Section 36(2) of the Act. It was argued that pursuant to Section 36(2) of the Act, investigation period for determining dumping shall normally cover twelve (12) months preceding the month of initiation of the investigation, hence, the investigation period has to be a year before in which the imports were made, whereas, in some of the cases. the same was prior to the preceding 12 months i,e, W.P. No,3581/2017, W.P.No,3579/2017 and W.P.No,129/2018. It was argued that though under the proviso discretion vests with NTC to allow investigation beyond the period of 12 months but the same has to be exercised in a reasonable and structural manner which has not been done in the instant case. Reliance was placed on "Corruption in Hajj Arrangements in 2010" (PLD 2011 SC 963), "Tariq Aziz-ud-Din and others" (2010 SCMR 1301), "Abid Hassan and others v. PIAC and others" (2005 SCMR 25), "Allah Yar v. GM Railway, Headquarter" (2001 SCMR 256) "Muhammad Aslam v. Vice Chariman and others" [2010 PLC (CS) 266]. It was also added that under Section 39 of the Act the Final Determination is to be made within one hundred eighty (180) days of the date of publication of a notice of Preliminary Determination, which also has not been done in the instant cases, therefore, the actions are without lawful authority. Reliance was placed on the principles that where law requires anything to be done in a particular way that ought to be done in that way. Reliance was placed on "Ghulam Hussain v. Jamshaid Ali and others" (2001 SCMR 1001). It was reiterated that only the Parliament is competent to levy the tax in case of Federation. Reliance was placed on "Pakistan Tobacco Company Ltd., v. NWFP" (2002 CLC 1910), "Muhammad Aslam v. Punjab Government" (1996 MLD 685); that the Anti-Dumping Duty is a tax pursuant to Article 260 of the Constitution, hence, can only be levied by the Parliament in light of the dictum of the august Apex Court in "Mustafa Impex v. Federation of Pakistan and others" (PLD 2016 SC 808); that the Anti Dumping Duty is a not a fee as there is no element of Quid Pro Quo in light of the recent decision of Hon'ble Supreme Court of Pakistan reported as Workers' Welfare Funds, M/o Human Resources Development, Islamabad through Secretary and others v. East Pakistan Chrome Tannery (Pvt.) Ltd. and others (PLD 2017 SC 28), as well as "Iqbal Zafar Jhagra and another v. Federation of Pakistan and others" (2013 SCMR 1337), "M/s Sajid Traders, Lahore and 04 others v. M/o Commerce, Government of Pakistan and 4 others" (2013 PTD 698). It was contended that NTC is a creation of statutes and can only perform functions which are provided under the law. Reliance was placed on "Gadoon Textile Mills v. WAPDA" (1997 SCMR 641). It was submitted that by virtue of Section 30 of the NTC Act, the Provision of the Act override all other laws. It was also contended that the Acts of the NTC are in violation of the fundamental rights of the Petitioners. Reliance was placed on "Faisal Sultan v. E.D.O. (Education) and others" [2011 PLC (C. S.) 419]. 10. Conversely, the Respondents opposed the petitions. Mr. Ahmed Sheraz, Advocate High Court appearing on behalf of NTC explained that the word dumping is recognized as selling of product in the foreign country for less than the prevailing price of the said product in the domestic country. It was argued that Anti-Dumping Duty is not a tax, as there are features whether make it distinguishable. In this behalf, learned counsel contended that I n i-Dumping Duty is to be imposed as a guard against the unfair `r^cle and is a trade remedial measure in order to offset injurious effect to a specific industry. It was contended that it is not a compulsory exaction which is the fundamental feature of the tax and is only imposed on the dumped goods, it is country specific
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and export specific. Learned counsel in order to elaborate his contention regarding the concept of dumping and levy of the Anti-Dumping Duty took the Court through Sections 3, 43, 46 and 50 of the Act. It was also added that the matter is within the legislative competence of the Parliament and it has not abdicated its powers. In support of his contentions, learned counsel contended that it falls within the permissible delegation of power. Reliance was placed on "Zaibtun Textile Mills Ltd. v. Central Board of Revenue and others" (PLD 1983 SC 358). Attention was also drawn towards Entries Nos,3, 32 and 59 of the Federal Legislative List Reliance was also placed on the case law from English jurisdiction to substantiate that delegation of power is permissible. The case law relied upon was "Hodge v. Regina" (1883 3 Appeal Cases 117), "Cobb and Co. Ltd. v. Kropp" (1967 1 AC 141). Likewise, reliance was also made on cases from Indian and Local jurisdiction i,e, "Calcutta and another v. Liberty Cinema" (AIR 1965 SC 1107), "East and West Steamship Co. v. Pakistan" (PLD 1958 CIVIL SERVANT (Pak.) 41), "Muhammad Ismail and Co. and others v. Chief Colton Inspector" (PLD 1966 SC 388), "Zaibtun Textile Mills Ltd. v. Central Board of Revenue and others" (PLD 1983 SC 358), "Khauja Ahmed Hassan v. Government of the Punjab" (PLD 2004 SC 694). It was contended that the issue involved is distinguishable from "Engineer Iqbal Zafar Jhagra and another v. Federation of Pakistan and others" (2013 PTD 1491). It was also submitted that there are judgments which are opposed to the case of Zafar Iqbal Jhagra which authorize the levy of Regulatory Duty through sub-ordinate legislation. Reliance was placed on "Indus Trading and Contracting Company v. Collector of Customs (Preventive) Karachi and others" (2016 SCMR 842). In so far as, decision of the case or investigation within the prescribed time period is concerned, it was contended that the same is directory and not mandatory inasmuch as no consequence has been provided. Reliance was placed on "Molana Noor-ul-Haq v. Ibrahim Khalil" (2000 SCMR 1305), "Ghulam Hassan