P L D 1969 Dacca 477 (PLP)

SALAHUDDIN AHMED, J.‑All these seven petitions have been heard together as common questions of fact and law are involved in them and they are now being disposed of by one judgment. The broad facts necessary for the determination of the Rules nisi issued in these cases are as follows:‑The petitioners have described themselves as wholesalers/ dealers in salt and also as crushers of salt in East Pakistan. It is the common case of the petitioners that they purchased crude salt from middlemen and sold it to others after having subjected the salt to washing and crushing so as to make the grains finer for sale. Till the 30‑6‑66 by reason of the several notifications issued by the Central Government under section 12‑A of' the Central Excises and Salt Act (Act I of 1944) hereinafter called the Act the operation of the Act in regard to levy and realisation of duty on salt in East Pakistan had been exempted. The latest of such notifications was No. S.R.O. 62 (R)/65 dated 14‑6‑65 and it was in force till the 30‑6‑66 on and from 1‑7‑66 such Notifications ceased to be issued with the result that the Central Excises Authorities in East Pakistan called upon the petitioners to apply for licences for dealing in salt and also to pay duty on salt on their clearance from stock. The duty was fixed at the rate of Sts. 2.50 paisa per maund. These demands appear to have been made in July and August 1966. The petitioners in a body objected to the levy of taxes and the demand for taking out licences on the ground that the duty on salt was leviable at the source of its initial production in its elementary form only and at no subsequent stage and that the petitioners were not producers or manufacturers of salt within the meaning of the Act, and that a licence to manufacture, produce and process salt was needed at the original place stage where it teas produced or manufactured. It is submitted that this procedure was followed in West Pakistan which did not enjoy exemptions of duty and the same procedure must be followed in East Pakistan to maintain uniformity. It is submitted further that any deviation from this procedure runs the risk of levying duty twice in contravention of the rule against double taxation. The petitioners have asserted without contradiction that they had with them specific quantities of crushed and uncrushed salt. Both the crushed and uncrushed salt in their possession were in a consumable state and could be sold to the consumers. On the contrary it has been asserted on behalf of the respondents, the Central Excises authorities in East Pakistan that the petitioners are in fact manufacturers of salt within the meaning of the Act and that the salt that were purchased by the petitioners were crude in nature and mixed with earth and were not in a consumable state. The petitioners crushed the salt in their crushing mills which: were automatic machineries for washing and crushing with a view to separating salt from earth or other substances so as to produce fine eatable salt before they went to market for consumption. The salt, which the petitioners produced were alimentary salt in the market. The respondents have further asserted that no duty was ever paid on the salt in possession of the petitioners at any stage and as such the question of double levy of duty did not arise at all. It is stated that salt in East Pakistan became excisable articles for the first time on 1‑7‑66, that is, after the Notification of exemptions referred to above had ceased to be issued by the Central Government. There is. practically no dispute with regard to the quantity or crushed or non‑crushed salt that were in possession of the petitioners in July 1966. Mr. Kamal Hossain who has appeared on behalf of the petitioner in Petition No. 432 of 1966 has streneously contended before us that the petitioners are not manufacturers within the meaning of the Act and that it is only person who first manufactures salt in any form who is liable to pay puty on, salt under the Act. Manufacture has been defined in section 2(f) of the Act. thus: "(f) `manufacture' includes any process incidental or ancillary to the completion of a manufactured product; and" "(ii) in relation to salt, includes collection, removal, preparation,, steping, evaporation, boiling, or any one or more of these processes, the separation or purification of salt obtained in the manufacture of salt petre, the seperation of salt from earth or other substance so as to produce alimentary salt, and the excavation or removal of natural saline deposits or efforescence; and the word `manufacturer' shall be construed accordingly and. shall include not only a person who employs hired labour in the production or manufacture or exerciseable goods, but also any person who engages in their production or manufacture on his account if those goods are intended for sale;" "(j) Salt factory, includes‑ (i) a place used or intended to be used in the manufacture of salt and all embankments, reservoirs, condensing and.. evaporating pans, buildings and waste places situated within the limits of such place as defined from time to time by the Collector of Central Excise; (ii) all drying grounds and storage platforms and store houses appertaining to any such place; (iii) land on which salt is spontaneously produced; and a private salt factory' is one not solely owned or not solely worked by the Central Government. (k) `wholesale dealer' means a person who buys or sells excisable goods wholesale for the purpose of trade or manufacture, and includes a broker or commission agent who, in addition to making contracts for the sale or purchase of excisable goods for others, stocks such goods belonging to others as an agent for the purpose of sale." Section 3 which appears in Chapter II dealing with levy and collection of duty ready thus: "3(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 manufac tured in, or imported by land into, or any part of the Provinces, and the Capital of the Federation as, and at the rates, set forth in the First Schedule 2(2) The Central Board of Revenue may by notification in the official Gazette, fix, for the purpose of levying the said duties, tariff value so of any articles enumerated, either specifically or under general headings, in the First Schedule as chargeable with duty and valorem and may alter any tariff values for the time being in force." Section 6 provides that the Central Board of Revenue may provide that no person shall, except under the authority and in accordance with the Terms and conditions of a licence granted under this Act, engage in the production or manufacture or any process of the production or manufactures of any specified excisable goods or of saltpetre or of any specified component parts or ingredients of such goods or of specified containers of such goods. Under the First