1999 PLP 765 (CLC)

‑‑‑‑S. 60‑‑‑Sindh District Councils (Export Tax) Rules, 1976, R.12(2)‑‑ Constitution of Pakistan (1973), Art.199‑‑‑Constitutional petition‑‑‑Levy of Export Tax (Rawangi Mahsool) by District Council‑‑‑Refund of export tax collected under coercion‑‑‑Remedy‑‑‑Where the petitioner had obtained certificates in respect of some consignments, from the Municipal Committee in terms of the requirements of R.12(2) of the District Councils (Export Tax) Rules, levy of the export tax (Rawangi Mahsool) by the District Council was declined to be without lawful authority‑‑‑Amount paid by the petitioner under coercion might be recovered by the petitioner by filing an appropriate suit for recovery. Wazir Ali Industries Limited v. Secretary to the Government of Sindh 1985 CLC 1843; Ejaz Ahmad and others v. District Council, Sukkur 1990 CLC 1367 and Abid Hussain v. Government of Sindh PLD 1984 Kar. 269 ref. (i) Words and phrases‑‑‑

Transit"‑‑‑Meaning. Pakistan Textile Mills Owners Association v. Administrator of Karachi PLD 1963 SC 137 ref. Noor Muhammad for Petitioners. Muhammad Qasim Mirjat, A.A.‑G. for Respondents. M. L. Shahani for Respondent No. 7 (in C. P. No. 1170 of 1987). Rasool Bux Unar for Respondent No. 2 in (C. P. No. 1212 of 1986). Date of hearing: 17th November, 1998 SABIHUDDIN AHMED, J.‑‑‑ Both these petitions by the same petitioner involve common question of law and are, therefore, disposed of by the same judgment. For the purpose of convenience it may be pertinent to mention the facts stated in C.P. No. 1212 of 1986. The petitioner‑company engaged in the business of manufacturing and marketing cigarettes and tobacco, having their factories at Karachi, Jhelum and Akora Khattak (N.‑W.F.P.). They have established stores in different places in the country where cigarettes manufactured in their factories are stored for some time for onward transmission to different marketing spots. One such store is located within the area of Hatri Union Council which falls within the territorial limits of respondent No.2 i.e. District Council, Hyderabad. By a notification, dated 31‑8‑1983 the respondent levied export tax (Rawangi Mahsool) upon export of certain specified goods from the territorial limits of the District Council including cigarettes, which was chargeable at the rate of Rs.2.50 per 40 Kgs. The collection of such tax was contracted out to certain contractors i.e. respondents Nos.3 to 5 from time to time in accordance with rules.

2. The petitioner's case in a nutshell is that such tax could not be charged from them as they were not exporting cigarettes from the District Council limits. According to them the cigarettes were actually manufactured outside such limits and were only kept as goods in transit in the stores located within such limits and no export tax was chargeable on goods in transit. Apparently the petitioner protested to the respondent No.2 and the Chief Officer of the latter also issued a letter to the respondent No.3, stating that the goods of the petitioner were products of Karachi and no Rawangi Mahsool was leviable. Nevertheless according to the petitioner the staff of the respondents Nos.3 to 5 continued to demand such payments and the petitioner made the same under coercion and protest. Being unable to restrain the respondents from demanding and collecting the Mahsool, the petitioner moved this Court seeking to restrain the respondents from levying and charging Rawangi Mahsool and directing them to refund the amounts collected from the petitioner.

3. The respondent No.2 in their counter‑affidavit to the main petition did not basically dispute the facts in the petition but explained that the petitioners' goods manufactured in the factory are unloaded in their godown at Hatri for a number of days and months and thereafter, upon finding customers they are transported to areas outside the Hyderabad District and the journey starts from the limits of the Hyderabad District Council. It was further contended that the petition was barred by laches and was even otherwise not maintainable as the petitioner had an alternate remedy of filing a suit for recovery against contractors, who had collected the alleged amount. No affidavit‑in‑rejoinder controverting factual assertion that goods were stored in the godown for a substantial period of time was filed.

4. Mr. Noor Muhammad learned counsel for the petitioner vehemently argued that the goods in question were not exported from the District Council Limits and were actually exported from the factories of the petitioners and were retained within such limits while in transit to other destinations. He argued that no Mahsool was leviable on goods in transit. In support of his contention he strongly relied upon, inter alia, the judgments of this Court in Wazir Ali Industries Limited v. Secretary to the Government of Sindh 1985 CLC 1843 and Ejaz Ahmad and others v. District Council, Sukkur 1990 CLC 1367. Moreover, he drew our attention to the directions of the Sindh Government, dated 6‑6‑1983 judicially noticed in the case of Wazir Ali Industries, the relevant part whereas reads as under:‑‑ "... District Councils will not be entitled to recover Rawangi Mahsool from areas falling outside their limits. Hence the goods moving from urban areas within the District will not be subjected to Rawangi Mahsool by the District Council."

