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Writ Petitions Nos. 242 of 1981, 363 of 1982 and 91 of 1983, decided on 16th October. 1985.
‑‑‑Art. 151‑‑Trade, Commerce and Intercourse‑‑Freedom of‑‑Freedom had to be limited in order to be effectively possessed‑‑Freedom of trade, commerce and intercourse, held, would be subject to restriction in public interest imposed by parliament as well Provincial Assembly within certain limits.
B.N. Chobe and others v. M.S. Palnitkar and another A I R 1954 Hyd. 207 and Atiabari Tea Co. Ltd. v. State of Assam A I R 1961 S C 232 ref.
‑‑‑Art. 151‑‑Term 'Public interest', connotation of‑‑Term 'public interest', held, would embrace public security, public order and public morality.
‑‑‑ Term "export"‑‑Meaning of‑‑Term since not defined in enactment, its dictionary meaning was to be looked into‑‑Term 'export' would mean to carry or to send abroad to send, take or carry article of trade of commerce out of country.
According to Black's Law Dictionary, 'export' means to carry or to send abroad; to send, take, or carry an article of trade or commerce out of the country whereas, according to Chamber's Twentieth Century Dictionary the word 'export' means to carry or send out of a country, as goods in commerce. In Webster's International Dictionary 'export' means to carry away, to remove, to carry or send abroad especially to foreign countries merchandise or commodities in the way of trade. In Corpus Juris Secundum, Volume. 35, 'export' as verb, etymologically, signifies to carry out, and in its primary, general or essential meaning, to carry or send out of a place; beat in its secondary, specific, or especial meaning, to send out from one country to another; to carry from state or country, as wears in commerce, to carry or send abroad; and in a particular connection, to send or carry out of the State, for the purpose of sale, trade or disposition, rather than for one's own use or convenience.
Meaning of the word 'export' is two‑fold.
Firstly, it means taking out the goods abroad and, secondly, taking the goods out of the limits of a province, district or municipality for any destination within the country. It cannot, therefore, be said that the impugned export tax is levied on goods intended to be exported to other countries or to other province only from this province.
Black's Law Dictionary; Webster's International Dictionary; Corpus Juris Secundum, Vol. 35; Central India Spinning Weaving and Manufacturing Co. ‑ Ltd. 'The Empress Mills, Nagpur v. Municipal Committee, Wardha A I R 1950 Nag. 169 and Pakistan Textile Mill Owners Association, Karachi and 2 others v. Administrator of Karachi and 2 others P L D 1963 S C 137 ref.
‑‑‑ Word 'tax'‑‑Meaning and scope‑‑Tax, held, was a rate or sum of money assessed on person or property of‑citizen by Government for use of the nation or State‑‑Tax was compulsory exaction of money by public authority for public purposes enforceable by law and was contribution imposed by Government on individuals for services of the State.
Abdul Majid and another v . Province of East Pakistan and others P L D 1960 Dacca 502; Nagar Mahapalika, Varanasi v. Durga Das Bhattacharya and others A I R 1968 S C 1119; Haji Multan Zareen and 56 others v. Government of N.‑W.F.P. and another P L D 1980 Pesh. 137; Sheikh Muhammad Ismail & Co. Ltd. , Lahore v. The Chief Cotton Inspector, Multan Division, Multan and others P L D 1966 S C 388; Mahboob Yar Khan and another v. Municipal Committee, Mian Channu and 2 others P L D 1975 Lah. 748 and Messrs Lever Brothers (Pakistan) Ltd. , Karachi v. Market Committee, Rahimyar Khan through its Chairman and another P L D 1980 B J 23 ref.
‑‑‑Taxing words in a statute, held, must be construed according to their ordinary meaning‑‑In a taxing statute, as in other statute, there should be no departure from general rule that words used in statute must first be given their ordinary and natural meaning.
Maxwell on Interpretation of Statutes, (Twelfth Edn.) rel.
