GHANDHARA NISSAN DIESEL LTD., KARACHI VS COLLECTOR OF CUSTOMS APPRAISEMENT, KARACHI, 2006 PTD-KARACHI-HIGH-COURT-SINDH 2030 (2001)

(a) Words and phrases---

----"Levy"---Meaning in general and with reference to taxation.

Blacks Law Sixth Edition p.907 ref.

(b) Customs Act (IV of 1969)---

---Ss. 5, 18(I) & 19---Sales Tax Act (VII of 1990), S. 13(1)---S.R.O.815(I)/93, dated 16-9-1993, S.R.O. 438(I)/96, dated 13-6-1996---Customs General Order No. 13 of 1993, dated 4-10-1993---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Import of trucks under Prime Minister's Transport Revamping Scheme (S.R.O. 815(I)/93) exempt from duty and sales tax---Opening of Letter of Credit on 22-11-1995---Arrival of vehicles during operation of S.R.O.815(I)/93---Denial of benefit under S.R.O. 815(1)/93 to importer on basis of Customs General Order No. 13 of 1993 providing cut off date of 24-4-1993 for opening Letter of Credit---Validity---Section 18(1) of Customs Act, 1969 was a charging provision imposing duty per First Schedule thereof as general statute---Such S.R.O. was a special statute granting exemption under S.19 of Customs Act, 1969 from charging S.18(1) thereof---Exemption granted under S. 19 of Customs Act, 1969 through such S.R.O. would prevail and could not be denied during operation of such S.R.O.---CGO No: 13 of 1993 and instructions of C.B.R. could not prevail over substantive provisions of Sales Tax Act, 1990 and S.R.O., issued thereunder---High Court accepted constitutional petition, declared impugned order as void ab initio and directed authority to assess duty under said S.R.O.

C.B.R. v. Sheikh Spinning Mills 1999 SCMR 1443; 1993 SCMR 1232; 1995 PTD 1212; PLD 1990 SC 626; 1996 SCMR 727; AIR 1961 SC 751; AIR 1985 Dehli 195; AIR 1987 Patna (sic); Collector Customs v. Saleem Araya PLD 1999 Kar. (sic); 1998 SCMR 1404; 1992 SCMR ' 1270; Federation of Pakistan v. Amjad Hussain, Al-Samrez's case 1986 SCMR 1917; PLD 1998 Karachi 11, 1998 MLD 4286; PLD 1990 SC 626; PLD 1998 Kar. 99; PLD 1993 SC 136 and AIR 1992 Rajisthan 99 ref.

Syed Wasey Zafar case's PLD 1994 SC 621; Messrs Ghandhara Nissan Diesel Ltd. v. The Collector of Customs (Customs Appeal No.K-371/2000) and Messrs Pak Suzuki Motor Company Ltd. v. The Collector of Customs (Appeals Nos. 1740 and 1741 of 1999 rel.

(c) Interpretation of statutes---

----Fiscal statutes---Terms should be strictly construed and every word and sentence of legislation has to be given meaning and significance---Redundancy cannot be attributed to a statute and each and every word therein would carry meaning.

1992 SCMR 1898; PLD 1988 SC 64; CLC 1994 1612; 1992 SCMR 1270; PLD 1998 Kar. 338; 1990 MLD 2304 and PLD 1963 SC 486 rel.

(d) Customs Act (IV of 1969)---

----Ss. 5 & 19---C.B.R's. instructions/orders and S.R.O.---Nature---C.B.R.'s instructions/orders could not override S.R.O.---One S.R.O. could only be rescinded/amended/modified through another S.R.O.

Aziz A. Shaikh for Petitioner.

Ziauddin Nasir, Standing Counsel for Respondents.

Date of hearing: 11th September, 2001.

JUDGMENT

ZAHID KURBAN ALVI, J.---By a short order we had disposed of the following petitions:---

C.Ps. Nos. 1854, 396, 407 and 193 of 1996 and 1648 of 1995.

1. All the cited petitions are identical and involve interpretation of S.R.O. 815(I)/93 read with S.R.O. 1122(I)/95, S.R.O. 490(I)/94 and C.G.O. 13/93 besides Sec. 223 of Customs Act, 1969.

2. Briefly the facts of the case are that the petitioner imported Nissan Diesel trucks in CBU conditions under the Prime Minister's Transport Revamping Scheme exempt from duty & Taxes originally available which was made effective from 16-9-1993 and imports were made subject to duty @ 50% of leviable customs duty and free of Sales Tax per Syno. 3 of table of S.R.O. 815(1)/93 dated 16-9-1993.

3. The petitioners consignments under the Scheme arrived at Karachi, after 16-9-1993 and during operation of S.R.O. 815(I)/93 which was subsequently rescinded on 13-6-1996 vide S.R.O. 438(I)/96.