Schedule, of the Act Item No. 5 salt has been mentioned as excisable goods and it includes swamp salt, and salt or saline solutions made or produced from any saline substance or from salt earth arid the rate of duty is, prescribed as two rupees and fifty paisa per maund. Section 12‑A deals with exemptions and the relevant Pro visions thereunder are as follows:‑ "(1) The Central Government may from time to time, by notification in the official Gazettee, exempt any goods or class of goods from the whole or any part of the duty leviable under this Act." Sections 35 and 36 deal respectfully with appeal from an order of the Central Excise Officer and revision by Central Government. Section 37 provides that the Central Board of Revenue may, make rules to carry into effect the purposes of this Act and in. particular, and without prejudice to the generality of the forego ing power, such rules may regulate the production or manu facture, or any process of the production or manufacture, the possession, storage and sale of salt, and so far as such regulation is essential for the proper levy and collection of the duties imposed by this Act, of any other excisable goods, or of any component parts or ingredients or containers thereof and may impose on persons engaged in the production or manufacture, storage or sale (whether on their own account or as brokers or commission agents) of salt and may define any other area with regard to the manufacture or storage of salt from any other place. Section 38 provides that all rules made and notifications issued under the Act shall be made and issued by publication in the official Gazette, and such rules and notifications shall there upon have effect as if enacted in this Act. The relevant Rules framed under the Act are as follows:‑ Rule 2(iii) defining "contraband salt," Rule 2(xii) defining "saline substance," Rule 2 (xiii) defining "salt earth", as earth containing salt ; Rule 2(xiv) defining, "salt work" as any defined area within a salt factory, which is used for the manufacture of salt and which is separately registered .as such in the public accounts. Rule 7 deals with recovery of duty and is as follows:‑ "Every person who produces; cures, purchases or acquires from a curer, or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty or duties due on such goods, at such time and place and to such persons as may be designated in, or under the authority of these rules, whether the payment of such duties is secured by bond or otherwise. Provided that, in the case of un manufactured products, the person purchasing or acquiring them from a curer shall assume the liability for the payment of duty; and if any such person does not pay such duty or duties at such time and place and to such person as aforesaid, or upon written demand made by the proper officer, whether such demand is delivered personally or is left at his dwelling house, or at the premises where such duty or duties have been charged, every such person shall be liable to a penalty which may extend to five times the duty chargeable on the goods, and the goods, in respect of which the demand is shall be liable to confiscation." Rule 9 deals with time and manner of payment of duty and is as follows: ‑ "No excisable goods shall be removed from any place where they are produced or manufactured or any premises appurtenant thereto; which may be specified by the Collector in this behalf whether for consumption export, or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these rules or as the Collector may require, and except on presentation of an application in the proper form and on obtaining the permission of the proper Officer on the form." Rule 10 deals with recovery of duty short levied or erroneously refunded and is as follows: ‑ "When for any reason the duty due has not been levied or short paid or when any duty has erroneously refunded, the person liable to pay the duty, or to whom such refund has been erroneously made, shall pay the duty due on written demand being made within three years from the date on which the duty became due or was paid or adjusted in the owner's account‑current, if any, or from the date of making the refund." Rule 102 which prohibits manufactures, etc. of salt except under a licence is as follows:‑ "No salt shall be manufactured and no natural salt, and except under the provisions of the rule 106, no salt‑earth shall be excavated or collected or removed otherwise than by authority and subject to the terms and conditions of a licence to be granted by the Collector in this behalf." It is evident from the provisions of the Act and the Rules mentioned above that but for the Notifications issued by the Central Government under section 12‑A of the Act, salt was an excisable article upon which duty must be levied and collected in the manner mentioned in the Act. The latest of the Notifications of exemptions issued by the Central Government dated 14‑6‑65 was in the following terms: "In exercise of the powers confirmed by subsection (1) of section 12‑A of the Central Excise and Salt Act, 1944 (1 of 1944), the Central Government is pleased to exempt all salt manufactured in East Pakistan from the whole of the excise duty leviable thereupon for a period of one year commencing on the 1st July 1965." This Notification expired on 30‑6‑66 and is no lodger in force. The natural consequence that flows from this is that there is nothing to keep under suspension the various provisions of the Act applicable to the facts of the present cases and all the provisions of the Act that are attracted to the facts of the present cases are fully operative. The petitioners are undoubtedly manufacturers within the meaning of the Act inasmuch as the subject the crude salt which they purchased to further processes of manufacture, namely, washing and crushing them with a view to making the grains finer and turning them into alimentary salt. This process does include the process of separation of salt from earth and it can also be described as a process incidental o ancillary to the completion of manufactured salt. Under section 3 of the Act read with the First Schedule Item No. 5 salt is an excisable article and duty is leviable on it. Under Rule 7 every person who manufactures any excisable goods, shall pay the duty or duties due on such goods at such time and place and to such persons as may be designated in, or under the authority of these Rules. Rule 9 provides that no excisable goods shall be removed from any place where they are produced or manufactured or any premises appurtenant thereto which may be specified by the Collector in this behalf, whether for consumption, export, or manufacture or any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require. Rule 10 provides that if for any reason the duty due has not been levied or paid or has been short levied or