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(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 15th July 1968, in Writ Petition No. 1844 of 1967).

----S. 3 (1) & First Schedule, Item, No. 15‑A Explanation‑Processed fabrics as well as unprocessed fabrics both excisable goods‑Excise duty on cotton fabrics leviable at two stages, once at unprocessed stage and next at processed stage.

Raza Kazim, Advocate Supreme Court instructed by Masud Akhtar, Attorney for Petitioner.

Nemo for Respondents.

Date of hearing : 8th October 1968.

The petitioner filed a writ petition in the High Court of West Pakistan, Lahore, challenging the right of the respondents to levy excise duty on "fabrics" of the petitioner once at the unprocessed stage and then again at the processed stage for the years 1966‑67 and 1967‑68 on the ground that under the law Excise Duty was leviable only once.

The learned Judges in the High Court on an elaborate examination of the law on the subject as well as some decisions on which reliance was placed by the parties came to the conclusion that the intention of the law was to levy excise duty at two stages of manufacture of cotton fabrics‑once at the unprocessed stage and then at the processed stage.

The learned counsel for the petitioner has challenged the vires of Explanation 10 to Item No. 15‑A of the First Schedule of the Central Excises and Salt Act.

This explanation provides that the liability to duty under sub‑item II shall not be affected by any duty paid or payable under sub‑item I. Item No. 15‑A has two parts. The first part deals with the rates of duty on unprocessed fabrics and the second part with rates on processed fabrics.

It is contended that this explanation is in conflict with section 3 (I) of the Act which is the charging section. This section lays down that excise duty is leviable on all excisable goods manufactured in the Province and the Capital of the Federation. The argument that when unprocessed fabrics are also processed then they cannot be considered to be goods manufactured at the unprocessed stage does not appeal to us. It is not understood also why if duty is imposed at this stage it will not be excise duty within the meaning of the Third Schedule to the Constitution.

The argument of the learned counsel if accepted will lead to absurd results. It will mean that the rate of duty for processed fabrics will be much less than that of unprocessed fabrics. Both unprocessed fabrics and processed fabrics are excisable goods within the meaning of the Act and duty can be imposed on both.

The petition is dismissed.

Leave refused.

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