2004 PLP 66 (CLC)

This suit has been filed by the pLalntiff, against the defendants for declaration, injunction and recovery of Rs.82,875,530 with the following prayer:‑‑ (a) Declaration that the pLalntiff is entitled to the payment of 5 % on the electrical goods for WAPDA, imported by defendant No.1, within the limits of Union Council, Sultan Kot, District Shikarpur, during the year 1997‑98, commencing from 1‑7-1997 to 30‑6‑1998 and consequently the defendant No.1 is liable to pay the same to the pLalntiff from his amount of security lying with them.. (b) The defendants Nos.2 and 3 are liable to be restrained from releasing the securities of defendant No.1, lying with them, till the satisfaction of pLalntiff's dues. (c) The defendant No. 1 is liable to pay the octroi dues amounting to Rs.82,875,530 to the pLalntiff, forthwith; and (d) Any other relief that this Honourable Court may deem‑fit and proper in the circumstances of the case.

2. The facts of. the case as enumerated in the pLalnt are that the pLalntiff is a Octroi Contractor. He was granted Octroi Contract of Union Council, Sultan Kot, District Shikarpur for the year 1997‑98, commencing from 1‑7‑1997 to 30‑6‑1998, which was enforced from 1‑5‑1997. According to the existing rates in Octroi Schedule the pLalntiff was entitled to 5% octroi per Serial number 78 of the Schedule on the imported goods. When the pLalntiff sought payment of 5% octroi on goods so imported from defendant, the defendants Nos.2 and 3 intervened and the pLalntiff was accordingly directed that till the final decision no charge had to be recovered from the defendant No.1 and consequently the pLalntiff's cLalm was not satisfied at all. Subsequently, through several letters and notices the pLalntiff approached the defendant No.1 and higher officials of WAPDA including the defendants Nos.2 and 3 for the payment of the said outstanding dues but the defendants avoided such payments which resulted in huge amount of octroi accumulated against the defendant No.

1. It is claimed in the pLalnt that as per records of WAPDA electric goods worth Rs.1,65,76,10,616 has been imported by the defendant No. 1 within the limits of Union Council, Sultan Kot, Shikatpur and 5 % octroi dues on, the same comes to IB Rs.82,875,530 within the contract tenure of the pLalntiff, commencing from 1‑7‑1997 to 30‑6‑1998.

3. The defendant No. 1 has filed his comments to the suit, wherein it was mentioned that Octroi Contract Agreement was executed on 20‑1‑1998 and permission to recover the octroi was given on 21‑1‑1998; hence the pLalntiff was entitled to collect octroi from 21‑1‑1998. The material was not imported by the defendant No. 1 but WAPDA. It is alleged in the comments that the‑pLalntiff in collusion with the Union Council succeeded to get published Octroi Schedule in Gazette dated 24‑1‑1998 by adding Item No.78. The octroi was not paid as the site of defendant No.1 was not within the local octroi limits of pLalntiff, the importer of goods was WAPDA and not the defendant No.

1. As per Gazette Notification dated 12‑2‑1981 the imported goods are exempted from duty/tax. It is claimed that the revised Schedule published in Gazette dated 24‑1‑1998 was a forged one which was later on cancelled by the competent authority vide letter dated 16‑2‑1999. The pLalntiff has not filed this suit in accordance with the provisions of C.P.C. and WAPDA has not been made a party which is mandatory under section 3(2) of WAPDA Act.

4. Learned counsel for the defendant No.1 has filed an application under Order VII, rule 11, C. P. C. (C.M.A 2084 of 2001) with the prayer to reject the pLalnt/dismiss the suit on the following grounds:‑‑ (a) That the pLalntiff has no cause of action against the defendants. (b) That the suit is hit by section 42 of the Specific Relief Act. (c) The suit is also hit by the doctrine of stare decisis. (d) The suit is bad for mis‑joinder/non‑joinder of parties (e) The suit is hit by the Rules of the Local Government and Octroi Rules. (f) The suit, as framed, .is not maintainable and is liable to be dismissed. (g) That the pLalntiff has approached this Court with unclean hands; and (h) That this suit is an abuse of the process of the Court and is liable to be dismissed.

