1965 PLP 494 (PTD)

(i) In the case of goods falling under clause (a) of subsection (1) the sale price ; (ii) in the case of goods falling under clause (b) or clause (d) of the said subsection the duty-paid value ; (iii) in the case of goods falling under clause (c) of the said subsection being imported goods the duty-paid value: (iv) in the case of goods falling under clause (c) of the said subsection being goods manufactured or produced in Pakistanthe price for which the goods were purchased by the licensed wholesaler. (4) The tax in respect of the goods mentioned in clauses (a) and (c) of subsection (1) shall be payable on the occurrence of the first of the following events: (i) when the goods are delivered to the purchaser, or (ii) when the property in the goods passes to the purchaser, or (iii) when the goods are sent, consigned or exported to any place outside Pakistan, and for the purposes of this clause the goods shall be deemed to have been sold when they are sent, consigned or exported to any such place as aforesaid: Provided that in the case of goods specified in the First Schedule to the Central Excises and Salt Act, 1944 (I of 1944), (hereinafter `referred-to as `the said Act), the tax shall be payable at the same time and in the same manner as the duty of excise irrespective of whether such duty is for the time being payable in respect of those goods or not and the provisions of the said Act relating to the payment of duty and the removal of goods shall, so far as may be, apply to the payment of the tax under this Act as they apply for the purposes of the said Act. (5) The tax in respect of the goods mentioned in clauses (b) and (d) of subsection (1) shall be paid on importation or exportation, as the case may be, as provided hereunder- (i) where the goods on importation are directly cleared for home consumption before the order for such clearance is made by the Customs officer ; (ii) where the goods on importation are taken out of bond for home consumption-before the goods are removed from the warehouse ; (iii) where the goods are exported by sea-before the shipping bill is passed by the Customs collector ; (iv) where the goods are imported or exported by land-before the permit for the passage of the goods out of or into foreign territory is issued, and the provisions of the Sea Customs Act, 1878, and of the Land Customs Act, 1924, relating respectively to the clearance, shipping arid removal of goods and the passage of goods out of or into foreign territory shall. So far as maybe, applied to the payment of the tax under this Act as they apply for the purposes of those Acts. (6) Where goods are produced or manufactured in Pakistan tinder such circumstances or conditions as render it difficult to determine the value thereof for the tax because-- (a) a lease of such goods or the right of using the same but not the right of property therein is sold or given ; or (b) such goods having a royalty imposed thereon, the royalty is uncertain, or is not from other causes a reliable means of estimating the value of the goods, or (e) such goods are manufactured by contract for labour only and not including the value of the goods that enter into to same, or under any other unusual or peculiar manner or conditions ; or (d) such goods are for use by the manufacture or producer and not for sale ; the Sales Tax Officer may determine the value for the tax under this Act and all such transactions shall, for the purposes of this Act, be regarded as sales. (7) If any person other than the manufacture of producer or importer or licensed wholesaler or exporter hereinbefore mentioned acquires from or against any one of these persons the right to sell any goods, whether as a result of the operation of law or of any transaction not taxable under the next succeeding section, the sale of such goods by him shall be taxable as if made by the manufacturer or producer or importer or licensed wholesaler or exporter, as the case may be, and the person so selling shall be liable to pay the tax." "

4. Notwithstanding anything contained in section 3, the tax shall not be payable on- (a) goods sold by a licensed manufacturer to another licensed manufacturer if the goods are partly manufactured goods ; or (b) goods imported by a licensed manufacturer if the goods are partly goods ; or (e) goods imported by a licensed wholesaler; or (d) goods sold by a licensed manufacturer to a licensed wholesaler or a licensed exporter ; or (e) goods sold by a licensed wholesaler to a licensed manufacturer if the goods are partly manufactured goods ; or (f) goods sold by a licensed wholesaler to another licensed wholesaler Provided that if a licensed wholesaler sells goods to another licensed wholesaler at a price less than the value upon which the tax would be computed under clause (iii) or clause (iv) of subsection ($) of section 3, the vendor shall forthwith become liable to pay the tax upon the difference between such value and his sale price." "7. (1) The Central Government may, by notification in the official Gazette, exempt any goods or class of goods or any person or class of persons from the tax payable under this Act, and may also, by notification as aforesaid, make a reduction in the rate of tax leviable in respect of any goods or class of goods. (2) Any exemption notified under subsection (1) may be made subject to such conditions as may be specified in the notification." The Act, if considered as a whole, will be found to envisage that in the matter of imposition of sales tax there cannot be a rigid rule as to the rates of tax in regard to certain