2001 PLP 1969 (MLD)

I am directed to enclose an order of Federal Government relating to revised composition of Committee for fixed excise duty/sales tax under the Shoorai taxation scheme and request you to intimate the Board about the names of two nominees who will sit as the representatives of your industry in the Committee. Letter dated 15‑6‑1992: Please refer to your letter dated 15‑6‑1992 and find enclosed the list =of units and their fixed capacity as desired. Letter dated 8‑6‑1993; According to the spirit of the said letter, the fixed duty will not be remained operative after 10th June, 1993 in respect of the items manufactured by you. As such you are now required to pay CE duty/S. Tax on the basis of monthly fixed revenue for the first 10 days of June, 1993 and after 10th June, 1993 the CE duty/S. Tax should be deposited on the basis of actual clearance/supply: You are therefore, directed to maintain CE duty/S. Tax records as prescribed under Chapter XV of CE Rules, 1044 and S. Tax Act 1990. The manufacturers who have already deposited advance CE duty/S. Tax and shall switch over to actual clearance, are however, allowed to adjust the said advance deposit of CE. duty/S. Tax against their actual clearance basis which will be only indicated in monthly S. Tax return/ACL Register. Any sort of guidance/assistance in this process of switching over will be providing by this department as and whenever requested ..... The operative part of Letter dated 2 9 1993.‑‑‑In the end we hope that sympathetic consideration will be given to remove the clouds of uncertainty for the continuity of the scheme. We earnestly once again request that either the required S.R.O. be issued or the date of continuity of the scheme may further be extended up to 30th September, 1993 immediately, Letter dated 5‑9‑1993: I am directed to refer to the subject noted above and say that the existing interim arrangement of duty collection on the basis of provisionally assessed capacities of units has been further extended up to 30‑11‑1993. I am further directed to inform you that last proposals submitted by sub‑committee are not acceptable to the Board, you are therefore, requested to prepare alternate viable proposals and send the same to Collector, Central Excise and Sales Tax, Lahore in order to enable him to send a final/consolidated proposal which should reach the Board before 20th September, 1993 positively. Letter dated 26‑10‑1993: I am directed to refer to Board's letter No.5(17)‑PC/91 dated the 19th September, 1993, and to inform that all instructions and orders about collection of central excise duty on paper and paperboard industry on capacity basis are hereby withdrawn w.e.f. 1‑11‑1993 and central excise duty from this industry shall be collected under supervised clearance w.e.f 1‑I1‑1993. You are accordingly requested to inform all paper and paperboard unit/Association about this change immediately. (2) You are also requested to arrange stock taking of the said units forthwith and post officers of integrity and competence to all paper and paperboard, units w.e.f. 1‑11‑1993 for supervised clearance. Kindly ensure that Government get its due revenue from this Industry. Compliance report may be sent to the Board after above action is taken. In exercise of the powers conferred by section 37 o the Central Excises and Salt Act, 1944 (1 of 1944) the Central, Board of Revenue is pleased to direct that the following further amendment shall be made in Central Excise Rules, 1944, namely:‑‑ In the aforesaid Rules, in rule 23.5, in sub‑rule (1) the entries against the S.R No.47, shall be omitted. This Notification will take effect on 1st November, 1993. With reference to our meeting with your goodself on 31st October, 1993 at Islamabad. I am very much thankful to you for extending Capacity Tax System up to 31st November, 1993. As regards our commitment to your goodself for completion of the remaining exercise we are fastly mobilising our teams in different regions to collect the data for onward transmission to you before 14th November, 1993. In this connection I have requested the Collector, Central Excise and Land Customs, Lahore to issue necessary directive to all the Collectorate to extend full cooperation to our respective teams and also provide them necessary information as and when required by them. In this context very humbly I would like to request your goodself to kindly issue similar directive from your good yield early result for fruitful discussions which are to be held on 14th November, 1993 at 10‑00 a.m. when we will meet you in your office. As regards modalities of the S.R.O. to be prepared by our Association, it is nearly to complete expeditiously and will be