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Before Ajmal Mian, B. G. N. Kazi and K. A. Ghani, JJ
MESSRS STERLING ENGINEERING CORPORATION‑Petitioner
versus
THIS COLLECTOR OF CUSTOMS, KARACHI AND ANOTHER Respondents
Constitutional Petition No. D‑689 of 1977, decided on 14th June, 1983.
Language of Legislature admitting two constructions‑Principles to be followed.
A sense of the possible injustice of an interpretation ought not to induce Judges to do violence to well‑settled rules of construction but it may properly lead to the selection of one rather than the other of two reasonable interpretations. Whenever the language of the Legislature admits of two constructions and, if construed in one way, would lead to obvious injustice, the Courts act upon the view that such a result could not have been intended, unless the intention to bring it about has been manifested in plain words.
‑‑ Ss. 18(2) & 2 ‑Interpretation of S. 18‑Words 'such articles' occurring in both parts of S. 18(2), held, covered all articles men tioned in Schedule whether rates of regulatory duty were specified in First Schedule or not.‑[Interpretation of statutes].
Constitutional Petition No. 404 of 1977 ; Messrs Yousuf Re‑rolling Mills, Karachi v. Collector of Customs, Karachi and another P L D 1977 Kar. 911 approved.
‑‑‑ Fiscal statute‑While: construing and interpreting fiscal statute one must look to the words of statute and interpret them in the light of what is clearly expressed and nothing can be implied which is not expressed.
Commissioner of Agricultural Income‑tax v. B. W. M. Abdur Rehman 1973 S C M R 445 ; Cap Brandy Syndicate v. Inland Revenue Commissioner 1921 1 K B 64 ; Tenant v. Smith 1.982 A C 150 ; Collector of Customs (Appraisement), Karachi and others v. ,Messrs Abdul Majeed Khan and others 1977 S C M R 371 ; Case of Two Hundred Chests of Tea U S 6 Lawyer's Edn., p. 430 ; F. B. Ali v. The State P L D 1975 S C 506 and Muhammad Amir Khan v. The Controller of Estate Duty and others P L D 1961 S C 119 ref.
‑‑ Ss. 18 (2) & 25‑Interpretation of S. 18‑Federal Government, held, was empowered in its discretion to levy regulatory duty either under first part or the second part of S. Its (2) in prescribed manner subject to limitation mentioned therein.‑[Interpretation of statutes].
In order to ascertain as to what amount of customs duty (ad valorem) or regulatory duty imposed would be payable on articles specified in the First Schedule where the rate of duty is specified, mentioned in the part of subsection (2) or on the value of such' articles referred‑in the second part of the said subsection, Customs Authority would have to hove recourse to section 25 of the Act which lays down the principles for determination of the normal price of imported articles. No distinction, therefore, can be made for the reasons that reference to section 25 is made in the latter part of subsection (2).
While interpreting a taxing statute the Court must look to the words of statute, it would be relevant to take notice of the word "such" which is used as prefix to the word "articles", in the second part of subsection (2) under which the Federal Government is also empowered to impose regulatory duty at a rate not exceeding 100% of the value of "such" articles. The word "such" used in the second part of the said subsec tion (2) by the Legislature is significant and cannot be ignored. The word "such" must be read as referring back to articles mentioned in the preceding part of subsection (2).
On giving due significance to the word "such" it would be observed that there is no conflict in the earlier and subsequent parts of subsection (2) of section 18 of the Act. In the First Schedule rates of duties specified are neither uniform nor imposed on all articles. The words used' in the second part of subsection (2) of section 18 "or at a rate not exceeding hundred percent of the value of "such" articles would include not only articles on which rate of duty imposed is specified but also other articles mentioned in the Schedule. It would be noted that under the Schedules, Customs duty imposed, at places is ad valorem, and at others on quantity, unit, measurements, etc. and a number of articles are even free from payment of any custom duty whatever. The letter of law and the words used in subsection (2) therefore, cannot be so interpreted as to restrict the powers of the Federal Government to impose regulatory duty under second part of subsection (2) only to respect of the items importable free of any duty or on which ad valorem duty cannot be imposed. Such an interpretation obviously is not warranted by the clear language used in the statute under consideration, and the Court is to look to the words of the statute and interpret it in the light of what is clearly expressed and it cannot import provisions in the statute so as to support assumed deficiency.
