P L D 1988 Lahore 461 (PLP)

This judgment will dispose of writ petition W.P.No.5579 of 1987 filed by Lahore Textile and General Mills Ltd. , petitioner, and twenty‑nine other petitions, namely, W.P. No.5580 of 1987, W.P. No.5581 of 1987, W.P. No.149 of 1988, W P. No.150 of 1988, W. P. No.152 of 1988, W. P. No.240 of 1988, W. P. No.305 of 1988, W. P. No. 413 of 1988, W. P. No.505 of 1988, W. P. No.619 of 1988, W. P. No.661 of 1988, W. P. No.708 of 1988, W. P. No. 710 of 1988, W. P. No.711 of 1988, W. P. No. 7 57 of 1988, W. P. N o.'( ~) b o f 1989. W.P. No.934 of 1988, W. P. No.935 of 1988, W. P. No.1011 of 1988, W.F. No.1012 of 1988, W.P. No. 1137 of 1988, W. P. No. 1190 of 1988, W.P. No.1191 of 1988, W.P. No.1288 of 1988, W.P. No.1334 of 1988, W.P.No.1362 of 1988, W.P. No.1495 of 1988, W.P. No.1593 of 1988, W.P. No. 1651 of 1988 and W.P. No.1991 of 1988 filed by various parties, whereby the petitioners claim exemption from surcharge and lqrs surcharge imposed by the Customs on machinery imported by them. In one of these writ petitions, namely W.P. No.5581 of 1987, the petitioner also claims exemption from customs duty imposed by the customs on ring spinning machines imported by it.

2. The petitioners in the various cases before me are joint stock companies resident in Pakistan engaged in the business of manufacture, sale and export of cotton, art silk, yarn, etc.

3. The Federal Government, by Notification S.R.O. 500(1)/84, dated 14‑6‑1984, in exercise of powers conferred by section 19 of the Customs Act, 1969, and subsections (1) and' (2) of section 7 of the Sales Tax Act, 1951, and in supersession of Notification No.S.R.O.700(1)/80, dated 26‑6‑1980, directed that plant, and machinery which was not manufactured locally, would, if imported for initial installation or for balancing modernization, replacement or extension of the projects approved by the Government, for areas specified in column No.2 of the table given with the notification, be exempt from so much of the Customs duties leviable thereon under the First Schedule to the said Act as were in excess of the extent specified in the corresponding entries of column (3) of the table and the whole of sales‑tax, subject to certain conditions which were set out thereunder.

4. Likewise, the Federal Government, by Notification S.R.O.512(1)/86, dated 29‑5‑1986, in exercise of the powers conferred by section 19 of the Customs Act, 1969, and in suppression of Notification No.S.R.O. 702 (1)/80, dated 26‑6‑1980, directed that plant and machinery as was defined in the said notification, failing under heading numbers specified in column 4 of ME table given with the said notification, excluding Cone Winding Machines, Ring Spinning Machines and such machinery as was manufactured locally, would be exempt from the whole of the customs duties chargeable thereon if imported by the approved industrial projects of the type specified in column 2 of the table attached with the notification, for the purposes indicated in column 2 of the said table, subject to the condition that the importer, would, at the time of importation furnish an indemnity bond in the form attached therewith to the extent of the custom duties exempted under the notification. It was further directed? the said indemnity would be discharged on production within a period of one year from the date of importation of plant and machinery, a certificate from the Assistant Collector, Customs and Central Excise of the area, to the effect that such plant and machinery had be duly installed by the importer. ??? 5.???? The petitioners before me in 1987 and/or 1988 either imported for initial installation or for balancing, modernizing, replacing or extending its projects, as approved by the Government, in the backward areas specifically specified, as per notification of 14‑6‑1984, or imported machinery for initial installation or for balancing, in modernizing replacing or extending of its approved projects as specified, as per notification dated 29‑5‑1986. When bills of entries in respect of the said machinery imported were filed with the Custom Authorities, they allowed exemption of all Customs duties which were leviable under the said two notifications, but not the surcharge and Iqra surcharge.