5. We find no substance in the counsel's contention to the effect that the goods in question could be deemed to be exported only from the point of their A manufacture and from no other place. Neither the applicable law nor the expression "export" in its ordinary meaning implies such a connotation. This expression not having been defined in the Sindh Local Government Ordinance orle the rules must be construed in its ordinary natural sense. In Pakistan Textile Mills Owners Association v. Administrator of Karachi PLD 1963 SC 137, late Hamoodur Rehman, J. (as his Lordship then was) observed :‑‑ "Import and export, in their ordinary and natural sense mean to bring into or to take out of or away from a particular place .... . "

6. In a taxing statute, as in any other statute we see no reason to depart from the rule that words used in a statute must first be given their ordinary and natural meaning.

7. Mr. Noor Muhammad is, however, correct to the extent that export tax is only leviable on goods moving out of the District Council limits and not on goods‑in‑transit. The judgments cited by him and referred to in para. 4 above indeed support his argument to the extent that such tax is leviable on goods p which move from District Council limits and not on those which emanate from the limits of a Municipal Committee and merely pass through an area falling within District Council limits. Moreover, Rule 12(2) of the District Councils (Export Tax) Rules, stipulates as under :‑‑ "12(2). In case the goods are in transit from other Council or a Municipality or Town Committee, upon presentation of a certificate of payment of the tax or, in case the tax is not imposed by such Council or Municipality or Town Committee, a certificate of the origin of the consignment from such Council or Municipality or Town Committee, obtained from the tax post, a Octroi post of the Council or Municipality or Town Committee, the goods presented under sub‑rule (1) shall be exempted from the tax."

8. The crucial question for determination, therefore, would be, whether against the admitted factual background, the goods kept in the petitioner's godowns at Hatri could be treated as "goods‑in‑transit". The expression "transit" has not been defined in the Local Government Ordinance or the Export Tax Rules. In Pakistan Textile Mills Owners Association's case PLD 1963 SC 137 goods unloaded from vessels in Karachi and reloaded on trains or trucks for transmission to different places in the north were not treated as goods in transit for the purpose of terminal tax and such tax was held leviable on them. In Oxford 20th Century Dictionary this expression inter alia, has been defined to E mean "passing or conveyance over, across, or through". In Black's Law Dictionary, in the context of shipping law it has been defined to mean "stop over, privilege on a continuous journey granted by Carrier by which a break de facto in continuity of carriage of goods is disregarded and two legs of a journey are treated as though covered without interruption, uniting legs into a through route for which a joint rate can be published". In our humble opinion expression "goods‑in‑transit" would normally be referable to those goods which pass through an area in the course of their journey. Even if it is construed very broadly, it could perhaps signify goods which are temporarily stopped or F unloaded at a particular spot in the District Council area on their way to an identified destination. Admittedly the goods brought to the petitioners godowns in Hatri are not meant to be conveyed to any place other than Hatri itself. They are stored for an indefinite duration till it is decided to convey them to another place according to the requirements of the petitioner. In the circumstances we are clearly of the opinion that the goods stored at Hatri could not be treated ass goods in transit. They embarked upon a new journey from within the limits of I District Council, as such we find no force in this petition.

9. With respect to C. P. No. D‑1170 of 1987, the facts appear to be similar with the significant exception that petitioners' goods were stored in their godowns within the Municipal limits of Rohri Town in Sukkur District. Under the Sindh Local Government Ordinance, an urban area, i.e. area falling within H the local limits of a Metropolitan/Municipal Corporation, a Municipal/Town Committee does not fall within the limits of a District Council. This position is also clearly spelt out in a number of reported cases including the two Division Bench judgments mentioned in para. 4 which are indeed binding on us. The record shows that the petitioners had also obtained, in respect of some consignments, certificates from Municipal Committee, Rohri in terms of the 1 requirements of Rule 12(2) of the Export Tax Rules. In the circumstances levy of Rawangi Mahsool by the District Council, Sukkur, impugned in this petition, must be held to be without lawful authority.

10. With respect to the claim for refund it may be observed that the District Council had, under the authority of rules contracted out the function of collecting octroi to different contractors upon lump sum consideration and, therefore, the amount alleged to have been paid by the petitioner under coercion was appropriated by the contractors and only respondents Nos. 3 to 7 can be held responsible to refund the same. Without going into the question whether a direction can be made to them under these proceedings and being mindful of the fact that a direction for payment of an admitted specific amount of money can be made in view of this Court's decision in Abid Hussain v. Government of Sindh PLD 1984 Kar. 269 we have noticed that despite having amended the petition twice the petitioners have not identified the specific amount refundable by each of the contractors/respondents. We are unable to share the view that all the respondents are jointly and severally liable to refund the entire amount said to K have been collected under coercion. In the circumstances, we are inclined not to pass any order directing refund of amount of the petitioner who may recover the same by filing an appropriate suit for recovery if so advised. 11: For the foregoing reasons we would dismiss C.P. No. 1212 of 1986 and allow C.P. No. 1170 of 1987 to the extent that the levy of "Rawangi Mahsool" on ,goods moved from petitioner's godown in Rohri is declared to be without lawful authority and of no legal effect. Accordingly respondent No.2 and their contractors are restrained from collecting the same. The parties will bear their own costs. Q.M.H./M.A.K./P‑63/K Order accordingly