Word 'or' used by the Legislature in subsection (2) of section 18 has to be given its ordinary meaning.
Held: The Federal Government is empowered in its discretion to levy regulatory duty either under the first part or the second part of subsection (2) of section 18 of the Act in the prescribed manner subject to limitations mentioned therein.
Messrs Hashim Tanvir Traders v. Federation of Pakistan and others C. P. No. 404 of 1977 approved.
Abdul Aziz cnd another v. Muhammad Ibrahim P L D 1977 S C 442 ; C. F. Gihbou and others v Pakistan an,. others P L D 1957 Kar. 956 ; Beenlen v. Hooking 1846 L J & Common Law 49 at 51 ; Ghunskamdas Nebharufas v. Mst. Vishindevi and others 5 S L R 259 ; Kedar Nath Sadhukkan and others v. Muhdu Budan Das and others A I R 1923 Cal. 682 ; Green v. Premier Glynrhoswy State Company Limited (1928) 1 K B 561 and 13 A C 595 at p. 603 anti Sakhon and others v. The State P L D 1, 969 9 C 267 ref.
Messrs Khurshid Anwar and Zia Pervez for Petitioner.
Aziz A. Munshi, Deputy Attorney‑General for Respondents.
Date of hearing : 2nd May, 1983.
.‑This full Bench was constituted to resolve the conflict of decisions in Constitutional Petition No. 1178 of 1975 (reported in P L D 1977 Kar. 911) and Constitutional Petition No. 404 of 1977 given by the Division Benches of this Court in respect of interpreta tion of section 18 (2) of the Customs Act, 1969 (Act No. IV of 1969) (hereinafter referred to as the Act).
At the very outset it is observed that the decision of Division Bench in Messrs Yousuf Re‑rolling Mills, Karachi v. Collector of Customs, Karachi and another (PLD1977Kar.911) which was given earlier was not brought to the notice of Division Bench deciding Constitutional Petition No. 404 of 1977 as there is nothing in the order, dated 8‑8‑1977 dismissing the petition in limine about the earlier decision which also was followed in decisions of Constitu tional Petitions Nos. 1116 and 1117 of 1978 by other Division Benches,
The decision in Messrs Yousuf Re‑rolling Mills, Karachi was in respect of Constitutional Petitions Nos. 1178, 1179, 1180, 1265, 1266, 1278, 1315 and 1327 of 1975 which were heard and dealt with together as common question of law was involved to all the aforesaid petitions.
The question of law involved. is whether under subsection (2) of section 18. of the Act the Federal Government could impose a regulatory duty at a rate exceeding 50% of the rate if any specified in the schedule and further whether under the aforesaid provision of law the Federal Government had the option to levy regulatory duty as aforesaid or at a rate not exceeding 100% of the value of such articles as determined under section 25 of the Act. It, was the contention on behalf of the importers that it is only when no rate of duty is shown in the schedule against the item that rate of duty not exceeding 100 % of the value of such item as determined under section 25 of the Act, could be imposed as regulatory duty and in all other cases in which the rates of duty have been shown in the First Schedule to the Act the regulatory duty levied could not exceed 50 /o of the rate so indicated in the schedule.
Before dealing with the interpretation of the provisions of subsection (2) of section 18 of the Act the scope of such interpretation may well be considered. Maxwell in his Interpretation of Statutes, 12th Edition, at page 208 observes as under : ‑
"A sense of the possible injustice of an interpretation ought not to induce Judges to do violence to well‑settled rules of construction but it may properly lead to the selection of one rather than the other of two reasonable interpretations. Whenever the language of the Legislature admits of two constructions and, if construed in one way, would lead to obvious injustice the Courts act upon the view that such a result could not have been intended, unless the intention to bring it about has been manifested in plain words."
