SHADMAN COTTON MILLS LIMITED VS FEDERATION OF PAKISTAN
2001 P T D 411
[Lahore High Court]
Before Muhammad Nawaz Abbasi, J
Messrs SHADMAN COTTON MILLS LIMITED
versus
FEDERATION OF PAKISTAN through Secretary Ministry of Finance, Federal Secretariat, Islamabad and another
Writ Petition No. 505 of 1997, decided on 31/07/2000.
(a) Customs Act (IV of 1969)---
----S.18---Sales Tax Act (VII of 1990), S.13---Customs duty and sales tax-- Date for charging of such duties---Dates of chargeability of customs duty and sales tax are the date of filing of Bill of Entry and establishment of Letter of Credit respectively.
(b) Customs Act. (IV of 1969)---
----S.19---Service charges, imposition of---Scope---Imposition of such charges is illegal.
Collector of Customs and others v. Ravi Spinning Ltd. and others 1999 SCMR 412 rel.
(c) Customs Act (IV of 1969)---
----Ss.18 & 19---Sales Tax Act (VII of 1990), S.13---Notification No. S.R.O. 279(1)/94, dated 2-4-1994---Customs duty and sales tax, recovery of-- Benefit under Notification No. S.R.O. 279(1)/94, dated 2-4-1994---Execution of Power Purchase Agreement with WAPDA and KESC or Government-- Only condition to avail the benefit under the notification was that the machinery and equipment being imported would be used for power projects without any requirement of such agreement.
(d) Constitution of Pakistan (1973)---
----Art.25---Principle of equality---Exercise of discretion and reasonable classification---Essential conditions---All persons placed in similar circumstances must be treated alike and the reasonable classification must be based on reasonable grounds in a particular set of circumstances, but the same in any case must not offend the spirit of Art.25 of the Constitution-- Person equally placed must be treated alike in the matter of privileges and liabilities under the rule of equal protection of law.
Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652 and Messrs Godoon Textile Mills and others v. WAPDA and others 1997 SCMR 641; Government of Balochistan through Additional Chief Secretary v. Aziz-ullah Memon and others PLD 1993 SC 341 ref.
(e) Customs Act (IV of 1969)---
----Ss.18 & 19---Sales Tax Act (VII of 1990), S.13---Notification No.S.R.O. 279(1)/94, dated 2-4-1994---Customs duty and sales tax, recovery of-- Benefit under Notification No.S.R.O. 279(1)/94, dated 2-4-1994-- Subsequent change in policy through legislative measures in the form of notifications---Effect---Rights already accrued under the original notification in favour of such importers would remain available to them till the date of withdrawal of the same.
Rafi-ud-Din and 6 others v. The Chief Settlement and Rehabilitation Commissioner and 2 others PLD 1971 SC 252 ref.
(f) Customs Act (IV of 1969)---
----Ss.18 & 19---Sales Tax Act (VII of 1990), S.13---Notification No. S.R.O. 279(1)/94, dated 2-4-1994---Customs duty and sales tax, recovery of-- Benefit under Notification No.S.R.O. 279(1)/94, dated 2-4-1994---Execution of Power Purchase Agreement with WAPDA and KESC or Government-- Operation of amending notification---Retrospective effect---Where the condition of execution of Power Purchase agreement by the importers of equipment and machinery for Power Generation Projects was not made part of Notification No.S.R.O. 279(1)/94, dated 2-4-1994, the exemption from payment of customs duty, sales tax, regulatory duty and Iqra surcharge subject to the fulfilment of the conditions contained in the notification would be available to all those importers of such machinery and equipment under the Power Policy of the Government, who had filed Bill of Entry or opened the Letter of Credit before 1-7-1995 on which date amendment in the notification was made without any discrimination as the amending notification would not be operative retrospectively---Exemptions allowed under Notification No.S.R.O. 279(1)/94, dated 2-4-1994, would be available to all such importers till 1-7-1995, without any discrimination-- Amended notification would take effect from the date of its amendment.
Messrs M.Y. Electronic Industries Ltd. through Manager and another v. Government of Pakistan through Secretary Finance and others 1998 SCMR 1404 ref.
(g) Customs Act (IV of 1969)---
----Ss.18(2) (3) (4) & 19---Regulatory duty, levy of---Jurisdiction of Government---Exemption from payment of regulatory duty---Provisions of S.18 of Customs Act, 1969, were valid and the regulatory duty would remain enforced from the date of publication of notification till the end of financial year during which the same was issued---.Regulatory duty being transitory in nature was always imposed subject to the limitations contained in S.18(2) (3) (4) of Customs Act, 1969, and also the existence of conditions essential for such levy---Government being entitled to exercise the discretion of levying such duty could continue the imposition of the duty through a fresh notification on the expiry of earlier notification if such conditions still existed---Exemption from the payment of custom duty would not by itself exempt from the payment of regulatory duty unless the same was specifically provided through a notification under S.19 of Customs Act, 1969, and such notification could not ipso facto be applied to the duty not already enforced---Where it was provided in the exemption notification, in addition to its application to the existing charge of customs duty, same could also cover future levy of such duty.
(h) Customs Act (IV of 1969)---
----Ss.18(2) & 19---Regulatory duty, exemption from---Non-mentioning of such duty in exemption notification under S.19 of Customs Act, 1969-- Effect---In absence of specific mention of regulatory duty in exemption notification, the customs duty would not include the regulatory duty leviable under S.18(2) of Customs Act, 1969---Exemption from regulatory duty could not be claimed in general under a notification giving such exemption beyond the financial year, during which the same was imposed.
