1989 PLP 2036 (MLD)

SAEEDUZZAMAN SIDDIQUI, J: - This petition under Article 199 of the Constitution is filed by the petitioner to seek a declaration that they are entitled to compensatory export rebate under F.E. Circular No.40 of 1978 issued by State Bank of Pakistan against export of textile products made by them during June to September 1987. They have also sought a direction against the respondents for payment of a sum of Rs.136,53,877 by way of compensatory export rebate which the petitioner claims to have earned on account of their export performance. The case of -the petitioner is that against an irrevocable confirmed letter of credit established to their favour by a foreign purchaser through Habib Bank AG Zurich, Dubai, for US $ 78 lacs, they exported cotton fabrics on which they became entitled to compensatory export rebate amounting to Rs.1,36,53,

877. The fact that the petitioner exported cotton fabrics of the value US $ 78 lacs outside the country against an irrevocable confirmed letter of credit and that remittances have been received in Pakistan against the above export are not disputed by the respondents. The respondents, however, failed to pay export compensatory rebate to the petitioner so far, as they claim that they are investigating into the genuineness of the date of irrevocable letter of credit which was established in favour of the petitioner, through Habib Bank A G Zurich, Dubai, by the foreign suppliers, in connection with the above export of cotton fabrics. It may be mentioned here that in terms of paragraph 2 (111) of F.E. Circular No.40, dated 5th October, 1978 issued by respondent No.2, in case of export against confirmed irrevocable letter of credit the authorised foreign exchange dealer may submit application for compensatory export rebate alongwith a certificate to the effect that the documents have been negotiated under a confirmed irrevocable letter of credit and the authorised dealer has to pay the amount to the exporter within 24 hours of receipt of credit advice from State Bank of Pakistan. The above scheme for payment of compensatory export rebate envisaged by F.E. Circular No.40, dated 3-10-1978 has been abolished under Circular No.36, dated 18th June, 1986. However, in respect of export of cotton cloth and cotton bags made on or after 29-5-1986, against an irrevocable letter of credit established before 29-5-1986, the compensatory export rebate continued to be admissible, provided the firm contract was registered with Export Promotion Bureau before 29-5-1986, and shipments were made and payments realised in terms of letter of credit. It is therefore, quite clear that under F.E. Circular No.36r dated 18-6-1986, an exporter was entitled to payment of compensatory export rebate provided export was made against an irrevocable letter of credit established in favour of exporter before 29-5-1986 and other conditions mentioned in the above Circular were fulfilled. The only fact in dispute between the parties in the present case is the date of irrevocable letter of credit established in favour of the petitioner, by the foreign supplier through Habib Bank AG Zurich, Dubai. According to the petitioner, the date of letter of credit is 22-5-1986 while respondents have disclosed number of circumstances and facts in their counter-affidavit to support their contention that there was some manipulation in the date of letter of credit. Be that as it may, the fact remains that the respondents in spite of passage of about 1-1/2 years have failed to take a decision in this regard and decide the claim of petitioner for compensatory export rebate in respect of export made during June to September, 1987. This delay on the part of respondents to decide the claim of petitioner is really unfortunate as under the Scheme, the claim for compensatory export rebate is to be decided very promptly as laid down in paragraph 2 (111) of F.E. Circular No. 40, dated 5-10-1978. Mr. Khalid M. Ishaque, the learned counsel for the petitioner in these circumstances, justifiably made a grievance that the working of petitioner had been adversely affected as petitioner's claim for compensatory export rebate involving over Rs.1 crore has been withheld on account of inaction on the part of respondent Not to decide their case finally. In the above background when this petition came up for hearing before us yesterday, we expressed our disapproval of the manner in which the decision on the claim of petitioner was delayed by the respondents. The learned counsel for the respondents requested one day's adjournment to obtain further instructions in the case which we granted. Today, when the matter was taken up in the Court, learned counsel for the respondents placed on record letter, dated 1st February, 1989, addressed to him by the Director of State Bank in which it is stated that the application filed by the petitioner in respect of the payment of compensatory rebate against letter of credit No.D R 27250A will be decided by respondent No.2 finally by 28th of February, 1989. We