(a) Customs Act (IV of 1969)‑‑‑

‑‑‑‑S.19(3) [as inserted by Customs (Amendment) Ordinance (XXIV of 2002)]‑‑‑Protection of Economic Reforms Act (XII of 1992), Preamble‑‑ Provisions of S.19(3), Customs Act, 1969 (as amended) would prevail over the provisions of Protection of Economic Reforms Act, 1992 and were designed to nullify the effect of the pronouncement of the Supreme Court in Fecto Balarus Tractors Ltd. v. Pakistan 2001 PTD 1829.

1986 SCMR 1917 ref.

(b) Customs Act (IV of 1969)‑‑‑

‑‑‑‑S.19(3) [as inserted by Customs (Amendment) Ordinance (XXIV of 2002)]‑‑‑Sales Tax Act (VII of 4990), S.13(2)(a)‑‑‑S.R.O. 554(I)/98 dated 12‑6‑1998‑‑‑ Exemption‑‑‑Notification No. S.R.O. 554(I)/98 dated 12‑6‑1998 could not be characterized as "time bound" inasmuch as it did not grant any exemption from payment of duty for a specific period of time but merely stated certain preconditions to be fulfilled for qualifying to the benefit of exemption‑‑‑When the five years or three years period had not expired, the petitioners, had not even acquired the right to exemption and the question of withdrawal would be altogether irrelevant‑‑‑Executive was bound by representation it made under the doctrine of a promissory estoppel but there could be no estoppel against exercise of legislative power‑‑Even if certain rights had accrued to the petitioners, said rights stood wiped out by the enactment of S.19(3) of the Customs Act, 1969 [as amended].

Al‑Samrez's case 1986 SCMR 1917; Facto Belarus Tractors v. Pakistan 2001 PTD 1829; M.Y. Electronics v. Government of Pakistan 1998 SCMR 1404; Collector of Central Excise v. Azizuddin PLD 1970 SC 439 and Army Welfare Sugar Mills v. Federation of Pakistan 1992 SCMR 1652 ref.

(c) Estoppel‑‑‑

‑‑‑‑Promissory estoppel‑‑‑ Executive was bound by representation it made under the doctrine of a promissory estoppel but there could be no estoppel against exercise of legislative power.

Tariq Jawaid and Tasawar Ali Hashmi for Petitioner.

Faisal Arab, Standing Counsel.

Raja Muhammad Iqbal, Haider Iqbal Wahniwal, Nadeem Qureshi, Shakeel Ahmed and Ahmed Khan Bugti for Respondents.

Date of hearing: 23rd November, 2004.

JUDGMENT

SABIHUDDIN AHMED, J.‑‑‑All these petitions appear to contain similar facts and the same questions of law are therefore, being decided through this common Judgment. Basically it appears that the petitioners imported certain spare parts for expansion, replacement and modernization of certain existing industrial units upon certain terms and conditions; which need not be discussed for the purpose of deciding these petitions. The Notification No.S.R.O. 554(I)/98, dated 12‑6‑1998, issued in exercise of the powers under section 19 of the Customs Act and section 13(2)(a) of the Sales Tax Act, was operated when the petitioners apparently established their letters of credit for import, but had been rescinded by the time the goods actually arrived in Karachi after the exemptions have been recalled.

2. Mr. Tariq Jawed learned counsel for the petitioners in most of the petitions argued that he was conscious of the provisions of section 31-A of the Customs Act and would not order, claim the benefit of exemption in terms of the principles laid down in Al‑Samrez case (1986 SCMR 1917). Nevertheless, he relied upon section 6 of the Economic Reforms Act, 1992 and referred to the pronouncement of the Honourable Supreme Court in Facto Belarus Tractors v. Pakistan (2001 PTD 1829). In the aforesaid case their Lordships did acknowledged that section 31‑A of the Customs Act was intended to destroy any rights that an importer might have acquired before the date of withdrawal of the exemption premises upon the doctrine of promissory estoppel. However, their lordships held that the Economic Reforms Act, 1992 had an overriding effect over any other law including Customs Act and section 6 thereof protected all fiscal incentives for an investment provided by the Government which could not be altered to the disadvantage of the investors. Accordingly it was held that the benefit of exemption available to the petitioner at the time of placing an order for import would continue to remain available under the aforesaid section 6 irrespective of the insertion of section 31‑A of the Customs Act. The aforesaid judgment indeed squarely supports Mr. Tariq Javed's contention.

