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Constitutional Petition No. 888 of 1973, decided on 29th September 1977.

(a) Karachi Municipal Corporation Octroi Rules ‑‑‑

Octroi Sched., Class VIII, items 1(t) & 1(c) read with Evidence Act (I of 1871), S. 115‑Vested right‑‑Estoppel ‑Vested right to clear goods at lower rate‑Cannot be acquired by being permitted to do so in past for several years on erroneous interpretation of relevant item of Octroi Schedule‑Alleged practice, held, neither became law nor could there be an estoppel against statute.‑(Eestoppel).

Asia Food Industries Ltd. v. Pakistan and others P L D 1976 Kar. 1056 rel.

Nazir Ahmad v. Pakistan and others P L D 19'%0 S C 453 held nor applicable.

Koro v. The State P L D 1963 Kar. 256 distinguished.

‑‑ Octroi Sched Class VIII, items 1(1) & 1(c) M. S Bars‑Held Not heavy materials falling under item 1(s) but unspecified articles under item 1(1).

No doubt, the word "heavy" is a relative term depending on length, thickness or guage. But the word heavy" has to be construed in rela tion to iron beams, girders and rails which precede the words "and all Other heavy materials" in item 1(c), The common characteristic of iron beams, girders and rails is that they are heavy materials. This is clear from the words "other heavy materials" therefore, suggesting that other materials to order to fall in item 1(c), should also be heavy materials. tike iron beams girders and rails. When compared with an individual iron beam, girder or rails, it can hardly be said that an individual M. S. Bar is a heavy material. 1t is true that M. S. Bars generally are transported in a bundle and not singly, but so is the case with iron beams, girders and rails, There fore, the interpretation is correct that the M. S. Bare cannot be classified as "heavy materials" falling under item 1(c).

Mohsin Tayyabali for Petitioner,

Muhammad Nasir Khan for Respondents.

Dates of hearing : 10th, 11th and 29th August 19'17.

‑This constitutional petition calls in question the levy, assessment and collection of Octroi Duty on the import of M. S. Bars, Angles, Tees, etc. within the Octroi limits of the Karachi Municipal Corporation.

2. The petitioner Pakistan Steel Products is engaged in the production of the aforementioned goods in its factory at Korangi Industrial Area and brings in, its products for marketing in Karachi. It is the case of the petitioner that during the period between 14‑5‑71 and 11‑8‑71, and indeed even prior thereto the Karachi Municipal Corporation (hereinafter .referred to as K. M. C.) used to levy and charge Octroi on the aforesaid products at the rate of 31 paisas per maund under Item 1 (c) of Class VIII of the Octroi Schedule. The cause for the present controversy arose when on 4‑8‑71 the authorities of the K. M. C. started demanding and collecting from the petitioner Octroi at the higher rate of Re. 1.25 per maund under Item No. 1(1) of Class v III of the Octroi Schedule, The petitioner agitated the matter before the prescribed statutory authorities but failed to obtain redress. His petition before the Superintendent Octroi having been dismissed, the petitioner preferred an appeal to the Taxation Officer, K. M. C. which was also dismissed on 22‑2‑72. A further appeal was then taken to the Administrator K. M. C. which also met the same fate and was dismissed on 10‑6‑72. Thereupon the petitioner filed an appeal before the Controlling Authority for the K. M. C. under the Municipal Administration Ordi nance, 1960 which was also dismissed and the orders of the lower authorities were armed. The petitioner has therefore come up in the constitutional jurisdiction of this Court and questioned the legality of the aforesaid orders of the departmental authorities and their action in it demanding and recovering Octroi at the higher rate mentioned above.

3. The petition seeks besides declaration that the aforesaid orders of the departmental authorities are without lawful authority and of no legal effect, the further relief of declaration that the K. M. C. has no lawful authority to levy Octroi on M. S. Bars, Tees and other heavy materials for construction of buildings at the rate of Re. 1.25 per maund under Item 1(1) of Class VIII of the Octroi Schedule. The petition further seeks a prohibitory order in the nature of consequential relief to the declaration sought and for refund of the amounts recovered from the petitioner.

4. However, at the hearing of the petition Mr. Mohsin Tayyabali, learned counsel appearing for the petitioner made a statement at the bar that he would confine his submission to only M. S. Bars and further would not press the relief regarding prohibitory order and refund. According to the learned counsel the factory site of the petitioner now stands included within the Octroi limits of the K. M. C. and hence there is no apprehension of further recovery of the Octroi in respect of its products. We questioned the counsel how the question of refund will be adjudicated in absence of the particulars of the payments made by the petitioner and the amount claimed by him to be refunded On this the counsel stated that he would be satisfied with the relief of declaration only and would pursue his remedy regarding refund before the K. M. C. authorities. It may further be stated that on 15‑12‑76 learned counsel for the petitioner had made a statement in this Court that he does not propose to challenge the Octroi Rules.

5. Thus the only point in dispute in this petition which falls for determination is with regard to the interpretation of the Schedule to the Octroi Rules as to under what items the goods in question namely, M, S. Bars fall.

6. Before considering the contentions of the counsel it would be advantageous to set out the relevant portion of the Octroi Schedule (Annexure 'A') which reads as under :‑

OCTROI SCHEDULE

______________________________________________________________________________________

Rate per

S. No. Description of Articles maund

Rs. Paisa

_______________________________________________________________________________________

CLASS VIII

Metals, articles of metals, machinery, machines,

electric and scientific goods and vehicles.

