1994 PLP 1516 (CLC)

SYED HAIDER ALI PIRZADA, J.‑‑‑By this common judgment we intend to dispose of the above two Constitution petitions as they involve same common points of law.

2. The facts leading to the filing of the above petitions are that being manufacturer of yarn, the petitioners in. each case import manmade fibre from abroad for use as raw material in their textile mills located at Kotri/Hyderabad, import of such fibre is a continuous operation of the petitioners. Before the imported fibre is despatched to the petitioner's mill at Kotri/Hyderabad, which is located outside the local area of the Respondent No. 1 it is temporarily retained in bonded warehouse under licence from the Respondent No. 1 a local body created under the Sindh Local Government Ordinance, 1979. Under Rule 95 of the Octroi Rules, 1964, the initial validity period for temporary retention of goods is thirty days extendable to another period not exceeding thirty days in aggregate. The said initial period of thirty days temporary retention was from 1‑8‑1985 to 30‑8‑1985. It is the case of the petitioners that due to unavoidable circumstances and the transport difficulties the petitioners could not carry away and despatch such temporarily retained goods. The petitioners applied to the Deputy Director, Octroi, of the Respondent No. 1 vide their letter dated 25‑8‑1985 for extension of one month, as is permissible under the said Rule

95. It is the further case of the petitioners that the requisite permission was sought at least five days before the validity period on 30‑8‑1985. It is conceded that without giving any opportunity of hearing and to the utter surprise and shock of the petitioners and seven days after the expiry of initial period of validity, the Respondent No. 3 rejected their request for extension as made in the said letter dated 25‑8‑1985, and communicated her decision through the Deputy Director, Octroi of the Respondent No. 1 who wrote letter dated 7‑9‑1985 in this connection to the petitioners. Being aggrieved by the said rejection of the Respondent No. 3, the petitioners in each case went in appeal to the Mayor of the Respondent No.

1. The appeal was allowed in Constitution Petition No. D‑802/85. He observed that the extension in the validity period of the warehouse passes in question be allowed by the Deputy Director, Octroi for a period not exceeding sixty days in aggregate. Whereas in the other Constitution Petition No. D‑801 of 1985 the appeal was dismissed. While dismissing the appeal he observed that:‑ "Today when the matter came up for hearing it has been informed by the Directni Octroi that under Octroi Rules the maximum period of Warehouse passes, including 30 days extension is 60 days which have already been passed. Therefore, no further extension is now permissible under the Rules. The appellants can now remove the warehouse goods against the payment of octroi. As such appeal is liable for dismissal." The petitioners in each case have challenged the impugned. order in the above petitions.

3. We have heard Mr. Rashid A. Akhund, the learned counsel appearing for the petitioners and Mr. Yaseen Kiyani, learned counsel appearing for the respondents.

4. It is advantageous to reproduce Rule 95 of the West Pakistan Municipal Committees Octroi Rules, 1964 which is in the following terms: "

95. The maximum period of the validity of an Octroi Ware House Pass shall be thirty days; provided that the Taxation Officer may by an endorsement on the Octroi Warehouse Pass from time to time extend the period of the validity of the pass for a period not exceeding thirty days in the aggregate."

5. A perusal of the above provisions of Rules 95 shows that the maximum period of the validity of an Octroi Warehouse Pass shall be thirty days; provided that the Taxation Officer may by an endorsement on the Octroi Warehouse Pass from time for time extend the period of the validity of the pass for a period not exceeding sixty days in the aggregate.

6. The word "aggregate" is defined in Wharton's Law Lexicon (14th Ed) IA at page

42. It means a collection of things in order to form a whole.

7. We have perused the orders of the appellate authority. It is not in dispute that both the appeals were presented before the appellate authority and the facts were almost same and the circumstances were also same. It is surprisingly that one appeal was allowed and the other was dismissed. The rights of the importers have not been adverted to. An order which does not deal with the merits of the case and does not indicate that it was passed after applying mind to the relevant facts and merits of the case, cannot be termed as a valid order, at all. An order, whether it is passed by a judicial tribunal or quasi‑judicial tribunal or even by an executive authority must indicate that it was passed after considering all the relevant facts and respective claims of the parties. An arbitrary exercise of jurisdiction, in flagrant disregard of law and principles of natural justice, is tantamount to denial of justice. Therefore, the impugned orders are void and of no legal consequence.

8. We have perused the impugned order dated 12‑10‑1985 passed in 'Constitution Petitioner No. D‑801 of 1985. The relevant para 2 of the same is reproduced hereunder:‑. "Today when the matter came up for hearing it has been informed by the Director Octroi that under Octroi Rules the maximum period of Warehouse passes, including 30 days extension is 60 days which have already been passed. Therefore, no further extension is now permissible under the Rules. The appellants can now remove the warehouse goods against the payment of octroi. As such the appeal is liable for dismissal."

