1997 P T D 269
[Quetta High Court]
Before Amir-ul-Mulk Mengal and Javed Iqbal, JJ
AGHA GAS COMPANY (PVT.) LTD.
versus
CENTRAL BOARD OF REVENUE and others
Constitutional Petition No. 80 of 1996, decided 12th June, 1996.
(a) Sales Tax Act, 1990---
----S.13---Constitution of Pakistan (1973), Art.199---Constitutional petition--- Maintainability--- Exemption from customs duty and sales tax it terms of Notification, dated 9th May, 1994 for imported Liquid Petroleum Gas Cylinders with values was sought by petitioner---Such gas cylinder; being locally manufactured, duty free import was not allowed---Finding of Central Board of Revenue that petitioners having imported Liquid Petroleum Gas Cylinders, they were not entitled to exemption from customs duty and sales tax, was neither arbitrary nor whimsical---Jurisdiction exercised by Central Board of Revenue had been exercised in accordance with law---Such like orders could only be challenged when same were void, coram non judice and of no legal effect---Where Court or Tribunal having jurisdiction had determined such question, it could not be deemed to have acted illegally or with material irregularity, merely because decision rendered by it was erroneous on question of fact or even of law---Decision rendered by Board of Revenue, thus, could not be reversed whereby imported Liquid Petroleum Gas Cylinders were not exempted from customs duty and sales tax.
PLD 1976 Lah. 158; PLD 1982 Quetta 126; PLD 1976 SC 139 and PLD 1981 SC 246 rel:
(b) Sales Tax Act, 1990---
----S.13---Customs Act (IV of 1969), $s.193, 194 & 195---Constitution of Pakistan (1973), Art.199---Constitutional petition ---Maintainability---Non- exemption of Gas Cylinders imported by petitioner from sales tax and customs duty ---Adquate remedy available to petitioner in terms of Ss.193, 194 & 195, Customs Act, 1969---Petitioner not availing such alternate remedy---Effect---Resort to jurisdiction under Art.199 of the Constitution could not be permitted where it amounted to circumvention of normal process of law.
1995 PLC 306 and 1993 SCMR 2308 ref.
Syed Ayaz Zahoor for Petitioner.
Raja Rab Nawaz, Deputy Attorney-General for Respondents.
Dates of hearing: 13th and 14th May, 1996.
JUDGMENT
JAVED IQBAL, J.---This is a Constitutional petition preferred on behalf of M/s. Agha Gas Company (Private) Limited under Article 199 of the Constitution of Islamic Republic of Pakistan (hereinafter referred to as the Constitution) with the following prayer:
(a) Declaring that the action of respondents in taking away the exemption, available to petitioner by charging customs duty and sales tax, is in violation to the Petroleum Policy of 1994, as well as S.R.O. No.367(1)/94, dated 9th May, 1994, S.R.O. No.1091(1)/94, dated 8th November, 1994 and letter dated 26th December, 1994 issued by the Ministry of Petroleum.
(b) Declaring further that the policy laid down by the respondent No. 1 in letter dated 6th February, 1996 and C.G.O. 17/94, is not applicable in the case of petitioner.
(c) Further declaring that the notice of demand dated 28th February, 1996 issued by the respondents in view of the letter dated 6-2-1996 is totally without lawful authority and jurisdiction and of no legal consequence.
(d) Directing the respondents not to charge customs duty and sales tax, on the goods imported by petitioner from Iran i.e. L.P.G. Cylinders with Valves.
(e) Any other relief deems fit and proper in the circumstances of the case may also be awarded alongwith the cost of the petition, in the interest of justice.