1. IRON :‑

(c) Iron beams, girders, rails & all other heavy materials made of iron fused in the construction

of buildings . . . . . . . . . . . Rs. 0.31.

(1) All articles made of iron or steel not specified elsewhere . . . . . . Rs. 1.25.

7. The first submission of Mr. Mohsin Tayabally, learned counsel fog the petitioner is that M. S. Bars ‑‑bad been classified by the respondent Municipal authority as falling under item 1(c) of Class VIII of the Octroi Schedule @ 31 paisa per maund consistently in the past four years from 12‑4‑1967 until 4‑8‑1971. Therefore, the respondents are estopped from now classifying the said article under a different item viz., 1(1) of Class VIII of the said Schedule. In support of his submission, learned counsel referred to the observations of the Supreme Court in Nazir Ahmad v. Pakistan and others (P L D 1970 S C 453). In that case, the seniority in service of the appellant, who was serving in the Post & Telegraph Department as an Engineering Supervisor, wag lowered by the Department deviating from a construction put upon a departmental rule after several years. In allowing the appeal, their Lordships observed that the seniority, which was initially accorded to him on a particular construction of the relevant departmental rule, which had been adopted and followed consistently for abut 10 years, then whether the construction of the rule was right or wrong, It would be extremely unfair to mate a departure from it after a lapse of many years and to disturb rights that have been settled by a long and consistent course by the practice. These observations, which related to the construction of a departmental rule of seniority of a Government servant, do not apply, in our view, to the interpretation of a fiscal enactment. This case was considered and distinguished by a Division Bench of the High Court (of which one of us was a member) in Asia Food Industries Ltd. v. Pakistan and others (P L D 1976 Kar. 1056). In that case, the petitioner was permitted to clear import of certain commodity under Pakistan Customs Tariff heading attracting lower import duty on an erroneous interpretation of such heading by the Customs authorities. It was held that the petitioner could not on that account acquire any vested right to clear the goods under the same beading. The principle therein stated is applicable to the instant case. In our view, the petitioner did not acquire any vested right to clear the goods under item 1(c) of Class VIII of the Octroi Schedule at the lower rate of 31 paisa per maund, by being permitted to do so in the past for a period of four years on an erroneous interpretation of the relevant item of the Octroi Schedule. The alleged practice neither becomes law nor can there be an estoppel against a statute. Learned counsel also referred to Koro v. The State (P L D 1963 Kar. 256) in which it was observed that the interpretation put on the words "and shall also be liable to a fine" appearing in section 326 P. P. C., namely, that it is not obligatory on Courts to impose fine in addition to sentence of imprisonment, which has been followed and acted upon by the Courts over a long period of time, should be followed on the principle of stare decisis. That case Is clearly distinguishable as it related to Judicial interpretation of words in a penal statute by Courts of Law which expediency requires should be followed on the principle of stare decisis i.e., past and consistent decisions of Courts of law.

8. Mr. Mohsin Tayabally further submitted that in case there is ambiguity in a Taxing Statute, it should be construed in favour of the subject. No doubt, this is correct. But the question here is not of ambiguity of any particular words or expression used in a Statute, but of the correct classification of the article under the relevant item of the Octroi Schedule, having regard to the nature of the article, its properties and its use.

9. M. S. Bare are mainly used in the construction of buildings although they are also used in the manufacture of other articles, such as bolts, nuts, clamps, hooks and other mechanical spare parts. But the contention of Mr. Mohsin Tayabally is that M. S. Bars are "heavy materials made of iron". Even assuming that M. S. Bare are "materials" as contrasted with "articles" made of iron, which are also used in construction of buildings, such as window grills, steel doors and windows, iron sanitary pipes. angles and tees, which would fall in item 1(1), the main question is whether M. S. Bars are "heavy materials". No doubt, the word "heavy" is a relative term depending on length, thickness or guage. But the word "heavy" has to be construed in relation to iron beams, girders and rails which precede the words "and all other heavy materials" in item 1(c). The common characteristic of iron beams, girders and rails is that they are heavy materials. This is clear from the words "other heavy material", therefore suggesting that other materials in order to fall in item 1(c), should also be heavy materials, like iron beams, girders and rails. When compared with an individual iron beam, girder or rail, it can hardly be said that an individual M. S. Bar is a heavy material. It is true that M. S. Bars generally are transported in a bundle and not singly, but so is the case with iron beams, girders and rails. Therefore, we are inclined to agree with Mr. Muhammad Nasir, learned counsel for the Karachi Municipal Corporation, that the interpretation put by the respondent appellate authority is correct that the M. S. Bars cannot be classified as "heavy materials" falling under; item 1(c).

10. Mr. Mohsin Tayabally finally submitted that in the Model cotroi Schedule in Appendix A; in item 137 in Class XI, 'saria' which in Urdu means "M. S. Bars", have been included as heavy materials made of iron and used in the construction of buildings. But, as rightly pointed out by Mr. Muhammad Nasir, this item has been omitted from the Octroi Schedule which was notified by the Government of West Pakistan, which is Annexure 'A' to the petition. As the Model Octroi Schedule only serves as a guide to the Municipal Committees as stated in rule 28 of the Model Rules, the omission of "saria" is deliberate. No other argument was urged before us on behalf of the petitioner.

11. For the foregoing reasons, we find no merit in this petition, It is accordingly dismissed with no order as to costs.

S. A. H, Petition dismissed.

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