Benefits of S.R.O. 815(1)/93 were however refused by the respondents in pursuance of C.B.R. instructions under C.G.O. 13 of 1993 and assessment was made a 60% plus 12.5% Sales Tax at normal rate the levy of duty and Sales/Tax was challenged vide Constitution Petition No.284 of 1996 and the case was remanded back to respondents for deciding the case on merits.

In compliance of the High Court's order the respondent passed impugned Order-in-Original No.25 of 1996 dated 30-9-1996 and denied the benefits as prayed instead it levied duty at 60% and Sales Tax at 12.5% whilst observing:---

"I have examined the records of the case and considered the argument of the importers the issue involved revolves round the point whether the benefit of S.R.O. 815(I)/93 dated 16-9-1993 is applicable to vehicles `imported against the letter of credit opened after 24th July, 1993 though the said notification did not provide any cut off date but the Central Board of Revenue after the issuance of the notification had clarified through Customs General Order No.13 of 1993 and Letter C. No.2(9)Tax-11/91 dated 16-10-1993 that the special package of reduced tariff was available to vehicles imported against advanced booking imported through letter of credit opened up to the cut off date of 24-7-1993 it is an admitted fact that in the instant case the 15 units Nissan Diesel Trucks were imported against letter of credit established on 22-11-1995 keeping in view the issues raised by the petitioner during the hearing of the case, the matter was referred to Central Board of Revenue, Islamabad for specific advice whether the benefit of S.R.O. 815(I)/93 can be extended in the cases imported against letter of credit opened after the cut off date of 24-7-1993. C.B.R. Islamabad has clarified that:---

7. For vehicles under consideration although the booking was made before 24-7-1993, the letter of credit was established on 22-11-1995 i.e. after the cut off date 24-7-1993, as such benefit under S.R.O. 815(I)/93 cannot be extended to these vehicles."

"In view of the foregoing position the benefit of S.R.O. 815(I)/93 dated 16-9-1993 (as amended subsequently) cannot be extended in the instant case, and the assessment of duty and taxes at the normal rates is found to be correct."

The petitioner again approached this Court and petition was admitted on 18-11-1996 for regular hearing, operative part of order reads as follows:---????????? .

"As indicated by the para-wise comments filed on behalf of the Deputy Collector of Customs (Appraisement), law branch, dated 5-11-1996, duty on imported diesel trucks was demanded from the petitioner in terms of C.G.O. 13/93 and not in accordance with S.R.O. 815(1)/93, dated 16-9-1993, although, it is not the case of the respondents that the said S.R.O. did not occupy the field at the relevant time when the trucks of the petitioner were imported and bill of entry was filed in respect thereof, but the contention raised on behalf of the respondents is that terms of the said S.R.O. were modified by C.G.O. 13/93, according to which the C.B.R. had specified a cut off date, the same being 24-7-1993, apparently, the said cut off date does not figure anywhere in the said S.R.O. consequently, the contention of the petitioner that the demand made by the respondents in respect of customs duty on the imported trucks is without lawful authority, requires consideration, admit, notice."

Since collection of duty at statutory rate Sales Tax was made on other consignments of identical goods therefore Constitution Petitions Nos.1648 of 1995, 193 of 1996,396 of 1996 and 407 1996 were also admitted by this Court on same question of law.

Mr. Aziz A. Shaikh has urged on behalf of the petitioner that C.G.O. 13/93 dated 4-10-1993 and C.B.R. Letter C.No.2(9) tax-11/91 dated 16-10-1993 relied upon for impugned rejection were issued by C.B.R. as administrative instructions/orders without any mention of statutory provisions of the Act or sub-delegated legislative authority, whereas S.R.O. 815(I)/93 was issued in exercise of powers conferred under section 19 of Customs Act, 1969 and section 13(1) of Sales Tax Act, 1990 therefore the C.G.O. 13 of 1993 as well as said instructions of C.B.R. (impugned) cannot prevail over substantive provisions of the Act and S.R.O. 815(I)/93.

It was submitted that under section 21 of General Clauses Act, 1897 read with section 14 abide the power to make rules also includes power to amend, add, vary or rescind rules or bye-laws which has got to be exercised in a like manner and subject to like sanction and condition, hence any change in a S.R.O. can only be accomplished through publication of another S.R.O. in a like manner and not via C.G.O. as was done in this case to upset the provision of said S.R.O. having statutory force.

C.G.O 13 of 1993 was not issued in exercise of powers under section 19 of Customs Act, 1969 or any other law in force at relevant time, it has tried to restrict the benefit to the consignments for L/Cs which were established before 24-7-1993, this is contrary to plain language of S.R.O. 815(I)/93 where no such condition exist. The letter cannot override provision of said S.R.O, reliance was placed on case of C.B.R. v. Sheikh Spinning Mills 1999 SCMR at p.1443 and para.6 pp.1445-1446, 1993 SCMR 1232. 1995 PTD 1212, PLD 1990 SC 626, 1996 SCMR 727, AIR 1961 SC 751, AIR 1985 Dehli 195, AIR 1987 Patna (sic) and Collector Customs v. Saleem Araya PLD 1999 Kar. (sic).

