1984 PLP 68 (MLD)

The petitioners are manufacturers of Biscuits Sweets and Toffee etc. It is stated that the petitioners are not liable to pay excise duty under the Central Excise and Salt Act, 1944 although on the manufactured goods they are liable to pay sales tax. It is stated by Mr.Nasim Muhammad Khan that such tax is payable at the factory gate before the goods leave the factory premises. On 3-2-1982 some consignments were found being removed without any legal requirements regarding payment of sales tax so that a party of Excise and Land Customs intercepted these vehicles in which the manufactured goods were being taken out. The goods as well as vehicles were seized. On 9-2-1982 a letter was received by the petitioners from respondent No.3 stating the fact of removal of such goods and the petitioners were advised either to present the four vehicles in the office of respondent No.3 or furnish bank guarantee equivalent to the amount of the price of these vehicles. A pro forma of Bank Guarantee was also enclosed. Simultaneously the petitioners were asked to produce the vehicles or the required bank guarantee within 3 days. It was at that stage that the present petition was filed on 15-2-1982. In the petition the prayer clause is extremely wide. Relief has been sought for a declaration that the seizure of the vans and the goods were illegal, that the notice dated 9-2-1983 from respondent No.2 was illegal, that the demand for bank guarantee was illegal, that confiscation of the records of the petitioner was mala fide and illegal, that the collection of sales tax was also illegal and that all actions of whatever kind taken by the Central Excise Authorities was without lawful jurisdiction. Comments were called by this Court and the same have been submitted by respondent No.3. The relevant paras. in the comments are Nos.21, 25, 28 and

29. In these paras. it is stated that the petitioners were taking away the goods without payment of sales tax and such removal was in violation of law. It is further stated that the vehicles were liable to confiscation. It has further been stated that the Central Excise Authorities have exclusive jurisdiction to deal with the sales tax collection from the petitioners, as such functions, have been entrusted to them by the Central Board of Revenue under Sales Tax Circular No.7/81. Reliance has been placed on subsection (2) of section 5 of the Sales Tax Act which authorises the Central Board of Revenue to appoint any person by name or by virtue of office to exercise powers of authorities under the Sales Tax Act in respect of any matters or in respect of any case or class of cases. In fact subsection (2) of section 5 further states that the persons so appointed shall have concurrent jurisdiction with the Authorities under the Sales Tax Act. Mr.Nasim to that extent has made a statement that Circular No.7 had been issued by the Central Board of Revenue, appointing Officers of the collectorate of Central Excise as authorities within the meaning of section 5(2) of the Sales Tax Act but he however states that such appointment can be made only by notification and not by a circular. In paragraph 28 of the comments it is further stated that the case of the petitioners shall be heard by an authorised officer who will adjudicate in the matter exercising original jurisdiction and if the petitioners have any grievance with such adjudication they will have a right of appeal before the other functionaries of the Federal Government. By the several interim orders that have been passed the vehicles have been returned to the petitioners on some conditions. The first question that has engaged our attention is the maintain?ability of this petition at the present stage. Mr.Nasim Ahmed Khan states that the action of the respondent was without jurisdiction and, therefore, the constitutional jurisdiction of this Court will be attracted in spite of the fact that final orders have not been passed. Such jurisdiction in so -far as seizure of the vans and goods is concerned is being challenged on the sole ground that action under the Sales Tax Act can be taken only by the functionaries under that Act and not by the functionaries under the Central Excise and Salt Act, 1944. To that extent Mr.Murtaza has invited our attention to a proviso that was added in subsection (4) of section 3 of the Sales Tax Act by Finance Ordinance No.XXIV of 1981. This proviso reads as follows:- "Provided that, in case of goods mentioned in clause (a) of subsection (1), the tax shall, where the Board so directs, be payable at the same time and in the same manner as the duty of excise under the Central Excises and Salt Act, 1944 (I to 1944) and the provisions of the said Act and the rules made there under shall so far as may be and with the necessary modification apply for the purposes of this Act as they apply for the purposes of the said Act." Mr. Nasim Ahmed states that by this proviso the jurisdiction of the respondent was not attracted. Much can be said on both sides but we refrain from interpreting this proviso as the petitioner will have to contest his case before the respondents or the Sale Tax Officer and there was a probability that if we interpret this proviso the case of the Petitioner may be prejudged. We would like to avoid such determi?nation as the functionaries who are respondents or even the officers in the Sales Tax Department can enter into all questions of fact as well as law. As it is seizure of the vehicles does not appear to be illegal if the respondents have the power to seize the goods that had left the factory gate without payment of sales tax. After all the seizure of the vehicles was an act which can be justified on ground of necessity for unless the vehicles were seized the goods laden on the vehicles could not be seized and the amount of sales tax payable could not be assessed. Whether the vehicles are liable to confiscation or not, will also have to be considered by the respondents or the Sales Tax Officer, having due regard to the circumstances of the case. We will, therefore, not advert even to that aspect of the case at this stage. There is a further reason which compels us not to grant relief in this matter at present. That is that adequate alternate remedy is available to the petitioners. In fact the petitioner will have a right of hearing not only before the respondents but even before the other functionaries of the Federal Government at the appellate stage. On the other hand if the respondents come to the conclusion on interpretation of the proviso of subsection (4) of section 5 of the Sales Tax Act that they have no jurisdiction, the matter will have to go before the Sales Tax Authorities for determination of the public charges that are payable. Even the Sales Tax Act has full machinery for appeals at higher forum if the sales tax officer decides the case adversely to the petitioner. These remedies against the order to submit or calling of bank guarantee forbid us from exercising the present jurisdiction. We will in these circumstances dismiss this petition but observe that the respondents or any of them shall issue a notice to the petitioners to show cause in regard to any final action that they may propose to take. The petitioner shall then be heard and all the points that have been urged before us besides any other points that the petitioner may urge shall be duly taken into consideration by statutory functionaries who would pass an appropriate order in law. This they are bound to do. The petition stands disposed of but subject to our observations in the last paragraph. The interim orders in regard to custody of the vehicles shall however by consent remain in force until the respondents decide the case of adjudication or for a period of 9 months as from today, whichever date arrives first. The conditions attached to such vehicles by our interim orders shall also continue during the same time. There shall be no order as to cost. M . A . K .?????????????????????????????????????????????????????????????????????????????? Order accordingly.