short paid or if any duty has been erroneously refunded, the person liable to pay the duty, or to whom such refund has erroneously made, shall pay the duty due on written demand being made within three years from the date on which the duty became due. Having regard to the provisions just mentioned it seems to me clear that the salt that remained in possessing of the petitioners in their factory whether crushed or uncrushed became leviable to duty thereon immediately the aforesaid Notification ceased to exit, and the petitioners being manufacturers under the Act were put under an obligation to pay duty thereon. The time and place for the payment or realisation of the duty is the time when the salt are sought to be removed from the place where they have been produced or manufactured. The salt in the possession of the petitioners are, therefore, liable to imposi tion of duty thereon and the petitioners are liable to pay the duty. Admittedly no duty was ever paid on these salt and there fore, no question of double payment of duty arises in this case. I am unable to accept the contentions advanced on behalf of the petitioners that under the terms of the aforesaid Notifica tion dated 14‑6‑65 the salt which had already been manufactured before the Notification ceased to exist are not liable to salt duty under the Act. This contention would have been valid if the Notification which had kept the relevant provisions of the Act at play continued to be in force. With the cessation of the Notification the Act has become fully applicable to the salt in question and the said Notification cannot be prayed in aid to keep the provisions of the Act still suspended. It is also clear from the provisions of the Act the Rules framed there under that the petitioners are now under a legal obligation to take out licences in terms of section 6 read with rule 102 if they wish to continue manufacturing salt. It may be mentioned that by notification dated 10‑11‑66 the Central Board of Revenue has inserted a new Rule 138‑A in Chapter VI of the Rules. The new rule prescribed that the duty under the Act shall become chargeable as soon as salt is manufactured, but the liability for the payment of duty shall lie on the person who purchases or otherwise acquires salt without payment of duty from the primary manufacturer directly or through a commission agent or other intermediary. It further provides that the primary manufacturer shall be absolved of the liability for the payment of duty in respect of such salt as is removed from his premises under a valid transport certificate in proper Form. Other provisions of the Rule prohibit a person from purchasing or otherwise acquiring salt from a primary manu facturer unless he holds a valid licence and a valid transport ‑certificate as specified in sub‑rule (2). The Rule defines "Primary manufacturer" to mean a person who manufactures salt by any method but does not refine or crush salt. It is true that this Rule which came into being on the 10‑12‑66 did not apply to the petitioners on the date they were asked to take out licences or to comply with the provisions of the Act and the Rules thereunder in regard to the levy or collection of duty on salt. Nevertheless as I have mentioned already the salt in question were liable to imposition of salt duty and the petitioners are liable to pay the duty even under the Rules as they existed on that day, and therefore, there is no question of the retrospective operation of the new Rule 138‑A. In my opinion the position as it stands today is that the petitioners are undoubtedly manufacturers within the meaning of the Act and the salt manufactured by them and which are lying in their factory are leviable with duty and such duty must be collected at the time of the removal of the salt from their factories. I would accordingly discharge all the seven Rules nisi issued in the aforesaid seven petitions but without any order as to costs. A. H. KHAN, J.‑These 7 applications under Article 98 .of the Constitution of Pakistan were heard together as the same question of fact and law are involved in all of them. The applicants are limited companies, two of them having their registered offices in Chittagong and the rest in Chandpur in the District of Comilla. They all carry on business of crushing and refining of salt at Chittagong and Chandpur. They purchase crude salt from the dealers who in their turn purchase it from the manufacturers of crude salt in the coastal regions of East Pakistan and the petitioners carry on the process of washing and crushing and sell it in the market. Some samples of the crude salt were produced before us in Court. This salt admittedly ‑contains dust and sand, and the grains are coarse but when washed the colour changes to the brownish colour of ordinary salt and after crushing the grains become finer. The poor people of the locality where the salt is manufactured buy the crude salt for use after washing at home, while most people use the salt obtained after crushing and washing by the petitioners and others carrying on the business. Up to 30th of June 1966, salt manufacturers in East Pakistan had been enjoying exemption from salt duty under notifications under section 12‑A (1) of the Central Excise and salt Act of 1944 therein after referred to as the Act) issued from time to time. After the expiry of the financial year from July 1965 to June 1966, there was no further exemption. It appears that on or after the 1st July 1967, the Officer of the Excise Department visited the godowns on factories of the petitioners and verified and noted the quantity of salt in stock both crushed and uncrushed as it stood up to 30th June 1967. Thereafter under the impugned orders in each case, the petitioners were ordered by Officers of the Excise Department to pay excise duty at the rate of Rs 2.50 paisa per maund of salt found in stock, and also to obtain a license for carrying on the business of crushing and refining salt. The stock in the godowns or factories of the petitioners at the end of the 30th June, 1966 varied from 2030 maunds to 50847 maunds. Being aggrieved by the impugned orders, the petitioners in each case appealed to the higher authorities but without any effect. There after they approached this Court for a declaration that the impugned orders were without lawful authority and of no legal effect. Mr. Kamal Hossain appeared for the petitioners in petition No. 432 of 1966 and Mr. Ahmed Sobhan appeared for the petitioners in the remaining cases. Mr. Kamal Hossain argued the case in respect of the applicant in Petition No. 432 of 1966 and Mr. Ahmed Sobhan while adopting the arguments of Mr. Kamal Hossain laid special stress on some points. The grounds for challenging the impugned orders for payment of duty at the rate of Rs. 2.50 per maund of the salt in stock at the end of 30th June 1967 