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Constitutional Petition No.1308 of 1974, decided on 29th May, 1986.

---Art.199--Central Excises and Salt Act (I of 1944), Ss. 35 & 35-A Excise Duty on Production Capacity (Sugar) Rules, 1972, R.3(2) Finance Supplementary Ordinance (XX of 1973), First Sched., Section III, Item 7--Amendments introduced by Finance Supplementary Ordinance, 1973 in Central Excises and Salt Act and notification of Central Board of Revenue, dated 15-10-1973 challenged by invoking constitutional jurisdiction of High Court--Competency--Where petitioner had challenged amendments introduced in Act I of 1944, plea that such petitioner first availed the remedies of appeal/revision under Ss.35 & 35-A of the Act, held, was fallacious because amendment in an enactment could not be changed either in revision or appeal Constitutional petition was proper remedy where amendment in an enactment could be attacked on ground that same was without jurisdiction.

Muree Brewary Co. Ltd. v. Pakistan P L D 1972 SC 279 rel.

---Fourth Sched. & Art. 199--Central Excises and Salt Act (I of 1944), S. .3(1) & (4)-.Finance Supplementary Ordinance (XX of 1973), Ss.2 & 4--Flood relief surcharge levied and collected as additional duty of excise--Vires of S.4 of Finance Supplementary. Ordinance, 1973--Whether provisions in conflict with constitutional provisions--Words "surcharge" and "flood relief surcharge"--Connotation-- Word "surcharge" means something additional or in excess--Expression "flood relief surcharge", held, could not be construed as something distinct from excise duty- Flood relief surcharge could, therefore, be levied and collected under S.3(1) of Act I of 1944--Amendment introduced by Finance Supplementary Ordinance, 1973 was in no way in excess of powers conferred under S.3(1) of Excises and Salt Act, 1944--Provisions of S.4 of Finance Supplementary Ordinance were not in conflict with pro-visions of Fourth Sched. Entries 44 & 52 of the Constitution of Pakistan (1973).

--Art. 199--Finance Supplementary Ordinance (XX of 1973), Ss. 3 & 4--Constitutional jurisdiction exercise of--Vires of S.4 of Finance Supplementary Ordinance, 1973 empowering Central Government to levy and collect Flood Relief Surcharge as additional excise duty being not repugnant to Constitution of Pakistan, Fourth Sched. Entries 44 & 52, constitutional petition challenging vires thereof. held, would not be maintainable.

Mansoorul Arfin for Petitioner.

Obaidur Rehman for Respondents.

Dates of hearing: 8th and 9th April, 1986.

--The Fauji Foundation which is being administered by charitable endowment for Pakistan, is a charitable endowment, constituted for various charitable and benevolents objects under the Charitable Endowments Act (VI of 1890) The said Foundation owns Fauji Sugar Mills at Khoski.

2. On 11-6-1966 the Excise Duty on Production Capacity (Sugar) Rules were passed by the Central Board of Revenue (respondent No.l) in exercise of the powers conferred thereon under sections 3(4) and 37 of the Central Excise & Salt Act, 1944 (hereinafter referred to as "the Act") under which annual production capacity tax of the Mill was determined. Again by notification in the Gazette of Pakistan, dated 14th October 1972, Excise Duty of Production Capacity (Sugar) Rules, 1972 (hereinafter referred to as "the Rules") came into force which replaced the earlier rules. Rule 3(2) thereof, inter alia, provided that "duty shall be levied at Rs. 14 per cwt. on annual production capacity" as stated in the schedule annexed to such rules. At that time the production capacity of Fauji Sugar Mill was determined by the respondent as 45600 tons.

3. On 15-9-1973, the Finance Supplementary Ordinance, 1973 (hereinafter referred to as "the Finance Ordinance") was promulgated which made the following amendment in the First Schedule of the Act:

In Section III,--

(i) in item 7, the following shall be added at the end, namely:-

"Flood relief surcharge---------In addition to the duty leviable as aforesaid, a flood relief surcharge shall be levied on sugar at the rate of twenty-seven rupees and fifty paisa per hundred-weight."