2. Briefly stated the facts of the case are that the petitioner is a Private Limited Company and is marketing L.P.G. Cylinders throughout the country. A request was made to Government of Pakistan through Ministry of Petroleum and Natural Resources on 20th December, 1994 for the purpose of importing 25000 L.P.G. Cylinders with Valves. Exemption from customs duty and sales tax was also sought in view of S.R.O. 367(1)/94, dated 9th May, 1994. The petitioner was allowed to import the requisite article as his request was considered genuine and in accordance with S.R.O. 1091(1)/94, dated 8th November, 1994, letters dated 20-12-1994 and 26-12-1994 duly issued by Ministry of Petroleum. The letter dated 26th December, 1994 was also sent to Collector of Customs, Excise and Sales Tax (respondent No.2) for favour of doing the needful. The petitioner also opened L.C. with the Allied Bank of Pakistan for U.S. Dollars 67,500 for the purpose of importing 5,000 L.P.G. Cylinders with Valves on 13-12-1994 from Iran. The said consignment reached Quetta Dry Port on 22-3-1995 and the relevant documents including invoice and bill of landing was furnished through Custom Clearing Agent but the respondent No.2 refused to release the goods despite of exemption granted to petitioner by means of S.R.O. 367(1)/94, dated 9th May, 1994 and S.R.O. 554(1)/94, dated 9th June, 1994 and the letter dated 26th December, 1994 issued by Ministry of Petroleum. The goods were however, subsequently released on furnishing Bank Guarantee which was- substituted with that of Corporate Guarantee to the tune of ks.16,71,036. The petitioner did his best to procure the Gas Cylinders with Valves from Pakistan but he failed to get it as it was not locally manufactured item. The Fuji Metals Limited, Rawalpindi and Cylinder Engineering Industry (Pvt.) were contacted in this regard. The actions of respondents regarding charging of customs duty and sales tax being not in consonance with the abovementioned S.R.Os and Ministry of Petroleum Policy the jurisdiction of this Court under Article 199 has been invoked.
3. It is mainly contended by Syed Ayaz Zahoor, Advocate on behalf of the petitioner that the goods imported are not liable to customs duty as per S.R.O. dated 9th May, 1994 and Petroleum Policy and moreso, the Regulatory Authority which is Ministry of Petroleum and Natural Resources has given permission for importing the Gas Cylinders with Valves hence the question of imposition of any sales tax or customs duty does not arise and as such the actions of respondents for imposing customs duty and sales tax is without lawful authority and as such liable to be declared as illegal. It is next contended that the petitioner in fact imported machinery and equipment in the shape of Cylinders and Valves required for installation of L.P.G. storage and Battery/Filling Station at Quetta as such he was entitled for exemption from sales tax and customs duty. It is also urged with vehemence that L.P.G. Cylinders are not locally manufactured hence under compelling circumstances no other option was available to the petitioner except importing the same and that, too with the permission of Ministry of Petroleum which cannot be ignored by the respondents. It is also argued that Central Board of Revenue (respondent No. 1) has relied on Customs General Order No. 17/94 in withdrawing the benefit given to petitioner by ignoring the fact that the Fuji Metals has shown its inability to provide the same as they were not manufacturing the Valves without which Cylinders cannot be utilized.
4. Learned Deputy Attorney-General assisted by Assistant Collector (Legal) Customs appeared on behalf of respondents and vehemently opposed this Constitutional petition being not maintainable as alternate remedy was available as provided under sections 193, 994 and 195 of the Customs Act, 1969 which was not availed of by the petitioner. It is next contended that certain controversial questions as to whether the requisite Gas Cylinders and Valves are locally manufactured or not are involved which cannot be adjudicated upon while exercising jurisdiction as conferred upon this Court under Article 199 of the Constitution. It is also argued that Central Board of Revenue being the final authority has already decided the matter in accordance with law and no interference can be made as the verdict of Central Board of Revenue is in accordance with the abovementioned S.R.Os. and moreso, the Ministry of Petroleum cannot dictate Central Board of Revenue and for granting certain exemptions which are not permissible under law because Central Board of Revenue is the sole authority to decide such matters and the recommendations made by the Ministry of Petroleum cannot be termed as binding. It is also pointed out that L.C. was opened first and thereafter Ministry of Petroleum was approached and this action of the petitioner itself is mala fide and the petitioner has not approached this Court with clean hands but an attempt has been made to avoid sales tax and customs duty which was levied in accordance with law and no concession can be given in this regard.