Section 18 of the Act reads as under :‑
"18. Goods dutiable :‑(1) Except as hereinafter provided. customs duties shall be levied at such rates as are prescribed in the First Schedule and the Second Schedule or under any other law for the time being in force on‑
(a) goods imported into or exported from Pakistan ;
(b) goods brought from any foreign country to any customs‑station. and without payment of duty, there transhipped or transported for, or thence carried to and, imported at any other custom station ; and
(c) goods brought in bond from one customs‑station to another.
(2) The Federal Government may, by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose. a regulatory duty on all or any o: the articles specified in the First Schedule at a rate not exceeding fifty per cent of .the rate, if any, specified therein read with any notification issued under subsection (1) of section 2 or subsection (1) of section 3 or the Protective Duties, Act, 1950 (LXI of 1950), or at a rate not exceeding hundred per cent of the value of such articles, as determined under section 25 and may, be a like noti fication, levy a regulatory duty on all or any of the articles exported from Pakistan‑ .
(i) , in "the case of articles enumerated in the Second Schedule at a rate not exceeding thirty percent of the rate specified in the Second Schedule or of the amount which would represent the value of such articles as determined under section 25 ; and
(ii) in the case of articles not enumerated in the Second Schedule, at a rate not exceeding thirty per cent of the amount which re presents the value of such articles as determined under section 25.
(3) The regulatory duty levied under subsection (2) shall‑
(a) be in addition to any duty imposed under subsection (1) or under any other law for the time being in force, and
(b) be leviable on and from the day specified in the notification issued under that subsection, notwithstanding the fact that the issue of the Official Gazette in which such notification appears is published at any time after that day.
(4) Any notification issued under subsection (2) shall, if not earlier rescinded, stand rescinded on the expiry of the financial year in which it was issued."
The section as reproduced above was substituted by the Finance Act, 1975. Subsection (1) lays down that the customs duties shall be levied at such rates as are prescribed in the First Schedule and the Second Schedule or under any other law for the time being in force. However, subsection also is to the effect that the levy of customs duties would be as stated "except as hereinafter provided". Thus the general rule laid down in subsection (1) can be changed when there is such indication in the subsequent provisions of the Act which under subsection (2) provides that the Federal Government is empowered to levy and impose a regulatory duty on all or any of the articles specified in the First Schedule. In the first part of subsection (2) aforesaid, it has no doubt been provided that the rate could not exceed 50% of the rate, if any, specified in the Schedule but the power to impose the regulatory duty does not stop there and the words "read with any notification issued under subsection (1) of section 2 or subsection (1) of section 3 of the Protective Duties Act, 1950 (LXI of 1950)" have to be considered as further authorising the Federal Government to act in fixing the regulatory duty over and above 50 Y. of the rate specified in the Schedule. This is made clear in subsection (3) which provides as under :‑
"(3) The regulatory duty levied under subsection (2) shall‑
(a) be in addition to any duty imposed under subsection (1) or under any other law for the time being in force ; and
(b) be leviable on and from the day specified in the notification issued under that subsection, notwithstanding the fact that the issue of the Official Gazette in which such notification appears is published at any time after that day"
It may here be observed that imposition of protective duty under subsection (1) to section 2 and subsection (1) to section 3 of the Pro tective Duties Act, 1950 does not envisage any limit on the powers of the Central Government with regard to imposition of protective duty. Section 3(1) of the Protective Duties Act, 1960 Inter alia permits that if on an inquiry the duty imposed under subsection (1) of section 1 is found to be too low to provide adequate protection to the industrial concerned in Pakistan, .the Central Government may by notification in the Official Gazette raise the duty to such extent and for such period (which may be extended from time to time but not more than 3 years at one time) as it thinks fit.
With regard to the two parts of subsection (2) of section 18 of the Act since the word "or" has been used, it is quite clear that the levy of regulatory duty on all or any of the articles specified in the First Schedule shall be under part 1 or under part 2 at the discretion of the Federal Government.
