P L D 1986 Karachi 211 (PLP)

Reverting to the facts of the instant petition for the reasons given above the demand of import duty at the rate of 72 % on the basis of notification, dated 1‑7‑1976 published in the Gazette of Pakistan Extra ordinary, Part II, dated 1‑7‑1976 bearing‑S. R. O. No. 635 (1)/ 6 issued by respondent No. 2. is legal and valid. The petition is; therefore, dismissed however, with no order as to costs. K. A. GHANI, J.‑I have the benefit of reading the judgment of our brother Mr. Justice B. G. N. Kazi, on the question referred to the Full Court in view of the conflict of opinion between the two learned Division Benches of this Court on the interpretation of subsection (2) of section 18 of the Customs Act, 1969 (hereinafter referred as the said Act). I would like to give reasons of my own for arriving at the con clusion reached in the above judgment.

2. At the very outset, it may be stated that a perusal of subsection (2) of section 18 would show that the provisions thereof can conveniently be described as consisting of the following two parts, pursuant to which the Federal Government is empowered to levy a regulatory duty :‑ (i) on all or any of the articles specified in the First Schedule at a rate not exceeding fifty per cent of the rate, if any, specified therein." (ii) " or at a rate not exceeding hundred per cent of the value of such articles as determined under section 25."

3. In the first case of Yousuf Re‑rolling Mills v. Collector of Customs, decided on 19‑4‑1977 while interpreting the said subsection (2), and power of the Federal Government, to impose a regulatory duty it was held that in respect of those articles on which rate of customs duty has been provided on ad valorem basis, the regulator) duty could be levied only under the first part and " the intention of the Legislature could be to prohibit the levying of duty exceeding 100 per cent under the second part what it has permitted to be done under the first part."

4. In the other case Messrs Hashim Tanvir Traders v. Federation of Pakistan and others C. P. No. 404 of 1977 another learned Division Bench while interpreting subsection (2) of section 18, and repelling the contention raised that since the rate in respect of the item involved in that case was specified in the First Schedule to the Customs Act. 1969, the Federal Govern ment had no power to levy regulatory duty beyond the said percentage and that second part of the aforesaid subsection empowering the Federal Govern ment to impose duty at a rate not exceeding 100 per cent of the value of such articles as determined under section 25 was not attracted and the two parts of this section be read disjunctively, held :‑ "The aforesaid subsection (2) of section 18 of the said Act empowers the Federal Government to impose regulatory duty either at a rate not exceeding 50 % of the rate specified in the First Schedule or at a rate not exceeding 100% of the value of such articles, as determined under section 25 of the said Act. The power to impose regulatory duty covers all or any of the articles mentioned in the Schedule. In the first part of the subsection (2) of the said Act the imposition of regulatory duty on all or any of the articles specified in the First Schedule is to be at a rate not exceeding 50% of the rate, whereas in the 'second part of the subsection (2) it is to be at a rate not exceeding 100 % of the value of such articles, as determined under section 25 of the said Act. The words `such articles' occurring in the two parts of the subsection (2) clearly cover all the .articles mentioned in the schedule whether their rates are specified therein or not." It was further held "The object behind the. imposition of the regulatory duty is to afford protection to local manufacturing industries against foreign imports and if the imposition of the regulatory duty at the rate of 50% of the rate mentioned in the First Schedule is found inadequate qua prevalent market value of the goods, the Federal Government have a free choice to impose such regulatory duty but not exceeding 100% of the value of such articles as determined under section 25 of the said Act."

5. In view of the conflict between the judgments of the two learned Division Benches of this Court referred above the question of law which requires decision by the Full Court is whether under second part of sub‑section (2) of section 18 of the Act, the Federal Government is empowered to impose a regulatory duty at a rate not exceeding 100% of the value of such articles as determined under section 25 of the Act, on all or any of the articles specified in the First Schedule on which regulatory duty at a rate not exceeding fifty per cent of the rate, if any, specified therein could be imposed under the first part of the said subsection (2).

