IQBAL HUSSAIN VS FEDERATION OF PAKISTAN through The Secretary, Revenue Division
2010 P T D 2338
[Karachi High Court]
Before Muhammad Athar Saeed and Munib Akhtar, JJ
IQBAL HUSSAIN through Authorized Attorney
Versus
FEDERATION OF PAKISTAN through The Secretary, Revenue Division and 2 others
C.P. No.D-2536 of 2009, decided on 09/08/2010.
(a) Customs Act (IV of 1969)---
----S. 18 & First Sched. (Import Tariff)--- West Pakistan Arms Ordinance (XX of 1965), S. 11-A---Pistols of non prohibited bore/caliber of .9 MM (equal to 0.3533 inches), import of---Declaration of such pistols under PCT Heading 9302.0012 chargeable to customs duty @ 15%, but exempt from regulatory duty---Classification of such pistols by Department and Revenue Board under PCT Heading 9302.0092 chargeable to customs duty @ 35% and regulatory duty @ 15%---Validity---Term "prohibited bores" used in First Sched. of Customs Act, 1969 was neither defined therein or West Pakistan Arms Ordinance, 1965 nor did have any ordinary grammatical meaning---Federal Government in exercise of its powers under S. 11-A of West Pakistan Arms Ordinance, 1969 had issued Notification dated 18-8-1991 specifying therein "Revolvers or Pistols over 46 inches Bore" to be falling in category of "prohibited bores" --- While taking term "prohibited bore" to have same meaning as assigned thereto in West Pakistan Arms Ordinance, 1965, then expression "Revolvers and Pistols... of prohibited bores and calibers higher than 0.32 inches" as used in Import Tariff would mean all pistols falling within term "prohibited bore" would be of a bore in excess of 46 inches, then additional condition of being a caliber/bore in excess of 32 inches would become redundant---Word "and" as used in Import Tariff would be read disjunctively and not conjunctively as same would avoid latter part of heading from becoming redundant---PCT Heading 9302.0012 would apply to an imported pistol of prohibited bore or of a bore greater than 32 inches---High Court set aside impugned classification made by Revenue Board and Department.
(b) Customs Act (IV of 1969)---
----S. 18 & First Sched. Import Tariff---West Pakistan Arms Ordinance (XX of 1965), S. 11-A---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Alternate remedy---Availability of---Effect---Pistols of non prohibited bore/caliber of .9 MM (equal to 0.3533 inches), import of---Declaration of such pistols by petitioner under PCT Heading 9302.0012 chargeable to customs duty @ 15%, but exempt from regulatory duty---Classification of such pistols by Department and Federal Board of Revenue under PCT Heading 9302.0092 chargeable to customs duty @ 35% and regulatory duty @ 15%---Question involved in constitutional petition pertained to interpretation of Import Tariff and classification headings and true meaning thereof---Interpretation of a statute or any party thereof including a schedule thereto was function and duty of courtsspecially High Court under Art. 199 of the Constitution---Federal Board of Revenue being final authority for classification purposes had already given its ruling in such matter---No purpose, thus, would be served in requiring petitioner to pursue alternative remedies, even if such be available---Constitutional petition was maintainable in circumstances.
(c) Interpretation of statutes---
----Word "and" can be read as "or" or vice versa in appropriate circumstances.
Khadim Hussain and others v. Additional District Judge Faisalabad and others PLD 1990 SC 632 ref.
(d) Interpretation of statutes---
----When two reasonable interpretations possible, one leads to redundancy, while other avoids surplusage, then later interpretation has to be preferred.
Junaid Ghaffar for Petitioner.
Raja M. Iqbal for Respondents.
ORDER
MUNIB AKHTAR, J.---By means of a short order dated 9-8-2010, we had allowed this petition in the following terms:--
"Both the learned counsel have concluded their arguments. For reasons to follow separately we allow this petition and hold that for the purpose of falling under classification 99302.0012 or any other classification falling under the head of prohibited bores and calibers higher than 0.32 even if one of the conditions is fulfilled, the rates applicable to the tariff classification 9302.0011, 9302.0012, 9302.0013 and 9302.0019 shall apply."
The following are the reasons for which we allowed the petition.
The petitioner is engaged in the arms and ammunition business, and for this purpose from time to time imports various arms and ammunitions from worldwide sources. For this purpose, the petitioner is duly licensed and authorized to import non-prohibited bore arms and the required ammunition, including shotguns, revolvers, pistols and rifles. The present petition is concerned with 79 non-prohibited bore pistols of a bore or caliber of .9 MM (which is equal to 0.3544") which were imported from China. The petitioner declared these pistols under PCT heading 9302.0012 on which the applicable rate and custom duty is 15% and on which no regulatory duty was payable at the time of import. However, the respondent Department's view was that the subject pistols were classifiable under PCT 9302.0092 on which customs duty of 35% is leviable and in addition thereto there is a charge of 15% regulatory duty. The petitioner got the pistols released on a provisional assessment and subsequently filed the present petition challenging the refusal of the Department to classify the imported items under PCT 9302.0012.