For the reasons given above, with respect, the view adopted by the Division Bench deciding Constitutional Petition No. 404 of 1977 the since the words "such articles'''. occur in both the parts of subsection (2), the same cover all the articles mentioned in the Schedule whether the rates of regulatory duty are specified in the First Schedule or not, in our opinion is the correct view. If the contention that part 2 of subsection (2) section 18 applies only in respect of items on the free list is accep ted the very object of imposing regulatory duty would be nullified. The object of the Legislature in providing for imposing of regulatory duty is undoubtedly to afford protection to local manufacturing industries against the foreign imports. The first part of subsection (2) aforesaid provides for imposition of regulatory duty on all or any of the articles specified in the First Schedule at rate not exceeding 50 % of the rate, if any, speci fied therein read with any notification issued under subsection (1) of section 2 or subsection (1) of section 3 of the Protective Duties Act, 1950. The aforesaid Act as the very title shows was enacted, enabling the Central Government to impose protective duties of customs on goods produced or manufactured outside Pakistan and imported into Pakistan where such imposition is urgently necessary in the interest of industries established in Pakistan. There is no limit to the imposition of duties of customs in the circumstances stated and the rates of protective duties could be altered as provided by section 3 of the aforesaid Act. The Protective Duties Act, 1950 was repealed by the Federal Law (Revision and Declaration) Ordinance, 1981, as law which had become unnecessary. It is apparent from the wording of subsection (2) of section 18 of the Act that the reference to the provisions of the Protective Duties Act, 1950 still remains intact and is protected by the saving clause in section 7 of the repealing Ordinance of 1981. .
A perusal of Division Bench decision in Messrs Yousuf Re‑rolling Mills Karachi v. Collector of Customs and another indicates that while considering part 1 of subsection (2) of section 1R of the Act the words "read with any notification issued under subsection (1) of section 2 or subsection (1) of section 3 of the Protective Duties Act, 1950 (LXI)" were not taken into consideration. This is also apparent from the observa tions which read as under :‑
"However, in respect of the articles on which the customs duty has been levied on ad valorem basis if regulatory duty is allowed to be imposed at the option of the Federal Government either under the first part or under the second part as claimed by the Deputy Attorney‑General, it would lead to Trot only anomalous results but would also bring the levy of the duty under first part into conflict with the levy of duty under the second part as would be presently seen. Under the first part the regulatory duty in respect of the present articles 1. e. iron and steel scrap on which the customs duty
is levied at 25 percent. ad valorem could be up to 12 percent. ad valorem but if it is accepted that in respect of these very articles the regulatory duty could also be levied under the second part then it could be levied upto 100 per cent ad valorem as provided therein. This would bring the levy directly in conflict with the provisions of the first part which prohibit the levy of regulatory duty exceeding 50 per cent of the rate of customs duty, if any, provided in the First Schedule. Therefore it could not be the intention of the Legislature to permit to do under the second part what it has prohibited to be done under the first part."
With respect, in the observations quoted above the power of the Federal Government to impose protective duty by issue of notifications has been overlooked and the rate not exceeding 50 % of the rate specified in the Schedule, under subsection (2) of section 18 aforesaid is to be read with notification issued with regard to protective duty and the Federal Govern ment has been given the discretion to act under part 1 or part 2 of the aforesaid subsection. The discretion to act either in accordance with part 1 or in accordance with part 2 is apparent from the very use of the word "or" in the subsection as already stated. We would, therefore, support the decision of Division Bench in Constitutional Petition No. 404 of 1977 and with respect do not support the view taken by the Division Bench in the case of Messrs Yousuf Re‑rolling Mills, Karachi.
Due to the conflict of decisions which has been referred to above a number of writ petitions in which the same legal point was involved have been adjourned from time to time as petitions connected with the instant petition. Since each such petition has different set of facts and even the point of law involved may not be the same as in the instant petition, after this decision resolving the conflict of opinion, it will be for the Benches concerned to dispose of each of the petitions.
Reverting to the facts of the instant petition for the reasons given above the demand of import duty at the rate of 72 % on the basis of notification, dated 1‑7‑1976 published in the Gazette of Pakistan Extra ordinary, Part II, dated 1‑7‑1976 bearing‑S. R. O. No. 635 (1)/ 6 issued by respondent No. 2. is legal and valid. The petition is; therefore, dismissed however, with no order as to costs.
K. A. GHANI, J.‑I have the benefit of reading the judgment of our brother Mr. Justice B. G. N. Kazi, on the question referred to the Full Court in view of the conflict of opinion between the two learned Division Benches of this Court on the interpretation of subsection (2) of section 18 of the Customs Act, 1969 (hereinafter referred as the said Act). I would like to give reasons of my own for arriving at the con clusion reached in the above judgment.