were inclined to dispose of this petition by incorporating the above undertaking in our order but Mr. Khalid M. Ishaque the learned counsel for the petitioner opposed the disposal of the petition in terms of the above undertaking of the respondents. Mr. Khalid M. Ishaque contended that the conduct of respondents in failing to dispose of the claim application of the petitioner for compensatory export rebate for such a long time amounts to their refusal and as the petitioner has succeeded in establishing before this Court that they have fulfilled all the requirements of F.E. Circular No.40, dated 5th October, 1978 read with F.E. Circular No.36 dated 18th June, 1986, the Court should issue direction under Article 199 of the Constitution to respondents for payment of amount due to the petitioner as compensatory export rebate. In support of his contention the learned counsel relied on the cases of Hasan Industries Ltd. v. Central Board of Revenue (1973 P T D 312); Pakistan v. Hasan Ali (P L D 1960 S.C. page 310) and Motilal Padempat Sugar Mill Company Ltd. v. State of U.P. (1981 P T D 277). ' In the first cited case the petitioner claimed that he was entitled to the grant of tax holiday under Section 15-BB (4) of the Income tax Ordinance in respect of 12 new combing sets imported and installed in his factory for producing better varieties of yarn. The claim of petitioner was considered on merit by the Board of Revenue and rejected. The High Court reversed the decision of Central Board of Revenue and held that the petitioner was entitled to statutory tax holiday. In the second cited case, the respondent was issued an import licence against export of goods in accordance with declared policy of Government. This import licence was cancelled after issuance, by the authorities on the pretext of non-compliance with the rule, which required submission of bank certificate with the import application. The High Court in a Constitution petition held the cancellation of import licence, which was duly issued in favour of the respondent was illegal and declared the action of Government as without lawful authority. In Petition for leave to appeal against the order of High Court, the Supreme Court declined the leave and held that plea of non-compliance of condition of certificate by bank by the authority was an afterthought. In the last cited case the petitioner acting on the promise held out by the U.P. Government to exempt all new industrial units set up in the Province from payment of Sale Tax under. section 4-A of U.P. Sales Tax Act for three years, set up hydrogeneration plant for manufacture of vanaspati. Subsequently the Government of U.P. declined to give effect to above promise. Supreme Court of India, in these circumstances, held that the Government was estopped from going back on its promise on the basis of Doctrine of promissory estoppel. None of the above cases are of any assistance to the learned counsel in the present case. In the first referred two cases the decision of the authority concerned on merit was available before the Court so that the Court was in a position to examine the validity of the reasons given by the authorities concerned in support of their respective decisions. The last referred case is also distinguishable as it was decided on the basis of doctrine of promissory estoppel. In the case before us the authority concerned has not yet taken a decision on the merits of the case of the petitioner and as such this Court is not in a position at this stage to examine the validity or otherwise of the rationale of that decision. It, also, cannot be disputed that the declaration/direction sought by the petitioner in the case against the respondents cannot be granted/issued unless it is held that the L/C opened in favour of the petitioner was established before the target date mentioned m F.E. Circular No.36 dated 18-6-1986, namely 29-6-1986. As the reliefs prayed for by the petitioner in the case are dependent on determination of the factual aspect of the case which is not admitted by the respondents the same cannot be decided appropriately in proceedings under Article 199 of the Constitution. In these circumstances the only relief which could be granted to the petitioner at this stage would be in the nature of a direction to the respondent to dispose of the case of petitioner at an early date in accordance with law. As the respondents themselves have volunteered with a statement before us in the case undertaking to decide the case before 28-2-1989, we are of the view that it is not necessary to issue any specific direction to them in the case. However, in order to eliminate possibility of any further delay, in the case, we order disposal of this petition in terms of undertaking of respondents filed before us today under taking to finally decide the claim of petitioner for payment of compensatory export rebate before 28-2-1989 which has been recorded in this order. In the circumstances of the case we will make no order as to costs. H.B.T./M-815/K Order accordingly.