classes of goods and the exemption to be granted to goods which come within the purview of the Act from payment of tax. If the provisions, quoted above, are considered, it will be evident that the Legislature felt that, in regard to the above two matters, decision will be dependent upon the trade conditions prevailing in the Country at a given time. It is because of this that wide powers in regard to the rates of tax exemption have been given to the Central Government. In this view of the matter, we are unable to accept the contention that the provision under attack amount to delegated legislation and are therefore ultra vices. In our opinion, the argument that the provisions admit of wide power of unguided discretion, and that by refusing to grant exemption to the petitioner-company while some of the manufacturers of similar goods were granted exemption it has as a matter of fact been left to a situation of unfair competition, is equally unsubstantiated. We have already noted that in the affidavit-in-opposition filed on behalf of the respondents it has been stated that the articles, which were granted exemption, namely, rods of some sizes, are different from "wires" which are produced by the petitioner-company. At this stage, it is worth pointing out that the statement in the affidavit filed by the respondents does not appear to be fully satisfactory. More facts should have been stated to point out that difference between the two clauses of goods and the reason for exempting one class and not the other. Be that as it may, we are not satisfied that the petitioner, by the assertions made in the application, has succeeded in establishing a clear case of arbitrary discrimination, and in that view the petitioner-company is not entitled to any relief in this case. The conclusions, at which we have arrived in regard to these two points receives supports from some observations in the case of Messrs East arid West Steamship Company v. Pakistan (P L D 1958 S C (Pak.) 41). In that case section 3 of the Control of Shipping Act was challenged on grounds which are the same as the grounds on which Mr. Haidar Mota has challenged the provisions of sections 3, 7 and 8 of the Sales Tax Act. The learned Chief Justice, in this connection, observed as follows :- "From these provisions it seems to be perfectly clear that the Act proceeds on a definite policy, namely, the policy of placing the ships, for the period of the emergency, substantially at the disposal of the Government to enable it to direct what classes of cargo or passengers may be carried, to claim priority for Government cargo and passengers, to fix rates and freights, and to know the exact position of a Pakistan ship at a particular time so that if any urgency arises it may be called back for home service. This policy could successfully be carried out only if full powers which could not be controlled by rules, were given to the Shipping Authority, and the licensing system comtemplated by the Act is merely a means for the Shipping Authority to requisition shipping space to satisfy urgent and exceptional trade needs of the country. Financial injustice to the owners is avoided by the provisions for a Board to advise the Central Government in respect of rates. ??????????? Acting within the framework of the Act the Shipping Authority can protect Pakistan shipping against foreign competition, by regulating the rates can avoid cut throat competition between Pakistan shipping companies on the one had and prevent them from pooling together with a view to raising the rates to abnormal heights on the other. In the same manner the Authority can regulate exports and imports and maintain trade in essential goods and commodities between the two wings of the country which are separated by a distance of 1,500 miles and between which trade by air is impracticable and transport by rail can only be through a foreign country. If these were the objects intended to be attained by the Act, it was not possible for the Legislature to define in meticulous details how the Shipping Authority was to act in particular circumstances, and it was rightly considered to be necessary to leave him a large field of discretion so that he could act freely to meet a situation as it arose. The Legislature could not have possibly anticipated the varying trade situations, what the needs of Government or the community in the matter of carriage by sea may be, and what essential supplies would be needed from time to time by each wing. In view of this uncertainty considerable latitude had to be left to the shipping authority to cope with all possible situations. Even where legislation, which vests in public official absolute discretion to grant or refuse a licence to carry on an ordinary business, profession or activity without prescribing definite rules and conditions to guide them in the execution of their discretionary power, has been held to be invalid on the ground of unauthorised delegation of legislative powers, an exception has always been recognized in the case of situations which require the vesting of discretion in public boards or officials where it is difficult or impracticable to lay down a definite comprehensive rule or the discretion relates to the administration of licensing requirements to protect the general welfare. In the present case, the Legislature thought that the control of shipping was necessary in the interest of public welfare and from the very nature of the trade to be regulated it was necessary that the Shipping Authority should have abundant discretion if the policy and purposes of the Act