2. At the very outset, it may be stated that a perusal of subsection (2) of section 18 would show that the provisions thereof can conveniently be described as consisting of the following two parts, pursuant to which the Federal Government is empowered to levy a regulatory duty :‑
(i) on all or any of the articles specified in the First Schedule at a rate not exceeding fifty per cent of the rate, if any, specified therein."
(ii) " or at a rate not exceeding hundred per cent of the value of such articles as determined under section 25."
3. In the first case of Yousuf Re‑rolling Mills v. Collector of Customs, decided on 19‑4‑1977 while interpreting the said subsection (2), and power of the Federal Government, to impose a regulatory duty it was held that in respect of those articles on which rate of customs duty has been provided on ad valorem basis, the regulator) duty could be levied only under the first part and
" the intention of the Legislature could be to prohibit the levying of duty exceeding 100 per cent under the second part what it has permitted to be done under the first part."
4. In the other case Messrs Hashim Tanvir Traders v. Federation of Pakistan and others C. P. No. 404 of 1977 another learned Division Bench while interpreting subsection (2) of section 18, and repelling the contention raised that since the rate in respect of the item involved in that case was specified in the First Schedule to the Customs Act. 1969, the Federal Govern ment had no power to levy regulatory duty beyond the said percentage and that second part of the aforesaid subsection empowering the Federal Govern ment to impose duty at a rate not exceeding 100 per cent of the value of such articles as determined under section 25 was not attracted and the two parts of this section be read disjunctively, held :‑
"The aforesaid subsection (2) of section 18 of the said Act empowers the Federal Government to impose regulatory duty either at a rate not exceeding 50 % of the rate specified in the First Schedule or at a rate not exceeding 100% of the value of such articles, as determined under section 25 of the said Act. The power to impose regulatory duty covers all or any of the articles mentioned in the Schedule. In the first part of the subsection (2) of the said Act the imposition of regulatory duty on all or any of the articles specified in the First Schedule is to be at a rate not exceeding 50% of the rate, whereas in the 'second part of the subsection (2) it is to be at a rate not exceeding 100 % of the value of such articles, as determined under section 25 of the said Act. The words such articles' occurring in the two parts of the subsection (2) clearly cover all the .articles mentioned in the schedule whether their rates are specified therein or not."
It was further held
"The object behind the. imposition of the regulatory duty is to afford protection to local manufacturing industries against foreign imports and if the imposition of the regulatory duty at the rate of 50% of the rate mentioned in the First Schedule is found inadequate qua prevalent market value of the goods, the Federal Government have a free choice to impose such regulatory duty but not exceeding 100% of the value of such articles as determined under section 25 of the said Act."
5. In view of the conflict between the judgments of the two learned Division Benches of this Court referred above the question of law which requires decision by the Full Court is whether under second part of sub‑section (2) of section 18 of the Act, the Federal Government is empowered to impose a regulatory duty at a rate not exceeding 100% of the value of such articles as determined under section 25 of the Act, on all or any of the articles specified in the First Schedule on which regulatory duty at a rate not exceeding fifty per cent of the rate, if any, specified therein could be imposed under the first part of the said subsection (2).
6. It was contended by the learned Advocates on behalf of the im porters that it is only when no rate of duty is specified in the First Schedule against the item, duty at a rate not exceeding 100% of the value of such item as determined under section 25 of the Act could be imposed and that in all other cases in which the rates of duty have been specified in the First Schedule the regulatory duty levied could not exceed 50 / of the rate so indicated in the said First Schedule. According to the learned counsel for the petitioner any other interpretation would involve conflict in the first part and second part of subsection (2) of section 18 and would be a cause of great hardship to the importers. Reliance was placed on the case of Yousuf Re‑Rolling Mills v. Collector of Custom (ibid).
