P L D 1989 Supreme Court 222 (PLP)

The brief facts relevant at this stage are that the petitioner Company asserted that out of 500 looms on which the capacity tax had been worked out, 110 looms were of Polish origin, the working whereof having I proved unsatisfactory and expensive, they were not under use. That being so they claimed ratable rebate in the excise duty for the relevant period of non‑use of 110 looms. The claim for rebate was refused because the appellant had failed to satisfy the necessary conditions for claim of rebate laid down in the said Rule 3(9) which reads as follows:‑ "If, after the coming into force of these rules, any loom installed in a factory is dismantled and removed from the factory then for each such loom from the first of the month following the month in which the dismantling and removal takes place the annual production capacity of the factory for each of the four categories of cotton fabrics specified in column (4) of the Scheduled shall be reduced by the per‑loom production capacity obtained in the manner stated in sub‑rule (11)." As would appear from the first part of the Rule, it was necessary condition hereunder that the looms concerned which admittedly were earlier installed in the factory should have been "dismantled" and "removed from the factory". There was some correspondence between the department and the appellant with regard to dismantling and removal in consequence whereof by order dated 21st August, 1969 the said Rule was relaxed in appellant's favor, as follows:‑ "The Board has decided to relax sub‑rule (9) of rule 3 of the Fabrics Capacity Rules so far as it relates to the removal of dismantled looms from the factory premises, You are however, required to pack the dismantled looms in wooden boxes and get all the boxes sealed by the local Excise Staff. The sealed boxes can then be stored in the loomshed and its entrance shall likewise be sealed by the Excise Staff. The Collector, Central Excise, Lahore, is being advised to allow abatement for the dismantled looms from the month following the month in which these conditions are fulfilled and necessary certificate has been given by the Assistant Collector, Central Excise Lyallpur. It appears that although the dismantling part of the requirement of the rule was complied with, yet despite the relaxation, the appellant failed either to remove the looms from the factory or to follow the alternative procedure prescribed in the order of relaxation so as to achieve the final purpose; namely, that the looms were no more in such a position as to be put to the working use. Hence, the claim of rebate was refused. The appellant's ultimate grievance made before the High Court, in its constitutional jurisdiction, having failed for similar reason, as afore‑noted, leave to appeal was then sought. It was granted as follows:‑ I "It is stated in a certificate of page 54 of the paper book that: ‑ "Certified that Messrs Nishat Mills Limited, P.

0. Nishatabad, Lyallpur were equipped on 1st June, 1970 with29,816 (Twenty‑nine thousand eight hundred and sixteen) spindles and 390 (three hundred and ninety) Power Looms. Moreover 110 ( one hundred and ten) Power Looms have been dismantled and not working since. Ist August, 1969, The said Mills are also equipped with bleaching, dyeing, mercerizing, printing and finishing plants."