and for obtaining a license for carrying on business of crushing and refreshing salt by the petitioners are as follows:‑ "(1) That the petitioners are not "manufacturers" and their places of crushing salt are not "Salt factories "within the? definition of the terms in the Act and therefore, they were not liable to pay any salt duty before the amendement of the Rules framed under section 37 of the Act addition of Rule 138‑A of the said Rules in November 1966. (2) That the duty sought to be collected in respect of salt manufactured during the period of exemption from 1st July 1965 to 30th June 1966 is not leviable because of the notification, under section 12‑A(1), dated 14‑6‑65." As regards the first contention, I respectfully agree with my, learned brother that here is no substance in it as pointed out by him. The term "manufacturer" and salt 'factory' have been defined in section 2 (f) and 2(j) of the Act and the former term include, also a process that is carried on as incidental or ancillary to the completion of a manufactured product. Therefore, the petitioners are liable to pay duty for the process carried on by them, as "manufacturers" of salt and they are also to obtain., license for the purpose as required by law. Regarding the second question, namely, whether any duty, is payable in respect of stock of the petitioners at the end of the: period of exemption, with great respect I am unable to agree: with my learned brother Mr. Justice Salahuddin Ahmed that the duties are payable in respect of that salt. Section 3, subsection (1) of the act provides, inter alia, that duty shall be levied and collected in such manner as may be prescribed for excisable good at the rates set forth in the First Schedule of the Act. Item No. 5 of the First Schedule in respect of salt has fixed duty; payable at the rate of Rs. 2.50 per maund. Section 12‑A (1) provides for a general exemption from duty and it is, in the following terms:‑‑ "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." Rule 7 of the Act provides that the duty shall be paid to such persons and at such time and place as may be designated in or under the authority of the Rules. While rule 9 specifies the time and manner of payment of the duty and lays down that excisable goods shall not be removed from any place until excise duty leviable thereon has been paid. Let us now turn to the notification in respect of the exemption. It is in the following terms: "Islamabad, the 14th June 1966. S. R. O. 62 (R)/65 in exercise of the powers conferred by subsection (1) of section 12 A of the Central Excise and salt Act, 1944, (1 of 1.944) the Central Government is pleased to exempt all salt manufactured in East Pakistan from the whole of the excise duty leviable thereon for a period of one year commencing on the 1st July 1965." To my mind, this notification is to be interpreted as an exemption from levy of duty on salt manufactured in East Pakistan during the period mentioned therein. Duty on excisable goods becomes leviable on manufacture or production. This is supported by the following quotation from the judgment of their Lordships of the Supreme Court of Pakistan in the case of Muhammad Younus v. Central Board of Revenue, Government of Pakistan and others (P L D 1964 S C 113) at page 117. "This view also finds support from a later decision of the Judicial Committee of the . Privy Council in the case of Governor‑General‑in‑Council v. Province of Madras A I R 1945 P C 98 where Lord 'Simonds in delivering the opinion of the Board pointed out that the two taxes, the one levied upon a manufacturer in respect of his goods, the other upon a vendor in respect of his sales, may in one sense overlap. "But in law there is no over‑lapping. The taxes are separate and distinct imposts. . . If in fact they over lap, that may be because the taxing authority, imposing a duty of excise, finds it convenient to impose that duty at the moment when the excisable article leaves the factory or workshop for the first time upon the occasion of its sale. But that method of collecting the tax is an accident of administration it is not of the essence of the duty of excise which is attracted by the manufacture itself." The words underlined by me above support my view that duty becomes leviable as soon as manufacture takes place. The duty may be collected at any stage from the time of manufacture till the time of consumption as may be provided by law. The principle that duty becomes leviable or chargeable as soon as article is manufactured is also stated in rule 138(A) of the Act introduced for the first time by the notification dated 10‑11‑66 and substituted by new rule 138‑A under the notification dated 9‑11‑

66. Though in section 3 it is not specifically stated as in rule 138‑A that "duty shall become chargeable as soon as salt is manufactured" there can be no doubt that duty becomes leviable as soon as excisable goods are manufactured. The manner and the time of collecting duty are quite distinct from the leviability of the duty. Under the notification in question, all salt manufactured in East Pakistan for the period of one year commencing on the 1st July 1965 is exempted from the levy of duty. Thus no duty could be levied on manufacture of salt during E this period no matter whether it is removed from the factory during the period of exemption or thereafter. The emption, to my mind, clearly provides that the salt manufactured during the) specified period shall not be subject to the levy of the duty. Rules 9 and 131 require that the duty shall be paid when it is removed from the salt factory. If, however, the duty has not been levied or paid or has been short levied or short paid, then under Rule 10, the duty can be recovered at time within 3 years from the date mentioned therein. This also shows that leviability and collection of duty are distinctly different things. Let us take an illustration for clarification of the matter. Suppose there is an exemption from payment of rent of land under the provisions of a certain Act for a particular year and there is also an enactment in the same Act regarding collection of rent to the effect that the produce of the rent land shall not be removed from the farm of house of the producer before the rent is paid. Now, if a tenant producer does not remove the produce obtained during the period of exemption, from the farm‑house till after the expiring of the period for which rent had been exempted will the rent become payable. It appears to be quite clear that it will not. Under the order of exemption; the salt manufactured in East Pakistan during the period of one year from 1st July 1965 having been entirely exempted from the levy of duty for that year, no duty on salt manufactured during that year can be levied even if the salt has not already been removed from the place of manufacture during