P L D 1965 (W (PLP)

MUHAMMAD DAUD KHAN, J.‑The petitioners of these three Writ Petitions Nos. 248, 251 and 254 of 1964, were licensed duty paid dealers under the Central Excises and Salt Act I of 1944 (hereinafter will be referred as the Act of 1944), read with the Central Excise Rules of the same year. They were aggrieved with the notices (Annexure A) issued by the Inspector, Central Excise, Peshawar (R), (respondent No. 3), under the directions of the Circle Officer, Central Excise, Peshawar (respondent No. 2) demanding the payment of excise duty on the tobacco stalks at the rate of, 60 paisas per pound in possession of the petitioners on the 13th of June 1964, after the Finance Bill of 1964 was introduced in the Central Assembly of Pakistan, wherein the proposal of the levy of this duty was made, and under the same Bill, it was made "declared provision" for giving effect to this duty from the date when the Finance Bill was presented under the authority of the Provisional Collection of Taxes Act of 1931 (hereinafter will be referred as the Act of 1931).

2. Since all the three writ petitions are of the identical nature and kind, therefore, they we re heard together, and will be disposed of by this judgment:

3. Before the facts alleged in the writ petitions, and stated in the written statements of the respondents are given, it is necessary to give the history of the Legislation on the subject. In pre‑partitioned India, an, Act, known by the name of Provisional Collection of Taxes Act, 1931 (Act No. XVI of 1931) was enacted. The preamble of this Act. ran in the following: "An Act to amend the law providing for the immediate effect for a limited period of provisions in Bills, relating to the imposition or increase of duties of customs or excise." In section 2 of this Act "declared provision" is defined to mean a provision in a Bill in respect of which a declaration has been made under section

3. Section 3 of the Act provides :‑ "Where a Bill to be introduced in the Central Legislature on behalf‑ of Government provides, for the imposition or increase of a duty 6f customs or excise, the Central Govern ment may cause to be inserted in the Bill a declaration that it is expedient in the public interest that any provision of the Bill relating to such imposition or increase shall have immediate effect under this Act." Section 4 of the same Act provides :‑ "(1) A declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced. (2) A declared provision shall cease to have the force of law under the provisions of this Act :‑ (a) When it comes into, operation as an enactment, with or without amendment, or (b) when the Central Government, in pursuance of a motion passed by the Central Legislature directs by notification in the official‑Gazette that it shall cease to have the force of law, or (c) if it has not already ceased to have the force of law under clause (a) or clause (b), then on the expiry of the sixtieth day after the day on which the Bill containing it was introduced." Section 5 of the Act provides for the refund to be made when declaration ceases to have effect.

4. Under the provisions of Act of 1931, referred to above, a provision of the Finance Bill had all along been declared under section 3 in pre‑partitioned India, and in pursuance of that, the taxes were levied and collected during the interim period, namely, from the date of the introduction of the Bill and the date of its having been enforced after becoming an Act.

5. The Indian Legislature passed the Central Excises and Salt Act, 1944 (Act No. 1 of 1944). Relevant part of section 3 of this Act runs under the caption of "Levy and Collection of Duty," thus "(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable, goods other than salt which are produced or manufactured in the Provinces and the Capital of the Federation, and a duty on salt manufactured in, or imported by land into, any part of the Provinces and the Capital of the Federation as and at the rates, set forth in the First Schedule. (2)* * * * * * * * * * * * (3) * * * * * * * * * * * *"

6. In Schedule I of the Act, under Item No. 9, "tobacco" was one of the excisable items. In item No. 9, tobacco had been defined in the following words :‑ "Tobacco" means any form of tobacco whether cured or incurred, and whether manufactured or not, and includes the leaf, stalk and stems of the tobacco plant but does not include any part of a tobacco plant which is still attached to the earth."

7. The item contained different categories of `tobacco', but for the present, we are only concerned with the kind of "un-manufactured tobacco." This includes tobacco used in the manufacture of cigarettes and also used for other purposes. "It may be mentioned here that, the tobacco stalks are admittedly tobacco as laid down in Part 1(ii) in item No. 9' of the First Schedule, namely, "tobacco used for other purposes". Initially, on this category of tobacco, duty at the rate of 6 paisas per pound was made leviable in the Act itself. This rate of duty continued to be levied up to the Finance Act of 1963‑64, when it was raised to 50 paisas per pound. Under section 12‑A of the Act, the Central Government was authorized by Notification in the official Gazette to exempt any goods or class of goods from the whole or any part of the duty leviable under this Act. Under section 38 of the Act, such notification shall thereupon have effect, as if enacted in this Act. The Central Government, by Notification No. S. R. O. 11 (R), dated the 8th June 1963 (given on page 260 of the Central Excise Manual, (corrected up to the 30th of June 1963), under subsection (1) of section 12‑A of the Central Excise and Salt‑ Act, 1944 (No. 1 of 1944), exempted with effect from the 9th of June 1963, un-manufactured tobacco used for agricultural purposes and tobacco stalks from the whole of the excise duty leviable thereon.