6. It was contended by the learned Advocates on behalf of the im porters that it is only when no rate of duty is specified in the First Schedule against the item, duty at a rate not exceeding 100% of the value of such item as determined under section 25 of the Act could be imposed and that in all other cases in which the rates of duty have been specified in the First Schedule the regulatory duty levied could not exceed 50 / of the rate so indicated in the said First Schedule. According to the learned counsel for the petitioner any other interpretation would involve conflict in the first part and second part of subsection (2) of section 18 and would be a cause of great hardship to the importers. Reliance was placed on the case of Yousuf Re‑Rolling Mills v. Collector of Custom (ibid). On the other hand Mr. A. Aziz Munshi, the learned Deputy Attorney -General relied upon the case of Messrs Hashim Tanvir Traders v. Federation of Pakistan and others referred above. It was argued that the Federal Government has a choice to impose regulatory duty either under the first part of subsection. (2) at the rate of 50% of the rates mentioned in the First Schedule or to impose a regulatory duty but not exceeding 100 % of the value of such articles as determined under section 25 of the said Act.

7. I, however, find myself unable to accept the interpretation which the learned Advocates for the importers seek to place on subsection (2) of section

18. It would be relevant here to state that while construing and interpre ting fiscal laws one must look to the words of the statute and interpret them in the light of what is clearly expressed and nothing can be implied which is not expressed. The Hon'ble Supreme Court of Pakistan laid down principles of interpretation of the provisions of taxing statutes, relevant would it be to refer to them for purposes of resolving the question involved in this petition :‑ (i) In the case of Commissioner of Agricultural Income‑tax v. B. W. M. Abdur Rehman (1973SCMR445) the Honourable Supreme Court held : ‑ "But indeed, in determining whether or not a particular matter comes within a taxing statute, it is only the letter of the law which must be looked to. 'There is ample authority for the proposition that in a fiscal case, form is of primary importance, the principle being that if the person sought to be taxed comes within the letter of the law, he must be taxed, however, great a hardship may thereby be involved but on the other hand if the Crown cannot bring the subject within the letter of the law he is free, however, apparent it may be that his case is within what might be called the spirit of the Law. As was said by Rowlatt, J., in Cap Brandy Syndicate v. Inland Revenue Commissioner (1921) 1 K B 64. "In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." In Tenant v. Smith (1982AC150) Lord Halsbury said :‑ "1n a Taxing Act it is impossible, I believe to assume any intention any governing purpose in the Act, to do more than take such tax as the statute imposes .cases, therefore, under the Taxes Acts always resolve themselves into the question whether or not the words of the Act have reached the alleged subject of Taxation." In the light of these pronouncements with which I hereby express my respectful .agreement, it is clear that it is not possible to look either to the amending statute of 1951 or to the alleged collection allowance said to be included in the scheme of the case, in order to determine whether the words in clause (7) of section 6 provide for an allowance to be made in respect of the amount of cess received by the assessee. That question must be decided solely on a con sideration of the very words of the clause, although in interpreting those words it is permissible to look generally at the rest of the statute, and in particular to consider whether the words in question have been used elsewhere and if so in what sense." (ii) In the case of Collector of Customs (Appraisement). Karachi and others v. Messrs Abdul Majeed Khan and others (1977SCMR371), the principles as to interpretation of taxing statutes were declared as follows :‑ "Moreover, in interpreting a penal or a taxing statute the Courts must look to the words of the statute and interpret them in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provisions to the statute so as to support assumed deficiency, as held in Messrs Hirjina & Co. (Pakistan) Ltd. v. Commissioner of Sales Tax, Central, Karachi." In the abovementioned case the Honourable Supreme Court cited with approval from the case of Two Hundred Chests of Tea (US 6 Lawyer's Edn. 430) the following observations as quite instructive :‑ "The object of the duty laws is to raise revenue, and for this purpose to class substance according to the general usage and known determi nations of trade. Whether a particular article were designated by one name or another, in the country of its origin, or whether it were a simple or mixed substance, was of no importance in the view of the Legislature. I did not suppose our merchants to be naturalists or geologists or botanists. It applied its attention to the descrip tion of articles, as they derived their appraisements in our own markets, in our domestic as well as our foreign traffic. And it would have been as dangerous as useless, to attempt any other classification than that derived from the actual business of human life." (iii) In the case of F. B. Ali v. The State (P L D 1975 S C 506) it was held :‑ "It is first sought to be contended that the Ordinance were not law at all, because, they purported to unreasonably deprive a citizen of even the norms of a judicial trial. But this generalization cannot be accepted. Law has not been defined in the Constitution of 1962 and, therefore, in its generally accepted connotation, it means positive law, that is to say, a formal pronouncement of the will of a competent law‑giver. There is no such condition (bat a law must in order to qualify as a law also be based on reason or morality. The Courts cannot strike down a law on any such higher ethical notions nor can Courts act on the basis of philosophi cal concepts of law as pointed by me in the case of Asma Jilani (P L D 1972 S C 139)." (iv) In the case of Muhammad Amir Khan v. The Controller of Estate Duty and others (P L D 1961 S C 119) while pointing out the distinction between the provi sions which imposed taxes and those which provided for the machinery by which ‑tax is assessed and realised, the Hon'ble Court observed : "The provisions relating to imposition of tax are to be strictly cons trued in favour of the subject so that if there be any substantial doubt it has to be resolved in his favour. But the machinery sections are to be liberally construed. If the incidence of tax be clear the machinery sections should be so construed as to make the realization of the proper tax possible. They should not be so construed as to defeat the intention of the legislature and to prevent the realization of the tax that is in fact due. The distinction stated above was recognized by the. Federal Court of Pakistan in Khan Bahadur Amiruddin and others v. West Punjab Province (P L D 1956 F C 220) where the learned Judges while dealing with a case under the Punjab Immovable Property Tax Act said : The Act in question is no doubt a Taxing Act and unless the liability to be taxed is clear the interpretation should be in favour of the subject. But no question of interpretation arises regarding section 3, which, in unambiguous terms determines the liability of the lands to be taxed. The provisions that have to be interpreted are those relating to the machinery of the assessment and in respect of such provisions of a Taxing Act the Privy Council in . Income‑tax Commissioner v. Mahabi Ramjidas A I R 1940 P C 124, observed that construction should, be preferred which makes the machinery workable."