9. It is necessary to reproduce Rules 95, 96 and 98 of the Municipal Committees Octroi Rules, 1964: "95 The maximum period of the validity of and Octroi Warehouse Pass shall be thirty days; provided that On Taxation Officer may by an' endorsement on the Octroi Warehouse Pass from time to time extend the period of the validity of the pass for a period not exceeding thirty days in the aggregate. 96. ‑‑(1) When goods kept at the Octroi Warehouse are to be exported, the original of the Octroi Warehouse Pass shall be presented at the Octroi Ware House, when the Octroi Clerk shall: (a) make the necessary entries in the Octroi Ware House Pass and the coupon; retain the pass and return the coupon to the person concerned; (b) release the goods, and issue a Transit Pass for their export ax if the Octroi Warehouse were an Octroi Post of import. (2) The Octroi Warehouse Pass retained under this rule shall be pasted with the duplicate copy of the pass.

97. The provisions contained in Chapters IX and X. shall mutatis mutandis apply to all Transit Passes issued under rule 92 or 96."

98. If an Octroi Warehouse Pass is presented under rule 96 after the expiry of the period of the validity of the pass, the Octroi Clerk shall charge penal rent for such excess period in accordance with the scale fixed by the Municipal Committee with the approval of the Controlling Authority. The case shall also be reported to Octroi Officer for necessary action for a breach of these rules."

99. If any goods kept at an Octroi Warehouse are not claimed within seven days of the expiry of the last date of the validity of the pass, or when the goods are claimed, but the charges under rule 98 are not paid, an order of the seizure of goods may be passed under Chapter XXV, arid the provisions of the said Chapter shall mutatis mutandis apply to the goods seized under this rule."

100. An Octroi Warehouse Register shall be maintained at every Octroi Warehouse in which particulars of all transactions at the Octroi Warehouse shall be recorded". The Mayor observed in his order that no further extension is now permissible under the Rules. The petitioners can now remove the warehouse goods against the payment of octroi.

11. It is clear from the bare reading rule 35 contained in Chapter V of the Rules that when the goods liable to octroi are presented at an Octroi Post for assessment and then a declaration is made by the incharge of the goods that the goods are for immediate export or temporary retention within the Octroi limits and ultimate export Rule 35, envisages that if no declaration is made under Rule 35, it shall be deemed that the goods are intended for consumption, use, or sale within the octroi limit. The declaration made by the petitioners that the goods were to be despatched to the petitioner's mill at Hyderabad or at Kotri. The goods in question are to be shifted to and utilized at Hyderabad or Kotri, the respondents have no power to levy octroi on such goods until it is proved by reliable evidence that the petitioners have changed their mind in respect of the said goods which are now intended for . consumption, use or sale within the K.M.C. limits. A perusal of the impugned order would show that the goods were not removed from the Octroi Warehouse within the period of sixty days fixed by the rule 95.

12. In unreported judgment dated 18‑12‑1985 of a Division Bench of this court in Constitution Petition No. D‑967 of 1984 Firdous Spinning & Weaving Mills Ltd. v. K.M.C. and another, it was observed that: "No doubt rule 95, does not permit the goods in transit to be kept in the warehouse. for more than 60 days. But breach of this rule however does not entail levying of octroi. The warehouse referred to in this rule is clearly the octroi warehouse which is to be established by the Municipal Committee with the approval of the Government under rule

87. According to rule 88 every such warehouse is to be in charge of a clerk and the Municipal Committee has power under rule 90 to levy such charges for use of the octroi warehouse as may be fixed by it from time to time. As provided in rule 98, the clerk incharge of the octroi warehouse has power to charge penal rent in accordance with the scale fixed by the Municipal Committee for the excess period for which the goods have remained in the warehouse. If the penal charges as levied by the clerk of the warehouse are not paid, the goods would be liable to seizure under rule

99. It is thus clear from the above rules than rent or penal rent for the excess period is to be charged for the use of octroi warehouse established under rule 87, which is obviously the property of the Municipal Committee. In the instant case no such warehouse has been rented out by the petitioners and the goods in question are said to be sorted in the warehouse which belongs to Custom authorities. Consequently it is between the petitioners and the Customs Authorities to sort out the question of charges for use of the warehouse. It was also conceded by the learned counsel for the respondents that the respondent have no intention to levy penal rent against the petitioners. Since penal rent as provided in rule 98 is not intended to be levied the question of seizure of the goods in the event of non‑payment thereof would not arise." It was further observed that:" "As has been pointed out in the foregoing paragraphs the petitioners are not liable to pay octroi in respect of the goods in dispute. Consequently they cannot be held to have made any evasion in payment of the octroi."

13. The learned Bench has come to the conclusion after giving cogent reasons that since the respondents have produced no proof that the goods in transit are intended for consumption, use. or sale within the octroi limits of K.M.C., they have no power to levy octroi in respect of the said goods.

14. We are in respectful agreement with this decision of the learned Judges of the Division Bench for the reasons given by them in their unreported judgment dated 18‑12‑1985 and as such we are of the opinion, that the impugned orders dated 5‑10‑1985 and 12‑10‑1988 of the Mayor, City of Karachi Metropolitan Corporation cannot be sustained.

15. In the result the impugned orders relating to payment of octroi dues or penalty against the breach thereof are illegal and without lawful authority and they are hereby set aside.

16. However, the respondents will be free to examine if the petitioners have committed breach of any rules and if so, take appropriate action in accordance with law. H.B:T/M‑1938/x. Petition allowed.