8. It will be seen, therefore, that from the date of the promulgation of the Constitution, the rate of excise duty on tobacco was one anna per pound. By Notification No. S. R. O. 40 (R)/64, passed in exercise of the powers conferred by sub section (1) of section 12‑A of the Central Excises and Salt Act, 1944, the Central Government had withdrawn the Notification No. S. R. O. 11 (R), dated the 8th of June 1963, on the 12th of June 1964, with ‑respect to the tobacco stalks. By Notification No. S. R. O. 40 (R)/64, of the said Act, the Central Government had withdrawn the exemption by amending the previously enacted Notification whereby the words "tobacco stalks" were deleted.

9. It is, therefore, obvious that this exemption of the duty on tobacco stalks was withdrawn on the day when the Finance Bill of 1964 was presented in the Pakistan National Assembly. In this Bill the duty on tobacco stalks was proposed to be raised to 60 paisas on a pound. This provision of the Finance Bill was made a `declared provision', enabling, therefore, the Government to recover duty at this rate with effect from the 13th of June 1964, up to the 30th of June 1964, when the Finance Act, if passed, would be enforced as a Finance Act.

10. On the introduction of the Finance Bill of 1964, respondent No. 3, under the direction of respondent No. 2, had issued the impugned notices to the three persons, who are the petitioners of these writ petitions. The petitioners assailed the issue of these notices for the recovery of tax on the stalks in their possession at the rate of 60 paisas per pound before the Finance Bill had become law and‑ was ‑ enforced with effect from 1‑7‑1964, on the following grounds "(a) That, 60 paisas is the duty proposed to be levied on tobacco stalks in the Budget year beginning 1‑7‑1964. The stalks in possession of the petitioner until the 30th of June are exempt under the Law from the levy of any such duty. The proposal to levy of duty is subject .to approval of the National Assembly, and unless such approval is given by the National Assembly authorizing the levy the proposal does not take legal effect. (b) That the stalks already in possession of the petitioner cannot be taxed for the further reason that under a T. P. 1 Form issued under Rules 25, 32 and 217 of the Rules they are shown exempt though the Form is issued in respect of duty paid goods. (c) That, in case of tobacco leaf itself the excise duty of 37 paisas was levied for the year 1962‑63, and for the year 1963‑64, it was raised to 75 paisas yet the difference was not claimed by the respondents from the dealers of 1962‑63. (d) The demand for excise duty being clearly illegal, has resulted in complete stoppage of the petitioner's business. The petitioner has already filed an appeal to respondent No. 1 and his Association has sent telegrams to respondents Nos. 1 and

4. The other remedy provided under the Act is not an adequate remedy. To avoid irreparable loss, the petitioner has been forced to file this writ."

11. The petitioners, therefore, prayed that ‑ "(a) it be declared that the orders dated 13‑6‑1964 passed by respondent No. 3 under the authority of ‑respondent No. 2, demanding the sum of Rs. (different amounts in different writ petitions) as excise duty from the petitioner in respect of stalks of tobacco in his possession are a nullity at law having been issued without any lawful authority and are of no legal effect. (b) The respondents be directed not to recover the Excise Duty illegally levied and the stalks in possession of the petitioner be allowed to continue as exempt from duty. (c) Such other orders and directions be given as are necessary in the ends of justice."

12. Before the reply by the respondents in their written statements is reproduced in this judgment, it is necessary to point out that Mr. Abdul Qayyum Khan, counsel for the petitioner in his oral address, sought two 'reliefs, and if the first of them were not available, then he sought the second in the altern ative. First Relief. The duty on the tobacco stalks could not be levied with effect from the 12th of June 1964 up to 30th of June 1964, or in the alternative, if by virtue of Finance Act of 1963, the duty was raised from 6 paisas to 60 paisas and the Central Government was found to be competent to withdraw the exemption made by it under section 12-A of Act I of 1944 then the demand notices with respect to 60 paisas instead of 50 paisas, was illegal before the Finance Act had become law and enforced with effect from the new financial year, viz., on the 1st of July 1964.