the period of exemption. Now since the term "manufacture" includes "any process incidental or ancillary to the completion of any manufactured product", according to the definition in section 2(f) of the Act the crude salt which still remained to undergo crushing and refining on the 1st July 1966, and which would undergo this process thereafter in the factories of the petitioners would be included in the term "manufacture" and therefore would be liable to be levied with duty, as the exemption in question by its terms does not extend beyond 30th June 1966. But the salt which had undergone the process of crushing and refining in the petitioners' factories within 30th June 1966 were already "manu factured" before that date, and therefore, this salt will not be subject to any duty because of the exemption, the process of manufacture having been completed within that period. It has been contended by the learned Advocates appearing on behalf of the petitioners, that the provisions of Rules 7 and 9 of the Act clearly indicate that the duty was payable at the time when it first leaves the factory where it is first "manufactured" and it was not payable by the petitioners, even if they come under the definition of "Manufacturer". I am unable to find any substance in this contention. In view of the fact that they come under the term of "manufacturer" and their places of crushing and refining also fall within the term salt factory within the meaning of these terms in section 3 and rule 7, they too apart from any question of exemption, are liable for duty for the salt processed by them. It is true that had duty been already paid by the coastal manufacturers in respect of the salt in question the petitioners could not be made liable to pay the duty over again for the finishing process carried on by them after 30th of June 1966. The fact that at the time the salt was removed from the coastal factory it was liable to duty c cannot be interpreted as if duty had been‑already paid on the same. In the result, I am clearly of opinion that the salt which had undergone the process of crushing and refining in the factories of petitioners within 30th June 1966 is not liable for any duty, and no duty can be legally recovered in respect of this salt, although it was not removed from the petitioners' godowns or factories within the 30th June 1966. In my opinion, the Rules should be made absolute so far as they relate to the demand for duty in respect of the salt already manufactured by the petitioners by washing and crushing and refining within 30th June 1966, and the impugned order to that extent shall be declared as made without lawful authority and of no legal effect. The Rules nisi in respect of all other matters should be discharged. As unfortunately there has been a difference of opinion between me and my learned brother on certain question, we send these cases to the learned Chief Justice to appoint a Judge or Judges of this Court under Clause 36 of the Letters Patent to hear the cases upon the following point upon which we have differed and the consequential orders that we have made in the cases: ‑ Whether the salt which had been crushed by the petitioners during the continuance in force of Notification No. S.R.O. 62(R)/65, dated 14‑6‑65 issued by the Central Government, but had not left the factories of the petitioners during such continuance is leviable with duty under the Central Excises and Salt Act, 1944? Ahmad Subhan, A. T. Saadi and Manzur Hossain for Peti tioners (in Petitions Nos. 429, 581, 582, 585, 586 and 587 of 1966). K. Hossain and K. Z. Alam for Petitioner (in Petition No. 432 of 1966). Nural Huda, Deputy Attorney‑General, Md. Mujibur Rahman Khan for Respondent No. 1 (in all the Petitions.) M. R. KHAN, J.‑‑These seven writ petitions under Article 98 of the Constitution involving some common questions of fact and law were heard together by a Division Bench of this Court, composed of Mr. Justice Salahuddin Ahmed and Mr. Justice A. H. Khan. As the said two learned Judges differed on one of the points raised by the petitioners, these petitions have been referred to me for my opinion on the point on which they differed. The point on which the said two learned Judges have difference of opinion has been formulated by them as follows:‑ "Whether the salt which had been crushed by the petitioners during the continuance in force of Notification No. S.R.O. 62 (R)/65 dated 14‑6‑65 issued by the Central Government, but had not left the factories of the petitioners during such conti nuance is leviable with duty under the Central Excises and Salt Act, 1944." In order to appreciate this point, it is necessary to state briefly the facts of the case. The petitioners are declare in salt and are also crushers of salt in East Pakistan. They purchase crude salt from middlemen and, after crushing and refining such salt, sell the same to others. The middlemen, according to them, purchase crude salt from persons in the coastal regions of East Pakistan. The salt manufactured in the East Pakistan was exempted from duty for a period of four years ending on the 30th June 1965 under Notification No. S. R. O. 34 (R), dated 30‑6‑61 issued by the Central Government. On the eve of the expiry of the said period of four years, the Central Govern ment issued another Notification, namely, Notification No. S.R.O. 62(R)/66, dated 14‑6‑65 granting such exemption for a further period of one year from 1‑7‑65 to 30‑6‑

66. After the expiry of the said period of one year, no further Notification granting such exemption, was issued. On the 30th June 1966, the petitioners had certain quantities of both crushed and uncrushed salt in their respective godowns, warehouses or factories. In July or August 1966, officers of the Excise Department visited the godowns, warehouses, or factories of the petitioners, verified and noted the quantity of salt in their stock and made demands in writing for excise duty on such salt at the prescribed rate of Rs. 2.50 per maund and further required them to obtain licences for dealing in salt. The petitioners objected to the levy of duty on their stock of salt as on 30‑6‑66 contending inter alia, that they were not manufactures of salt and that the salt in their stock as on 30‑6‑66, was, at any rate, completely exempt from excise duty pursuant to the Notification No. S.R.O. 62 (R)/65, dated the 14th June 1965. As the officers of the Excise Department persisted in their demands for excise duty on such salt, they made these writ petitions challenging the validity of the demands for excise duty on their stock of salt as on the 30th June 1966. Both the learned Judges of the Division Bench agreed that the petitioners are manufacturers of salt and are required to obtain licences for dealing in salt. They further agreed that the crude salt in the possession of the petitioners will be liable to excise duty after the same has been crushed and refined. But they differed with regard to the interpretation of the Notification by which exemption was granted for another year ending on 30‑6‑