v. Jamshaid Ali and others" (2001 SCMR 1001). It was further submitted that there is a presumption in the constitutionality of any instrument and the Courts should exercise restraint in striking down any provision of the statute. Reliance was placed on "Lahore Development Authority through D.G. and others v. Imrana Taiwana and others" (2015 SCMR 1739). Learned counsel also took the Court through various provisions of the Act as well as NTC Act. 11. Arguments were also addressed by the learned counsel for the Private Respondents. In this behalf, learned counsel appearing on behalf of Private Respondents in W.P. No,2853/2017, W.P. No,3076/2017 and W.P. No,3251/2017, inter-alia, contended that the Act and NTC Act were enacted pursuant to the international treaties to protect the local industry. It was contended that the intent of the legislature is that Anti-Dumping Duty is not a tax and same can be borne out by the examination of preamble to the Act; the agreement establishing World Trade Organization, 1994 and agreement on implementation of Article 6 of GATT, 1994. It was further contended that all the three treaties which form the basis of the Act are concerned with trade regulation and have no nexus with taxation. It was contended that federal legislature has authority to promulgate the Act as it exists under items 3, 27 and 32 of the Federal Legislative List as provided in the Constitution. In order to substantiate his arguments that Anti-Dumping Duty is not a tax, learned counsel placed reliance on "Federation of Pakistan and another v. Durrani Ceramics and others" (2014 SCMR 1630), "Workers' Welfare Funds, M/o Human Resources Development, Islamabad through Secretary and others v. East Pakistan Chrome Tannery (Pvt.) Ltd, and others" (PLD 2017 SC 28). It was contended that NTC does not have any unbridled powers to determine dumping margin, the injury and levy Anti-Dumping Duty. Likewise, Mr. Salman Zaheer Khan, learned counsel for the Respondents in Writ Petition No, 694/2018 contended that the fact that Anti-Dumping duty is not a tax has been decided in a recent judgement by the Hon'ble Sindh High Court. Reliance was placed on the judgments already cited above, however, it was added that NTC performs quasi judicial functions under the Act. It was contended that even the Anti-Dumping Duty is a tax is not hit by Article 77 of the. Constitution. Mr. Jahanzab Awan, appearing on behalf of Private Respondent i,e, Messrs Engro
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Polymer and Chemicals Limited, in the instant petition, also took the Court through the provisions of the Act and NTC Act and contended that the Preliminary Determination dated 13.06.2017 cannot be set-aside on the basis that the provisions of the Act are ultra-vires Article 77. It was submitted that the Petitioners had an alternate remedy by way of appeal which they did not avail. It was submitted that the Petitioners are enjoying the interim relief by way of injunctive order by this Court. Learned Deputy Attorney General appearing pursuant to notice under Order 27-A, C.P.C. adopted the arguments on behalf of Respondents. 12.Arguments advanced by the learned counsel for the parties have been heard and the documents placed on record have been examined with their able assistance. 13.For dilating upon the respective contentions by learned counsel. for the parties, it is worthwhile to reproduce certain provisions/ Sections from the NTC Act as well as the Act. The preamble to the NTC Act provides that since it is expedient to provide for certain reforms in the National Tariff Commission by repealing National Tariff Commission Act, 1990 and re-enacting it for the purposes hereinafter appearing. Section 2(f) of the NTC Act defines trade remedy laws as includes the-Anti- Dumping Law, the Countervailing Duties Law and the Safeguard Measures Law for the time being in force. Section 8 provides for the functions of the Commission which reads as follows: 8. Function of the Commission.-- , I) The functions of the Commission shall be to advise the Federal Government on,- (a) tariff and other trade measures to,- (i) provide assistance to the domestic industry; and (ii) improve the competitiveness of the domestic industry; (b) trade remedy actions being faced by domestic producers and exporters; (c) rationalization of tariff and proposals for tariff reform; (d) removal of tariff anomalies; and (e) any other matter relating to tariff or trade measures that the Federal Government may refer to the Commission. (2)In addition to the functions specified in subsection (I), the Commission shall also perform such functions with respect to International trade and other matters that may be assigned to it by the trade remedy laws or any other law for the time being in force. (3) Where the Federal Government has adopted the recommendations of the Commission in whole or part, the Commission shall periodically review the effect of such recommendations and in consequence of the review may give further recommendations to the Federal Government. (4) The Commission shall advise, where possible, the domestic exporters and producers facing trade remedy investigations abroad. (5) The Commission shall assist the Federal Government at the World Trade Organization dispute settlement body in respect of matters pertaining to the Trade Remedy Laws, WTO Covered Agreements and disputes under other trade agreements. The Federal Government may hire the services of a qualified and experienced international trade lawyer or international trade consultant for this purpose on a case-to-case basis. (6) The Commission may undertake research to facilitate effective implementation of Trade Remedy Laws and tariff rationalization, in a manner to be prescribed. 14.The bare perusal of the Section 8 ibid shows that it has the functions as provided in Section 8 (1) and in addition it also shall perform functions with respect to international trade and other matters as well as trade remedy laws or any other laws for the time being in force. Subsection (2) of section 8 read with Section 2 (t) of the NTC Act makes it clear that the NTC shall perform functions with respect to Anti-Dumping Laws as well. 15. The preamble to the Act reads as follows:- "Whereas it is expedient to give effect in Pakistan to the provisions of Article VI of the General