(i) Customs Act (IV of 1969)---
----Ss-18 & 19---Sales Tax Act (VII of 1990), S.13---Notification NO.S.R.O.279(1)/94, dated 2-4-1994---Constitution of Pakistan (1973), Art.199---Constitutional petition---Customs duty, sales tax, regulatory duty and service charges, levy of---Benefit of Notification No.S.R.O. 279(1)/94, dated 2-4-1994, withdrawal of---Retrospective effect of the notification-- Petitioners imported power generating plants under the power policy framed by the Federal Government---Such duties were exempted by the Government vide Notification S.R.O. No.279(1)/94, dated 2-4-1994, and the exemptions were withdrawn through subsequent notifications issued by the Government---Petitioners claimed exemptions from the duties on the basis of the notification---Validity---Notification through which the exemption was granted remained operative so long the same existed and in case the exemption was withdrawn, the notification of withdrawal of exemption being prospective in its operation would not operate retrospectively and the exemption already made through earlier notification would remain available till the time the same was not taken away---Exemption in sales tax given through the Notification S.R.O. No.279(1)/94, dated 2-4-1994, would be given to the petitioners indiscriminately till the same was withdrawn through a subsequent notification---Such exemption on the import of machinery and equipment which were imported within the target date would be available under the notification and would continue till the issuance of notification of withdrawal---Where the notification through which the exemptions were allowed was neither issued for a specific time nor the power of the Government to withdraw the benefits given -under the notification were restricted by any condition, consignment relating to the contract already entered into for the import of machinery and equipment of power generation projects, in which the Letters of Credits were established before the target date would be unconditionally entitled to avail the exemption from the payment of sales tax under S.R.O. No.279(1)/94---Grants and withdrawal of exemptions were subject to certain conditions which must not be discriminatory and under the principle of prospective application of the notification the petitioners were entitled to get the benefit of the notification for the period during which the same held the field in its original form qua the imports made before the date of its amendment.
Collector of Customs and others v. Ravi. Spinning Ltd. and others 1999 SCMR 412; Messrs M.Y. Electronic Industries Ltd. through Manager and another v. Government of Pakistan through Secretary Finance and others 1998 SCMR 1404; Molasses Trading and Export (Pvt.) Limited v. Federation of Pakistan and others 1993 SCMR 1905; Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652; Messrs Godoon Textile Mills and others v. WAPDA and others 1997 SCMR 641; Government of Balochistan through Additional Chief Secretary v. Aziz-ullah Memon and others PLD 1993 SC 341 and Rafi-ud-Din and 6 others v. The Chief Settlement and Rehabilitation Commissioner and 2 others PLD 1971 SC 252 rel.
(j) Customs Act (IV of 1969)---
----Ss.18 & 19---Sales Tax Act (VII of 1990), S.13---Customs duty and sales tax, exemption from---Power to withdraw such exemption---Scope-- Notification which purports to impair an existing right or imposes new liability or an obligation cannot operate retrospectively, whereas the notification which confers benefits can operate retrospectively but no one can claim exemption from payment of customs duty sales tax or any other tax as of right without legal sanction---Grant of exemption being discretionary, the Authority which enjoys the power to grant exemption is also empowered to withdraw such exemption subject to the condition that the exemption, if already allowed would not be withdrawn from the previous date---Where exemption was granted subject to the existence of certain conditions and withdrawal of the same was also made conditional, the Government while fulfilling such condition would be justified in withdrawing the exemption-- No estoppel can be pleaded against the law or the legislative power of the Government for the grant of exemption or withdrawal thereof.
Army Welfare Sugar Mills Ltd. And others v. Federation of Pakistan and others 1992 SCMR 1652 rel.
(k) Vires of legislation---
---- Judicial interference into the functions of legislation of representative body or Government---Scope---Legislature is presumed not to legislate a law manifestly causing injustice or abuses of the jurisdiction of legislation-- Where such abuses of jurisdiction is manifest the Courts have the exclusive powers to examine the validity of the same.
Raja Muhammad Akram and Salman Akram Raja for Petitioners.
Farhat Nawaz Lodhi and Raja Bashir Ahmad Kiani for Respondents.
Date of hearing: 19th May, 2000.
JUDGMENT
Through this common judgment, I propose to dispose of Writ Petition Nos. 982 of 1995, 983 of 1995, 1008 of 1995, 1197 of 1995, 1725 of 1995, 70 of 1996, 1223 of 1996, 1731 of 1996, 94 of 1997, 505 of 1997, 506 of 1997, 509 of 1997, 510 of 1997, 511 of 1997, 946 of 1997 and 2305 of 1997.
2. The petitioners through the above writ petitions having questioned the legality of levy of customs duty, sales tax, regulatory duty and the services charges on the import of Power generation Plants in pursuance of the Power Policy (PP) framed by the Government of Pakistan, in 1994, have sought declaration that exemption of customs duty, sales tax and such other taxes on the import of Power Generation Plants given under Notification No.S.R.O. 279 (1)/94, dated 2-4-1994 was still available and that the subsequent notification bearing S.R.O. No. 584(1)/95, dated 1-7-1995, S.R.O. No. 585 (1)/95, dated 1-7-1995, S.R.O. No. 426 (1)/96, dated 13-6-1996, S.R.O. No.478(1)/96, dated 13-6-1996, S.R.O. No.560(1)/96, dated 1-7-1996 and S.R.D. No.1198(1)/96, dated 22-10-1996 relating to the 2 % service charges under section 18-B of the Customs Act, 1969, through which the concessions in the payment of such duties and taxes were withdrawn or reduced be declared to be ineffective qua the Power Generation Plants imported under the above said SRO, dated 2-4-1994.
3. The Government from time to time issued separate notifications under the Customs Act, 1969 and under Sales Tax Act, 1990 for whole or partial exemption of the customs duty and sale tax on the import of Power Generation Plants and parts to be used in such Plants which are not locally manufactured. The Government initially issued Notification S.R.O. No.279(1)/94, dated 2-4-1994 through which the total customs duty and regulatory duty leviable under sections 18(1) and 18(2) of the Customs Act, 1969, and sales tax under section 13(1) of the Sales Act, 1990, on the import of machinery and the equipment for the use of Power Generation Projects were exempted. Later, through Notification S.R.O. No.584(1)/95, dated 1-7-1995, the Projects which have not signed the power purchase agreement with WAPDA and K.E.S.C. were excluded from the purview of above notifications and through S.R.O. No.585(1)/95, dated 1-7-1995, the exemption on the customs duty available under S.R.O. No.279(1)/94, dated 2-4-1994 to the Projects which did not sign such agreement was reduced only in excess of 10% leviable under the First Schedule to the Customs Act, 1969. Through S.R.O. No.773(1)/95, dated 1-8-1995, the agreement with WAPDA and K.E.S.C. was substituted with implementation agreement with the Government. The exemption on the sales tax given through S.R.O., dated 2-4-1994 was omitted through S.R.O. No. 426 (1)/96, dated 13-6-? 996. The Government in exercise of powers under section 13 (2)(a) of Sales Tax Act, 1990, read with Item No.39 to the 6th Schedule of the said Act through S.R.O. 230(1)/97, dated 29-3-1997 and S.R.O. No.582(1)/98, dated 12-6-1998 notified the description of Power Generating Machinery and plant for the purpose of sales tax. Under S.R.O. No.279(1)/94, dated 2-4-1994, exemption of customs duty and sales tax was allowed on the import of machinery till 30-6-1995 if not manufactured locally and under S. R. O. No.978(1)/95, dated 4-10-1995 beyond 25% of the customs duty and other taxes were exempted on the goods which were imported under S.R.O. No. 484(1)/92, dated 14-5-1992. These writ petitions involving the question relating to the exemption of customs duty and sales tax and withdrawal or reduction in the percentage in such exemptions were admitted to consider the following questions:--
(a) Whether the general exemptions initially given by the Government on the Power Plant Projects in the payment of customs duties and sales tax could be withdrawn retrospectively through subsequent notifications?