An amendment was also introduced in the Rules by the respondent No.l, vide notification, No. SRO 1477(1)/73, dated 15-10-1973 issued by the said respondent with prior approval of the Federal Government, which provided as follows:

"In exercise of the powers conferred by subsection (4) of section 3 of the Central Exercise and Salt Act, 1944 (1 of 1944), road with section 37 thereof, the Central Board of Revenue, with the prior approval of the Federal Government is pleaded to direct that the following further amendment shall be made in the Excise duty on Production Capacity (Sugar) Rules, 1972, namely;-

In the aforesaid Rules; in Rule 3 in sub-rule (2) after the figure "14", the words letters and figures "and a flood relief surcharge at the rate of Rs.27.50" shall be inserted."

4. As a consequence of the said amendments the Fauji Foundation had to pay Rs.25,08,000 by way of flood relief surcharge which was calculated on 4560 tons at the rate of Rs.550 per ton. The petitioner has now challenged the notification, dated 15-10-1973 and the said amendments made in the Finance Ordinance as being without lawful authority, ultra vires and of no legal effect.

5. Two counter-affidavits were filed on behalf of the Collector of Central Excise and Land Customs (respondent No.2) wherein the facts stated by the petitioner were more or less admitted. However, preliminary objection was taken in respect of the maintainability of the petition as according to the said respondents the petitioner had failed to avail the right of appeal or revision provided under the law. It was also contended that according to the notification, dated 21-11-1973, issued by the Sind Government, all sugar mills in the Province of Sind had to reserve 100 of the sugar produced by them during the crushing season 1973-74 for sale in the manner to be specified by the Government of Sind. Therefore, it was contended that the flood relief surcharge had, in fact been recovered by the sugar mills from the consumers and as such the petitioner was not directly affected by such taxation, and consequently, it was contended that the petitioner had no cause of action to file the instant petition. This position was, however, not admitted by the petitioner, who in the rejoinder filed on its behalf once again reiterated that liability to pay production capacity tax and flood relief surcharge in respect of 4560 tons was that of the petitioner.

6. We have heard Mr. Mansoorul Arfin, learned counsel for the petitioner, and Mr. Obaidur Rehman learned - counsel for the respondents.

7. Mr. Mansoorul Arfin learned counsel for the petitioner, has raised the following contentions before us. It has been argued by him that section 3(1) of the Act only authorises levy and collection of duties of excise and since 'flood relief surcharge' has not been defined by the Finance Ordinance as excise duty, the same cannot be collected under section 3(1) of the Act. Next contention of the learned counsel was that even if flood relief surcharge could be levied and collected under section 3(1) of the Act the same could not be collected under section 3(4) of the Act, as under section 3(4) of the Act, the Central Board of Revenue has been authorised to. levy and collect duties on the production capacity of plants, machinery etc, in lieu of levying or collecting duties of excise under section 3(1) of the Act which could not include flood relief surcharge. Lastly, it was contended that the provisions of the Finance Ordinance in respect of flood relief surcharge were repugnant to the Constitution.

8. Before going into Mr. Arfin's contention, the first question to be determined is as to the maintainability of this petition. According to Mr. Ubaidur Rehman, the petitioner should have first availed the remedies of appeal or revision provided by sections 35 and 35-A of the Act, respectively. According to section 35 any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under the Act or the Rules made thereunder may file appeal to the Central Board of Revenue or a Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise, if empowered in that behalf by the Central Board of Revenue. The contention of Mr. Ubaidur Rehman qua the remedy of appeal appears to be fallacious as in the instant petition among other things, the petitioner has challenged the amendments, introduced by the Finance Act in the Central Excises and Salt Act and notification issued by the Central Board of Revenue, dated 15-10-1973, therefore, how can the same be challenged in appeal before the Central Board of Revenue, is hard to understand. However, whatever be the case, as was held .by the Supreme Court in Muree Brewary Co. Ltd. v. Pakistan P L D 1972 S C 279, "the rule that the High Court will not entertain a writ petition when other appropriate remedy is yet available is not a rule of law barring jurisdiction but a rule by which the Court regulates its jurisdiction .... One of the well recognised exceptions to the general rule is a case where an order is attacked on the ground that it was wholly without jurisdiction". Therefore, failure on the part of the petitioner to file appeal cannot fatal for the instant petition.