6. Being aggrieved by the decision of the Customs Authorities, the petitioners preferred writ petitions in this Court, the number and details of which have been, given above which are now before me for disposal,

7. On behalf of the petitioners M/s. Muhammad Akram Khawaj Asntar Ausat All. Ch. Muhammad Sadiq, Umar Ata Bandial, Re Muhammad Muzaffar, Kh. Ahmad Tariq Rahim, Iftikhar Ullah Mali and Tariq Javed, Advocates have appeared. On behalf of t responents Malik Muhammad Qayyum, Deputy Attorney General . Qadir Ahmad Siddiqui have appeared,

8. On behalf of the petitioners a number of submissions ha been made. First, that there is no difference between "customs duties levied at rates prescribed in the First and Second Schedules of t Customs Act, 1969, or under any other law for the time being force and "additional customs duties" levied under the Finance Ordinance or Act, for the words "customs duties" and "addition customs duties" mean the same thing and are not distinctive as t categories of customs duties. in this connection, it is submitted the under subsection (1) of section 18 of the Customs Act, 1969, custom duties are levied at rates prescribed in the First Schedule and t Second Schedule or at rates as may be prescribed under any other law for the time being in force and under subsection (2) of section 18, regulatory duties are levied on all or some of the articles specific in the First and the Second Schedule at rates specified under t said subsection, whereas under subsection (1) of section 2 of t Finance Ordinance, 1982 and subsection (1) of section 5 of the Finance Act, 1985, additional customs duties as surcharge and lqra surcharge are levied at rates prescribed in the said sections. Though subsection (1) and (2) of section 18 of the Customs Act create two different categories, namely, the "customs duty" and the "regulatory duty subsection (1) of section 18 of the Customs Act and section 2 of t Finance Ordinance, 1982, and section 5 of the Finance Act, 1985, not create two different categories of customs duties and the word "additional customs duty" in the Finance Ordinance and Act are on descriptive of the further additional or added levy. Second, that section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1985, which impose surcharge and the lqra surcharge respectively only contain charging sections and in the absence of any machinery and procedural sections dealing with the mode and manner of assessment, collection, recovery and remedies available to both the ?????? parties by way of appeal, revision, etc., all the provisions of the Customs Act, 1969, dealing with the said matters, become applicable by beneficial incorporation and thus section 19 of the Customs Act, which enables the Federal Government to grant exemptions to all customs duties levied under the Customs Act or under any other law for the time being in force, becomes applicable. Thus, the exemptions granted under the Federal Government's notifications dated 14‑6‑1984 and 29‑5‑1986 also extend and cover surcharge and lqra surcharge. Third, that subsection (2) of section 2 of the Finance Ordinance, 1982, and subsection (2) of section 5 of the Finance Act, 1985, which exclude the exemptions granted under the Customs Act, 1969, or any other law for the time being in force from being applicable to the surcharge and lqra surcharge levied under the said sections, it is submitted that the said subsections can only apply to exemption notifications in force on the coming into force of the said Ordinance and Act, but subsequent exemption notifications would not be affected as to exclude their operation over surcharge and Iqra surcharge. In this connection it is submitted that the words "for the time being in force", as appearing in the said subsection mean subsisting law and not future legislation. Maj. Mehtab Khan v. The Rehabilitation Authority P L D 1973 S C 451 at 462 and Mst. Amro Jan and ;others v. Malik Amir Muhammad Khan 1972 S C M R 639 at 641 are referred in this respect. It is, therefore, submitted that the Federal Government's??????? notification dated 14‑6‑1984 exempting customs duties, which