sent to you in advance by 8th November, 1993‑" AMEN Letter dated 6‑11‑1993: Please refer to Board's Circular dated 31st October, 1993 whereby you were asked not to give effect to Board's orders issued vide Board's letter of even number dated 20th October, 1993, for collection of central excise duty on paper and paperboard under supervised system of clearance w.e.f 1st November, 1993. You are requested to continue the collection of central excise duty from paper and paperboard units till 30th November, 1993 under the existing averagement. You are also requested to send your final proposals/report on the issues/matters indicated in Board's letter No.5(17) P/C/91 dated , 19th September, 1993. Paper and Paperboard Association of Manufacturer may be informed that if the revised scheme which is to be prepared by 10th November, does not reflect the true capacities of the factories then Government will be constrained to collect central excise duty on actual production under supervised clearance scheme w. e. f. 1st December, 1993 Letter dated Please find enclosed a copy of letter dated 4th November, 1993 from Chairman, Pakistan Pulp Paper and Paper and Board Makers Association, Karachi with the request to extend full cooperation to M/s. Pakistan Pulp Paper and Board Makers Association, Karachi for completion of the exercise about capacity assessment of various units of paper and paperboard in your jurisdiction. Letter dated 14‑11‑1993: Sir evasion of Central Excise Duty was a loss to Government exchequer and simultaneously to the paper and paperboard industries which were converted into sick industry. If steps that you took in February, 1993 for capacity taxation were not taken then today we would have experienced closure of major number of industries. We would like to recall that the Central Board of Revenue vide its order, dated 26‑11‑1993 was pleased to order the collection of Central Excise Duty on Paper and Paperboard under supervisory system of clearance with effect from 1st November, 1993. However, on our representation made on 31st October, 1993 to your goodself at Islamabad you were kind enough to withdraw the order of supervisory clearance system till further orders and later on vide your letter No.C. No.l (22) C.B.R./93 dated 6‑11‑1993 you we're pleased to issue order for continuity of Fixed Capacity System up to 30‑11‑1993. In the meantime this Association was directed to produce the production figures for the years 1990‑91, 1991‑1992 and 1992‑93 and also to make its final representation on 14th November, 1993 in person before you at Islamabad. Sir in compliance of your aforesaid directive the delegation of this Association met you in your office at Islamabad on 14th November, 1993 and provided to you' the desired information. Sir, we were expecting very early response in this regard from your goodself. But we have not received any communication from your end so far, November, 30th is heading and this Association is totally unaware of future policy of C.B.R. in respect of Fixed Capacity Tax System and its continuity quarries in this respect are being made off and on by our members and we are unable to give them any satisfactory reply. In view of above facts your goodself is very earnestl3 requested to kindly let us know the future policy on the subject to be adopted. Letter dated 28‑11‑1993: It is regretted that no response to our aforesaid communications was made by your goodself (a) my several attempts to contact you on telephone. At last succeeded today 28th November, 1993 at 11‑30 a.m. And I was really shocked and surprised on your flat refusal for the continuity of capacity tax system from 1st December, 1993 in spite of your assurance to Lahore High Court through your advocate in writ petition withdrawn by our Association with the hope that the rules will be framed by your department as agreed upon with the approval of the Federal Committee. Sir the decision conveyed by you today is neither in good interest of Industry nor C.B.R. This Association has started hard to build confidence between tax‑payer and tax collector. This confidence is shattered we afraid what it will possible to be restored. In the National interest we once again appeal you to kindly extend the date of capacity tax system and be pleased to invite this Association for dialogue immediately. Regards. In case the aforesaid letters are put in juxtaposition then it is crystal clear that the appellants did not make any representation to the respondents. The word 'representation' was interpreted by the Dacca High Court in PLD 1957 Dacca 184 (Akhtarunnessa's case) and defined the word 'representation' as follows:‑‑ "In order to find an estoppel, the representation i.e. a