On the other hand Mr. A. Aziz Munshi, the learned Deputy Attorney -General relied upon the case of Messrs Hashim Tanvir Traders v. Federation of Pakistan and others referred above. It was argued that the Federal Government has a choice to impose regulatory duty either under the first part of subsection. (2) at the rate of 50% of the rates mentioned in the First Schedule or to impose a regulatory duty but not exceeding 100 % of the value of such articles as determined under section 25 of the said Act.
7. I, however, find myself unable to accept the interpretation which the learned Advocates for the importers seek to place on subsection (2) of section 18.
It would be relevant here to state that while construing and interpre ting fiscal laws one must look to the words of the statute and interpret them in the light of what is clearly expressed and nothing can be implied which is not expressed. The Hon'ble Supreme Court of Pakistan laid down principles of interpretation of the provisions of taxing statutes, relevant would it be to refer to them for purposes of resolving the question involved in this petition :‑
(i) In the case of Commissioner of Agricultural Income‑tax v. B. W. M. Abdur Rehman (1973SCMR445) the Honourable Supreme Court held : ‑
"But indeed, in determining whether or not a particular matter comes within a taxing statute, it is only the letter of the law which must be looked to. 'There is ample authority for the proposition that in a fiscal case, form is of primary importance, the principle being that if the person sought to be taxed comes within the letter of the law, he must be taxed, however, great a hardship may thereby be involved but on the other hand if the Crown cannot bring the subject within the letter of the law he is free, however, apparent it may be that his case is within what might be called the spirit of the Law. As was said by Rowlatt, J., in Cap Brandy Syndicate v. Inland Revenue Commissioner (1921) 1 K B 64.
"In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
In Tenant v. Smith (1982AC150) Lord Halsbury said :‑
"1n a Taxing Act it is impossible, I believe to assume any intention any governing purpose in the Act, to do more than take such tax as the statute imposes .cases, therefore, under the Taxes Acts always resolve themselves into the question whether or not the words of the Act have reached the alleged subject of Taxation."
In the light of these pronouncements with which I hereby express my respectful .agreement, it is clear that it is not possible to look either to the amending statute of 1951 or to the alleged collection allowance said to be included in the scheme of the case, in order to determine whether the words in clause (7) of section 6 provide for an allowance to be made in respect of the amount of cess received by the assessee. That question must be decided solely on a con sideration of the very words of the clause, although in interpreting those words it is permissible to look generally at the rest of the statute, and in particular to consider whether the words in question have been used elsewhere and if so in what sense."
(ii) In the case of Collector of Customs (Appraisement). Karachi and others v. Messrs Abdul Majeed Khan and others (1977SCMR371), the principles as to interpretation of taxing statutes were declared as follows :‑
"Moreover, in interpreting a penal or a taxing statute the Courts must look to the words of the statute and interpret them in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provisions to the statute so as to support assumed deficiency, as held in Messrs Hirjina & Co. (Pakistan) Ltd. v. Commissioner of Sales Tax, Central, Karachi."
In the abovementioned case the Honourable Supreme Court cited with approval from the case of Two Hundred Chests of Tea (US 6 Lawyer's Edn. 430) the following observations as quite instructive :‑
"The object of the duty laws is to raise revenue, and for this purpose to class substance according to the general usage and known determi nations of trade. Whether a particular article were designated by one name or another, in the country of its origin, or whether it were a simple or mixed substance, was of no importance in the view of the Legislature. I did not suppose our merchants to be naturalists or geologists or botanists. It applied its attention to the descrip tion of articles, as they derived their appraisements in our own markets, in our domestic as well as our foreign traffic. And it would have been as dangerous as useless, to attempt any other classification than that derived from the actual business of human life."
(iii) In the case of F. B. Ali v. The State (P L D 1975 S C 506) it was held :‑
"It is first sought to be contended that the Ordinance were not law at all, because, they purported to unreasonably deprive a citizen of even the norms of a judicial trial. But this generalization cannot be accepted. Law has not been defined in the Constitution of 1962 and, therefore, in its generally accepted connotation, it means positive law, that is to say, a formal pronouncement of the will of a competent law‑giver. There is no such condition (bat a law must in order to qualify as a law also be based on reason or morality. The Courts cannot strike down a law on any such higher ethical notions nor can Courts act on the basis of philosophi cal concepts of law as pointed by me in the case of Asma Jilani (P L D 1972 S C 139)."