8. In the light of the above principles we proceed to examine the provisions of subsection (2) of section 18 of the said Act. (i) In the first place it would be seen that in order to ascertain as to, what amount of customs duty (ad valorem) or regulatory duty imposed would be payable on articles specified in the First Schedule where the rate of duty is specified, mentioned in the first part of subsection (2) or on the value of "such" articles referred in the second part of the said subsection, Customs Authority would have to have recourse to section 25 of the Act which lays down the principles for determination of the normal price of imported articles. No distinction, therefore, can be made) for the reasons that reference to section 25 is made in the latter part of the subsection (2). (ii) As laid down in the case of Commissioner of Income‑tax v. B. W. M. Abdur Rehman (ibid) and Collector of Customs v. Messrs Abdul Majeed Khan and others (ibid) while interpreting a taxing statute the Court must look to the words of statute, it would be relevant to take notice on the word "such" which is used as prefix to the word "articles", in the second part of subsection (2) under which the Federal Government is also empowered to impose regulatory duty at a rate not exceeding 100 Y. of the value of "such" articles. The word "such" used in the second part of the said subsection (2) by the Legislature is significant and cannot be ignored. The word "such" must be read as referring back to article mentioned in the preceding part of subsection (2). The view expressed as above by us find support also from the case reported as Abdul Aziz and another v. Muhammad Ibrahim (PLD1977S C442). Before the Honourable Supreme Court the provisions of section 13 (3) (a) (ii) (d) of the then West Pakistan Urban Rent Restriction Ordinance which read as follows, came up for Interpretation :‑ "He (landlord) or his said child is not occupying in the same area in which `such' building is situated for purposes of his business another such building or rented land as the case may be suitable for his needs at the time." The Honourable Supreme Court while taking notice of the word "or" which occurred twice and the word "building" each time prefixed by the word "such" held :‑ "Considering its implication that it refers generally and naturally to its last antecedent the use of ‑this word is with a definite purpose, i. e. to identify the ownership of the building with that before mentioned in the introductory part of clause (ii). In this connec tion we would also refer to the rules as to how the word "such" should be construed as stated by Maxwell in his book on the interpretation of statutes, 12 Edition at page 30 "Where the word 'such' occurs in a section it must not be‑ ignored, but must be read as referring back to the preceding provisions, even though this gives rise to a result which appears anomalous." The conclusion, therefore, is irresistible that the word building can have no other meaning except that which is owned by the landlord . This is in accord with the rule of construction i. e. to intend the Legislature to have meant what they have actually ex pressed."