2. Learned counsel states that this was sufficient compliance 'of the relevant rule to enable the petitioner to claim the rebate on this count and the view of the High Court to the contrary is not correct. Leave is granted to inter alia consider this point. Learned counsel for the appellant has frankly conceded that ,the is no evidence nor assertion by the appellant that the dismantled looms, mentioned in the afore‑quoted certificate, were also "removed from the factory" as required by Rule 3(9). On the other hand the learned Deputy Attorney‑ General has not denied the authenticity and correctness of the certificate quoted in the leave granting order, He also asserted and argued that even after dismantling if the looms were not ‑'removed from the factory', the appellant was not entitled to rebate as a required condition, laid down in the Rule, was not satisfied. Learned counsel for the appellant, in addition to two other arguments, contended that in the facts and circumstances of this case the appellant having dismantled the looms and having further dealt with them in such a manner as to render them incapable of working, as stated in the aforementioned certificate that they were "not working since Ist August, 1969" had substantially complied with' the requirements of the Rule. This plea, according to him, is further supported by the fact that the "not working" part of the certificate( has not been challenged and further that the requirement in the rule of "removal from the factory'! was not only relaxed in appellant's case but was later on deleted/relaxed even generally by the order of the Central Board of Revenue dated 27th April, 1970, Learned counsel, placed a copy of that order on record which was not disputed by the learned Deputy Attorney‑General. It reads as follows:‑, "I am directed to say that under the Excise DUTY In Production Capacity (Cotton Yarn Fabrics) Rules, 1968, dismantled spindles/looms have to be removed from the factory premises to qualify for reduction in the production capacity of the factory. The Board have, however, decided that dismantled spindles/looms may be allowed to be stored in god owns or sheds within the factory duly packed and scaled with excise seal. It may be mentioned here that the above reproduce relaxations is similar to the one earlier granted to the appellant by order dated 21‑8‑1969. It cannot be denied that the principle of Substantial compliance', particularly with regard to requirement of statutory rules has been accepted by the Pakistan superior courts since long. Learned counsel for the appellant has, in this behalf rightly relied on (i) Imtiaz Ahmad v. Ghulam Ali (P L D 1963 S.C.382) 00 Ghulam Abba v. Zohra Bibi and another (PLD 1972 SC 337), (iii) Mrs. Dino Mlanakji Chinoy and 8 others v. Muhammad Matin (PLD 1983 SC 693) and Ov) Manager, Jammu and Kashmir, State Property in Pakistan v. Khuda Yar and another (PLD 1975 SC 678). These cases do support him. It is not denied that the Pakistan superior Courts while insisting at, compliance with the statutory rules in accordance with their provisions as also the parent laws; have also by and large accepted the rule of 'substantial compliance' with a view to see, as observed in the case of Mrs. Dino Manakii Chinoy, that they are not applied and operated as "stumbling blocks", instead of "stepping stones". And we may add that they should also be not used simply to trap people by technicalities of these rules instead of advancing the purpose for which they are framed. The learned Deputy A attorney‑ General, however, is right in pointing out that the distinction will have to be made between one type of rules and others eg. even the rules relating to procedural could be divided into those relatable to Court proceedings or the proceedings before other forums including quasi‑judicial, and those relating to other matters like the present instance. He is also right in pointing out that as observed in the case of Imtiaz Ahmed cited E by the learned counsel for the appellant, it would depend upon the circumstances of each case; whether, or not the relevant rule deals with an ordinary subject or a specific question of public policy. And further that when dealing with matters of public policy it would also have to be seen; whether the law required compliance with the rules or made it essential also as a matter of public policy. It would be advantageous to reproduce here the relevant observations made in that case. "I must confess that having dealt with technicalities for more than forty years, out of which thirty years are at the Bar, I do not feel much impressed with them. I think the proper place of procedure in any system of administration of justice is to help and not to thwart the grant to the people of their rights. All technicalities have to be avoided unless it be F essential to comply with them on grounds of public policy. The English system of administration of justice on which‑ our own is based may be to a certain extent technical but we are not to take from that system its defects. Any system which by giving effect to the form and not to the substance defeats substantive rights is defective to that extent. The ideal must always be a system that gives to every person what in his. Having put in almost similar periods in the realm of law and administration of justice we with respect entirely agree with the afore‑reproduced observations. Learned Deputy Attorney‑General contended that in the present case, being a question of public good so as to avoid fraudulent dealings between the departmental functionaries and others interested in the exercise, and also resultant embarrassment to either side, it was deemed necessary as a good public policy to lay down in the rule itself that the dismantled looms should also be removed from the factory, so as to render them into the condition of 11 non‑ working". Insistence on the enforcement of the relevant rules in the matters relating to public policy, the learned Deputy A attorney‑ General further stressed, is justified on the basis of the well‑known case: E.A. Evans v. Mohammad Ashraf, (P L D 1964 S C 536). It is not necessary to make any comments on the case of E.A. Evans because the facts, principle and the rule involved therein are not strictly applicable to the present case. The other cases cited at the Bar, no doubt, have direct relevance. We agree with the learned Deputy Attorney‑ General that the requirement of removal from the factory was based on public policy. But, it cannot be said that the requirement/ public policy, could not be changed from time to time so as to remove hardship. In the present case if that requirement would not, as a matter of policy, have been changed and relaxed subsequently, the appellant might not have had a case to press on the ground of substantial compliance. This aspect of the matter need not be examined any further, because another intervening factor goes in its favor. It is admitted that the requirement of the rule regarding removal of the looms from the factory was, notwithstanding it being in the field of public policy, relaxed and changed by subsequent orders passed in this particular case and also generally, as applicable to such like cases. The condition of removal from factory was dispensed with. Instead another procedure mentioned in the said orders which have been reproduced earlier, was prescribed with a view only to ensure that the looms concerned were rendered into an absolute "non‑working" condition. Even if the examination of the application of principle of 'substantial compliance' with regard to the rule as it originally stood, would have gone against the appellant, the further exercise and examination regarding the application of the same principle, to the relaxed procedure, would be necessary. After discussion on the last question, it was agreed as a question of fact that; when by complying with the changed procedure contained in the orders of relaxation or by any other satisfactory method the looms were rendered into non‑working condition, the changed procedure would be deemed to have been substantially complied with. In this case the certificate relied upon by the learned counsel for the appellant and quoted in the leave granting order having been accepted as correct, and thus "non‑working" having admittedly been ensured, the only question that remains to be decided is; whether; the direction in the order of relaxation for rendering the looms into "non‑working" condition can be deemed to have been satisfied on the principle of "substantial compliance." It must be straight‑away stated that the statutory rule concerned [3(9)], is at a higher level than the order of relaxation passed by the Board of Revenue‑‑whether it is the particular one in, the case of appellant or the general one for others. Keeping in view the state of the case law and ‑the foregoing discussion on the rule of "substantial compliance" it will not be possible to hold that this principle would not be applicable to the direction by the Board of Revenue given to the appellant for ensuring that the looms were rendered into "non‑working" condition. To hold otherwise would be insistence on a mere technicality of procedure, which as observed by this Court in the case of Imtiaz Ahmed, "in any system of administration of justice is to. help and not to thwart the grant to the people of their rights". We with respect follow the said rule and hold accordingly. It is an admitted position that looms concerned were rendered into j non‑working condition after their dismantling. That being so the requirements of the direction given by the Central Board of Revenue to the appellant in place of the requirement of the "removal from the factory", were substantially complied with. The appellant was thus entitled to the rebate in question. While allowing this appeal and setting aside the impugned judgment, we order accordingly. There shall be no order as to costs. M.B.A./N‑140/S Order Accordingly