66. The said Notification was issued by the Central Government on 14‑6‑65 in exercise of the powers conferred by section 12‑A(1) of the Central Excises and Salt Act, 1944, and it runs thus :‑ "S.R.O. 62(R)/65.‑1n exercise of the powers conferred by subsection (1) of section 12‑A of the Central Excises and Salt Act, 1944 (I of 1944), the Central Government is pleased to exempt all salt manufactured in East Pakistan from the whole of the excise duty leviable thereon for a period of one year commencing on the 1st July 1965." Mr. Kamal Hossain, the learned Advocate representing the: petitioners in writ Petition No. 432 of 1966, contended that then Notification quoted above completely exempted all salt manu factured in East Pakistan during the period of one year from 1‑7‑65 to 30‑6‑

66. In other words, his contention is that whatever quantity of salt was manufactured by the petitioners within the said period of one year is completely exempt from excise duty under the said notification and shall therefore continue to enjoy that exemption even after the expiry of that period. This conten tion was also adopted by Mr. Ahmed Sobhan, the learned Advocate who represents the petitioners in the other writ petitions. Mr. Justice A. H. Khan accepted this contention of the learned Advocates as correct and stated his own opinion in the matter as follows:‑ "To my mind, this Notification is to be interpreted as an exemption from levy of duty on salt manufactured in East Pakistan during the period mentioned therein.. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . under the notification in .question, all salt manufactured in East Pakistan for the period of one year commencing on the 1st July 1965 is exempted from the levy of duty. Thus no duty could be levied on manufacture of salt during this period, no matter whether it is removed from the factory during the period of exemption or thereafter. The exemption, to my mind, clearly provides that the salt manufactured during the specified period shall not be subject to the levy of duty . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . Under the order of exemption, the salt manufactured in East Pakistan during the period of one year from 1st July 1965 having been entirely exempted from the levy of duty for that year, no duty on salt manufactured during that year can be levied even if the salt has not already been removed from the place of manufacture during the period of exemption." Having expressed his opinion as above, the learned Judge arrived at the following conclusion:‑ "In the result, I am clearly of opinion that the salt which had undergone the process of crushing and refining in the factories of petitioners within 30th June 1966 is not liable for any duty, and no duty can be legally recovered in respect of this salt, although it was not removed from the petitioners' godowns or factories within the 30th June 1966." Mr. Justice Salahuddin Ahmed, on the other hand took the view that after the expiry of the Notification granting exemp tion, the salt in stock of the petitioners became liable to excise duty in accordance with the provisions of the Act and the Rules. In his own words, the following are the reasons in support of the view taken by him: "This Notification expired on 30‑6‑66 and is no longer in force. The natural consequence that flows from this is that there is nothing to keep under suspension the various provisions of the Act applicable to the facts of the present cases and all the provisions of the Act that are attracted to the facts of the present cases are fully operative. After referring to the provisions of section 3 of the Act and those of rules 7, 9 and 10 made thereunder, the learned Judge observed "Having regard to the provisions just mentioned, it seems to me clear that the salt that remained in possession of the petitioners in their factory whether crushed or uncrushed became leviable to duty thereon immediately the aforesaid Notification ceased to exist, and the petitioners being manu facturers under the Act were put under an obligation to pay duty thereon. . . . . .. . . . . . . . . .. . . . . . . With the cessation of the Notification the Act has become fully applicable to the salt in question and the said Notification cannot be prayed in aid to keep the provisions of the act still suspended. ." Thereafter, the learned Judge came to the conclusion: "The salt in the possession of the petitioners are liable to imposition of duty thereon and the petitioners are liable to pay the duty." In view of their difference of opinion, the two learned judges of the Division Bench formulated the point quoted hereinbefore and sent the cases to the learned Chief Justice to appoint a Judge under Clause 36 of the Letters Patent to hear the cases upon that point. In order to deal with point at issue, it is necessary to examine the scheme of the Central Excises and Salt Act, 1944 (hereinafter called the Act) and the Rules made thereunder as regards levy and collection of excise duty on salt. Section 3 (1) of the Act, so far as it relates to salt, runs thus: ‑ 3(1) There shall be levied and collected in such manner as may be prescribed 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." The word `prescribed' occurring in section 3(1) according to its definition in section 2(g), means prescribed by rules made under the Act. Thus it is clear that while section 3(I) is the charging section and provides the authority for levy of excise duty on salt manufactured in any part of the Provinces and the Capital of the Federation, the duty on salt is to be levied and collected in accordance with the rules made under the Act: It appears from the various rules framed under the Act (reference to the relevant rules will be made hereinafter) that the manner, the stage, the time and place of levy and collection of duty on salt are all prescribed by the Rules. The Central Excise Rules, 1944 made under the Act consist of as many as 15 Chapters. Of them, Chapter I is preliminary Chapter II relates to appointment and powers of officers, and Chapter III relating to levy and refund of duty and exemption from duty, contains provisions which are of general application. The remaining chapters deal with different kinds of excisable goods and other incidental matters. Of them, Chapter VI contains Special rules relating to salt alone. Then comes Chapter VII relating to warehousing which also provides rules of general application. For our present purpose, the provisions of the rules contained in Chapters IV, V and VIII to XV except rule 52 in Chapter V do not appear to be relevant. Rules 7 and 9 contained in Chapter III, though these are not self contained and rely on the authority of the other rules, appear to be relevant here inasmuch as these are rules of general application. Rule 7 runs thus:‑ "

