P L D 1967 Dacca 58 (PLP)

SATTAR, J.‑The petitioner, Azizuddin Industries Limited, has, in this application under Article 98 of the Constitution, called in question the right of the Government of. Pakistan to realise excise duty on cigarettes manufactured by the petitioner‑company at its factory in P. S. Lama in the Chittagong Hill Tracts for a period of four years from 18th July 1961. The facts relevant for the disposal of the rule may be shortly stated as follows. The petitioner‑company was granted permis sion to establish a cigarette manufacturing factory in Chittagong on or about the 5th January 1961. Respondent No. 4, namely, the Government of Pakistan through the Central Board of Revenue, Exercising its power under sub‑rule (1) of rule 8 of the Central Excise Rules, 1944, issued Notification No. S. R. O. 35(R) dated the 30th June, 1961 exempting for a period of four years, with effect from the 1st July 1961, all exisable goods produced or manufactured in the special and excluded areas men tioned in the Schedule to the said notification from the whole of excise duty leviable thereon. In this notification the district of Chittagong Hill Tracts excluding the area falling with the jurisdic tion of Chandragona Police. Station was included as an area, which would enjoy the above exemption. After this the Central Excise General Order No. 1 of 1961 was issued on the 1st July, 1961. In this order, it was provided inter alia that various provisions of the Central Excise Rules, 1944 were suspended in respect of all excisable goods produced or manufactured in the Special and excluded area, mentioned in the notification of the 30th" June 1961. The petitioner‑company, relying upon the notification by which exemption was given for four years to all excisable goods manufactured in the areas specified therein, applied for permission to shift the site of its factory from Chittagong to Chittagong Hill Tracts Permission was granted to shift the site of the factory to the Chittagong Hill Tracts on the 9th September, 1961 by a letter of the Commerce Labour and Industries Department of the Government of East Pakistan. The petitioner established its factory, at Harbang in P. S. Lama within the Chittagong Hill Tracts. The petitioner's case is that, relying upon the aforesaid notification and the assurance given in the said notification for granting exemption from payment of the whole of excisable duties on all excisable goods, it invested about forty lakhs of rupees in establishing its factory to the exempted area and bore the burden of additional backward character of the area. On or about the 31st May, 1962, the Tax Laws (Amendment) Ordinance being Ordinance 'No. XXXI of 1962 was passed whereby clause (xvii) of subsection (2" of section 37 of the Central Excise and Salt Act, 1944 which authorised the Central Government to make rules for exempting any goods from the whole or any part of the duty imposed by the Act, was deleted. The said Ordinance further inserted section 12A in the Act which provides as follows: "(1) The Central Government may from time to) time, by notification in the official Gazette exempt any goods or class of goods from the whole or any part of the duty leviable under this Act. (2) The Central Board of Revenue may, by special order in each case, exempt from the payment of the whole or any part of the duty leviable under this Act; under circumstances of an exceptional nature to be stated in such order, any goods on which such duty is leviable." It appears that the respondent No. 4purporting to act under the above section published Notification No. S. R. O. 363 (K)/63 dated the 17th May, 1963. This notification superseded the original notification dated the 30th June, 1961 but substantially reiterated the provisions regarding exemption in the said noti fication subject to certain provisions which are not relevant for our purpose. In this notification, instead of the expression "Special and Excluded Areas" the expression "Tribal Areas" was used. It may however be mentioned that the district of Chittagong Hill Tracts excluding the areas falling with the jurisdiction of Chandra gona Police Station was an area which was to enjoy the exemp tion granted by this notification. The petitioner's further case is that it continued to enjoy the complete benefit of said statutory exemption until the 28th February, 1964. On or about that date a letter was received by the petitioner from the respondent No. 3 forwarding a copy of the letter from the Central Board of Revenue to the respondent No. 1 to the following effect: "As the Constitution (First Amendment) Act, 1964 (sic) ha; removed Chittagong Hill Tracts from the category of "Tribal Areas" Ministry of Finance Notification No. SRO. 363 (K)/63 dated 15‑5‑1963 (sic) granting exemption in respect