5. It has been argued by the learned counsel appearing on behalf of the defendant No.1 that the suit has been wrongly filed, based upon a forged notification.

6. The main point urged by Mr. Hassan Akbar counsel for the defendant No.1 is that the notification that has been relied upon is a forged document. In fact the notice was issued to the concerned office to produce the original notification dated 24‑1‑1998 so that it could be tallied with the other documents relied upon by the pLalntiff. This was produced and, it was very clear by the simple comparison that the one relied upon by the pLalntiff was not original.

7. For the original notification produced it is clear that the imposition, of octroi was. made effective from 1‑12‑1980. According to Mr. Hassan Akbar such power cannot be granted through a notification. He further pointed out that retrospectively cannot be given effect and is considered to be bad in law specially in respect of fiscal matters. He, therefore, urged that at a time when octroi was not payable on a particular commodity it cannot be made payable through subsequent notification with retrospective effect. Counsel has drawn my attention to Item 78 of the Schedule. In the notification dated February, 1981 against Item 78 merely electricity has been mentioned and the rate of octroi payable has been shown as 0.50 per K.W.T. In the notification issued on 24‑1‑1998 against Item 78 alongwith electricity oblique sign has been put and thereafter the words WAPDA machinery/equipment have been added. The octroi payable has been shown as 5 % of value. This notification has been made effective from the year 1980. Mr. Hassan Akbar 'has relied upon the following case‑laws in support of his contention. The case of Gul Ahmed Textile Mills Limited v. Landi Korangi Municipal Committees 1988 MLD 2753 in this case a Division Bench of Sindh High Court had observed that taxation proposal under West Pakistan Municipal Committees Imposition of Tax Rules; 1960 can be made effective from the date when the notification is issued. It cannot be imposed retrospectively. The direction was issued to the Municipal Committee that recovery of tax should be made effective from the date of operation of notification. In the case of Taj Mahal Hotel Limited v. Karachi Water and Sewerage Board, a Full Bench of the Supreme Court had held that administrative‑ order or notification shall not operate retrospectively. This was reported in 1997 SCMR

503. In the case of Federation of Pakistan v. Shaukat Ali Mian PLD 1999 SC 1026 a Full Bench of the Supreme Court came to the conclusion that retrospective operation affecting the rights of any person cannot be made, applicable. On the other hand if through a notification or an executive order a benefit is conferred then it can be made applicable retrospectively. They have also relied on case of Hashwani Hotels Limited v. Federation of Pakistan PLD 1997 SC 315 and Army Welfare Sugar Mills Ltd. v. The Federation of Pakistan 1992 SCMR 1652. In the case of Hashwani Hotel a Full Bench of the Supreme Court has come to the conclusion that notification and or executive order can only operate prospectively. The other cases where similar principles have been upheld are the cases of Condicalo Hypolito Constancio Noronha v. Damji Deji and others PLD 1954 PC 22; Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187; The Income Tax Officer (Investigation); Circle 1, Dacca and another v. SuLalman Bhai and another PLD 1970 SC 80; Mian Rafi-ud‑Din and 6 others v. The Chief Settlement and Rehabilitation Commissioner and 2 others PLD 1971 SC 252 and Mahmood Shah and others v. Additional Settlement Commissioner Revenue and others PLD 1979 Lah. 709.

8. It is, therefore, apparent from the case‑laws and the facts that in, the year 1980‑82 no octroi was payable on WAPDA machinery, electricity equipment and hence a right that was enjoyed by the defendant No.1 cannot be taken away through a `retrospective operation of in the year 1998. Learned counsel appearing on behalf of the pLalntiff could not any argument, that would negate the view‑points put the defendant No.

1. Under the circumstances the application under Order 7, rule 11, C.P.C. is allowed and the pLalnt is rejected. H.B.T./N-148/K PLalnt rejected.