1990 PLP 1420 (MLD)

"Unless otherwise specified licence will be issued to the following:‑‑ (a) ............................. (b) ............................. (c) ............................. (d) Actual users without import registration subject to the provisions of paragraph 2.16 if the amount for which import is to be made exceeds Rs. 25,

000. Paragraph 2.16 reads as follows:‑‑ "Import by actual user: (I) Actual users desiring to import any of the following items for an amount exceeding Rs. 25,000 shall submit their applications to the Licensing Authority with an undertaking that the goods imported against licence applied for will be for their own use only. (II) Cars, motorised wheel chairs and three wheelers for disabled persons on condition notified by the Licensing Authority. Such provision appeared in Import Policy of 1987 as well. SRO 1101(1)/83 dated 23‑11‑1983 issued under section 19 of the Customs Act and section 7 of the Sales Tax Act which reads as follows:‑‑ S. R. O. 1101(1)/83.‑‑In exercise of the powers conferred by section 19 of the Customs Act 1969 (IV of 1969), and section 7 of the Sales Tax Act, 1951 (111 of 1951) and in supersession of this Ministry's Notification No. SRO 827(1)/78 dated the 2nd October, 1978, the Federal Government is pleased to exempt, from whole of the customs duties and sales‑tax chargeable thereon, such of the motor vehicles of engine capacity not exceeding 1300 cc, motorised wheel chairs and three wheelers, fitted with special gadgets for the purpose of compensating disability, hereinafter referred to as the vehicle, as is imported for his own use by a disabled person to whom a disability certificate has been issued by the Federal Disability Board consisting of an officer possessing medical qualifications nominated by the Ministry of Health and one representative each of the Central Board of Revenue and Chief Controller of Imports and Exports subject to the following conditions, namely:‑‑ The vehicle shall not be sold or transferred to any person before the expiry of five yeas from the date of its arrival in Pakistan except‑‑ (a) to a disabled person on production of a disability certificate from the said Federal Disability Board; (b) to the Department of Supplies, Government of Pakistan, on the usual terms and conditions relating to such sale, or (c) In case of death of the disabled person owning the vehicle, by any of his heirs to any person.

2. The purchaser or transferee of the vehicle, other than a disabled person or the Department of Supplies, Government of Pakistan shall pay the same customs duty and other taxes as were leviable thereon at the time of its import:' Section 3 of the Import and Export (Control) Act 1950 empowers the Federal Government to regulate the import. and export of goods. It has power to impose conditions for grant of import licence. In order to achieve this object orders and notifications are issued by the Federal Government/Chief Controller, Import and Export. Import Policy Order is one such document which regulates the import. The licence is issued by the Chief Controller of Imports and Exports in accordance with the Import Policy Order. Accordingly the actual user of a car for disabled person is entitled to apply for licence for importing it on conditions mentioned in para 2.16 reproduced above. No condition has been imposed that before applying for import licence for car for disabled person a disability certificate should be obtained. Such certificate is required if the importer wants exemption from payment of customs duty and sales‑tax. It is required after the import and not before it. Under the notification dated 23‑11‑1983 exemption can be granted to a disabled person who has imported the vehicle for actual use and has obtained disability certificate from respondent No.

1. Another condition is that it will not be sold for five years except to a disabled person having a certificate from respondent No. 1 or the Government. It further provides that persons other than disabled persons purchasing the vehicle will have to pay customs duty and sales tax, leviable at the time of import. This clearly demonstrates that respondent No. 1 is saddled with a duty to issue disability certificate certifying that the importer is a disabled person. The stage at which respondent No. 1 is required to act, and the duty it is required to perform clearly indicates that it has nothing to do with the financial ability of an importer. While considering the importer's case in terms of notification dated 23‑11‑1983 respondent No. 1 cannot investigate into his financial condition. This is a matter which may be taken care of by the Licensing Authority. The authority of respondent No. 1 is derived from the notification issued by the Central Board of Revenue, reproduced above. The disability certificate is required by an importer if he applies for exemption from customs duty and sales- tax and not for obtaining import licence. The notification has not prescribed any guideline, rule or regulation for the purpose of granting the disability certificate. In such circumstances the Board has to exercise its discretion according to well -recognised principles of justice, equity and fair-play without being tainted with malice, mala fides or bias. The object of the Notification and the purpose for which import is allowed and exemption is granted should be kept in view while granting import licence or disability certificate. Mr. Makhdoom Ali Khan has contended that the discretion should be proper and legal on principles enunciated in N.M. Khan and another v. The Deputy Settlement Commissioner, Lahore, 1970 S C M R 158 and Manthar Jatio's case 1988 PLC (Service)