‑‑‑S. 134‑‑Words "tax" and "fee"‑‑Distinction‑‑Definition of word "tax" given in Ordinance IV of 1979, included "fee"‑‑Local Authority, held, was competent in law to levy export "tax" which included term "fee"‑ Notification by Local Authority for imposition of tax, were not violative of any provision of law or statutory rules‑‑[Words and phrases].
Qazi Muhammad Jamil for Petitioners.
J.D. Akbarji and Amirzada Khan, A.‑G. for Respondent No.2
Date of hearing: 3rd September, 1985.
‑‑Since common questions are involved we propose to dispose of the following Writ Petitions per this judgment:‑‑
(1) Writ Petition No. 242 of 1981:
(Messrs Khyber Electric Lamps Manufacturing Limited and another v. Chairman, District Council, Peshawar and another).
(2) Writ Petition No. 363 of 1982:
(Messrs Makk Beverages and Mineral Waters Ltd. v. Chairman, District Council, Peshawar and another).
(3) Writ Petition No. 91 of 1983:
(Cosmopolitan Development Company Ltd., Karachi v. The Province .of N.‑W.F.P. and another).
2. The facts as gleaned from the petitions briefly are that the petitioners in the first petition are manufacturers of electric bulbs add market the same throughout the country. The industry of electric bulbs is controlled by the Central Government which fixes their prices. The respondent Chairman, District Council impose the export tax on bulbs at the rate of one paisa per bulb vide Notification, dated 31‑12‑1980 and their representation to him bore no fruit. The petitioners in the second petition manufacture beverages known as Coca Cola, Fanta 'and Sprite. It is alleged that besides paying excise duty at the rate of 80 paisa per bottle to the Central Government it pays octroi duty to the Municipal Corporation/ Committees of various districts. The respondents had for the first time in 1978 introduced export tax on their products carried outside the District of their origin. It was vide Notification, dated 23‑6‑1982 that respondent 1 enhanced the said tax from one paisa to 3 paisas per bottle. In the third petition the petitioner, a limited company, with its registered office at Karachi deals in molasses and exports abroad paying export duty at 25 per cent ad valorem. It entered into a contract on 6‑1‑1983 with Charsadda Sugar Mills Ltd. for purchase of molasses and the expenses of transport and payment of local taxes was its liability. The entire lot of molasses was to be lifted upto 15th April, 1983. In January, 1983 it entered into another contract with Khazana Sugar Mills on the same terms and conditions. Its tankers carrying the goods were prevented from crossing the local limits of Peshawar District unless an amount of rupee one per standard maund was paid as required by Notification, dated 23‑6‑1982 by respondent 1. The export fee was, however, paid under protest.
3. By these writ petitions the petitioners have called in question the notifications regarding the imposition of export tax by the Chairman, District Council, Peshawar and have sought a declaration that the said tax is without lawful authority and of no legal effect.
4. Section 134 of the North‑West Frontier Province Local Government Ordinance, 1979 (hereinafter called the Ordinance) empowers a Local Council, subject to the provisions of any other law, and if directed by Government, to levy all or any of the taxes enumerated in the Second Schedule. Part II of the Second Schedule pertains in taxes leviable by District Council and at item 7 appears "fees for the export of goods and animals from the District". It was in exercise of the powers conferred under section 134 of the Ordinance read with rule 6(2) of the N.‑W. F. P. Local Council (Imposition of Taxes) Rules, 1980 that the Chairman, District Council, Peshawar (hereinafter called the respondent) levied the export tax per the aforesaid notifications which now form the subject‑matter of these writ petitions.
5. The learned counsel for the petitioners strenuously contended that Article 151 of the Constitution of the Islamic Republic of Pakistan had guaranteed that trade, commerce and inter‑course throughout Pakistan shall be free but by levying export tax the respondent had violated this provision inasmuch as free movement of goods had been restricted by unwarranted act of taxation. According to them, taxation per se was tantamount to restriction on the freedom of trade and such a restriction could not be imposed at all. It escaped their notice that there cannot be absolute or uncontrolled freedom for that would lead to anarchy and disorder. It is said that freedom has to be limited in order to be effectively possessed. The freedom of trade, commerce and inter‑course also must, therefore, be subject to restriction in the public interest imposed by the Parliament as well as the Provincial Assembly within certain limits, i.e. without affecting the freedom of trade, commerce and inter‑course as such. Article 151 of our Constitution reads as under:‑‑
(1) Subject to clause (2), trade, commerce and inter‑course throughout Pakistan shall free.