7. Recovery of duty.‑Every person who produces, cures, purchases, or acquires from a curer, or manufactures any excise able goods, or who stores such goods in a warehouse, shall pay the duty or duties due on such goods, at such time and place and to such persons as may designated in, or under the Authority of these Rules, whether the payment of such duties is secured by bond or otherwise ; provided that, in the case of manu factured products, the person purchasing or acquiring them from a curer shall assume the liability for the payment of duty ; and if any such person does not pay such duty or duties at such time and place and to such person as aforesaid, or upon written demand made by the proper officer, whether such demand is delivered personally or is left at his dwelling house, or at the premises where such duty or duties have been charged, every such person shall be liable to a penalty which may extend to five times the duty chargeable on the goods, and the goods in respect of which the demand is made shall be liable to confiscation." The main part of Rule 9 is as follows:‑ "

9. Time and manner of payment of duty.‑No excisable goods shall be removed from any place where they are produced or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export, or manufactured of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at place and in such manner as is prescribed in these Rules or as the Collector may require, and except on presentation of an application in the proper form and on obtaining the permission of the proper Officer on the form." This rule has two provisos, but the reproduction of these provisos. is not necessary. As already stated, there are special rules in Chapter VI relating to salt. Rule 101 contained in Chapter VI provides that the provisions of Chapter VI with regard to salt are in addition to the various salt rules framed under section 37 of the Central Excises and Salt Act, 1944. This mean, that all general rules including rules 7 and 9 are also applic able to salt. Rule 131 provides that no salt shall be removed from any salt factory otherwise than on account of the Central Government or for transport to a place of storage authorised by the Collector and no salt shall be removed from such place or storage, except under a permit and upon payment of duty and of certain other charges enumerated therein. The premises in which the petitioners crush and refine salt are also salt factories as it clearly appears from the definition of "Salt factory" in section 2 (j) of the Act. Rule 140 requires, among others, licencing of private warehouses for storage of excisable goods on which duty has not been paid. Rule 141 provides that all excisable goods brought for warehousing shall be assessed to duty prior to their entry into the warehouse. Rule 142 authorised the Collector to take account of stock of excisable goods in the warehouse. Rule 144 lays down that no goods shall be removed from any warehouse except on payment of duty unless permitted otherwise. Rule 145 prescribes the period for which excisable goods can be kept in deposit in a warehouse. This rule being important is reproduced below: "145.‑Any goods warehoused may be left in the warehouse in which they are deposited or in any warehouse to which such goods may in manner hereinafter provided be removed, till the expiry of three years from the date on which such goods were first warehoused. The owner of any such goods remaining in a warehouse on the expiry of such period shall clear the same on payment of duty in the manner provided in rule 157." Thus, this rule prescribes the maximum period of three years for which excisable goods can be kept in a warehouse without payment of duty. This has been made all the more clear rule 160 which lays down that if any exercisable goods are not removed from the warehouse within three years from the date on which they first warehoused, the owner of the goods shall, on demand by the proper officer, forthwith pay the full amount of duty chargeable thereon. Then comes another important rule namely, rule 157 which runs thus:‑ "157.‑Any owner of goods warehoused may, at any time within three years from ‑ the date on which they were first warehoused, clear the goods for home consumption by paying‑ (a) the duty thereon assessed prior to entry or re‑assessed under rule 159; and (b) all rent, penalties, interest and other charges payable in respect of such goods. The gods shall then be assessed and cleared in the manner described in rule 52." This rule 157 requires that if the excisable goods had been already assessed to duty prior to entry into a warehouse, then, such duty shall be paid when such goods are cleared for home consumption. This rule further requires that if the goods had not been assessed to duty prior to their entry into a warehouse, then, such goods shall be assessed to duty and cleared in the manner described in ‑rule

52. This is clear from the words underlined by me in the above quoted rule

157. Now, rule 52, though it occurs in Chapter V relating to `manufactured goods' other than salt; has been made applicable also to salt by the express provision of rule 157 which is .a rule of general applica tion. Rule 52 runs thus: ‑ "52.‑When the manufacturer desires to remove goods on payment of duty, either from the place or premises specified under rule 9 or from a storeroom or other place of storage approved by the Collector under rule 47, he shall make application in triplicate (unless otherwise by rule or order required) to the proper officer in the proper Form and shall deliver it to the officer at last twelve hours (or such other period as may be elsewhere prescribed or as the Collector may in any particular case require or allow) before it is intended to remove the goods. The officer shall thereupon assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the Treasury, or paid to the account of the Collector in any office or agency of the State Bank of Pakistan, shall allow the goods to be cleared." Thus rule 52 requires the making of an application in triplicate to the proper officer in proper form in order to remove excisable goods from the place of storage, on payment of duty. Such applications for removal or clearance of excisable goods from the place of manufacture or storage on payment of duty, are also required under rules 9 and

158. The proper Form mentioned in rules 9, 52 and 158 is Form No. A R I as stated in Appendix I to the Central Excise Rules. Having regard to all these rules, it appears that the scheme of the Act and the rules is that salt which is excisable goods is assessed to duty at the time of clearance or removal of salt from the factory, warehouse or the place of storage and, that too, on applica tions made for the purpose of such clearance or removal in the prescribed Form AR‑