13. Mr. Ghias Muhammad, Attorney‑General for Pakistan who represented the respondents, filed a written statement or their behalf, stating inter alia that tobacco stalks is an excisable commodity mentioned in Schedule I of the Central Excises and Salt Act, 1944, and is subject to duty vide Item 9 of the said Schedule, and that according to the provisions of section 12‑A of the said Act, the Central Government is empowered to exempt from time to time, goods from duty leviable under the Act. I was conceded in the written statement that in exercise of the said powers, the Central Government, by Notification No. S. R. O. 11 (R), dated 8‑6‑1963, exempted tobacco stalks from duty. It was at the same time urged, that, by Notification No. S. R. O. 40 (R)/ 74, dated 12‑6‑1964, the Central Government withdrew the exemption from duty of tobacco stalks, with the result that the same became leviable to duty. His contention was that the objection against the levy is thus wholly unfounded.

14. It was further stated in the written statement that although by notification dated the 8th of June 1963, tobacco stalks were exempted from the duty, nevertheless no relaxation was made in procedural Rules relating to Transport permits and maintenance of accounts regarding exempted tobacco stalks, in order to prevent abuse of exemption, vide General Order No. 10/63, issued on the 29th of June 1963. This, according to the written statement explains paras. 7 and 8 of the writ petition.

15. It was further stated in the written statement that according to item 9 of Schedule I to the Central Excises and Salt Act, 1944, as amended in 1963, the rate of levy in respect of tobacco stalks is 50 paisas per pound. In the Finance Bill of 1964, which was introduced in the National Assembly, on the 12th of June 1964, Item 9 of the said Schedule was amended so as to substitute "60 paisas per pound" for "50 paisas per pound", as duty leviable on tobacco stalks, and the said provision in regard to the enhancement of levy was made a `declared provision' under the Provisional Collection of Taxes Act, 1931, with the result that the enhanced levy became immediately recoverable from the date of the introduction of the Bill, vide sections 3 and 4 of 1931 Act.

16. The learned Attorney‑General, therefore; submitted that the levy of duty at an enhanced rate was fully warranted by law, and the challenge to the validity of the same as contained in the writ petition is misconceived. He added that nothing contained in Art. 48 of the Constitution detracts from the validity of the provisions contained in the Provisional Collection of Taxes Act, 1931, that the latter Act is a valid legislative measure continuing in force even after the commencement of the Constitution of 1.962, and as such, the demand made by the impugned notice is perfectly valid in law, and the objection against its constitu tionality is ill‑founded. It was further contended in the written statement that in any case, the objection as based upon the alleged invalidity of the Act of 1931, if at all tenable, (which position is however emphatically repudiated) can be applicable only to the enhancement of levy from 50 paisas to 60 paisas. The provisions of the said Act have no relevancy to the demand of duty which became due consequent upon withdrawal of exemption by Notifications issued under section 12‑A of Central Excises and Salt Act. In the end, it was further contended that as the. remedy by way of appeal is provided in section 35 of the Act, and the Petitioner has already availed of it by filing an appeal which is pending, the present petition is not competent and is not maintainable under Article 98 of the Constitution.

17. Khan Abdul Qayyum Khan argued in the beginning that the Notification made under section 12‑A of the Central Excises and Salt Act, 1944, by the Government could not be withdrawn by the Government under any provision of the Act, as under section 38 of the Act, it had been specifically provided that the Notification shall thereupon have effect as if enacted in this Act. He, therefore, urged that the Central Government having no power to withdraw the exemption of duty on the tobacco stalks it could only be made leviable by the Act of the Central Legislature, as the Central Legislature of Pakistan was only competent under Article 48 of the Constitution to impose a fresh duty or tax. The learned Attorney‑General met this argument by referring to the provisions of section 21 of the General Clauses Act, which reads as follows :‑ "Where, by any Central Act or Regulation, a power to issue notifications, orders, rules, bye‑laws is conferred, then that power includes a power, exercisable in the like manner, and subject to the like sanction and conditions (if any) to add to; amend, vary or rescind any notifications, orders, rules or bye‑laws so issued."

18. The learned Attorney‑General, therefore, contended that the Central Government was competent to withdraw the exemption made by it under section 12‑A of the Act of 1944, and no fresh legislation was necessary unless it had been specifically provided in the same Act. In support of this contention, he relied on section 21 of the General Clauses Act. He cited a case A. Subramania Iyer v. Trawancore Cochin State and another (A I R 1957 Trav. 314), in support of his view. This decision was given while interpret ing section 20 of the T. C. General Clauses Act, which is equivalent to section 21 of the Pakistan General Clauses Act. The relevant portion of the decision runs thus :‑ "The Notification No. S. R. I.‑4789/51 A. R. D., dated 18‑7‑1951, published by the State Government under section 6 (1), T. C. General Sales Tax Act, cancelling the exemption granted under the previous notification No. SRI 1643/A/51 RD, dated 5‑2‑1951, has not the effect of the imposition of any new tax. It merely removed the ban that had been placed on the levy of the tax which the statute had already imposed under section 3 (1). In view of section 20, T. C. General Clauses Act, the power of removing such a ban is co‑extensive with the power granted by section 6 (1) to impose the ban. Hence the notification of 18‑7‑1951 is not ultra vires of the powers of Government under section 6 (1), T. C. General Sales Tax Act."