(2) Majlis‑e‑Shoora (Parliament may by law imposed such restrictions on the freedom of trade, commerce or intercourse between one Province and another or within any part of Pakistan as may be required in the Public interest.
(3) A Provincial Assembly or a Provincial Government shall not have power to‑‑
(a) make any law, or take any executive action, prohibiting or restricting the entry into, or the export from, the Province of goods of any class or description, or
(b) impose a tax which, as between goods manufactured or produced in the Province and similar goods not so manufactured or produced, discriminates in favour of the former goods or which, in the case of goods manufactured or produced outside the Province discriminates between goods manufactured or produced in any area in Pakistan and similar goods manufactured or produced in any other area in Pakistan.
(3) An Act of a Provincial Assembly which imposes any reasonable restriction in the interest of public health, public order or morality, or for the purpose of protecting animals or plants from disease or preventing or alleviating any serious shortage in the Province of an essential commodity shall not, if it was made with the consent of the President, be invalid.
A plain reading of Article 151 reproduced above shows that it is not p charter of absolute freedom and the opening words of clause (1) "subject to clause (2)"‑ make it clear that the Parliament is competent to impose such restriction as may be required in the public interest. It shows that public interest is the paramount consideration in this connection.
The term public interest may embrace public security, public order and public morality. Clauses (1) and (2) of Article 151 of our Constitution are analogous to Articles 301 and 302, respectively, of the Constitution of India. A somewhat similar question was agitated in B.N. Chobe and others v. M.S. Palnitkar and another A I R 1954 Hyd. 207 and the Full Bench made the following remarks:‑‑---
"When Article 301 declares that the freedom of trade, commerce and inter‑course throughout the territory of India is to be free it is not a declaration of absolute freedom. There is no liberty which is absolute, unfettered and without restriction. The framers of our Constitution acknowledge that this was so when they placed limitations both on the fundamental freedoms enumerated in Part 3 as well as on trade, commerce and inter‑course in Part 13 of the Constitution."
6. The questions whether no tax could be imposed on the carriage or movement of goods and whether taxation per se could be regarded as restriction on the freedom of trade were succinctly dealt with in Atiabari Tea Co. Ltd. v. State of Assam A I R 1961 S C 232 and in the concluding part of paragraph 52 of the judgment the following observation was made:‑‑
"At this stage we think it is necessary to repeat that when it is said that the freedom of the movement of trade cannot be subject to any restrictions in the form of taxes imposed on the carriage of goods or their movement all that is meant is that the said restrictions can be imposed by the State Legislatures only after satisfying the requirements of Article 304(b). It is not as if no restrictions at all can be imposed on the free movement of trade."
The conclusion arrived at was summed up in the last portion of paragraph 54 in these words:‑---
"We are dealing in the present case with an Act passed by the State Legislature which imposes a restriction in the form of taxation on the carriage or movement of goods, and we hold that such a restriction can be imposed by the State Legislature only if the relevant Act is passed in the manner prescribed by Article 304(b)."