5. We have carefully examined the respective contentions as adduced on behalf of petitioner and for respondents in the light of relevant provisions of law and record made available. The pivotal question to be determined seems to be as to whether S.R.O. 367(1)/94 can be made applicable in the peculiar circumstances of the case and whether exemption as claimed by the petitioner is permissible or otherwise. It seems appropriate to reproduce the relevant portion of said S.R.O. for ready reference:---
GOVERNMENT OF PAKISTAN
MINISTRY OF FINANCE, REVENUE AND ECONOMIC
AFFAIRS (REVENUE DIVISION)
Islamabad, the 9th May, 1994
NOTIFICATION
(CUSTOMS)
S.R.O. 367(1)/94.---In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969) subsection (1) of section 13 of the Sales Tax Act, 1990, and subsection (2) of section, 5 of the Finance Act, 1985 (I of 1985), the Federal Government is pleased to exempt the machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals and consumables, as are not manufactured locally, if imported for the projects mentioned in column (2) of the table below for the phases and by the importers mentioned in columns (3) and (4) respectively of that table from customs duties including regulatory duties, sales tax and Iqra surcharge to the extent specified in column (5) thereof, subject to the following conditions, namely:---
(1) Only such machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals and consumables shall be entitled to the exemption 'under this notification, as are certified through Central Board of Revenue by the relevant Regulatory Authority from time to time in terms of Annexure VI to the Petroleum Policy, 1994. The relevant Regulatory Authority shall take such measures as it deems necessary to ensure that the concerned companies, corporations and organizations entitled to avail exemption under this notification import only so much quantity of machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals and consumables as is approved by the said Regulatory Authority in view of their actual project requirements.
A bare perusal would indicate that Federal Government was pleased to exempt the machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals and consumables which are not locally manufactured meaning thereby that a free hand was not given to the importers but it was subject to condition that the item mentioned in the said S.R.O. can be imported free to sales tax and customs duty if they are not manufactured locally. It is obvious that the said condition was imposed to protect the Local Industry. The above reproduced portion of the said S.R.O. further indicates that exemption under the said S.R.O. is also subject of certificate to be issued by Central Board of Revenue by the relevant Regulatory Authority from time to time in terms of Annexure-VI to the Petroleum Policy, 1994. It is thus abundant clear that after the issuance of said notification the role Central Board of Revenue does not come to an end. The said notification further provides that the items mentioned therein can be imported as determined by Regulatory Authority in view of the actual project requirements. Whether the items imported by the petitioner were the actual project requirements or not being controversial fact cannot be determined by this Court while exercising our Constitutional jurisdiction under Article 199 of the Constitution. It is to be noted that L.C. was opened on 13-12-1994 and thereafter Ministry of Petroleum was approached on 28th December, 1994 while this action should have been taken prior to opening of L.C. which could not be done for the reasons best known to the petitioner. We have carefully examined letter, dated 26th December, 1994 relied upon by Syed Ayaz Zahoor, Advocate and relevant portion whereof runs as follows:--
"No.L.P.G.-2(35)/94
GOVERNMENT OF PAKISTAN
MINISTRY OF PETROLEUM AND NATURAL RESOURCES
DEPARTMENT OF PETROLEUM AND ENERGY RESOURCES.
21-E HUMA Plaza, Blue Area.
Islamabad, 26th December, 1994.
OFFICE MEMORANDUM:
SUBJECT: Exemption from customs duty and sales tax vide S.R.O. 367(1)/94, dated the 9th May, 1994 for the import of Machinery and Equipment required to Installation of L.P.G. Storage and Bottling/Filling Station at Quetta.
.
M/s. Agha Gas Company (Pvt.) Limited intends to import the machinery/equipment as per details given in their Letter No.786/A.G.C./94-1/20, dated the 20th December, 1994 (Copy enclosed). The request of M/s. Agha Gas Company (Pvt.) Limited is genuine and it is recommended in accordance with S.R.O. No.1091(1)/94, dated the 8th November, 1994 that they may be allowed to import the said items without duty/sales tax etc., as per S.R.O. 367(1)/94, dated the 9th May, 1994.
(Sd.)
(MANSOOR MUZAFFAR ALI),
DIRECTOR (L.P.G.)."
The contents of above produced portion would indicate that the request of petitioner was considered as genuine and recommended in accordance with S.R.O. 1091(1)/94, dated 8th November, 1994. It may be kept in view that Ministry of Petroleum has made certain recommendations which are not binding in nature and the matter pertaining to interpretation or clarification of any S.R.O. falls within the jurisdictional ambit of Central Board of Revenue. The abovementioned letter cannot be considered as binding, therefore, it hardly renders any assistance to the case of petitioner that exemption from sales tax and customs duty should be granted on the basis of said letter. It is worthwhile to mention here that the matter was also considered by Central Board of Revenue and following clarification was made:---
GOVERNMENT OF PAKISTAN
CENTRAL BOARD OF REVENUE
SUBJECT: Request for exemption of Excise Duty and Sales Tax on locally manufactured Cylinders LPG.