9. Reference may again be made here to the case of Commissioner of Agricultural Income‑tax v. B. W. M. Abdur Rehman (ibid) wherein the following Clauses (1) and (7) (which provided for certain allowances) of section 6 of Bengal Agricultural Income‑tax Act of 1954, came up for consideration :‑ "Clause (I).‑any sums paid by him in the previous year on account of ; (i) land revenue or rent ; (ii) any local rate or cess including Education cess in respect of such land ; "Clause (7).‑ in respect of the cost of collection of such rent or revenue including the cost of maintenance of any Karchari or other capital assets and any expenses of litigation, a sum equal to fifteen per cent of the total amount of rent or revenue which accrued to him in the previous year in respect of the land from which such rent or revenue is derived." After referring to the above clauses the Honourable Supreme Court proceeded to interpret the above referred clause 7 as follows :‑ "Employing recognized methods of construction, in relation to clause (7) of section 6 is quite clear that in the phrase 'the cost of collection of such rent or revenue including the cost of maintenance of any Katchar, or other capital assets and any expenses of litiga tion' the word `such' makes it clear that the `rent or revenue' intended is that last previously mentioned. The clause must be read for this purpose as if it appeared immediately after the opening words of the section as the first item of allowance." Considered in the light of the above principles and on giving due significance to the word "such" it would be observed that there is no conflict in the earlier and subsequent parts of subsection (2) of section 18 of the Act. It may also bf pointed out that in the First Schedule rates of duties specified are neither uniform nor imposed on all articles. The words used in the second part of subsection (2) of section 18 "or at a rate not exceeding hundred percent of the value of "such" articles would include not only articles on which rate of duty imposed is specified but also other articles mentioned in the Schedule. It would be noted that under the Schedules. customs duty imposed, at places is ad valorem, and at others on quantity. unit. measurements, etc. and a number of articles are even free from payment of any custom duty whatever. The letter of law and the words used in subsection (2) therefore cannot be so interpreted as to restrict the powers of the Federal Government to impose regulatory duty under second part of subsection (2) only in respect of the items importable free of any duty or on which ad valorem duty cannot be imposed. Such an interpretation obviously is not warranted by the clear language used in the statute under consideration, and the Court as already noted above, is to look to the words of the statute and interpret it in the light of what is clearly expressed and it cannot import provisions in the statute so as to support assumed deficiency.

10. This brings us to take into consideration the word 'or' used by the Legislature in subsection (2) of section 18 which has to be given it ordinary meaning as laid down in the case of C. F. Gibbon and others v. Pakistan and others (P L D 1957 Kar. 956) wherein it was held :‑ "The word 'or' has been subject‑matter of controversy in several judicial pronouncements and the preponderance of authority states that 'or' prima facie has only an alternative significance." The learned Full Court while arriving at the above conclusion placed reliance upon the cases reported as Beonlen v. Hooking (1846 L J & C L 49). Gharishamdas Nebhandas v. Mst. Vishindevi and other (5 S L R 259). Kedar Narh Sadhukkan and others v. Mahdu Budan bas and others (A I R 1923 Cal. 682), Green v. Premier Glynrhonwy State Company Limited ((1982)1K8561:13AC595) (on the opinion of Lord Halsbury and the opinion of Lord Fitzgerald at page 607). Reliance was also placed upon the case of Salehon and others v. The State (PLD1986SC267) wherein the Honourable Supreme Court while interpreting section 497, Cr. P. C. and the word 'or' occurring therein observed :‑ "The answer to the question raised in the appeal lies in finding out whether the word 'or' in the exception clause is used in disjunctive or conjunctive sense. Ordinarily 'or' is used in disjunctive sense. The governing rule, however, is to carry out the intention of the Legislature. It may be found necessary to read the conjunctions 'or' and 'and' one for the other depending on the consequences intended by the Legislature." Considered in the light of the above principles I am of the opinion that the Federal Government is empowered in its discretion to levy regulatory duty either under the first part or the second part of sub section (2) of section 18 of the Act in the prescribed manner subject to limitations mentioned therein.

11. For the reasons discussed above, I agree with the conclusion reached by our brother Mr. Justice B. G. N. Kazi. AJMAL MIAN J.‑I agree with my learned brother K. A. Ghani's reasonings given in his proposed judgment. M.B.A. Reference answered