In the aforesaid authority the vires of Assam Taxation (on Goods carried by Roads or Inland Waterways) Act, 1954 had been challenged as it purported to collect taxes on goods solely on the ground that they were carried by road or by inland waterways within the area of the State. It follows that Parliament is competent under clause (2) of Article 151‑ of our Constitution to impose such restriction on the freedom of trade, commerce or inter‑course between'' one Province and another or within any part of Pakistan as may be required in the public interest whereas the Provincial Assembly is empowered under clause (4) to impose reasonable restriction in the interest of public health, public; order or morality, or for the other purposes enumerated therein with consent of the President. It is significant to point out that this provision of our Constitution negates the contention of the learned counsel for the petitioners that no restriction in the form of taxation can be placed upon the free movement of goods. It is worth mentioning that the learned counsel did not urge before us that the Ordinance had not been passed in the manner provided by clause (4) of Article 151 of our Constitution which to some extent corresponded to Article 304(b) of the Indian Constitution. They, however, addressed us on altogether a different plane. They urged that as contemplated by clause (3) of Article 151 the Provincial Government had no power to prohibit or restrict the entry into, or the export from, the Province of goods of any class or description. They added that the provisions of the Ordinance authorising the District Council to levy tax for the export of goods from the District were ultra vires the Constitution. It may be pointed out that it is not the Provincial, Government which has prohibited or restricted the export of goods from the Province. It is, in fact, the District Council which has imposed the export tax on the goods from the District. This tax is payable on goods exported from the District to any other District of the Province or outside it. It was emphatically, contended before us that the respondent was not competent in law to levy the export tax because taxation on import and export of goods was within the legislative competence of the Federal Government.
7. The term "export" has not been defined in the Ordinance and its dictionary meaning is to be looked into. It would be appropriate if the meaning and significance of the term export is elucidated at this stage. According to Black's Law Dictionary, 'export' means to carry or to send abroad; to send, take, or carry an article of trade or commerce out of the country whereas according to Chamber's Twentieth Century Dictionary the word 'export' means to carry or send out of a country, as goods in commerce. In Webster's International Dictionary 'export' means to carry away, to remove, to carry or send abroad especially to foreign countries merchandise or commodities in the way of trade. In Corpus Juris Secundum, Volums 35, 'export' as verb, etymologically, signifies to carry out, and in its primary, general or essential meaning, to carry or send out of a place; but in its secondary, specific, or especial meaning, to send out from one country to another; to carry from a State or country, as wares in commerce; to carry or send abroad; and in a particular connection, to send or carry out of the State, for the purpose of sale, trade or disposition, rather than for one's own use or convenience.
8. The words 'export' and 'import' came up for discussion before a Full Bench in Central India Spinning, Weaving and Manufacturing Co. Ltd. The Empress Mills Nagpur v. Municipal Committee,‑ Wardha A I R 1950 Nag. 169 and in para. (42) of the judgment it was observed by Hidayatullah, J. that the words 'export and import' have no special meaning. They bear the ordinary dictionary meaning which has been the foundation for the decisions to which I have referred in the opening portion of my opinion. These words mean only 'taking out of and 'bringing into'. It was remarked in the context of terminal tax levied by Karachi Municipal Corporation in Pakistan Textile Mill‑Owners Association, Karachi and 2 others v. Administrator of Karachi and 2 others P L D 1963 S C 137 that 'import' and 'export' in their ordinary and natural sense mean to bring into or take out of or away from a particular place.
9. It is manifest that the meaning of the word 'export' is two‑fold. Firstly, it means taking out the goods abroad and, secondly, taking the goods out of the limits of a province, district or municipality for any destination within the country. It cannot, therefore, be said that the impugned export tax is levied on goods intended to be exported to other countries or to other province only from this province. The learned counsel for the petitioners, however, emphatically urged that it was not within the competence of the respondent or the Provincial Government, the co‑respondent, to levy tax on export of goods as it was the Federal Government who was competent to levy tax on the export and import of goods. In this connection they referred to Federal Legislative List, Part I‑, appearing in the Fourth Schedule of the Constitution and alluded to Item 27 pertaining to the import and export across customs frontiers as defined by the Federal Government, inter‑provincial trade and commerce, trade and commerce with foreign countries, standard of quality of goods to be exported out of Pakistan. Item 49 relates to taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed. Had the Provincial Government levied tax on the goods to be exported abroad these provisions would have been relevant As a matter of fact, as remarked above, it is not the Provincial Government which has levied the export tax on the goods intended to be sent abroad but it is the respondent Chairman, District Council who has imposed tax on the export of goods and animals from the district. The imposition of tax is not confined to export of goods and animals from the district to the other countries and an exporter of goods and animals from the district to any other district of the province or outside it is liable to pay the export tax. It follows that the contention of the learned counsel that the impugned export tax infringed the aforesaid items of the Fourth Schedule of the Constitution would not prevail. It cannot, therefore, be said that the impugned export tax is levied on goods and animals intended to be exported to other countries or on 'export from the province'.
