(On appeal against the judgment, dated 22‑1‑2004 passed by the Lahore High Court, Lahore in Writ Petitions Nos. 166, 3501, 3522, 19483 and 19895 of 1996).

Central Excises Act (I of 1944)‑‑‑

‑‑‑‑Sched. I, Item No. 14.14‑‑‑Finance Act (VII of 1992), Ss. 4(8) & 12‑A‑‑‑Notification S.R.O. 519(I)/1992, dated 25‑5‑1992‑‑‑Constitution of Pakistan (1973), Arts.165, 165‑A & 185 (3)‑‑‑Central excise duty, levy of‑‑‑Exemption from central excise duty‑‑‑Leave to appeal was granted by Supreme Court to consider; whether Water and Power Development Authority was not a Government Authority/functionary for the purpose of exemption from the payment of central, excise duty on services in shape of bank loans under the provisions of Notification S.R.O. 519(I)/1992; dated 25‑5‑1992; whether under Arts. 165 and 165A of the Constitution, the Government was ‑empowered to impose tax upon the corporation like Water and Power Development Authority etc. and whether High Court legally was not justified to declare that Water and Power Development Authority a Government functionary for the purpose of exemption of excise tax in view of the judgments of Supreme Court in cases titled Messrs Gadoon Textile Mills and 814 others vs. WAPDA and others, reported, as 1997 SCMR 641 and WAPDA and another v. Administrator, District Council, Swabi and others reported as 2000 CLC 40, because both the judgments dealt altogether different subject and it had not been held therein that the Water and Power Development Authority was Government functionary.

Messrs Gadoon Textile Mills and 814 others v. WAPDA and others 1997 SCMR 641 and WAPDA and another v. Administrator, District Council, Swabi and others 2000 CLC 40 ref.

Izhar‑ul‑Haque, Advocate Supreme Court and Tanvir Ahmad, Advocate‑on‑Record (absent) for Petitioners.

Nemo for Respondents.

Date of hearing: 3rd August, 2004.

ORDER

IFTIKHAR MUHAMMAD CHAUDHRY, J.‑‑‑These petitions for leave to appeals have been filed against the judgment, dated 22nd January, 2004 passed by the Lahore High Court, Lahore, whereby Writ Petitions filed by the respondents have been accepted.

2. Precisely stating the facts of the case are that the respondent No. 1 is a statutory body established and working under the Water and Power Development Authority Act, 1958. Respondent No. 1 obtained loans from respondent No.2 and finance from time to time. Through Finance Act (XII of 1991), the Central Excises Act, 1944 was amended and inter alia item No. 14.14 was added to its First Schedule which reads as follows:‑‑

Later on vide section 4(8) of the Finance Act (VII of 1992) the rate of duty was raised to 2%. In exercise of power under section 12‑A of Act the Federal Government issued Notification S.R.O. No. 555(I)/79, dated 28th June, 1979. This Notification was amended by another notification S.R.O. No. 519(I)/1992, dated 25th May, 1992, item (g) whereof mentioning that there was `NIL' duty on advances, inter alia, taken by the Government. The respondent No. 1 was called upon to make payment of the excise duty from time to time. Instead of making payment the respondent No.1 approached the learned High Court in extraordinary writ jurisdiction claiming that the exemptions available to the Government under S.R.O. No.519(I)/1992 were available to respondent No.1 and nothing was due as excise duty on advances. The writ petition filed by the respondent No. 1 has been accepted by means of impugned judgment as such instant petition for leave to appeal has been filed.

3. Learned counsel for the petitioners contended that:

(a) Respondent WAPDA is not a Government Authority/functionary for the purpose of exemption from the payment of Central Excise Duty on services in the shape of Bank loans under the provision of Notification No. S.R.O. 519(I)/92, dated 25th May, 1992.

(b) Under Articles 165 and 165‑A of the Constitution of Islamic Republic of Pakistan, 1973, the Government is empowered to impose tax upon the corporation likewise WAPDA etc.

(c) Learned High Court legally has not justified to declare that the WAPDA is a Government functionary for the purpose of exemption of Excise Tax in view of the judgment reported in the cases of Messrs Gadoon Textile Mills and 814 others v. WAPDA and others (1997 SCMR 641) and WAPDA and another v. Administrator, District Council, Swabi and others (2000 CLC 40) because both these judgments deals altogether different subject and it has not been held therein that the WAPDA is Government functionary."

After hearing learned counsel for the petitioners and having gone through the relevant Constitutional provisions and judgments on the subject, we are inclined to grant leave to appeal, inter alia, to examine the contentions put forward on behalf of the petitioners. As question of interpretation of Constitutional provisions is involved in this case, therefore, notice to Attorney General for Pakistan be also issued.

M.H./C‑18/S Leave granted.