Kindly refer to Central Excise Budget's U.0. No.(8l)-C.E.B./1st November, 1995 on the above subject and to say that the benefit of S.R.O. 367(1)/94, dated 9-5-1994 is not admissible on locally manufactured goods, since L.P.G. Cylinders are manufactured locally therefore, not entitled to duty free import under the aid notification.
(Sd.)
(KHALIQ NADEEM),
SECRETARY MACHINERY.
Mr. Abdul Nasir Butt, Secretary (C.E. Bud) C.B.R., Islamabad Mach. Section's U.O. No.2(7) Mach/91 P.T.-3, dated 20-11-1995."
The abovementioned letter makes it crystal clear that benefit of S.R.O. 367(1)/94 was not considered admissible being applicable on locally manufactured goods. It was also clarified that since L.P.G. Cylinders are manufactured locally therefore, duty free import was not allowed. The Central Board of Revenue has decided the matter after diligent consideration of relevant facts and no interference is called for as the clarification made by Central Board of Revenue is neither arbitrary or whimsical and the jurisdiction as conferred upon Central Board of Revenue has been exercised in accordance with law. We may point out here that such like orders can only be challenged by Writ Petition when the same are void, coram non judice or without jurisdiction. It is well-settled by now that "the expressions" without lawful authority and of no legal effect are expressions of art and refer to jurisdictional defects as distinguished from a mere erroneous decision whether on a question of fact or even of law. It is well-settled that where a Court or Tribunal has jurisdiction and if determines the question it cannot be said that it acted illegally or with material irregularity, merely because it came to an erroneous decision on a question of fact or even of law." PLD 1976 Lah. 158, PLD 1982 Quetta 126, PLD 1976 SC 139 and PLD 1981 SC 246. It can thus be inferred safely that the clarification as made Central Board of Revenue cannot be reversed without sufficient legal justification which is apparently lacking in this petition.
6. We have also focussed our attention whether any alternate remedy is available to petitioner or otherwise. It is worthwhile to mention here that the provisions as contained in relevant section of Customs Act, 1969 are capable enough to meet all sort of such eventualities and as such instead invoking Constitutional jurisdiction, the remedy as provided in Customs Act should be availed. It may not be out of place to mention here that, resort to jurisdiction under Article 199 should not be permitted if it amounts to circumvention of normal process of law. Writ jurisdiction is not available to a person seeking to circumvent and defeat law by initiating parallel proceedings and substituting writ jurisdiction for remedy otherwise available in law. (1995 PLC 306)
7. A thorough scrutiny of record would transpire that Fuji Metals Limited was asked to supply 11.8 K.G. Cylinder fitted with 22 M. valve and similarly Cylinder Engineering Industries (Pvt.) Limited was asked for supply of 11.8 K.G. Cylinders fitted with 22 M. Valve but it is quite amazing that the same category of Cylinders fitted with requisite valves were not imported but on the contrary 5,000 L.P.G. Cylinders with valves weighing 11 K.G. were imported from Iran. It is difficult to understand that what in fact was the exact demand of the petitioner. In such view of the matter it cannot be said that locally manufactured industry failed to meet the requisite demand. It is worthwhile to mention here that Ministry of Petroleum was also requested to recommend their case for 11.8 K.G. Cylinder with needle valves but as mentioned earlier from Iran Cylinders of different quality was imported. We have also perused the case-law as relied by Syed Ayaz Zahoor, Advocate 1993 SCMR 2308 is not applicable. Besides that L.C. was opened prior to completion of the mandatory formalities and subsequently an abortive attempt seems to have been made to fill in the gap in a haphazard manner to avoid the payment of requisite sales tax/customs duty which cannot be allowed to be done by invoking Constitutional jurisdiction of this Court.
In view of what has been stated above, the petition being devoid of merits is dismissed. These are the reasons for our short order dated 14-5-1996.
A.A./593/Q Petition dismissed