Learned counsel for the petitioner submitted that- there was no dispute that the pistols in question were of a non-prohibited bore, and submitted that it was a long standing practice of the Department to classify pistols such as those that had been imported under PCT 9303.0012. However, it appears that at some point prior to the importation of the subject pistols, the Collector of Customs (Preventive), the respondent No.2 had written to the Federal Board of Revenue ("F.B.R.") seeking a ruling as to whether the applicable classification should be under PCT 9302.0012 or PCT 9302.0092. Learned counsel submitted that after this request for clarification (which was made on or about 9-1-2009), the Collector wrote a follow up letter dated 20-4-2009, in which the matter was stated in somewhat greater detail and the request for a suitable ruling from F.B.R. was reiterated. It, appears that subsequent to the second letter, the petitioner's trade association, the Pakistan Arms and Ammunitions Merchants Manufacturers Association, also wrote to the F.B.R. on or about 25-4-2009, reiterating its position that the applicable classification was PCT 9302.0012. Subsequent to this, the F.B.R., by means of its letter dated 22-6-2009 (which is considered in more detail below) gave a ruling that pistols of the caliber equal to the imported pistols which are subject matter of the present petition ought not to be classified under PCT 9302.0012 but should be classified in the subsequent subheadings, including PCT 9302.0092. The petitioner's trade association made a further representation to the F.B.R., and it appears that the latter has since then not deviated from the earlier ruling given its letter dated 22-6-2009. Learned counsel for the petitioner submitted that the F.B.R. had misinterpreted and misapplied the relevant headings of the Import Tariff and that the subject pistols were classifiable under the PCT heading as declared by the petitioner.
The headings in question, which require consideration in the present case, are as follows:-
"93.02 Revolvers and pistols, other than those of heading 93.03 or 93.04.
---Of prohibited bore and of calibers higher than 0.32
| 9302.0011----Revolvers | 15 |
| 9302.0012----Pistols, single barrel, semi-automatic or otherwise | 15 |
| 9302.0013----Pistols, multiple barrel | 15 |
| 9302.0019----Others. | 15 |
| ----Other | |
| 9302.0091----Revolvers | 25 |
| 9302.0092----Pistols, single barrel, semi-automatic or otherwise | 35 |
| 9302.0093----Pistols, multiple barrel | 35 |
| 9302.0099----Others. | 35" |
Developing his arguments, learned counsel submitted that the classification of arms in the prohibited or non-prohibited bore categories was done under the Pakistan Arms Ordinance, 1965 ("1965 Ordinance"). He submitted that in terms of section 11-A of the 1965 Ordinance, the Federal Government was empowered, by notification in the official Gazette, to specify the sort of arms -which were to be regarded as prohibited bores for purposes of the Ordinance. He stated that pursuant to this power, the Federal Government had issued a notification dated 18-8-1991 which was still holding the field. This notification is in the following terms:--
"In exercise of the powers conferred by subsection (1) of section 11-A of Pakistan Arms Ordinance, 1965 (West Pakistan Ordinance No. XX of 1965) and in supersession of this Ministry's Notification No.4/11/70-Arms, dated 1st July, 1985, the Federal Government is pleased to specify below the description, caliber and bore of arms and ammunition which are to be prohibited bore for the purpose of the said Ordinance, namely:
(1) All 'Cannon' which under the Arms Ordinance is defined as - Prohibited bore, including:
(i)All types of artillery, mortars, machine guns; (ii) Silencers for all machine and sub-machine guns;
(ii)Anti-tank rifles and recoil-less guns or rifles and bazookas;
(iii)Revolver or Pistols over 46 inches bore;
(iv)Nuclear weapons of all types;
(v)Projectors, guided missiles and dischargers for grenades, rockets, bombs and gas or smoke containers;
(vi)Flame throwers of all types;
(vii)All carriages, platforms and appliances for mounting or transporting cannon; and
(viii)Parts of cannons.
2. All automatic rifles of all calibers.
3. Semi-automatic rifles of 7.62 MM Calibers."
Learned counsel submitted that a joint reading of this notification with PCT head 93.02 clearly showed that the subject pistols were classifiable under PCT 9302.0012 and not otherwise. He submitted the FBR had erred in its interpretation of the classification heading and prayed that the subject pistols be declared as falling under PCT 9302.0012.
Learned counsel appearing for the respondents firstly submitted that the petition was not maintainable as the petitioner had not availed any alternate remedies, which were appropriate and efficacious in the facts and circumstances of the case. On the merits, learned counsel did not dispute any factual aspect of the case. However, he submitted that the F.B.R. and the concerned Collector had correctly interpreted and applied the relevant PCT heading. He submitted and that the subject pistols did not fall under PCT 9302.0012 and the only other applicable classification was PCT 9302.0092. Therefore, according to him, the subject pistols had been correctly classified under that heading and he accordingly prayed that the petition be dismissed.
We heard learned counsel for the parties, considered their submissions and gone through the record with their assistance, and ultimately came to the conclusion that the petition ought to be allowed and the subject pistols be classified under PCT 9302.0012.