10. A tax is said to be a rate or sum of money assessed on the person or property of a citizen by the Government for the use of the nation or the State. It is a compulsory exaction of money by public authority for public purposes enforceable by law and is a contribution imposed by the Government on individuals for the services of the State. The learned counsel for the petitioners in the third writ petition averred that Part II of the Second Schedule of the Ordinance pertained to Taxes of District Council and Item 7 had authorised the District Council to collect "fees" for the export of goods and animals from the District The respondent, however, had on the strength of the impugned notification charged export tax on molassis though he was not competent to charge export tax and had exceeded his power which was restricted to charging fees. He added that tax was distinguishable from fee inasmuch as the latter was to be charged for the services rendered. He principally relied on Abdul Majid and another v. Province of East Pakistan and others P L D 1960 Dacca 502 wherein it is remarked that the distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for special benefit or privilege. The observation made in Nagar Mahapalika, Varanasi v. Durga Des Bhattacharya and others A I R 1968 S C 1119 was that "there is no generic difference between a tax and a fee both are the compulsory exaction of money by public authority but whereas a tax is imposed for public purposes and is not supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. "The import of the terms tax and cess came up for consideration in Hap Multan Zareen and 56 others v. Government of N.‑W.F.P. and another P L D 1980 Pesh. 137 and it was remarked that there was no difference between the two. The word "cess" had been defined in various dictionaries as a tax levied for a specific object and tax in legal parlance was nothing more than money which individuals are compelled to pay for public purposes and it was, therefore, impossible to distinguish between a "tax" and "cess". It was observed in Sheikh Muhammad Ismail & Co. Ltd., Lahore v. The Chief Cotton Inspector, Multan Division Multan and others P L D 1966 S C 388 at page 401 that "the Indian Constitution had, however, made a distinction between a tax and a fee and fees could only be levied under that Constitution with reference to governmental action undertaken in respect of the matters entered in the legislative lists of the Constitution." It was further observed that "I gather that in the cases cited no hard any fast rule was laid down which could serve to distinguish a tax from a fee. It would appear that the question has to be decided on the basis of the special facts and circumstances of each case. This appears to be the correct approach in a case of this kind." This and Dacca case were referred to in Mahboob Yar Khan and another v. Municipal Committee Mian Channu and 2 others P L D 1975 Lah. 748 wherein distinction was made between a tax and a fee on the same lines. This view was adopted and reiterated in Messrs Lever Brothers (Pakistan) Ltd., Karachi v Market Committee, Rahimyar Khan through its Chairman and another PLD 1980 B.J. 23.
Now it is well‑settled that in a taxing statute, as in other statutes, there should be no departure from the general rule that words used in a statute must first be given their ordinary and natural meaning. In Maxwell on the Interpretation of Statutes (Twelfth Edition) it is observed at page 28 that first and most elementary of construction is that it is to be assumed that the words in a Statute must be construed according to their ordinary meaning, if there is no ambiguity about the ordinary meaning of the words which have to be construed then the Courts would not be justified in ordering the ordinary meaning of these words by resorting to complicated canons of construction. The word "tax" has been defined in section 3(55) of the Ordinance a under:‑‑--
"(55). 'tax' includes any cess, fee, rate, toll or other impost leviable under this Ordinance."
In the light of the dictum laid down by the Supreme Court in Muhammad Ismail and Co's case that the question with regard to distinction between a tax and a fee has to be decided on the basis of the special facts and circumstances of each case we are of the view that the definition of the word "tax" given in the Ordinance settles the controversy about the distinction between tax and fee. It is obvious that tax includes fee and the respondent was competent in law to levy export tax which of course includes the term fee and, as such, the impugned notifications were not violative of any provision of law or statutory rules.
In the result, the writ petitions fail and are dismissed wit costs.
A . A . Petitions dismissed
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