(b) Whether the pre-shipment 2% service charges under section 18-B of the Customs Act, 1969 were not ultra vires to law .and were chargeable.
(c) Whether the exemption on customs duty would ipso facto be applicable to the regulatory duty.
4. The customs duty is leviable under section 18(1) of the Customs Act, 1969, and regulatory duty is imposed under section 18(2) of the said Act whereas sales tax is imposed under section 13 of the Sales Tax, 1990. The date of filing Bill of Entry and the establishment of letter of credit respectively are the dates of chargeability of customs duty and sales tax. The preshipment service charges at the rate of 2% were imposed under section 18-B of the Customs Act, 1969.
5. The Government of Pakistan having introduced a policy of establishment of (private) Power Generation Projects with the incentive of grant of exemption from certain taxes and duties initially allowed on the import of Plants' machinery and equipment, which were not being manufactured in Pakistan for setting up such Power Projects free of customs duties and sales tax under Notification S.R.O. No.279(1)/94, dated 2nd April 1994. Later, it was decided that such exemption on customs duty would only be available to the Projects which signed power purchase agreement with WAPDA and KESC and consequently Notification S.R.O. No.584(1)/95, dated 1-7-1995; was accordingly issued and thus, in this way, Power Plants were classified into two categories i.e. (a) the Projects which signed the agreement with WAPDA and K.E.S.C.; and (b) the Power Projects, which were established without entering into such agreements. The Power Plants could be further identified with the following description:
(i) The Power Plants of the capacity of generating the power for sale; and
(ii) The Power Generation Projects for self-consumption in an Industrial Unit. Under the original scheme, all Power Projects without any distinction could avail the benefit of Notification S.R.O. No.279(1)/94, dated 2-4-1994. However, later through Notification S.R.O. No.585(1)/95 issued on 1st July, 1995, the Power Projects of category (ii) (supra) were allowed to avail such exemption only in excess of 10% of customs duty.
6. The learned counsel for the petitioners in this background raised the following contentions in support of this petition:--
(a) That notwithstanding the condition of execution of power purchase agreement with WAPDA and KESC, the Power Plants established under the Power Generation Policy of Government were equally entitled to the benefit of exemption in the customs duties and sales tax, without any distinction and the discriminatory treatment being meted out by the respondents with Power Plants which have not signed the power purchase agreement with WAPDA and. KESC was violative of Article 25 of the Constitution of Islamic Republic of Pakistan, 1973.'
(b) That the withdrawal of exemption of the Power Plants which have not signed the power purchase agreement and grant of exemption on payment of sale tax and customs duty on the import of machinery and equipment for the Projects which have signed such agreement was unfair.
(c) That notwithstanding the withdrawal of concession in the payment of sales tax on the machinery and the equipment through a subsequent Notification S.R.O. No.426(1)/94, dated 13-6-1996, in case of opening the letter of credit within the target date, the exemption in the sales tax given under S.R.O. No.279(1)/94, dated 2-4-1994 would be available.
(d) That the respondent while extending incentives of concession in the payment of customs duties and sales tax introduced Power Policy and through a legitimate expectation of continuation of such concessions motivated the (private) sectors for setting up Power Generation Projects, therefore, the subsequent notification through which the exemption made available under S.R.O., No.279(1)/94, dated 2-4-1994 were withdrawn being violative of principle of promissory estoppel were ineffective to the rights of the petitioners.
(e) That the financial commitments made by the Government were not supposed to be altered to the disadvantage of the beneficiaries under the protection of Economic Reforms Act, 1992, and that the Power Policy falling within the ambit of said Act, the commitments made thereunder were to be given effect without any change..
(f) That the classification of the Power Projects made by the respondent for the purpose of grant of exemption being unreasonable was violative of Article 25 of the Constitution of Islamic Republic of Pakistan, 1973.
(g) That the exemption made available to the Investors for the establishment of Power Plants under S.R.O. No. 279(1)/94, dated 2-4-1994 could not be subsequently taken away retrospectively.
(h) That the imposition of regulatory duty under section 18(2) of the Customs Act, 1969, was not legal and retrospective operation of section 31-A of the Customs Act, 1969 which was made part of the Act through a subsequent amendment was unconstitutional..
(i) That the service charges under section 18-B of the Customs Act, 1969, is not legal.
7. Learned counsel appearing on behalf of the respondents 'contended that the exemption in the payment of customs duties and taxes is always granted in exercise of discretion by the Government under the special circumstances and that neither such exemptions can be claimed as of right nor the withdrawal of the same can be resisted under the law, therefore, the subsequent notifications through which the exemptions allowed under S.R.O. No.279(1)/94, dated 2-4-1994 were withdrawl were not questionable. The learned counsel, however, have frankly conceded that the pre-shipment service charges having declared ultra vires by the apex Court in Collector of Customs and others v. Ravi Spinning Ltd. and others 1999 SCMR 412 were not chargeable but still the judgment having no retrospective effect, the payment of such charges. levied under section 19 of the Customs Act, 1969 was not refundable.