19. The learned Attorney‑General also relied on, the Book entitled "Craise on Statute Law, 6th Edition, page 296, given under the caption, of `power of revocation.' The relevant portion, on which he relies, is as under :‑ "I should certainly have been prepared to hold apart from authority that where a statute enables an authority to make regulations, a regulation made under the Act becomes for the purpose of obedience or disobedience, a provision of the Act. The regulation is only the machinery by which Parliament has determined whether certain things shall or shall not be done." At another place on the same page, it had been laid down as follows :‑‑ "But where an Act (public, local and personal or private) passed after 1889 confers a power to make any rules, regulations, or byeAaws, the power is to be construed, unless the contrary intention appears, as including a power, exercis able in the like manner, and subject to the like consent and conditions, if any, rescind, revoke, amend, or vary the rules, regulations, or bye‑laws."

20. In supp6rt of this proposition that the power to rescind a Notification flows naturally, and as a necessary sequence from the power to issue a notification,. the learned Attorney‑General relied on a case reported as Kutoor Vengavil Revarappan Navanar v. Kutoor Vengavil valia Madhavi Anima and others (A I R 1950 F C 140) wherein it has been laid down :‑ "Section 16 has codified the well‑understood rule of general law that the power to terminate flows naturally and as "a necessary sequence from the power to create. In outer words, it is a necessary adjunct of the power of appointment and is exercised as an incident to, or consequence of, the power, the authority to call an officer into being necessarily implies the . authority to terminate his functions, when their exercise is no longer necessary, or to remove the incumbent for an abuse of those functions or for other causes shown." It is, therefore, clear that under section 12‑A of the Act of 1944, which empowered the Central Government to exempt from duty a commodity leviable under the Act, the power to withdraw the exemption, flows from the same provision.

21. We feel inclined to accept the interpretation placed by the learned Attorney‑General on this point. No doubt in section 38 of the Act of 1944, it has been mentioned that the notification will have the effect as if enacted in that Act, but this A does not take away the powers of revocation or the withdrawal of the exemption provided in section 21 of the General Clauses Act. We, therefore, hold that Notification No. S. R. O. 40 (R), dated the 12th of June 1964, made by the Central Government, whereby it had withdrawn the exemption from the tobacco stalks was intra vires, and this notification had not the effect of fresh imposition or levy or duty, within the meaning of Article 48 of the Constitution.

22. With the withdrawal of the exemption by the notification referred to above, the tobacco stalks became leviable to duty at. the rate of 50 paisas per pound, as was passed in the Finance Act of 1963. The respondents, therefore; were competent to demand 'the duty at the rate of 50 paisas per pound on the tobacco stalks from the date of the withdrawal of the exemption, viz., 12th June 1964, up to 30th June 1964, even if the Finance Bill .of 1964 had not been introduced in the Assembly or had not become 'an act under the law.

23. This leads us to the resolution of the second contention of the learned counsel for the petitioner. The second contention was that the Provisional Collection of Taxes Act, 1931 (Act XVI of 1931) was ultra vires of Article 48 of the Constitution, as this Act was not passed by the Central Legislature of Pakistan, and therefore, under sections 3 and 4 of this Act, no duty is recover able from the date of the presentation of the Finance Bill until the Finance Bill has been passed into Act, and that too from the new Financial year, viz., the 1st of July 1964. No doubt this Act was not passed by the Central Legislature of Pakistan, and it was an Act passed in the pre‑Partition period. The learned Attorney-General relied on Article 225 of the Constitution, and urged that the Provisional Collection of . Taxes Act, 1931 falls within the category of `existing law' provided in this Article, and subject to this Constitution, as provided therein to remain in force so far as applicable with the necessary adaptation until altered, repealed, or amended by an Act of the appropriate Legislature. He urged that the words "subject to this Constitu tion" used in Art. 225 (1) of the Constitution means that had it' been provided in this Constitution that no law, which provides the provisional recovery of a tax from the date when the Finance Bill is presented in the Central Legislature till it is passed, then the Act of 1931 would have been ultra vices of the Constitution. He contended that the Act of 1931 is a departure from the normal norm, and in the absence of any provision to the contrary, in the Constitution, disallowing such departure, it is valid, as it is not repugnant to the Constitution, and therefore, is still a law of the country. He, therefore, contended that under sections 3 and 4 of the Provisional Collection of Taxes Act, 1931, the duty levied on the tobacco stalks could be made as `declared provision', and it could become recoverable on the day following the Finance Bill of 1964 was introduced in the Central Legislature. In support of his contention, be relied on S. Gopalan v. State of Madras (A I R 1958 Mad. 539), wherein it has been held as follows :‑ "The levy, assessment and collection of land revenue are not rendered illegal by reason of Art. 265 as such levy; assessment and collection were valid prior to the Constitution and they are continued by the force of Art. 372."