were to be carried out. The Act is not, therefore, ex facie bad either on the ground of legislative authority or on the ground of excessive delegation that the Shipping Authority if it were so minded could administer it in a discriminatory manner. Objection on the first ground must fail because the Act lays down a policy which the Shipping Authority has to implement by the exercise of power given to him, while objection on the second ground must be repelled because the petition does not allege any discrimination in practice". Cornelius, J. (as he then was) has observed: "Therefore, it seems to me that reference to Article 5 of the Constitution is not really relevant in the present case. It cannot be said that by leaving discretion to the Shipping Authority, he is given the position of being a law unto himself in the sense that he can decide for himself in what conditions he will grant a permit or, as the case may be, refuse a permit. There is no question of legislation at all since each case has to be considered ad hoc in relation to the circumstances existing when it arises in the light of the requirements of the State, and in compliance with the policy laid down. That degree of discretion is vested in the Executive inherently as a necessary condition of its existence." The above observations, in our view, clearly apply to the present case. The requirements which would justify exemption could not be anticipated by the Legislature and therefore it was not possible to enumerate them in the Act. Discretion had to be left, therefore to the Executive Government to take decision from time to time in this regard within the framework of the not according to the exigencies of trade, and in the absence of any clear proof that the discretion has been abused against the petitioner to his prejudice, we are unable to accept the contention that the impugned provisions are ultra vires as delegated legislation or violative of the 15th Fundamental Right guaranteed by the Constitution. When the subject dealt with by the Legislature by its very nature suggests that a wide discretion has to be left to the Executive Government allowing such discretion do not amount to delegated legislation, and in the absence of any proof of exercise of the power resulting in discrimination, the Court cannot interfere. In a system as ours, where separation of powers of the Legislature and the Judiciary and the Executive is provided for by the written Constitution, all that the Legislature is required to guard against is that it does not surrender or abdicate its power. In a given case, whether the legislation amounts to surrender or abdication, will depend upon the nature of the impugned provisions read alongwith the other provisions of the law in question. If it is found that the power given to the Executive does not allow it to modify any essential feature of the law, then it does not amount to delegation of legislative power. The power to work out details within the framework of the law, if given, has been held to be within permissible limits of delegation so as not to render it unconstitutional. In the case of the Queen v. Burah (5 I A 178), the Judicial Committee pointed out that while the Indian Legislature acting within the limits of its powers given to it by the Act of the Parliament could not create a new legislative power, it could legislate it within its sphere conditionally. It was observed: "Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing, and, in many circumstances, it may be highly convenient." In the case of Baxter v. Ah. Way ((1909) 8 C L R 626 at p. 637). O'Conner, J. of the Australian High Court has observed as follows :- "The aim of all Legislatures is to project their minds as far as possible into the future, and to provide in terms as general as possible for all contingencies likely to arise in the application of the law. But it is not possible to provide specifically for all cases and therefore, legislation from the very earliest times, and particularly in modern times, has taken the form of conditional legislation, leaving it to some specified authority to determine the circumstances in which the law shall be applied, or to what its operation shall be extended, or the particular class of persons or goods to which it shall be applied." In that case the validity of certain provisions of the Customs Act of 1901 was challenged. By the Act, the importation of certain goods which were specifically mentioned was prohibited. The Act further gave power to the Governor-General-in-Council to include by proclamation other goods also within the prohibited list. The validity of the provision leaving power to the Governor-General to add to the list was challenged on the ground of being delegation of legislative powers. The contention however, was not accepted and it was held that it amounted only to conditional legislation. We have not been able to procure a copy of 8 C L R and have accordingly quoted the above passage and taken the facts of the case from the decision reported as Edward Mills Co. v. State of Ajmer (A I R 1955 S C 25 at p. 32). Having found that the present case is covered by the decision of our Supreme Court in the case of East and West Steamship Co., we have felt it unnecessary to refer to some Indian decisions on which Mr. Haidar Mota has relied in support of his contention. The result, therefore, is that this Rule is discharged with costs which we assess at ten Gold Mohurs. SIKANDAR ALI, J.-I agree. S. Q.??????????????????????????????????????????????????????????????? ??????????????????????????????????? Rule discharged.