party's declaration, act or omission, must be clear, definite, unambiguous, unequivocal. The person making the representation should so conduct himself that reasonable man would take the representation to be true and believe that it was meant that he should act upon it." The letter, dated 6‑11‑1993 is sufficient notice to the respondents as is evident from the following operative part of the letter dated 6‑11‑1993:‑‑ "Paper and Paperboard Association of manufacturer may be informed that if the revised scheme which is to be prepared by 10th November, does not reflect the true capacities of the factories then Government will be constrained to collect central excise duty on actual production under supervised clearance scheme w.e.f. 1st December, 1993. " The subsequent letters also did not reveal that any commitment was made by the appellants with the respondents. The Hon'ble Supreme Court has laid down certain limitations for the purpose to apply the doctrine of promissory estoppel in PLD 1991 SC 546 (Salah‑ud‑Din's case) which are reproduced hereunder:‑‑ "(i) The doctrine of promissory estoppel cannot be invoked against the Legislature or the laws framed by it because the Legislature cannot make a representation. (ii) Promissory estoppel cannot a invoked for directing the doing of the thing which was against law when the representation was made or the promise held out. (iii) No agency or authority can be held bound by a promise or representation not lawfully extended op given. (iv) The doctrine of promissory estoppel will not apply where no steps have been taken consequent to the representation or inducement so as to irrevocably commit the property or the reputation of the party invoking it; and (v) The party which has indulged in fraud or collusion for obtaining some benefits under the representation cannot be rewarded by the enforcement of the promise. Learned counsel for the respondents failed to bring the case of the respondents within the parameters prescribed by the Hon'ble Supreme Court in Salah‑ud‑Din's case (supra). The appellants had authority to levy and collection of duty under section 3(4) under the Central Excises Act 1944. The same is reproduced hereunder:‑‑ (4) With the prior approval of the Federal Government the Central Board of Revenue main lieu of levying and collecting under subsection (1) duties of excisable goods, by Notification in the official Gazette, levy and collect duties on the production capacity of plants, machinery undertakings, establishment or installations producing or manufacturing such goods: and such notifications 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 manner of collection of such duty Similarly the appellants have authority to "ales tax under section 3(4) of Sales Tax Act 1990 which is reproduced hereunder:‑‑ The Federal Government may, in addition to or in lieu of levying and collecting the tax under subsection (1) levy and collect such fixed amount of tax on any goods or class of Roods to be nab by any registered person of class of registered persons, supplying such goods or class of goods, in such mode manner and at time .... and subject to such conditions and limitation as it may specify by a Notification in the official Gazette The aforesaid provisions of law prescribed conditioned precedent to levy, the aforesaid tax by issuing a Notification in the official Gazette. In the present case no notification was issued by the competent authority under the provisions of the aforesaid laws. Therefore, certain correspondence between the appellants and respondents did not bring the case of the respondents under the doctrine of promissory estoppel. The promissory estoppel cannot be invoked for directing the doing of the thing which was against law when the representation was made or the promise held out, as per principle laid down by the Hon'ble Supreme Court in Salah‑ud‑Din's case supra. The contentions of the appellants' counsel has no force that the respondents were entitled relief till 31st May, 1994 keeping in view financial year. The question of financial year in the present case does not arise in view of the letter dated 6‑11‑1993 in which the date was fixed 1‑12‑1993. It is settled p principle of law that our Constitution is based on trichotomy as per law laid down in Zia‑ur‑Rehman's case (PLD 1973 SC 49) and (PLD 1973 SC 473) Mian Nawaz Sharif's case. The Court has only jurisdiction to interpret the law and has no jurisdiction whatsoever to take the role of Legislature or the policy maker. In arriving to this conclusion we are fortified by the following judgments of the Hon'ble Supreme Court:‑‑ PLD 1975 SC 667 (Government of Pakistan through Secretary v. Zameer Ahmad Khan). 