The exemption was available on consignments imported under the Scheme during operation of S.R.O. 815(I)/93 which was rescinded vide S.R.O. 438(I)/96 on 13-6-1996, no cut off date of 24-7-1993 was mentioned in said S.R.O. on the contrary it extends to letters of credits or even imports made on or after 16-9-1993, therefore the exemption cannot be denied to petitioners on imports made and bill of entry presented prior to 13-6-1996 in term of sections 30 and 31-A of Customs Act, 1969. Reliance was placed on 1998 SCMR 1404, 1992 SCMR 1270 Federation of Pakistan v. Amjad Hussain, Al-Samrez case 1986 SCMR 1917, it was further urged that impugned administrative order i.e. CGO. 13 of 1993 and C.B.R. letter stands at a lower pedestal from notifications, it cannot destroy or undo the superior law i.e. S.R.O. 815(I)/93 (PLD 1998 Karachi 11, 1998 MLD 4286 and PLD 1990 SC 626).

It was argued that C.B.R. instructions have got no binding force on quasi judicial authority while exercising quasi judicial functions therefore the respondent has acted in violation of first proviso of section 223 of Customs Act 1969, the Order No, 25/96 (impugned) suffers from serious infirmity of law (reliance placed on Indus Automobile's case PLD 1998 Kar. 99, PLD 1993 SC 136 and AIR 1992 Rajisthan 99.

The words "leviable customs duty" at S. No.3 of S.R.O. 815(1)/93 (words "as specified in the First Schedule of Customs Act, 1969") were omitted vide S.R.O. 1122(I)/95 dated 27-11-1995 are distinguishable and have no nexus with words, "statutory duty or normal duty", hence at the relevant time leviable duty was 30% & no Sales Tax was leviable.

The words `levy' as defined in Blacks Law Sixth Edition p.907 . means: to assess, raise, execute, exact, tax, collect, gather, take up, seize, thus with reference to in Taxation it shall only mean rate of taxation rather than physical act of applying the rate to property, whereas at pages 1410 and 1411 Blacks Law Dictionary it is stated that it is relative to a statute, created or defined by a statute, required or conforming to a statute.

Precisely section 18(1) ibid, is a charging section imposing duty per First Schedule of Customs Act, 1969 as General Statute, while S.R.O.815(I)/93 and S.R.O.490(I)/94 are special statutes granting exemption under Section 19 ibid from charging section of 18(1). Therefore, . exemption granted under section 19 through said S.R.Os. shall prevail and cannot be denied to petitioner during operation of said S.R.Os.

No where in S.R.O.815(I)/93, the words "statutory or normal rate of duty" are mentioned but leviable duty and no Sales Tax are mentioned therefore respondent has disregarded and completely ignored rather disrespected the well-settled principle of interpretation of fiscal statutes that terms should be strictly construed and that every word and sentence of legislature has to be given meaning and significance, redundancy cannot be attributed to a statute and each and every word therein would carry meaning (1992 SCMR 1898, PLD 1988 SC 64, 1994 CLC 1612 and 1992 SCMR 1270, PLD 1998 Kar. 338 also 360, 1990 MLD 2304 and PLD 1963 SC 486).

It is incorrect as suggested vide CGO 13/93 dated 4-10-1993 that the Scheme was discontinued, the said CGO is contrary rather disrespective of observations made by apex Court in Syed Wasey Zafar's case PLD 1994 SC 621 that the Scheme is not discontinued but only duty structure has been changed/varied (relevant para at pages 632 & 634).

Therefore, the CGO 13/93 as well as said instructions of C.B.R. cannot prevail over substantive Provisions of the Act and the S.R.O. F issued thereunder. It is a settled law that C.B.R. instructions/orders cannot override the S.R.O. One S.R.O. can only be rescinded/amended modified through another S.R.O. The Customs Excise and Sales Tax Tribunal has also decided this point in the case of Messrs Ghandhara Nissan Diesel Ltd. v. The Collector of Customs (Customs Appeal No.K-371/2000) and Messrs Pak Suzuki Motor Company Ltd. v. The Collector of Customs (Appeals Nos. 1740 and 1741 of 1999) decided on 23-10-2000 and 13-3-2000 respectively against which the Department has not filed any appeal.

For, the aforesaid reasons we would allow this petition and declare the impugned order as void ab initio. The respondent No.1 is directed to assess the duty under S.R.O.815(I)/93 dated 16-9-1993, and refund the duty and taxes collected in excess of the duty specified in the said S.R.O.

S.A.K./G-19/K??????????????????????????????????????????????????????????????????????????????????? Appeal accepted.