8. I have heard the learned counsel for the parties and considered their arguments in support of their respective contentions. 'The imposition of service charges under section 19 of the Customs Act, 1969 has been declared illegal by the apex Court in the above-referred judgment and the question relating to the refund of services charges is not subject-matter of the present petitions, therefore, only the issue relating to the withdrawal of exemption of sales tax, customs duty and the regulatory duty is required to be examined. Since the provisions of section 31-A of the Customs Act, 1969, have been declared by the apex Court as a valid piece of legislation prospectively in M/s. M.Y. Electronic Industries Ltd. through Manager and another v.. Government of Pakistan through Secretary Finance and others 1998 SCMR 1404 and Molasses Trading and Export (Pvt.) Limited. v. Federation of Pakistan and others 1993 SCMR 1905, therefore, the same needs no debate. S.R.O. No.279(1)/94, dated 2-4-1994 under which the exemption of sales tax and customs duty leviable under First Schedule to the Customs Act, 1969, on the import of machinery and equipment for setting up or for balancing, modernization and extension of power generation was allowed would be read as under:---
Notification No.S.R.O. 279(1)/94, dated 2nd April, 1994.---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, the Federal Government is pleased to direct that the machinery and equipment, including coal mining equipment as listed in S.R.O.. 125(1)/89, dated 3rd June, 1989, not manufactured locally, shall be exempt from the whole of the Customs duty leviable under the First Schedule to the Customs Act, 1969, regulatory duties leviable under subsection (2) of section 18 of the Customs Act, 1969, Sales Tax and iqra surcharge chargeable thereon, if imported for setting up or fob - balancing, modernization and extension of power generation. i.e'., oil gas, hydel, coal wind and wave energy projects, including under construction projects subject to the conditions set out below, namely:--
(1) The importer shall, at the time of import submit a detailed packing list of machinery and equipment specified below in Explanations (i), (ii), (iii), (iv) and (b) and shall also make a written declaration on the bill of entry to the effect that the machinery and equipment and spares have been imported for the aforesaid projects.
(2) The importer shall furnish an indemnity bond in the form set out hereinbelow to the extent of customs duty, regulatory duties, sales tax, iqra surcharge exempted under this Notification. The said bond shall not be discharged till the expiry of one year after the commissioning of the project indicated in the sanction or approval letter of the concerned Ministry, and after due verification by the Assistant Collector of Customs and Central Excise in whose jurisdiction the project is located. Such certificate of verification would clearly state that machinery and equipment imported for the purposes specified in the bills of entry have been duly installed or the machinery and equipment imported temporarily has been duly re-exported.
(3) In the event of non-production of such certificate by the importer to the Collector of Customs shall enforce the indemnity bond and proceed to recover Government dues under section 202 of the Customs Act, 1969, and the rules made thereunder.
(4) Spares and maintenance parts not locally manufactured required for the project after its commissioning would be subject to customs duty at the rate of twenty per cent ad valorem.
Explanation.----For the purpose of this notification, "machinery and equipment" shall mean:--
(i) machinery and equipment operated by power of any description, such as is used in the generation of power;
(ii) apparatus and appliances, including metering and testing apparatus and appliances specially adapted for use in conjunction with machinery and equipment specified in item (i) above;
(iii) mechanical and electrical controls and transmission gear adopted for use in or with item (i) above;
(iv) all machinery and equipment imported temporarily for the construction, erection, installation and end-completion of the project including specified equipment for hydle and thermal power and specialized vehicles (4 x 4 non-luxury), but excluding passenger vehicles; and
(v) component parts of machinery and equipment as specified in items (i), (ii), (iii) and (iv) above, identifiable as for use in or with such machinery imported for the project and equipment, including spares for purposes of the project."
9. Under the above notification, the importers in addition to a declaration that the machinery and the equipment mentioned in the Bill of Entry were being imported for the Power Projects were also required to furnish an indemnity bond and a certificate as mentioned therein. The spare parts required for maintenance of such Projects, which were not being manufactured in the country, could also be imported subject to the payment of customs duty at the rate of twenty per cent ad valorem. Thus, the only condition to avail the benefit under this notification was that the machinery and equipment being imported would be used for Power Projects without any requirement of execution of power purchase agreement with WAPDA and KESC or the Government, as the case may be. The benefit given under the above notification remained available without any distinction till its amendment through a subsequent Notification S.R.O. 585(1)/95, dated Ist of July 1995, which was as under:--
"Notification S.R.O. No.585 (1)/95 dated 1st July 1995.---In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the machinery and equipment, including coal mining equipment, not manufactured locally, shall be exempt from customs duty in excess of 10% leviable under the First-Schedule to the same Act, if imported for setting up or for balancing modernization, and extension of power generation through oil, gas, coal wind and wave energy projects, including under construction projects, subject to the following conditions, namely:--
(1) The importer shall, at the time of import submit a detailed packing list of machinery and equipment specified below in Explanations (i), (ii), (iii), (iv) and (v) and shall also make a written declaration on the bill of entry to the effect that the machinery and equipment and spares have been imported for the aforesaid projects:
(2) The import shall furnish an indemnity bond in the form set out hereinbelow to the extent of customs duty exempted under this Notification. The said bond shall not be discharged till the production of installation certificate from the Assistant Collector which shall be produced within one year from the date of importation of plant and machinery and after due verification by the Assistant Collector of Customs and Central ,Excise in whose jurisdiction the project is located. Such certificate of verification would clearly state that the machinery and equipment imported for the purposes specified in the bill of entry have been duly installed or the machinery and equipment imported temporarily has been duly re-exported;
(3) In the even of non-production of such certificate by the importer the Collector of Customs shall enforce the indemnity bond and proceed to recover Government dues under section 202 of the Customs Act, 1969, and the rules made thereunder; and
(4) Spares and maintenance parts not locally manufactured required for the project after its commissioning would be subject to customs duty at the rate of twenty per cent ad valorem.
Explanation--For the purpose of the Notification "machinery and equipment" shall mean---
(i) machinery and equipment operated by power of any description, ' such as is used in the generation of power;
(ii) apparatus and appliances, including metering and testing apparatus and appliances specially adapted for use in conjunction with machinery and equipment specified in Explanation (i) above;
(iii) machinery and electrical controls and transmission gear adapted for use in or with Explanation (i) above;
(iv) all machinery and equipment imported temporarily for the construction, creation, installation and end-completion of the project including specific equipments for thermal power and specialized vehicles (4 x 4 non-luxury), but excluding passenger vehicles; and
(v) component parts of machinery and. equipment as specified in Explanations (i), (ii) (iii) and (iv) above, identifiable as for use in or with such machinery imported for the project and equipment, including spares for purposes of the project."