1. It is also clear from the rules that manufac tured salt can be deposited in a warehouse or place of storage for the maximum period of three years after the expiry of which period the duty on such salt must be paid, irrespective of its clearance or removal from the warehouse or the place of storage. Having seen the scheme of the Act and the rules, let me now examine the point formulated for my opinion. A correct answer to the point formulated by the two learned Judges of the Division Bench really depends upon the true and proper construction of the Notification No. S.R.O. 62 (R)/65, dated 14‑6‑65 by which salt manufactured in East Pakistan was exempted from duty. For a proper appreciation of this point, would be useful to reproduce the said Notification, at the cost of repetition. The Notification runs thus: ‑ "S.R.O. 62 (R)/65.‑In' exercise of the powers conferred by subsection (1) of section 12‑A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government is pleased to exempt all salt manufactured in East Pakistan from the whole of the excise duty leviable thereon for a period of one year commencing on the 1st July 1965." This Notification as it is, does not state that the salt manufac tured in East Pakistan during any particular period shall be exempt from excise duty, nor does it state that only such salt as was manufactured in East Pakistan during the period from 1‑7‑65 to 30‑6‑66 would alone enjoy the exemption granted by the Notification. The exemption granted by this Notification, t according to its plain meaning, is that no excise duty shall be leviable during the said period of one year one salt manufactured in East Pakistan, irrespective of the time when such salt was actually manufactured in East Pakistan. In other words the exemption granted by the Notification was only for a period of one year from 1‑7‑65 to 30‑6‑66 in respect of all salt manu factured in East Pakistan, whether the manufacture took place during, the period of exemption or at any time before that period. The period of one year mentioned in the Notification is the period of exemption from excise duty and not the period of manufacture of salt in East Pakistan. This appears to be the plain meaning of the Notification. If the contention of Mr. Kamal Hossain all that salt which was manufactured in East Pakistan within the period of one year from 1‑7‑65 to 30‑6‑66 is totally exempt from duty under the Notification be correct, then the salt manufactured before the commencement of the said period but the balance stock of which was carried forward and remained in possession of the manufacturers during the period of exemption from 1‑7‑65 to 30‑6‑66 will be liable to excise duty. But there is nothing in the Notification to indicate that it was the intention to make a discrimination between the salt manufactured during the said exemption period and the salt manufactured prior to that period and not to grant any exemption during the period between 1‑7‑65 and 30‑6‑66 in respect of the stock of salt carried forward from the years previous to that period. Again, if the contention of the learned Advocate is correct, the benefit of the exemption granted by the Notification will indefinitely continue to remain attached to that salt which was manufactured in East Pakistan within the period from 1‑7‑65 to 30‑6‑

66. But any such exemption for un limited period must not have been the intention of the maker of the Notification ; rather the exemption, as expressly stated in the Notification, is only for a period of one year ending on 30‑6‑

66. In this connection, it is pertinent to note that none of the petitioners stated in his petition that the whole of his stock of salt as on 30‑6‑66 was manufactured only during the period between 1‑7‑65 to 30‑6‑

66. The Notification cannot be construed in the manner as attempted by Mr. Kamal Hossain, except by putting a rigorously strained on construction thereon. The plain meaning of the Notification is that excise duty on salt manufactured in East Pakistan, which could have been levied during the year 1965‑66 was not leviable during that year because of the exemption granted by the Notification. The period mentioned in the Notification is the period of exemption. After the expiry of the period, no exemption can be claimed on the ground that the petitioners' salt was manufactured during the exempted period. With the expiry of the period of exemp tion, whatever manufactured salt remained in the possession of the petitioners, became liable to excise duty for the reason that the exemption was no more there. I would, therefore, agree with the view taken by Mr. Justice Salahuddin Ahmed and answer the point of reference in the affirmative. Before parting with these cases, I would like to observe that the new rule 138‑A regarding chargeability of duty on salt to which an incidental reference was made by both the learned Judges of the Division Bench, was introduced long after the expiry of the period of exemption and has no bearing on the construction of the Notification granting the exemption. SALAHUDDIN AHMED, J.‑All the seven petitions were heard together, but as there vi as unfortunately a difference of opinion between us on certain questions they were ultimately referred to a third Judge Mr. Justice M. R. Khan under clause 36 of the Letters Patent. The learned third Judge Mr. Justice M. R. Khan has since given his opinion and the matter has come back to us for orders. It may be mentioned here that the Petitions were referred to the third Judge both in regard to the consequential orders i that we passed in the cases earlier on the 24th July 1967 and in regard to the following questions: ‑ "Whether the salt which had been crushed by the petitioners during the continuance in force of Notification No. S. R. O. 62(R)/65, dated 14‑6‑65 issued by the Central Government, but had not left the factories of the petitioners during such continuance is leviable with duty under the Central Excises and Salt Act, 1944." So far as this question is concerned the learned third Judge has answered it in the affirmative, and has held that with the expiry of the period of exemption granted by the aforesaid Notification whatever manufactured salt remained in the posses sion of the petitioners became liable to excise duty for the reason that the exemption was no more there. The learned third Judge has not expressed any opinion about the order that should be passed in these seven Petitions. In accordance with the opinion of the learned third Judge we hereby discharge all the seven Rules nisi issued in the seven Petitions but without any order as to costs. ABDUL HAIM KHAN, J.‑‑I agree. K. B. A. Reference answered. Order accordingly.