9. The next objection of the respondents was that another remedy is provided by the Act in the form of revision which could also have been availed by the petitioner. This argument also appears to be misconceived section 35-A of Act confers a suo motu power of revision on the Central Board of Revenue to call and examine the record of any departmental proceedings under the Act or the rules made thereunder. Without going into the question whether the Central Board of Revenue was empowered to exercise jurisdiction under the said provisions of law, it may be pointed out that where powers of suo motu revision are conferred, then no party as of right can invoke such powers. (See PLD 1967 S C 221) . For the aforesaid reasons, the petition is maintainable, as neither the provisions relating to filing of appeal or revision provided for in the Act, could be invoked by the petitioner nor its failure to invoke such provisions would debar it from invoking the writ jurisdiction of this Court.

10 The last objection of the respondents also appears to be wholly misconceived because, as stated in para. 6 of the petition and the rejoinder filed on behalf of the petitioner, the actual production of the factory admittedly was 35307 tons -against its production capacity of 45600 tons. Therefore, there was obviously a shortfall in the production by 10293 tons. Against this shortfall; the abatement granted by the respondent No. 1, admittedly was only 5733 tons which still left a balance of 4560 tons. That being the position, the petitioner still maintained that it had to pay duty from it-s own resources on 4560 tons. That being more or less an admitted position, is cannot be conceived how the petitioner might nave recovered this amours; from its consumers. For these reasons the last objection raised by the respondents also cannot be sustained.

11. The relevant provisions of the Act which provide for levy or collection of duty of excise or tax on production capacity in lieu of such duty are contained in subsections (1) and (4) of the Act. They provide as follows:-

"(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods, produced or manufactured, and on all excisable services provided, or rendered, in Pakistan, as and at the rates set forth in the First Schedule."

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"(4) With the prior approval of the Central Government, the Central Board of Revenue may, in lieu of levying and collecting under subsection (1) duties of excise on excisable goods, by notification in the official Gazette levy and collect duties on the production capacity be plants, machinery, undertakings, establishments or installations producing or manufacturing such goods; and such notification shall specify.

(a) the guiding principles for the determination of production capacity,

(b) the production capacity, as determined in accordance with such guiding principles, of the plants, machinery, undertakings, establishments or installations affected by it,

(c) the duty or the rate of duty on production capacity, and

(d) the manner of collection of such duty.

Item No.7 in part I, section III of the First Schedule to the Act is also relevant which provided:

12. Turning to the first contention of Mr. Mansoorul Arfin, he has argued that the expression "flood relief surcharge" is not synonymous with "excise duty". According to the learned counsel, no such intention was expressed by the Legislature that "flood relief surcharge" was to be collected as additional duty of excise. For the sake of comparison reference was made to section 2 of the Finance Ordinance where it has been expressly provided that "there shall be levied and collected an additional custom duty as flood relief surcharge on the goods ...." The argument of the learned counsel has been that section 4 of the Finance Ordinance fails to express the intention of the Legislature in such explicit terms as section 2 thereof. Therefore, flood relief surcharge could not be levied as additional duty of excise.

13. No doubt, the language used in sections 2 and 4 of the Finance, Ordinance is not couched in similar terms, but nevertheless, it is manifest from the language used in section 4 that flood relief surcharge is to be levied and collected as additional duty of excise. Although similar words have not been used by the Legislature, as in case of customs duty but still the intention of the Legislator does not appear to be different. From the language used in the amendment there appears to be a clear intention that flood relief surcharge is to the levied and collected as additional duty of excise. The words "In addition to the duty leviable as aforesaid a flood relief surcharge shall be levied on sugar used in the amendment leave no doubt that flood relief surcharge was to be levied as additional duty of excise. The term surcharge" according to Oxford Dictionary means extra load or charge. According to Black's Law Dictionary 4th Edition, it means "an over charge; an exaction, impost, or encumbrance beyond what is just the right, or beyond one's authority or power------". Legal Thesaurus by William C. Burton defines it as "added charge, additional charge, excessive burden, excessive charge, extra charge, extra fee, over assessment, over burden, over charge, over load, penalty."

14. According to the above definitions, "surcharge" means something additional or in excess. Therefore, the expression "flood relief surcharge" cannot be construed as something distinct from excise-duty. The intention of the Legislature, therefore, clearly was to provide for levy or collection of an additional or excessive excise-duty. For the afore-stated reasons, flood relief surcharge could be levied and collected under section 3 (1) of the Act and the amendment introduced 'by the Finance Ordinance in no way appears to be in excess of powers conferred under section 3 (1) of the Act. The first argument of Mr. Mansoorul Arfin, therefore, cannot be accepted.