10. Under the above notification, the total exemption of customs duty on the import of machinery and equipment for setting up or use in the power generation leviable under the First Schedule to the Customs Act, 1969, made available to Power Projects was withdrawn to the extent of Power Projects which have not fulfilled the condition of execution of power purchase agreement imposed through Notification S.R.O. No. 584(1)/95, dated 1-7-1995 and such Projects were allowed exemption only in excess of 10% of the total duty leviable. The Federal Government further through another Notification- S:R.O. No:773(1)/95, dated 1st August 1995, substituted condition of signing power purchase agreement with implementation agreement with the Government. Notifications S.R.O. No.584(1)/95, dated 1-7-1995 and S.R.O. No.773(1)/95, dated 1-8-1995 are as under:
"Notification S.R.O. No. 584(1)/95.---In exercise of the powers conferred by section 19 of the Customs Act, 1969, (IV of 1969), and subsection (1) of section 13 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendments shall be made in this Ministry's Notification No.S.R.O. No.279(1)/94, dated, the 2nd April, 1994, namely:-
In the aforesaid Notification, in the preamble after the word 'projects', occurring for the second time, the commas, words and letters', but excluding those which have not signed power purchase agreements with WAPDA or KESC, 'shall be inserted'.
Notification S.R.O. No.773(1)/95, dated 1st August, 1995.--In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and subsection (1) of section 13 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendments shall be made in this Ministry's Notification No.S.R.O. 279(1)/94, dated the 2nd April, 1994, namely:-
In the aforesaid Notification in the preamble, for the commas, words and letters, 'but excluding those which have not signed power purchase agreements with WAPDA and KESC,' the words and comma 'which entered into an implementation agreement with the Government of Pakistan,' shall be substituted."
The Government also decided to withdraw the exemption on sales tax and, therefore, Notification S.R.O. No.279(1)/94, dated 2-4-1994 was further amended through a Notification S.R.O. No.426(1)/96, dated 13th June, 1996, which is re-produced as under:--
Notification S.R.O. 426 (1)/96.---In exercise of the powers conferred by section 19 of the Customs Act, 1969, (IV of 1969), and subsection (1) of section 13 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendments shall be made in' this Ministry's Notification S.R.O. No.279(1)/94, dated the 2nd April, 1994, namely:-
In the aforesaid Notification,---
(1) in the preamble,---
(i) The words, brackets, figures and comma 'and subsection (1) of section 13 of the Sales Tax Act, 1990,' shall be omitted;
(ii) the words 'and sales tax' shall be omitted;
(2) in condition (2), the words 'and sales tax' shall be omitted; and
(3) in the Form of Indemnity Bond,--
(i) in the second paragraph, the words 'and sales tax' shall be omitted; and
(ii) in the forth paragraph, the words 'and sales tax', occurring twice shall be omitted. "
11. The contention raised by the learned counsel for the Customs Department that the Government under its legislative authority while enjoying plenary power of taxation is also empowered to grant exemption in its discretion through a reasonable classification and the Court has only to judge the reasonableness in the light of the conditions for such classification and the essential qualification required under law is not disputed but the exercise of power of discretion and classification must not offend the principle of equality as embodied in Article 25 of the Constitution of Islamic Republic of Pakistan 1973. The exercise of discretion by the Government in such matters in favour of a particular class or group of person is always subject to the fulfilment of essential condition and the requirements of the general principle of equality before law. The basic rule for the exercise of such discretion and reasonable classification is that all persons placed in similar circumstances must be treated alike and the reasonable classification must be based on reasonable grounds in a particular set of circumstances, but the same in any case must not offend the spirit of Article 25 of the Constitution of Islamic Republic of Pakistan, 1973. Following the rule of equal protection of law, person equally placed must be treated alike in the matter of privileges and liabilities. Reference may be made to the case of Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652 and Messrs Gadoon Textile Mills and others v. WAPDA and others 1997 SCMR 641. The apex Court in Government of Balochistan through Additional Chief Secretary v. Aziz-ullah Memon and others PLD 1993 Supreme Court 341 has laid down the following principle of equality clause under Article 25 of the Constitution of Islamic Republic of Pakistan 1973:--
(i) that equal protection of law does not envisage that every citizen is to be treated alike in all circumstances, but it contemplates that persons similarly situated or similarly platted are to be treated alike;
(ii) that reasonable classification is permissible but it must be found on reasonable distinction or reasonable basis;
(iii) that different laws can be validly be enacted for different sexes, persons in different age group, persons having different financial standing, and persons accused of heinous crimes;
(iv) that no standard of universal application to test reasonableness of a classification can be laid down as what may be reasonable classification in a particular set of circumstances, may be unreasonable in the other set of circumstances;
(v) that a law applying to one person or one class of persons may be constitutionally valid if there is sufficient basis or reasons for it, but a classification which is arbitrary and is not founded on any rational basis is no classification as to warrant its exclusion from the mischief of Article 25;
(vi) that equal protection of law means that all persons equally placed be treated alike both in privilege conferred and liabilities imposed;
(vii) that in order to make a classification reasonable it should be based---
(a) on an intelligible differentia which distinguished persons or things that are grouped together from those who have been left out;
(b) that the differentia must have rational nexus to the object sought to be achieved by such classification.
