AL-HAMRA INDUSTRIES VS FEDERATION OF PAKISTAN
2005 P T D 2505
[Karachi High Court]
Before Subihuddin Ahmed and Ghulam Rabbani, JJ
AL-HAMRA INDUSTRIES
Versus
FEDERATION OF PAKISTAN
C.P. No. 1240 of 1996, heard on /01/.
rd
October, 2000. Customs Act (IV of 1969)-----
----Ss. 19 & 20---Protection of Economic Reforms Act (XII of 1992), S.6---Constitution of Pakistan (1973), Art. 199 --- Constitutional petition---Exemption from Customs duty---Customs duty on imported goods at time of placing import order was leviable at the rate of 10% ad valorem in terms of Notification which had expressly stipulated that it would remain in force till 30-6-1996---Subsequently during enforcement of said Notification, Customs Authorities demanded 45% ad valorem duty on said goods and on failure of petitioner to do so, his goods were detained---Validity---Incentives to imported goods at concessional rate of customs duty available to petitioner up to specified date, could not be withdrawn through a subsequent executive order before expiry of the specified date---Authorities were directed to release goods on the concessional rate of duty at 10% as provided by earlier Notification which existed at the relevant time.
Messrs Gatron and Bhadelia Industries Ltd. v. Government of Pakistan 1999 MLD 2994 ref.
Anwar Mansoor and Asim Mansoor for Petitioner.
M. Naimur Rehman, Dy. A.-G. for Respondent.
Date of hearing: 3rd October, 2000.
JUDGMENT
SABIHUDDIN AHMED, J.---The petitioner imported certain EVA and PVC Resin from Europe and Saudi Arabia respectively, pursuant to Letters of Credit established on 14-4-1996 and 25-4-1996 and the goods arrived at the Karachi Port on 15- & 17-6-1996. Admittedly at the time of placing the import order of establishment of the Letter of Credit customs duty on the imported goods was leviable at the rate of 10% ad valorem in terms of S.R.O. 508(I)/95, dated 14-6-1995. This notification expressly stipulated that it would remain in force till 30-6-1996.
2. It appears that the Federal Government issued S.R.O. 444(I)/96, dated 13-6-1996 purporting to rescind S.R.O. 508(I)/95. Through this notification the concessionary rate of duty was no more applicable to the goods imported by the petitioner, therefore, the Customs authorities demanded 45% ad varoorem duty on the aforesaid goods, which was prevailing at that point of time on account of the petitioner's failure to do so the goods were detained. Since a pure question of law involved this petition was admitted to regular hearing.
3. Mr. Anwar Mansoor, learned counsel for petitioner has argued that section 6 of the Protection of Economic Reforms Act, 1992, created a statutory clog on the powers of the Government to withdraw incentives for investment for a specified period of time. It may be pertinent to reproduce the aforesaid section 6 which reads as under:--
"6. Protection of fiscal incentives for setting up of industries---The ownership, management and control of any banking, commercial, manufacturing or other company, establishment or enterprise transferred by the Government to any person under any law shall not again be compulsorily acquired or taken over by the Government for any reason whatsoever."
4. Learned counsel has contended that since the petitioner, who is an investor, was given incentives to import the goods in question at concessional rate of customs duty, which was to be available upto a specific date i.e. 30-6-1996, the same could not be withdrawn through a subsequent executive order. He has strongly relied upon a judgment of the Honourable Supreme Court in Gatron (Industries) Limited v. Government of Pakistan 1999 MLD 2994. In this case certain exemptions from customs duty were granted by the Federal Government through notification, dated 13-12-1990 which were to last till 30-6-1995. The Notification was superseded by a subsequent Notification dated 14-5-1992 and the exemption did not remain available to the appellant after the latter notification. Their Lordships however, held that in view of the protection to fiscal incentives for industrialization provided by the Protection of Economic Reforms Act, once the exemptions had become applicable to the petitioners, it could be withdrawn through an executive order. A Division Bench of this Court of which one of us (Sabihuddin Ahmed, J.) was a member, also had an occasion to follow the law declared in the above judgment, in Messrs Gatron and Bhadelia Industries Ltd. v. Government of Pakistan (1999 MLD 2994).
5. Mr. Naimur Rehman, learned Deputy Attorney General attempted to argue that no vested right matured in favour of the petitioner until the goods had actually arrived at the Karachi Port. However, when controverted with the proposition that the petitioner's case was not based on any theory of vested rights, but specific' protection of statutory provisions he candidly conceded that the claim may be up-held. In view of the above, we allow this petition and direct the respondents to release the goods on the rate of duty in terms of S.R.O. 508(I)/95, dated 14-6-1995. The relevant Authorities will sympathetically consider question of the demurrage art warehouse charges as goods were held up on account of interpretation of a complicated question of law.
H.B.T./A-233/KPetition allowed.