We first take up the question of maintainability of the petition. The Import Tariff is the First Schedule to the Customs Act, 1969 and being part of a statute, its contents, including explanatory notes, applicable rules and classification headings are to be interpreted and applied in terms of the well known principles applicable to statutory interpretation. The interpretation (i.e., determination of the legal meaning) of a statute or any part thereof, including a schedule thereto, is the function and duty of the courts, especially the High Court under Article 199 of the Constitution, and since in the present case the only question involved is the true meaning and interpretation of a statutory provision, the petition is proper are maintainable before this Court in Article 199 proceedings. Secondly, the General Rules which preface the Import Tariff (and are therefore as much part of the Customs 'Act as the Tariff itself) clearly provide in a section titled "Pakistan Rules" as follows:
"For the purpose of classification in the first schedule to Customs Act, 1969 (IV of 1969) the Board shall be the final authority to determine the classification of any item meant to be imported or exported."
Thus in terms of the relevant statutory provision itself, the F.B.R. is the final authority for classification purposes. In the present case the F.B.R. has already given its ruling. Hence, no purpose would be served in requiring the petitioner to pursue alternative remedies, even if such be available. Accordingly, the preliminary objection is repelled, and the petition is held to be maintainable.
It will be seen that the entire case turns on the proper meaning and interpretation of the words with such PCT 9302.0012 and the other subheadings are prefaced namely: "Of prohibited bores and of calibers higher than 0.32". The F.B.R. in terms of its ruling dated 22-6-2009 held that the word "and" as used in the heading meant that both the conditions had to be fulfilled, i.e., the imported arms had to be both of a prohibited bore and also of a caliber higher than 0.32. In other words, the F.B.R. read the word "and" conjunctively. Since admittedly the subject pistols are of a non-prohibited bore, one of the conditions was not fulfilled and hence, according to the F.B.R. and the concerned Collector, the pistols did not fall under PCT 9302.0012. On the other hand, learned counsel for the petitioner submitted that the two conditions spelled out in the heading had to be read disjunctively so that even if one of the conditions were fulfilled, the imported arms would fall under the heading. He submitted that 'since it was undisputed that the subject pistols were of a caliber higher than 0.32 (having a caliber of 0.3544) the subject pistols did come within the heading and were therefore to be classified under PCT 9302.0012. In other words, his case was that the word "and" as used in the heading should be read as "or", or as though there was a comma after the word "bores" as used in the heading. The question that falls for determination is which of the two interpretations gives the true meaning of the heading.
It is of course, a well settled principle of statutory interpretation' that in appropriate circumstances, the word "and" can be read as "or" or vice versa. The learned counsel for the petitioner in this regard referred to a case reported as Khadim Hussain and others v. Additional District Judge Faisalabad and others PLD 1990 SC 632. In our view, in order to determine whether the word "and" has to be read conjunctively or disjunctively, the proper meaning of the term "prohibited bores" will have to be ascertained. Now this term is defined neither in the Customs Act nor in the First Schedule, i.e. the Import Tariff. However, this is a term well understood in the context of the 1965 Ordinance under which, as noted above, the Federal Government has issued a notification in the exercise of its powers under section 11-A. Since the term "prohibited bores" does not have any ordinary grammatical meaning, in our view it should be given the same meaning which is assigned to it under and for the purposes of the 1965, Ordinance. That Ordinance also does not, as such, define "prohibited bores" but rather confers a statutory power on the Federal Government to specify the arms which are to be regarded as falling in this category. It follows that meaning assigned by the Federal Government to this term should be regarded as the applicable meaning for the purpose of interpreting and applying the heading in the Import Tariff which is under consideration. That meaning has been assigned by the Federal 'Government in terms of its notification dated 18-8-1991 reproduced above. The entry from this notification that is relevant for present purposes is entry (iv) of Paragraph 1 which is as follows:--
"Revolvers or Pistols over 46 inches Bore"
It will be seen at once that if, as we conclude, the term "prohibited bore" is to have the same meaning as assigned to it in the 1965 Ordinance, then on a conjunctive reading of the word "and", the second condition, namely that "of calibers higher than 0.32" would be rendered` redundant. The reason is that prohibited bore pistols have been defined as having a bore of over 46". Since all pistols falling within the term "prohibited bore" would, by definition, be of a bore in excess of 46", the additional condition that they have a caliber (or bore) in excess of 32" would obviously be redundant. It is a well settled principle of statutory interpretation that if two reasonable interpretations are possible, but one leads to redundancy while the other avoids surplusage, it is the latter interpretation that has to be preferred. Therefore, in our view, the proper interpretation of the heading is that the word "and" as used therein should be read disjunctively and not conjunctively since that would avoid the latter part of the heading from becoming redundant. It follows that in our opinion, the proper interpretation and application of the heading is that it applies either if the pistols being imported are of a prohibited bore or are of a bore greater than 32". In the present case therefore, the proper classification of the subject pistols was indeed PCT 9302.0012 as claimed by the petitioner and not PCT 9302.0092 as held by the F.B.R. and the respondent Department.
For the foregoing reasons, we had come to conclusion that the petition was to be allowed and had made the short order reproduced hereinabove.
S.A.K./I-27/KPetition accepted.