Although class legislation has been forbidden, it permits reasonable classification for the purpose of legislation. Permissible classification is allowed provided the classification is founded on intelligible differentia which distinguishes persons or things that are grouped together from others who are left out of the group and such classification and differentia must be on rational relation to the objects sought to be achieved by the act. There should a nexus between the classification and the objects of the act. This principle symbolizes those persons or things similarly situated cannot be distinguished or discriminated while making or applying the law. It has to be applied equally to persons situated similarly and in the same situation. Any law made or action taken in the violation of these principles is liable to be struck down. If the law clothes any statutory authority or functionary with unguided and arbitrarily power enabling it to administer in a discriminatory manner, such law will violate equality clause. Thus, the substantive and procedural law and action taken under it can be challenged as violated of Articles 8 and 25. "
12. Thus, the classification of Power Projects on the basis of condition of execution of an agreement with WAPDA and KESC having no nexus with the objection of power policy would not be reasonable to undo the effect of Notification S.R.O. No.279(1)/94, dated 2-4-1994 qua the Power Projects which have not signed such agreements in the light of the principle of equality before law. The purpose of power policy was to meet the shortage of energy in the country by establishing Power Generation Projects in the private sector and provide the electricity to .the people at low rate. In pursuance of this policy, the investors in the private sectors with attractions of certain financial relaxation imported the machinery and equipment for the establishment of Power Projects under the said policy. Therefore, notwithstanding the subsequent change in the policy through legislative measures in the form of notification, the right already accrued under the original Notification S.R.O. No.279(1)/94, dated 2-4-1994 in favour of such importers would remain available to them till the date of withdrawal of the same. Therefore, the classification of the Power Projects with reference to the execution of an agreement with WAPDA and KESC or the Government, as the case may be, would be ineffective to the existing rights made available to the importers of machinery and equipment for establishing Power Projects under the original notification. The classification of the Projects for the purpose of distribution of the energy to the consumers through public functionaries under the direct control of the Government in public interest and for collecting the public revenue may not be objectionable, but this classification would only be relevant under the policy from the date of change and not retrospectively. It was held in Rafi-ud-Din and 6 others v. The Chief Settlement and Rehabilitation Commissioner and 2 others PLD 1971 Supreme Court 252 at page 306 as under:
"It is well settled that when the law is altered during the pendency of an action, the rights of the parties are decided according to the law as it existed when the action was begun and not the law that existed at the date of the judgment or order. This is, however, subject to the exception that the new law shall apply if it is a mere rule of procedure or if it has been applied retrospectively to pending proceedings".
13. Since the condition of execution of power purchase agreement by the importers of equipment and machinery for Power Generation Projects was not made part of Notification S.R.O. No.279(1)/94, .dated 2-4-1994, therefore, the exemption from payment of customs duty, sales tax, regulatory duty and Iqra charges subject to the fulfillment of the conditions contained in the above notification would be available to all those importers of machinery'. and equipment for Power Plant under the Power Policy of Government, who have filed bill of entry or opened the letter of credit before 1-7-1995 on which date an amendment in S.R.O. No.279(1)/94, dated 2-4-1994 was made through Notification S.R.O. No.584(1)/95, dated 1-7-1995, without any discrimination as the amending notification would not be operated retrospectively. Thus, the exemptions allowed under Notification S.R.O. No.279(1)/94, dated 2-4-1994 would be available to all such importers till 1-7-1995 without any discrimination and after the amendment the said notification in its amended form would take effect from the date of its amendment. The apex Court .in M.Y. Electronics Industries (Pvt.) Ltd. through Manager and others v. Government of Pakistan through Secretary Finance Islamabad and others (1998 SCMR 1404) held as under:--
"The effect of insertion of section 31-A in the Act-is that when exemption from payment of customs duty granted by the Government under section 19 of the Act is withdrawn, then notwithstanding the fact that while exemption was enforced, the; party had opened a letter of credit or concluded the contact with the foreign suppliers, the amount of customs duty payable on the goods will be that which may have become payable as a result of withdrawal of the exemption. It is, therefore, quite clear that the right to claim exemption from customs duty under a notification issued under section 19 of the Act remains available to a party only as long as the exemption notification holds the field. However, as soon as the exemption notification is withdrawn, the payment of customs duty on the imported articles is to be determined in accordance with the provisions of section 30 of the Act. The contention of the appellants that section 31-A was inserted in the Act with the sole object of doing away with the effect of the judgment of this Court in Al-Samrez's case and, therefore, the exemptions granted by the Government after insertion of section 31-A are not controlled by the section 31-A does not appear to be correct. Section 31-A was inserted in the Act by section 5(2) of Finance Ordinance II of 1988 which provided that section 31-A shall be deemed always to have been so inserted in the Act, meaning thereby that it was given retrospective effect from the date the Customs Act, 1969, came into effect. There is nothing in the language of section 31-A (ibid), to justify the interpretation that this section applied only to the cases covered by the judgment of this Court in Al-Samrez's case or to those cases only, which did not acquire the character of passed and closed transaction on the date of insertion of section 31-A in the Act. The language of section 31-A (ibid) is wide enough to include within its ambit all those cases where exemptions have been withdrawn after the insertion of section 31-A in the Act as well.
At this stage, we may also dispose of another connected argument of Mr. Aitzaz Ahsan relating to interpretation of section 31-A. Mr. Aitzaz Ahsan contended that 'Surcharge'and ' Iqra surcharge' were levied under section 2 of the Finance Ordinance, 1982, and section '5' of the Finance Act, 1985, respectively. Section 31-A as originally enacted amongst others, provided that the rate of duty applicable to any goods shall also include the amount of duty imposed under section 2 of Finance Ordinance, 1982, and section 5 of Finance Act, 1985. However, by section 2(4) of the Finance Act of 1991, the words "section 2 of the Finance Ordinance (XI of 1982) and section 5 of the Finance Act, 1985' (1 of 1985) and the Anti-dumping or countervailing duty imposed under the Import of Goods (Anti-dumping and Countervailing Duties Ordinance, 1983, (III of 1983)' appearing in section 31-A were omitted, with the result the withdrawal of Surcharge and Iqra Surcharge through the impugned notifications could not be defended on the strength of section 31-A of the Act. In reply to the above argument of Mr. Aitzaz Ahsan, Mr. S.M. Zafar, the learned counsel for the respondents contended that on the date the two notifications withdrawing the exemptions from payment of Surcharge and Iqra Surcharge were issued-by the Government, the words' section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1985' were very much part of section 31-A of the Act and as such the withdrawal of 'Surcharge' and ' Iqra surcharge' were fully covered and protected by section 31-A of Act. The contention of Mr. S.M. Zafar appears to be well-founded. The notification withdrawing the exemptions of Surcharge and Iqra Surcharge were issued by the Government on 9th of May, 1991 while the Finance Act of 1991, received the assent of the President of Pakistan on 20-6-1991 and it was published in the Gazette of Pakistan, extraordinary, Part I of 27-6-1991. Therefore, on the date the notifications withdrawing- the exemptions from payment of 'surcharge' and 'Iqra surcharge' were issued, section 31-A also covered the cases of withdrawal of exemptions from payment of Surcharge and Iqra Surcharge. We, therefore, find no force in the above submissions of learned counsel for the appellants.