(iv) In the case of Muhammad Amir Khan v. The Controller of Estate Duty and others (P L D 1961 S C 119) while pointing out the distinction between the provi sions which imposed taxes and those which provided for the machinery by which ‑tax is assessed and realised, the Hon'ble Court observed :
"The provisions relating to imposition of tax are to be strictly cons trued in favour of the subject so that if there be any substantial doubt it has to be resolved in his favour. But the machinery sections are to be liberally construed. If the incidence of tax be clear the machinery sections should be so construed as to make the realization of the proper tax possible. They should not be so construed as to defeat the intention of the legislature and to prevent the realization of the tax that is in fact due. The distinction stated above was recognized by the. Federal Court of Pakistan in Khan Bahadur Amiruddin and others v. West Punjab Province (P L D 1956 F C 220) where the learned Judges while dealing with a case under the Punjab Immovable Property Tax Act said :
The Act in question is no doubt a Taxing Act and unless the liability to be taxed is clear the interpretation should be in favour of the subject. But no question of interpretation arises regarding section 3, which, in unambiguous terms determines the liability of the lands to be taxed. The provisions that have to be interpreted are those relating to the machinery of the assessment and in respect of such provisions of a Taxing Act the Privy Council in . Income‑tax Commissioner v. Mahabi Ramjidas A I R 1940 P C 124, observed that construction should, be preferred which makes the machinery workable."
8. In the light of the above principles we proceed to examine the provisions of subsection (2) of section 18 of the said Act.
(i) In the first place it would be seen that in order to ascertain as to, what amount of customs duty (ad valorem) or regulatory duty imposed would be payable on articles specified in the First Schedule where the rate of duty is specified, mentioned in the first part of subsection (2) or on the value of "such" articles referred in the second part of the said subsection, Customs Authority would have to have recourse to section 25 of the Act which lays down the principles for determination of the normal price of imported articles. No distinction, therefore, can be made) for the reasons that reference to section 25 is made in the latter part of
the subsection (2).
(ii) As laid down in the case of Commissioner of Income‑tax v. B. W. M. Abdur Rehman (ibid) and Collector of Customs v. Messrs Abdul Majeed Khan and others (ibid) while interpreting a taxing statute the Court must look to the words of statute, it would be relevant to take notice on the word "such" which is used as prefix to the word "articles", in the second part of subsection (2) under which the Federal Government is also empowered to impose regulatory duty at a rate not exceeding 100 Y. of the value of "such" articles. The word "such" used in the second part of the said subsection (2) by the Legislature is significant and cannot be ignored. The word "such" must be read as referring back to article mentioned in the preceding part of subsection (2).
The view expressed as above by us find support also from the case reported as Abdul Aziz and another v. Muhammad Ibrahim (PLD1977S C442). Before the Honourable Supreme Court the provisions of section 13 (3) (a) (ii) (d) of the then West Pakistan Urban Rent Restriction Ordinance which read as follows, came up for Interpretation :‑
"He (landlord) or his said child is not occupying in the same area in which such' building is situated for purposes of his business another such building or rented land as the case may be suitable for his needs at the time."
The Honourable Supreme Court while taking notice of the word "or" which occurred twice and the word "building" each time prefixed by the word "such" held :‑
"Considering its implication that it refers generally and naturally to its last antecedent the use of ‑this word is with a definite purpose, i. e. to identify the ownership of the building with that before mentioned in the introductory part of clause (ii). In this connec tion we would also refer to the rules as to how the word "such" should be construed as stated by Maxwell in his book on the interpretation of statutes, 12 Edition at page 30
"Where the word 'such' occurs in a section it must not be‑ ignored, but must be read as referring back to the preceding provisions, even though this gives rise to a result which appears anomalous."
The conclusion, therefore, is irresistible that the word building can have no other meaning except that which is owned by the landlord . This is in accord with the rule of construction i. e. to intend the Legislature to have meant what they have actually ex pressed."