came into force after the Finance Ordinances of 1982 and 1983, would cover the surcharge levied under section 2(l) of the Finance Ordinance, 1982, and Federal Government's notification dated 29-5‑1986 exempting certain portions of customs duties, which came into force after the Finance Act, 1985, would cover the lqra surcharge levied under section 5(1) of the Finance Act, 1985, and subsection (2) of section 2 of the Finance Ordinance, 1982, and subsection (2) of ?? section 5 of the Finance Act, 1985, would not have the effect of ?????????? earning the said exemptions. Fourth, that Iqra surcharge basically is not a levy of a customs duty, but the levy of educational fee to cover education and since items 43 to 54 do not cover education or fees to cover education, the levy of lqra surcharge is ultra vires of the Constitution, In this respect it is submitted that the words "there shall be levied and collected an additional customs duty as Iqra surcharge", as used in subsection (1) of section 5 of the Finance Act, 1985, clearly show that the duty is meant for Iqra i.e. educational purposes only. Para. 66 of page 94 of the Pakistan Budget 1985‑86 has been referred to show that the Federal Ministry does not consider the said levy as customs duty, but lqra surcharge from the whole nation. Item 0212 at page 183 of the Pakistan Budget 1987‑88 is also referred to show that lqra surcharge is. listed ' separately from customs duty. It is pointed out, on the basis of the law declared by the ??????????? Supreme Court of India in K.P. Varghese v. I.‑T.O. A I R 1981 SC 1922 that where words are clear in a statute, speeches made in the ???????? legislature cannot be referred, but speeches made in support of Annual Budget Statements, in fulfillment of requirements of the Constitution, can be taken into consideration to show the intent of the Government, when framing a particular law. Since the Annual Budget Statements show the total and clear allocation of the Iqra surcharge towards education, it is submitted that the levy is basically for educational purposes and since education is covered by item No.38 of the Concurrent Legislative List, only an educational fee should have been levied under item 44 of the said List. Relying upon the rule of "pith and substance", it is submitted that the levy for lqra should have been by way of an Iqra fee and not as an additional customs duty and the legislature being not competent to impose additional customs duty for the purposes of levying finance for education, its act must be treated as incompetent and thus mala fide. In. this connection Fauji Foundation v. Shamimur Rehman P L D 1983 S C 457 at 470 has been cited. Fifth, that where general and special provisions co‑exist, any one of them can be applied, which is most appropriate. In this connection, the Commissioner of Income‑tax v. M. Babar Ahmad & Sons 1981 SCMR 1029 Is referred. It is, therefore, submitted that the exemption granted under section 19 of the Customs Act, 1969, can co‑exist with the special exemptions that may be granted under section 2(2) of the Finance Ordinance, 1982, and section 5(2) of the Finance Act, 1985, and if all are present, any one of them or the most appropriate one of them can be applied. Since presently only the ones under the Customs Act are appropriate, they should be applied. Sixth, that the whole object of the two exemption notifications dated 14‑6‑1984 and 29‑5‑1986 was to enable new entrants into the industry to install? new machinery and the old industrialists to update, balance and modernise their old and sick units and the whole object of the scheme was to ensure that the new machineries coming in under the said notifications would be free of customs duties to the extent stated in the said notifications and since Government by their promise induced the petitioners to import new machinery, the Government was bound by their promissory estoppel and thus debarred from claiming the duties that were exempted. In this connection, Federation of Pakistan v. Ch. Muhammad Aslam 1986 S C M R 916 and Union of India v. Anglo Afghan Agencies AIR 1968 SC 718 have been referred.