The next contention of appellants in these appeals is that the observations of the High Court in the impugned judgment is fully established the allegations of appellants that the Government held out promises and inducements to the Industrialists by offering them exemptions from payment of various duties and taxes in case they established industries in the under-developed area of Gaie. The appellants having acted on the inducements offered by the. Government invested huge amounts in establishing various Industrial Units in Gaie. It is accordingly contended that in these circumstances, the Government could not be allowed to withdraw these exemptions on the principle of promissory estoppel.
The doctrine of promissory, estoppel is founded on equity. It arises when a person acting on the representation by the Government or a person competent to represent on behalf of the Government changes his position to his detriment, takes a decisive step, enters into a binding contract or incur a liability. In such case, the Government will not be allowed to withdraw from its promise or representation. However, a general promises without any time limitation cannot bind the Government for all times to come. The enforcement of doctrine of promissory estoppel against the Government or a Government functionary competent to represent on behalf of the Government is, however, subject to the following limitations as held by this Court in the case of Army Welfare Sugar Mills Ltd. v. Federation of Pakistan (1992 SCMR 1652):
'(i) The doctrine of promissory estoppel cannot be invoked against the legislature or the laws framed by it because the legislature cannot make a representation;
(ii) promissory estoppel cannot be invoked for directing the doing of thing which was against the law when the representation was made or the promise held out;
(iii) no agency or authority can be held bound by a promise or representation not lawfully extended or given;
(iv) the doctrine of promissory estoppel will not apply where no steps have been taken consequent to the representation or inducements so as to irrevocably commit the property or the reputation of the party invoking it; and
(v) the party which has indulged in fraud or collusion for obtaining some benefits under the representation cannot be rewarded by the enforcement of the promise.'
In the cases before us, the appellants are invoking the doctrine of promissory estoppel against the Government on the basis of alleged inducements and representations contained in the exemption Notification No.517(1)/89, dated 3-6-1989, No.480(1)/88, dated 26-6-1988 and 481(1)/88, dated 26-6-1988. These notifications do not contain any time limitation during which these exemptions were to remain operative. The appellants have failed to bring on record any material to establish that the Government either before or after issuance of these notifications made any representation to the Industries in Gaie that these exemptions will remain operative for any specified period. In the absence of period having been specified in these notifications regarding their validity, the exemptions under these notifications could be availed by the appellants only during the period these notifications were operative. These exemptions ceased to be available from the date the above notifications were superseded or withdrawn. The learned counsel for the appellants have, however, argued that as no time limit was mentioned in the above notifications, they were entitled to reasonable notice by the Government before withdrawal of these exemptions. In support of their contention, they have relied on the case of Gadoon Textile Mills. v. WAPDA (1997 SCMR 641)."
14. In addition to the grievance of the petitioners relating to the changes made in the exemption of customs duty and sales tax, they have also challenged the levy of regulatory duty under section 18(2) of the. Customs Act, 1969, as well as constitutionality of sections 31-A and 18-B of the Customs Act, 1969, and section 3(1)(a)(b) of the Sales Tax Act, 1990. The apex Court subject to the limitations contained in section 18(3) and (4) of the Customs Act, 1969, declared the provisions of section 18(2) of the ibid. Act valid and held that the regulatory duty would remain enforce from the date of publication of notification till the end of financial year in which it is issued. The regulatory duty being transitory in nature is always imposed subject to the limitations contained in section 18(2)(3)(4) of the Customs Act, 1969, and also the existence of condition essential for such levy. The Government being entitled to exercise the discretion of levying the regulatory duty can continue the imposition of said duty through a fresh notification on the expiry of earlier notification if such condition still exist. Thus, the exemption from the payment of customs duty would not by itself exempt the payment of regulatory duty unless it is specifically provided through a notification under section 19 of the Customs Act, 1969, and such notification cannot ipso facto apply to the duty not already enforced. However, an exemption notification in addition to its application to the. existing charge of customs duty can also cover future levy of such duty if it is so provided in the notification. The customs duty is levied under section 18(1) of the Customs Act, 1969, whereas the regulatory duty is imposed under section 18(2) of the said Act and, therefore, in absence of specific mention of regulatory duty in an exemption notification issued under section 19 of the Customs Act, 1969, the customs duty would not include the regulatory duty leviable under section 18(2) of the Customs Act, 1969. The exemption in general terms under section 19 would only apply to the customs duty leviable under section 18(1) of the Customs Act, 1969, unless exemption from the regulatory duty is specifically mentioned in the said notification. In nut shell, the exemption from the regulatory duty cannot be claimed in general under a notification giving such exemption beyond the financial year, during which it is enforced.
15. The next question relates to the withdrawal of exemption in the payment of sales tax through Notification S.R.O. No.426(1)/96, dated 13-6-1996. The notification through which the exemption is granted remains operative so long it exists and in case the exemption is withdrawn, the notification of withdrawal of exemption being prospective in its operation would not operate retrospectively and the exemption already trade through an earlier notification would remain available till the time, the same is not taken away. Consequently, the exemption in the sales tax given through Notification S.R.O. No.279(1)/94 would be given to the petitioners indiscriminately till the same was not withdrawn through a subsequent notification and thus, the exemption in payment of sales tax on the import of machinery and equipment which were imported within the target date would be available under S.R.O. No.279(1)/94, dated 2-4-1994 and would continue till the issuance of notification of withdrawal. The notification through which the exemptions were allowed was neither issued for a specific time nor the power of the Government to withdraw the benefits given under the said notification was restricted by any condition and, therefore, the consignment relating to the contract already entered into for the import of machinery and equipment of Power Generation Projects, in which the letters of credit were established before the target, date would be unconditionally entitled to avail the exemption from the payment of sales tax under S.R.O. No.279(1)/94.