of "Excisable goods produced or manufactured in the tribal areas" has become infructuous so far as Chittagong Hill Tracts is concerned even though Chittagong Hill Tracts is expressly mentioned in that Notification. Accordingly, with effect from the date on which the Constitution (First Amendment) Act, 1964 (sic) came into force the 10th January, 1964 all excisable goods produced in Chittagong Hill Tracts are subject to Excise Duty and Excise Control in the normal way." The petitioner made representations against the claim made by the Central Government that, in view of the amendment of the Constitution, excise duty was payable on excisable goods manufactured in Chittagong Hill Tracts but with no effect. It is said that in spite of the representation the respondents continued to press for realisation of excise duty on cigarettes manufactured by the petitioner in its factory, and being compelled, the petitioner company had up to the 13th December 1964 paid a sum of Rs. 31,27,000 by way of excise duty under protest. On the 19th May 1964 the Central Government, by Notification No. S. R. O. (R)/64, further sought to amend the notification dated the 17th May, 1963 whereby a further proviso was added in the following terms: "Provided further that the exemption herein granted shall not apply to any excisable goods manufactured in the tribal areas which bear brand or trade names or trade marks under which similar goods manufactured in any area of Pakistan other than the said tribal areas are also marketed, if such goods are removed from tribal area to any other area in Pakistan." The petitioner's case is that the stand of the Government of Pakistan that because of the amendment of the Constitution by the Constitution (First Amendment) Act, 1963 the notification of exemption from payment Excise duty of excisable goods produced in the Chittagong Hill Tracts stood abrogated, has no basis and further that the petitioner had a vested right to enjoy exemption for four years from the 1st July 1961. In the affidavit‑in‑opposition filed on behalf of the respon dents, which has been affirmed by Mr. I. M. Chisty, Deputy Superintendent, Central Excise and Land Customs, it has been stated that the Chittagong Hill Tract District was removed from the category of tribal Areas by the Constitution (First Amend ment) Act, 1964 with effect from the 10th January, 1964. In view of this amendment, the Central Board of Revenue in its letter dated the 21st February, 1964, addressed to the Collector of Central Excise and Land Customs, East Zone, Chittagong intimated that exemption in respect of excisable goods produced or manufactured in tribal areas had become infructuous so far as the Chittagong Hill Tracts were concerned. The petitioner conse quently ceased to be entitled to the exemption granted by the earlier notification dated the 17th May, 1963. It has further been stated that the Government was entitled to withdraw the exemp tion and modify the notification under section 21 of the General Clauses Act. We find from the affidavit‑in‑opposition filed on behalf of the respondents that the stand taken mainly is the same as was taken in the letter written by the Central Board of Revenue to the Collector, namely, that, since the Chittagong Hill Tracts on and from the 10th January, 1964 in view of the amendment of the Constitution ceased to be a tribal area, the exemption, granted by the notification dated the 17th May 1963 could not be claimed by the petitioner‑company in respect of its products in that area. We have already noticed that exemption from payment of excise duty was originally granted by a notification dated the 30th June, 1961 issued under the rules framed under the Salt and Excise Act. This notification reads as follows "S. R. O. 35 (R).‑In exercise of the powers conferred by sub -rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government is pleased to exempt, for a period of four years, with effect from 1st July 1961, all excisable goods produced or manufactured in the Special and excluded areas mentioned in the Schedule below from the .whole of the excise duty leviable thereon. (1) Malakand, Mohamand, Khyber and Kuram, North Waziristan and South Waziristan Agencies. (2) Am b, Chitral, Dir and Swat. (3) The Special Areas under the Deputy Commissioners, Hazara, Peshawar, Kohat, Dera Ismail Khan and Bannu. (4) The district of Chittagong Hill Tracts excluding the area falling within the jurisdiction of Chandragona Police Station." The question that falls for determination is whether the notification dated the 17th May, 1963 under which the petitioner claims exemption from payment of excise duty and which it appears has not been yet expressly withdrawn or cancelled stands abrogated so far as Chittagong Hill Tracts are concerned because of the