1978 SCMR 327 (Zameer Ahmad Khan v. Government of Pakistan). It is settled principle of law that if an exemption from payment of excise duty or any other tax has been granted for a specific period on certain conditions and if a person fulfils those conditions, he acquires a vested right. He cannot be denied the exemption before the expiry of the specific period through an executive instrument like notification as per principle laid down by the Hon'ble Supreme Court in M/s. Army Welfare Sugar Mills' case (1992 SCMR 1652). Keeping in view the contents of the writ petition and the correspondence between the appellants and the respondents. The vested right did not accrue to the respondents. It is pertinent to mention here that the learned Single Judge granted the status quo order vide order, dated 30‑11‑1993 in the following terms:‑‑ "Meanwhile status quo shall be maintained subject to the petitioner/manufacturer maintaining the account of actual production of the items produced by them under Notification to the Collector, Excise and Sales Tax Department in respective Zones, this is subject to notice for a very early date. " It is settled principle of law that nobody should be penalized by the act of the Court. In arriving to this conclusion we are fortified by the law laid down by the Division Bench of this Court in Mian Irshad Ali's case (PLD 1975 Now we intend to decide the preliminary objection raised by the learned counsel for the respondents. It is better and appropriate to reproduce the prayer of the Constitutional petition and relevant provisions of law to resolve the controversy between the parties:‑‑ "that the action of the respondent withdrawing the production capacity procedure approved by the Committee of the Federal Government is illegal, void and without lawful authority and writ be issued accordingly declaring the same as void and illegal and further prayed that the respondent No.2 be directed not to enforce the "Supervised Clearance Procedure" on the petitioner as intimated to be made effective from 1‑12‑1993 on the petitioner. The relevant provisions of Central Excises Act, 1944 are reproduced hereunder:

"Section 3(5).‑‑The production capacity of any plant or machinery or part thereof specified in a Notification under subsection (4) shall, upon an application made to the (Federal Government) within thirty days of the Notification by any aggrieved person, be reviewed by (Standing Tribunal) constituted under subsection (6) to which the application shall be referred; and the decision of the (Standing Tribunal) (confirming, reducing or increasing the production capacity shall be final). (Provided that, in the case of any plant or machinery used for the manufacture of cotton fabrics or cotton yarn, the production capacity of which was determined before the 30th June, 1970. Any aggrieved persons may, within such time as the (Federal Government) may, by Notification in the official. Gazette, specify in this behalf, make an application in writing to the (Federal Government) for re‑examination of the production capacity, and such application shall be referred by the (Federal Government) to a (Standing Tribunal constituted under subsection (6); and the decision of the Standing Tribunal on such reference shall be, final). Appeals.‑‑‑(1) Any person,. including the ~Sales Tax Department aggrieved by any decision or order made under this Act by an officer of Sales Tax below in rank than a Collector may, within thirty days of the date of communication of such decision or order, appeal to the Collector of Sales Tax (Appeals): Provided that an appeal preferred after the expiry of thirty days may be admitted by the Collector of Sales Tax (Appeals) if he is satisfied that the appellant has sufficient cause for not preferring the appeals within the specified period. " Recovery of arrears of tax.‑‑‑(1) Where any amount of tax levied, penalty imposed or demand raised under any bond or other instrument executed under this Act is due from any person, the Officer of Sales Tax may ...... In case the aforesaid provisions and prayer are put in juxtaposition then the impugned order in Constitutional petition of the appellants by respondents is not appealable before any higher authority of the appellants under the provisions of aforesaid laws. In this view of the matter this I.C.A. is maintainable and the bar under proviso of section 3(2) of Law Reforms Act, 1972 is not attracted. In view of what has been discussed above, this I.C.A. is accepted and the impugned order is set aside with the rider, the appellants are not entitled to demand additional dues and penalties from the respondents. Disposed of with the aforesaid observations. Q.M.H./M.A.K./C‑111/L Appeal allowed