The apex Court in 1998 SCMR 1404 at page 1441 further held as under:-
"The next question which arises for consideration in this behalf is, what is the effect of withdrawal of notification, dated 9-5-1991 on the vested rights which the appellants acquired under notification, dated 3-6-1989 with regard to the exemption from payment of sales tax on raw material and components imported for exclusive manufacturers of goods by recognized industrial unit located in Gaie. We have already held that the notification, dated 4-6-1989 issued by the Government was not time bound. It is, therefore, quite clear that the exemption from payment of sales tax under the notification, dated 3-6-1989 was available till such time the notification was withdrawn by the Government. The withdrawal of notification is, dated 9-5-1991. Therefore, the withdrawal of exemptions from payment of sales tax would be applicable only from 9-5-1991. This withdrawal, however, did not effect the rights of the appellants to claim exemptions from payment of sales tax in respect of import of raw material and components for which contracts were already entered into and letters of credit were established in favour of foreign suppliers before the date of withdrawal of notifications. The notification issued on 9-5-1991 withdrawing the exemption, however, itself provides that the notification will not affect the raw material and components imported against irrevocable letters of credit opened on or before 8-5-1991. The power to issue a notification included the power to withdraw the said notification and exercise of this power by the Government is unconditional as held by this Court in Azizullah Industries Ltd.'s case, (supra). Therefore, to the extent of exercise of that power by the Government, no exemption could be taken. The learned counsel for the appellants has, however, contended that as the appellants have made huge investments in the industries on the representation of the Government, the Government could not withdraw the exemption from payment of sales tax abruptly. In our view; the contention of the learned counsel for the appellants cannot succeed for the reason that the notification, dated 5-6-1989 issued by the Government granting exemption from payment of sales tax was not for any specific period. In the absence of period having been specified in the above notification, the power of the Government to withdraw the notification was not circumscribed by any other condition. In these circumstances, the effect of withdrawal of the exemption granted by the Government would be that all contracts entered' into for import of raw material Ad components before the date of withdrawal of the exemption and all those consignments in respect whereof irrevocable letters of credit were established before the date of withdrawal of the notification would continue to enjoy exemption from payment of sales tax. Beyond that the appellants will not be entitled to any further concession in respect of exemption from payment of sales tax."
16. In the light of the legal position as discussed above notwithstanding the execution of power purchase agreement with WAPDA and KESC or Government, as the case may, the machinery and the Power Plants imported under the Power Policy within the target date would be entitled to all exemptions made available under S.R.O. No.279 (1)194, dated 2-4-1994 indiscriminately till the withdrawal of the said exemptions. This is settled principle that a notification, which purports to impair an existing right or imposes new liability or an obligation cannot operate retrospectively, whereas the notification which confers benefits can operate retrospectively but no one can claim exemption from the payment of customs duty, sales tax or any other tax as of right without legal sanction as the grant of exemption being discretionary, the authority which enjoys the power to grant exemption is also empowered to withdraw such exemption subject to the condition that the exemption, if already allowed would not be withdrawn from the previous date. This general principle is always subject to the exception that if the, exemption was granted subject to the existence of certain conditions and withdrawal of exemption was also made conditional, the Government while fulfilling such condition would be justified in withdrawing the exemption and thus, no estoppel can be pleaded against the law or the legislative power of the Government for the grant of exemption or withdrawal thereof. The apex Court in Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others (1992 SCMR 1652) held as under:--
"It may be mentioned that by now, it is well-settled proposition of law obtaining in Pakistan that if an exemption from payment of excise duty or any other tax, has been granted for a specified period on certain conditions and if a person fulfils those conditions, he acquires a vested right, he cannot be denied the exemption before the expiry of the specified period, through an executive instrument like a notification, but he can be denied his vested right by a legislative provision, like section 31A, which has been incorporated in the Customs Act in 1988 nullifying the effect of the judgment of this Court in the case of Al-Shamrez Enterprises (supra) as has been held by the author of the above judgment, Zaffar Hussain Mirza, J., in the recent unreported majority judgment, dated 24th September, 1991, in Civil Appeals Nos.915-K to 918-K all of 1990 (Molasses Trading and Exports (Pvt.) Ltd. v. Federation of Pakistan and others.
It is, therefore, evident that the doctrine of promissory estoppel is available in Pakistan against the Government and its functionaries, subject to inter alia limitations highlighted by one of us, Shafiur Rahman, J., in the case of Pakistan v. Salahuddin (supra). However, if the appellants had passed on the additional burden of the excise duty after the two impugned S.R.Os. were issued, they are not entitled to press into service the doctrine of promissory estoppel and it will be inequitable to deny the State excise duty on the excess quantity of sugar referred to hereinabove, in terms of section 3C of the Act. We may observe that doctrine of promissory estoppel has been evolved by the Courts as an equitable doctrine with the object to pre-empt suffering of any loss by a promise and was not designed or intended to provide a windfall profit to him, though Bhagwati, J., in the case of Motilal Padampat Sugar Mills (supra) had held that it was not necessary in order to attract applicability of doctrine of promissory estoppel, that the promisee, acting in reliance on the promise should suffer any detriment, but this view was contrary to the Indian Supreme Court's earlier view and also to the subsequent view taken by Bhagwati, as C.J., in the case of Union of India v. Godfrey Philips India Ltd. (supra)".
17. The judicial interference into the functions of legislation of a representative Body or the Government, as the case may, ordinarily is not proper but at the same time, legislature is presumed not to legislate a law manifestly causing injustice or abuses of the jurisdiction of legislation, therefore, in such circumstances, the Courts have the exclusive powers to examine the validity of such exercise of jurisdiction. The nut shell result of the above discussion is that the exercise of discretion or the grant of exemptions in customs duty, regulatory duty and sales tax as well withdrawal of such exemptions being subject to certain conditions must not be discriminatory and consequently in the light of the principle of prospective application of the notification, the petitioners shall be entitled to get the benefit of S.R.O. No.279(1)/94, dated 2-4-1994 for the period during which it held the field in its original form qua the imports made before the date of its amendment. Consequently', it is held;
(a) That the notification withdrawing exemptions from payment of customs duty and sales tax would not operate retrospectively and all exemptions would be available indiscriminately to the petitioners on the import of machinery and equipment for Power Generation Projects under the Policy under Notification S.R.O. No.279(1)/94 dated 2-4-1994 till it was amended on 1-7-1995.
(b) The regulatory duty being recoverable in addition to the customs duty only for the specified financial year in which it is issued, the exemption of such duty in absence of a specific notification would no more be available at the expiry of financial year.
(c) Since the notification of withdrawal of exemptions in customs duties and sales tax would not operate retrospectively, therefore, the importers would be entitled to claim refund of the payments made in connection with such duties and taxes which were not chargeable on the date of issue of notification of withdrawal.
These writ petitions are accordingly disposed of in the above terms with no order as to, costs.
Q.M.H./M.A.K./S-114/L
Order accordingly