Constitutional Amendment by which this area was removed from the category of tribal areas. The Constitutional amendments made by the Constitution (First Amendment) Act were primary for introducing Fundamental Rights and for making them justiciable. The purpose for excluding Chittagong Hill Tracts from the category of tribal areas than to allow the residents of Chittagong Hill Tracts to enjoy the Fundamental Rights and claim enforcement in case they were under threat of being violated. We have already noticed that exemption notification of 1961 as well as of 1963 did not include the whole area of Chittagong Hill Tracts. The area included was "the district of! Chittagong Hill Tracts excluding the area falling within the jurisdiction of Chandragona Police‑station". In each of these notifications a schedule of the areas was given. What does this signify? Does it not indicate unmistakably that the raison d'etre of the exemption was that the areas in question were undeveloped and not that they came within the definition of some special areas in the Constitution? The Original exemption was given at a time when the present Constitution was not in force. In the notification the words used are "Special and excluded areas" which obviously‑ were borrower; from the Constitution of 1956 (Articles 103 and 104). In the notification dated the 17th May 1963 the words used instead are "Tribal Areas" Article 242 of the Constitution provides that in this Constitution unless the context otherwise requires the words mention ed in that Article will have the meaning mentioned in that Article. How then can it be claimed that, simply because Chittagong Hill Tracts ceased to be a tribal area within the meaning of the Constitution, the exemption from payment of excise duty granted on the authority of subsection (l) of section 12‑A of the Central Excise and Salt Act ceased to be operative in that area? We have found no ground to accept the contention on behalf of the respondents that the Constitutional amendment did automa tically affect the notification dated the 17th May 1963 or the earlier notification of 1961. The demand for payment of excise duty by the respondents has been justified on this ground alone, and as we have found that this is not a valid ground, it must be held that the petitioner was not, in view of the exemption granted by the notifications already referred to, liable to pay any excise duty on cigarettes manufactured in its factory in Chittagong Hill Tracts for the period beginning from 1st July 1961 until the 30th June 1965. . Mr. Brohi on behalf of the petitioner has argued that the conditions imposed by the notification dated the 19th May 1964 were without jurisdiction as section 12‑A does not authorise imposition of such conditions. It is not necessary for us to go into this question in this case as it will be presently seen that the conditions imposed cannot have any application in the case of the petitioner‑company. ' It has then been claimed that, as the petitioner‑company on the assurance given in the notification issued in 1961 made commitments and established its factory in Chittagong Hill Tracts, it had acquired a vested right to claim exemption for that period and the Central Government was not entitled to either withdraw or modify the said notification to the disadvantage of the peti tioner company. We feel that there is considerable force in the argument of the learned Advocate and we further find that this argument receives support from a decision of the West Pakistan High Court (Peshawar Bench) in Writ Petition No. 186 of 1964. We may in this connection point out that the contention of Mr. Brohi receives considerable support also from the decision of the Supreme Court in the case of Pakistan and the Chief Controller of Imports and Pakistan v. S. Hussain All Shah A. Fazlani (P L C 1960 S C 310) The pro visions of section 21 of the General Clauses Act do not alter the position in any way, while the power to add to, amend, vary or rescind a notification is available such power does not include the authority to take away a validly acquired right. The change of law made by Ordinance XXXI of 1962 does not affect the position of the petitioner as under this law also the exemption was to remain effective till the 30th June 1965. In the present case, the petitioner; in addition the prayer for a declaration that all acts performed by the respondents in conflict with the exemption notifications dated the 30th June 1961 and the 17th May 1963 it respect of excise duty on cigarettes manufactured by the petitioner‑company at its factory in Chitta gong Hill Tracts are without lawful authority and of no legal effect, has prayed for a direction for granting refund of the sum of Rs. 31,27,000 which, it is said, has been realised illegally as excise