24. The words "subject to Constitution" used in Article 225 of the Constitution of Pakistan, which is equivalent to Article 372 of the Indian Constitution, has been explained in the Madras case referred to above. By parity of reasoning, in the absence of a provision in the Constitution that the collection of tax from the date when the Finance Bill was introduced in the National Assembly, is illegal, under the present Constitution, the law, which previously existed in regard to it, will continue to be valid even after the Constitution.

25. In further 'support of this contention, the learned Attorney‑General relied on Art. 237 of the Constitution, which provides that :‑ "Notwithstanding anything in this Constitution all taxes and fees levied under any law in force immediately before the commencing day shall continue to be levied until they are varied or abolished by an Act of the appropriate Legislature."

26. This Article is a complete answer to both the objections raised by the learned counsel for the petitioner. Accordingly, notwithstanding Article 48 of the Constitution, the duty on tobacco stalks at the rate of 6 paisas per pound was levied and was enforced immediately before the commencing day, and this duty was authorised to be continued to be levied until it was varied or abolished by an Act of the appropriate Legislature. In the instant case, this duty was raised to 50 paisas per pound in the Finance Act of 1963, which was passed by the Central Legislature of Pakistan.

27. Counsel tried to interpret the word "levied" by reference to Chamber's Dictionary as meaning "to raise and collect by authority as a tax", and not merely "imposed". His argument is that the word "levied" contained in Article 237, when it means `Imposed and collected", then this Article would not be attracted to the present case, as in the Finance Bill of 1963, the rate of duty was enhanced to 50 paisas, but no recovery was made at that rate at all by virtue of the exemption notified by the Central Government under section 12‑A of Act, 1944, and therefore, this duty would be interpreted as having not been levied in the meaning of Article

237. The learned Attorney‑General did not agree with this interpretation of the word "levied" used in the said Article. His interpretation with reference to Webster's Dictionary is that the word "levied" means as "imposed by authority". He contended that there are three stages of the enforcement of a fiscal statute. According to him, the first stage is the fixation of rate of a duty or tax which is called imposit on, the second stage is assessment, and third stage is collection. He, therefore, contended that the word "Levied" used in Articles 48 and 237 of the Constitution relates to the first stage, namely, of fixation of a rate of duty or tax. In our view, the interpretation placed on the word "levied" used in Articles 48 and 237 of the Constitution by the learned counsel for the respondents was in consonance with the normal meaning of the word "levied". This is supported by Madras judgment mentioned above, where the three stages, namely, levy, assessment, and collection had been specifically mentioned as being different acts of the relevant authorities in giving effect to a fiscal Act.

28. This Article also, in a way, gives protection to the provisions of sections 3 and 4 of the Provisional Collection of Taxes Act of 1931.

29. The learned Attorney‑General had not pressed his last item of defence raised in the written statement that since the petitioners had an adequate remedy in another form, namely, appeal against the impugned notices, and they have virtually availed of it, and the appeals were still pending, therefore, the writ petitions under Article 93 of the Constitution were not competent. He had, however, not pressed this contention any further in his arguments, and we need not examine this question in detail, as the writ petitions are bound to fail on merits.

30. For the aforesaid reasons, we hold as follows :‑ (1) Provisional Collection of Taxes Act XVI of 1931 was intra vires of the Constitution. (2) The Central Government was competent to revoke or withdraw the exemption of the duty on tobacco stalks under section 12‑A of the Central Excises and Salt Act, 1944, read with section 21 of the General Clauses Act, and therefore, the impugned notices issued by respondent No. 3 under the directions of respondent No. 2 to the petitioner, were valid in law.

31. As a result, all the three writ petitions are dismissed with costs. The fee of the Attorney‑General in each of the writ petitions is fixed in Rs.

500. K. B. A. Petitions dismissed.