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Agreement on Tariffs and Trade, 1994, and to the Agreement on Implementation thereof and to amend and consolidate the law relating to imposition of anti-dumping duties to offset such dumping, to provide a framework for investigation and determination of dumping and injury in respect of goods imported into Pakistan and for matters ancillary thereto or connected therewith; And whereas the imposition of anti-dumping duties to offset injurious dumping is in the public interest; And whereas it is expedient to provide for certain reforms in the Anti-Dumping Duties Ordinance, 2000 (LXV of 2000), by repealing the said Ordinance and re-enacting the law for the purposes hereinafter appearing; " The perusal of above preamble shows that the Act was enacted to give effect to Article 6 of the General Agreement on Tariff and Trade and its implementation as well as the imposition of the Anti-Dumping Duty and to provide a framework for investigation and determination. The relevant Sections of the Act are as follows: 3. Levy of anti-dumping duty. ---(1) The Commission shall, by notification in the official Gazette, impose anti-dumping measures on products imported into Pakistan when it determines, pursuant to an investigation initiated and conducted in accordance with the provisions of this Act that (a) an investigated product is dumped within the meaning of this Act; and (b) injury is being caused to domestic industry within the meaning of this Act. 21. Notice to government of exporting country,---Upon receipt of a duly documented application compliant with the requirements of sections 20 and 24, the Commission shall promptly give notice to the government of each exporting country of the receipt of such application. 36. Assessments to be on the basis of data relating to defined periods.---(1) The Commission shall base its assessments of dumping and injury on data relating to defined periods which shall be the periods for which information is required by the Commission. (2) For the purposes of an investigation of dumping, an investigation period shall normally cover twelve months preceding the month of initiation of the investigation for which data is available and in no case the investigation period shall be shorter than six months. (3) For the purposes of an investigation of injury, the investigation period shall normally cover thirty-six months: Provided that the Commission may at its sole discretion, select a shorter or longer period if it deems it appropriate in view of available information regarding domestic industry and an investigated product. 37. Preliminary determination.---(1) The Commission shall make a preliminary determination of dumping and injury, if any, not earlier than sixty days and not later than one hundred and eighty days, after initiation of an investigation. Such preliminary determination shall be based on the information available to the Commission at that time. (2) The Commission shall issue a notice of preliminary determination, whether affirmative or negative, which shall, subject to the requirements of section 3 1, set forth in sufficient detail the findings and conclusions reached on all issues of fact and law considered material. Such notice of preliminary determination may also contain such other information as may be prescribed. (3) The Commission shall publish a copy of the notice of preliminary determination in the official Gazette and in at least one issue each of a daily newspaper in the English language and a daily newspaper in the Urdu language having vide circulation in Pakistan. (4) The Commission shall forward a copy of the notice of preliminary determination to exporting country and to other known interested parties. 39. Final determination.---(1) The Commission shall normally make a final determination of dumping and injury within one hundred and eighty days of the date of publication of a notice of preliminary determination in the official Gazette under subsection (3) of section 37.
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(2) The final determination shall be based on information obtained by the Commission during the course of the investigation that has been disclosed by the interested parties: Provided that the Commission shall not be precluded from taking into consideration information or data received or collected from any other source. (3) The Commission shall, subject to the requirements for the protection of confidential information under section 31, issue a notice of the final determination, whether affirmative or negative, containing relevant information on the matters of fact and law and reasons that have led to the determination. (4) Without prejudice to the generality of the provisions of subsection (3) and in addition to such further information as may be prescribed, the notice of the final determination referred to in subsection (3) shall speak? (a) the amount of the dumping margin, if any, found to exist and the basis for such determination; (b) the amount of the definitive anti-dumping duties to be imposed, where applicable; and (c) if definitive anti-dumping duties are to be collected with regard to the imports to which provisional measures were applied along with the reasons for the decision to do so. (5) The Commission shall publish a copy of the notice of the final determination referred to in subsection (3) in the official Gazette and in at least one issue each of a daily newspaper in the English language and a daily newspaper in the Urdu language having wide…
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