3. Mr. Tasawwar Ali Hashmi learned counsel for the petitioner in Constitutional Petitions Nos. D‑1142/03, 54 of 2004 and 222 of 2004 further argue that the Notification, dated 12‑6‑1998 granting exemptions was time‑bound inasmuch as the machinery thereunder could not be used for any other purpose for five years and the benefit of the exemptions could only be availed when importers met an export target of certain percentage of the value of imported goods for a period of three years. Learned counsel urged that such time‑bound exemptions could only be withdrawn through a legislative edict but not through a subsequent notification or executive order. In support of his contention Mr. Hashmi relied upon the pronouncements of the Honourable Supreme Court in M.Y. Electronics v. Government of Pakistan (1998 SCMR 1404) and two earlier pronouncements, in Collector of Central Excise v. Azizuddin (PLD 1970 SC 439) and Army Welfare Sugar Mills v. Federation of Pakistan (1992 SCMR 1652). The aforesaid judgments no doubt support Mr. Hashmi's above proposition of law.

4. Raja Mohammad Iqbal learned counsel for Respondents, however drew our attention to subsection (3) of section 19 to the Customs Act which was inserted through Ordinance XXIV of 2002 after delivery of pronouncement of the Honourable Supreme Court in Facto Belarus case and reads as under:‑‑

"(19) General power to exempt from customs duties.‑‑. . . . . . . . . .

(3) Notwithstanding anything contained in any other law for the time being in force, including but not limited to the protection of Economic Reforms Act, 1992 (XII of 1992) and notwithstanding any decision or judgment of any forum, authority or Court, no person shall, in the absence of a notification by the Federal Government published in the official gazette expressly granting and affirming exemption from customs duty, be entitled to or have any right to any such exemption from or refund of customs duty on the basis of the doctrine of promissory estoppel or on account of any correspondence or admission or promise or commitment or concessionary order made or understanding given whether in writing or otherwise, by any Government department or authority."

5. As is evident from a plain reading of the above provision it is evident that it would also prevail over the provisions of the Protection of Economic Reforms Act, 1992 and was designed to nullity the effect of the pronouncement of the Supreme Court in Fecto Belarus case. In the circumstances, therefore, we find ourselves unable to accept Mr. Tariq Jawed's contention.

6. Moreover, as regards Mr. Hashim's view, we are extremely doubtful whether the notification in question can be characterized as "time‑bound" inasmuch as it hoes not grant any exemption from payment of duty for a specific period of time' but merely states certain pre‑conditions to be fulfilled for qualifying to the benefit of exemption. Obviously when the five years or three years period had not expired, the petitioners, strictly speaking, had not even acquired the right to exemption and the question of withdrawal would be altogether irrelevant.

7. It is equally clear that even if we were to assume that the exemption was time‑bound. It is evident that the distinction between a legislative and an executive measure explained in the cases cited by him was premised upon principle that the executive is bound by representation it makes under the doctrine of a promissory estoppel but there could be no estoppel against exercise of legislative power. In the instant case it is clear that even if certain vested rights had accrued to the petitioners they' stood wiped out by the enactment of section 19(3) of the Customs Act.

8. For the foregoing reasons we would dismiss all these petitions with no order as to costs. We must however, express our appreciation for the assistance rendered by both counsel for the petitioners and Raja Muhammad Iqbal appearing for the Respondents, who presented their respective cases with a great amount of precision.

M.B.A./N‑44/KPetitions dismissed.