15. The next argument of Mr. Mansoorul Arfin was in respect of subsection (4) of section 3 of the Act which authorises the Central Board of Revenue (respondent No.l) with prior approval of the Federal Government, to levy or collect duty on production capacity of plants, machinery, etc. in lieu of levying or collecting excise duty on actual production of goods. The argument was, that in case the said surcharge is construed as additional duty, then the same can be levied on actual production but not on production capacity as contemplated by section 3 (4) of the Act.

16. The argument, on the first impression appears to be attractive, because duty of excise can be levied or collected either on actual production of goods' or on production capacity of plant, machinery, etc. in lieu of the actual production. However, an examination of the notification, dated 15-10-1973, makes it manifestly clear that "flood relief surcharge" at the rate of Rs. 27.50 was to be collected additionally as duty on production capacity besides what was already provided by Rule 3(2) of the Excise Duty on Production Capacity (Sugar) Rules, 1972. Before the issuance of the said notification, dated 15-10-1973, rule 3 (2) read as follows:-

"(2) Duty shall be levied at the rate of Rs.14 per cwt. on annual production capacity stated in the annexed schedule as determined under sub-rule (1) ...."

After its amendment by notification dated 15-10-1973, rule 3 (2) of the above-said rules then read as follows:-

"(2) Duty shall be levied at the rate of Rs.14 and a flood relief surcharge at the rate of Rs. 27.50 per cwt. on annual production capacity stated in the annexed schedule as determined under sub rule (1) ...."

The words added to rule 3 (2) clearly show that Rs.14 plus al surcharge of Rs.27.50 per cwt. were to be charged or levied as annual production capacity duty on production of sugar therefore, manifest that surcharge of Rs. 27.50 was merged with Rs.14 and a consolidated amount of Rs.51.50, per cwt. was to be charged as annual production capacity duty. No doubt, if the amount of Rs. 27 .50 was to be charged or levied as additional tax, distinct and separate from annual production capacity duty of Rs.14 per cwt. Then the provisions of the Finance Ordinance would have been in direct conflict with section 3 (4) of the Act. But such was not the language used in the said amendment, therefore, the amendment, dated 15-10-1973 introduced, in the Rules was not in conflict with section 3 (4) of the Act. Tire second argument of Mr. Mansoorul Arfin, therefore must also fail.

Turning now to the last contention of Mr. Mansoorul Arfin, it was argued by him that the provisions of section 4 of the Finance Ordinance, were repugnant to the Constitution. In this respect, the learned counsel referred to Entries No.44 and 52, respectively in the fourth Schedule to the Constitution which provide as follows:-

"44. Duties of excise, including duties on salt but not including duties on alcoholic liquors, opium and other narcotics.

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52. Taxes and duties on production capacity of any plant, machinery, undertaking, establishment or installation in lieu of taxes and duties specified in Entries 44, 47, 48 and 49 or in lieu of any one or more of them".

17. It was contended by the learned counsel that the Constitution permits levying or collection of excise duty either on actual production under Entry No.44 or on production capacity of any plant, machinery, etc. in lieu of the taxes and duties on actual production under Entry No. 52 in the fourth Schedule to the Constitution. The learned counsel thus attacked the amendments in the Act and the rules introduced by the Finance Ordinance and the notification, dated 15-10-1973, respectively as according to the learned counsel, both purported to impose an additional duty which was distinct and separate from excise-duty and not contemplated by the said entries in the Fourth Schedule to the Constitution.

18. This argument equally appears to be without force. In fact it once again raises the same question which has already been answered by us. As we have already stated that the flood relief surcharge is not an additional duty or burden but the same merges with excise duty or duty leviable on production capacity. The amendments, therefore, cannot be repugnant to the Constitution. The reasons are the same as we have already stated above. The amendments are, therefore, intra vires the Constitution.

19. As a result, we find no force in this petition and the same is hereby dismissed. In view of the circumstances of the case the parties are directed to bear their own costs.

A.A./F-1/K Petition dismissed.

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