344. In the last case after an exhaustive review of several judgments following observation was made by Naimuddin, C.J. (as he then was):‑‑ "The competent authority may have discretion in the matter still the discretion has to be exercised on well‑settled principles, that is, it should be exercised in good faith having regard to all relevant considerations and for public purpose and in accordance with law and it should be exercised justly, fairly and reasonably. It should not be exercised arbitrarily or capriciously." An authority has to exercise his discretion taking into consideration the facts and circumstances of the case and in such manner that the remedy provided by the Statute is advanced and not stilled. The discretion is not the whim, caprice or desire of any authority. Nor is it an unfettered and absolute power. When a H discretion is vested in an authority then it is an unwritten code that it cannot be exercised arbitrarily, unreasonably or mala fide. It should be judiciously exercised. Maxwell in Interpretation of Statutes 12th Ed. page 146 observed as follows:‑‑ "Enactments which confer powers are so construed as to meet all attempts to abuse them, and so the Court will always be ready to inquire into the bona fides of purported exercise of a statutory power (Biddulph v. St. George's Hanover Square, Vestry, (1864) 33 L.J. Ch. 411). The modern tendency seems to be against construing statutes so as to leave the person or body upon whom a power is conferred absolutely untrammled in the exercise of it. `A discretion', said Lord Wrenbury, does not empower a man to do what he likes merely because he is minded to do so he must in the exercise of his discretion do, not what he likes but what he ought. In other words, he must, by use of his reason, ascertain and follow the course which reason directs. He must act reasonably (Roberts v. Hopwood, 1925 A.C. 578). In the words of Lord Macnaghten. `It is well settled that a public body invested with statutory powers ..must take care not to exceed or abuse its power. It must keep within the limits of the authority, committed to it. It must act in good faith. And it must act reasonably (Mayor, etc. of Westminster v. L. & N.W. R.y. Co. 1905 A.C. 426)." It was further observed: "Even though an act done is ostensibly in execution of a statutory power and within its letter, it will nevertheless be held not to come within the power if done otherwise than honestly and within the spirit of the enactment. A discretion is to be regulated according to known rules of law' (Loc v. Budo & Torrington Junction Ry. Co. 1871 L.R. 6 C.P. 576), and not the mere whim or caprice of the person to whom it is entrusted on the assumption that he is discreet `When', said Lord Halsbury L.C., `it is said that something is to be done according to the rules of reason and justice, not according to private opinion; Rooke's Case (1598) 5 Rcp. 99b); according to law and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man competent to the discharge of his office ought to confine himself (Sharp v. Wakefield, 1891 A.C. 173). These principles have neither been followed nor practised by respondent No.

1. The learned Deputy Attorney‑General has contended that the respondent has to take into consideration the financial resources of the applicant in order to avoid misuse of the concession granted by the notification. It is true that such factors have to be taken into consideration not by the respondent No. 1 but by the Controller of Import and Export while granting licence. Respondent No. 1 is merely an authority to certify that the applicant is a disabled person. As the disability certificate is required for purposes of obtaining exemption it will be needed after the car has been imported. For issuing disability certificate it is completely irrelevant for respondent No. 1 to investigate the financial stability and solvency of the applicant. If a person does not wish to claim exemption he can obtain an import licence and after payment of customs duty and sales tax take delivery of the car without the intervention of respondent No. 1 which can be completely bypassed. Respondent Authority was therefore not justified in making fishing inquiries into the financial stability of the petitioner. The conduct of the Board particularly by issuing letter on 30th September, 1989 requiring the petitioner to produce certain documents regarding financial stability and without their production and without taking any further step by the petitioner it issued the certificate, to say the least, demonstrates the irresponsible manner in which discretion was exercised completely ignoring the principles of justice, fair-play and responsibility which is expected to be practised and exhibited. For these reasons by a short order the petition was disposed of as the certificate had been issued by the respondent No.

1. A.A/A‑760/K Order accordingly.