9. Reference may again be made here to the case of Commissioner of Agricultural Income‑tax v. B. W. M. Abdur Rehman (ibid) wherein the following Clauses (1) and (7) (which provided for certain allowances) of section 6 of Bengal Agricultural Income‑tax Act of 1954, came up for consideration :‑
"Clause (I).‑any sums paid by him in the previous year on account of ;
(i) land revenue or rent ;
(ii) any local rate or cess including Education cess in respect of such land ;
"Clause (7).‑ in respect of the cost of collection of such rent or revenue including the cost of maintenance of any Karchari or other capital assets and any expenses of litigation, a sum equal to fifteen per cent of the total amount of rent or revenue which accrued to him in the previous year in respect of the land from which such rent or revenue is derived."
After referring to the above clauses the Honourable Supreme Court proceeded to interpret the above referred clause 7 as follows :‑
"Employing recognized methods of construction, in relation to clause (7) of section 6 is quite clear that in the phrase 'the cost of collection of such rent or revenue including the cost of maintenance of any Katchar, or other capital assets and any expenses of litiga tion' the word such' makes it clear that the rent or revenue' intended is that last previously mentioned. The clause must be read for this purpose as if it appeared immediately after the opening words of the section as the first item of allowance."
Considered in the light of the above principles and on giving due significance to the word "such" it would be observed that there is no conflict in the earlier and subsequent parts of subsection (2) of section 18 of the Act. It may also bf pointed out that in the First Schedule rates of duties specified are neither uniform nor imposed on all articles. The words used in the second part of subsection (2) of section 18 "or at a rate not exceeding hundred percent of the value of "such" articles would include not only articles on which rate of duty imposed is specified but also other articles mentioned in the Schedule. It would be noted that under the Schedules. customs duty imposed, at places is ad valorem, and at others on quantity. unit. measurements, etc. and a number of articles are even free from payment of any custom duty whatever. The letter of law and the words used in subsection (2) therefore cannot be so interpreted as to restrict the powers of the Federal Government to impose regulatory duty under second part of subsection (2) only in respect of the items importable free of any duty or on which ad valorem duty cannot be imposed. Such an interpretation obviously is not warranted by the clear language used in the statute under consideration, and the Court as already noted above, is to look to the words of the statute and interpret it in the light of what is clearly expressed and it cannot import provisions in the statute so as to support assumed deficiency.
10. This brings us to take into consideration the word 'or' used by the Legislature in subsection (2) of section 18 which has to be given it ordinary meaning as laid down in the case of C. F. Gibbon and others v. Pakistan and others (P L D 1957 Kar. 956) wherein it was held :‑
"The word 'or' has been subject‑matter of controversy in several judicial pronouncements and the preponderance of authority states that 'or' prima facie has only an alternative significance."
The learned Full Court while arriving at the above conclusion placed reliance upon the cases reported as Beonlen v. Hooking (1846 L J & C L 49). Gharishamdas Nebhandas v. Mst. Vishindevi and other (5 S L R 259). Kedar Narh Sadhukkan and others v. Mahdu Budan bas and others (A I R 1923 Cal. 682), Green v. Premier Glynrhonwy State Company Limited ((1982)1K8561:13AC595) (on the opinion of Lord Halsbury and the opinion of Lord Fitzgerald at page 607).
Reliance was also placed upon the case of Salehon and others v. The State (PLD1986SC267) wherein the Honourable Supreme Court while interpreting section 497, Cr. P. C. and the word 'or' occurring therein observed :‑
"The answer to the question raised in the appeal lies in finding out whether the word 'or' in the exception clause is used in disjunctive or conjunctive sense. Ordinarily 'or' is used in disjunctive sense. The governing rule, however, is to carry out the intention of the Legislature. It may be found necessary to read the conjunctions 'or' and 'and' one for the other depending on the consequences intended by the Legislature."
Considered in the light of the above principles I am of the opinion that the Federal Government is empowered in its discretion to levy regulatory duty either under the first part or the second part of sub section (2) of section 18 of the Act in the prescribed manner subject to limitations mentioned therein.
11. For the reasons discussed above, I agree with the conclusion reached by our brother Mr. Justice B. G. N. Kazi.
AJMAL MIAN J.‑I agree with my learned brother K. A. Ghani's reasonings given in his proposed judgment.
M.B.A. Reference answered
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