duty and paid under protest We have already noticed that the petitioner‑company has in this application clearly stated that up to the 30th December 1964 it paid Rs. 31,27,000 by way of excise duty and the payments were made under protest. We find that in the affidavit‑in‑opposition all that has been stated with regard to the above statement is that the said statement needs no comment. We therefore take it that the claim of the petitioner‑company that it had paid Rs. 31,27,000 under protest as excise duty is not denied. Rule 11 of the Central Excise Rules, 1944 provides for refund of any duty, which has been realised through inadvertence, error or misconstruction. There is a time limit for claiming refund and that is one year from the date of such payment. Two' questions arise with regard to this last prayer of the petitioner‑company, viz. whether in this proceeding a direction of the nature which has been prayed for can be given, and, if so, against whom. We find that there is a statutory provision for giving refund. The amount in question was realised by the respondents as they thought that because of the Constitutional amendment already referred to on and from the 10th January 1964 the petitioner‑company was not entitled to any exemption from payment of excise duty on cigarettes manufac tured in Chittagong Hill Tracts. It is this stand of the respondents which is under challenge before us. The question that arises is: Whether, in view of our finding that the stand has no basis, the petitioner would be asked to institute other proceedings for getting refund. There are authorities for the proposition that where refund can be claimed on the basis of a Statute, such refund can be directed in exercise of the Court's Writ jurisdiction. Reference in this connection may be made to the case of M/s. Burmah Construction Company v. The State of Orissa and others (A I R 1962 S C 1320) and to the case of the Queen v. The Commissioners for Special Purposes of the Income‑tax ((1888) 21 Q B D 313. (C A)) in the present case, we have already noticed that refund can be claimed under rule11 of the Rules, and as the petitioner‑company in its demand of Justice notice claimed the refund, we have found no reason to refuse the prayer for going the direction asked for in view of the facts of this case. Mr. Nurul Huda has cited the decision of Khan Bahadur A. G. Khan v. Shujauddin Qureshi (P L D 1961 S C 1). The fats of that case are distinguishable. There the claim for a writ for enforcing a claim for damages for actionable wrongs Mr. Nurul Huda has relied upon the decision of Commis sioner of Income‑tax v. Bombay Trust Corporation (A I R 1936 P C 269). The facts of this case in our view are clearly distinguishable from the facts of the present case. These cases therefore cannot be said to be against the contention of Mr. Kamal Hossain who ‑has argued this point on behalf of the petitioner and has relied on the decisions already referred to. The next question that arises is: Who can be directed to give the refund. In the course of arguments in this case which were advanced today, it has been claimed on behalf of the respondents that no such direction can be given by this Court to the Central Government or, for the matter of that, to the Central Board of Revenue. Without going into that question, we feel that as Mr. Kamal Hossain has submitted that his purpose would be served if such a direction is given upon respondent No. 1, the Collector of Central Excise and Land Customs, we feel that we should issue such a direction upon him without deciding the question of jurisdiction in regard to the respondent No.

4. In the result, this rule is made absolute. It is declared that all acts performed by the respondents which are in conflict with the exemption provided by notification No. S. R. O. 35 (R) dated the 30th June, 1961 and/or the notification No. S. R. O. 363 (K)/ 63 dated the 17th May, 1963 including in particular the demand ing, realising and collecting of excise duties on the cigarettes manufactured by the petitioner‑company at its factory in P. S. Lama in the Chittagong Hill Tracts from the 1st July 1961 to the 30th June, 1965 are. without lawful authority and of no legal effect. We direct the respondent No. 1 to refund to the petitioner the sum of Rs. 31,27,000 which it is said was paid by the petitioner‑company under protest. The petitioner will be entitled to the costs of this case which we assess at twenty Gold Mohurs. Mr. Nurul Huda prays for a certificate under clause (a) of paragraph 2 of Article 58 of the Constitution. 'We do not think that the questions decided by us have any bearing as to the interpretation of the Constitution. In this view of the matter, the prayer for leave is refused. SALAHUDDIN AHMED, J.‑I agree. K. B. A. Rule made absolute.