9. On behalf of the respondents the following submissions have been made. First, that additional customs duties imposed by virtue of section 2(1) of the Finance Ordinance, 1982, and section 5(1) of the Finance Act, 1985 must be treated as separate categories of customs duties by way of surcharges, as they happen to be customs duties over customs duties. The very word "surcharge" means extra load or charge or burden. Section 2(1) of the Finance Ordinance, 1982, speaks of the imposition of an additional customs duty as surcharge and section 5(1) of the Finance Act, 1982, speaks of all an additional customs duty as iqra surcharge; both being leviable on the importation of the goods specified in the First Schedule to the Customs Act, 1969, at the rate of 5% of the value of such goods as determined under section 25 of the Customs Act. Since under section 18(l) of the Customs Act, 1969, customs duty is levied and under section 18(2) of the said Act, regulatory duty is levied, it is submitted that under the Finance Ordinance, 1982, and the Finance Act, 1985, the additional customs duties levied by way of surcharge and iqra surcharge must be treated as a category separate from the customs duty and the regulatory duty levied ‑under the Customs Act, '1969. Second, that subsection (2) of section 2 of the Finance Ordinance 1982, as amended by the Finance Ordinance, 1983, and section 5(2) of the Finance Act, 1985, . clearly provide that the exemption of goods into Pakistan from the whole or any part of the additional customs duty leviable under subsection (1) of the said sections can only be allowed by the Federal Government and that no exemptions from payment of customs duty under the Customs Act, 1969, or any other law for the time being in force, can apply to the additional customs duties leviable under subsection (1) of the said sections. In the light of this clear language, it is submitted that the petitioners are not entitled to claim exemption of surcharge and iqra surcharge, for none have been provided by subsection (2) of section 2 of the? Finance Ordinance, 1982, or by subsection (2) of section 5 of the Finance Act, 1985, and that unless the petitioners can strictly lay claim to a clear exemption, the benefit??????????? must go to the State and not the petitioners. in the connection para. 258 of Statutory Construction by Crawford, 1940 Ed. , has been referred to show that provisions providing for an exemption must be construed strictly against the person who claims the exemption. Muhammadi steamship Co. Lta, v. The Commissioner of Income‑tax P L D 1966 S C 828 at 838 and Messrs Rehmat Ullah and Sons v. The Commissioner of Sales Tax 1974 S C M R 127 at 129 have also been cited in the said connection. Third, that since the Finance Ordinance of 1982 and the Finance Act Of 1985, which are special laws and which inter alia provide for imported goods being specifically exempted from the levy of additional customs duty by way of surcharge and iqra surcharge, were enacted after the Customs Act, 1969, which is the general law on Customs and which inter alia provides for imported goods being specifically? exempted' from the levy of customs duty and regulatory duty, the rule that the provision in the general enactment which provides exemptions in respect of customs duties and regulatory duties stands pro tanto avoided by the provisions in, the special enactments which provide for exemptions being granted in respect of the surcharge and iqra surcharge, would apply to the instant cast_ In this connection the subject heading "Curtailment without Repeal" appearing at page 374 of Craies of statute law, 7th Edition, has been referred to show that if a subsequent statute creates an exemption or exception from the operation of a previous statute, the previous statute is not necessarily repealed, but may be treated as inoperative. In other words, the general enactment is pro tanto avoided by the express enactment which is entirely inconsistent with the former. The subject heading "Presumption" appearing at page 401 of the Interpretation of Statutes and General Clauses Act by N.S. Bindra, 3rd. , has also been referred to show that where a general intention is expressed, ,and also a particular intention, which is compatible with the general one he particular intention is considered as an exception to the general one and that even when the later, or later part of the enactment is in the negative, it is sometimes reconcilable with the earlier one by so treating it. Rai Singh v. . Allah Din P L D ' 1950 Lah. 111 and Allah Wasaya v. Federal Land Commission P L D 1979 SC 44 at 49 have also been cited‑Fourth, that the words "for the time being in force" as appearing in subsection (2) of section 2 of the Finance Ordinance, 1982, as amended by the Finance Ordinance, 1983, and in subsection (2) of section 5 of the Finance Act, 1985, do not necessarily mean the law subsisting at that time, but also cover future legislation. In this connection Mian Iftikhar‑ud‑Din v. Muhammad Sarfraz P L D 1961 S C 585 at 595 has been cited to show that the words "for the time being" do not necessarily refer to the past and may well hale reference to what is to happen in the future. It is, therefore, submitted that the words "for the time being in force" appearing in the subsections referred to above not only contemplate exemptions that may be issued under the Customs Act, 1969, but also under any other law then prevailing or which may in future be enacted. Fifth, that the additional customs duty by way of surcharge and iqra surcharge levied under the Finance Ordinance, 1982, and the Finance Act, 1985, were within the competence of the Federal Legislature by virtue of items Nos.27, 43 and 54 of Part I of the Fourth Schedule of the Constitution of Pakistan, 1973, read with Articles 70(4), 141, 142 and 143 of the said Constitution. In determining the "pith and substance" of section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1985, what is to be seen is not the name of the tax or duty, but its real nature. In this connection, Governor‑General‑in‑Council v. Province of Madras 1945 P C 98 has been cited. On this point, it is submitted, relying upon the observation of Suleman, J, in United Provinces v. Atiqa Begum A I R 1941 F C 16, that where the question is whether any impugned Act is within any of the Lists, or is not at all, it is the duty of the Courts to consider the Act as a whole and to decide whether in pith and substance the Act is with respect of a particular category or not. This can be inferred only from the design and purpose of the Act as disclosed by its language and the effect which it would have in its actual operation. Relying upon F.B. Ali v. The State P L D 1975 SC 506 at 524, it is urged that what is to be seen is as to what in reality is the true nature and character of the impugned legislation and that what may be incidentally the consequences of the legislation cannot be said in pith and substance to be the object of the legislation. In the instant case, it is submitted that the object of section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1983, was to impose additional customs duty and nothing else and, therefore the Federal Government was competent to. legislate in that matter. Sixth, that speeches and debates in the legislature are not relevant for the purposes of determining the nature and intent of the law, if the same are clear from the law itself. In this connection ‑M / s. Abbasi Textiles Mills Ltd. ‑v. The Federation of Pakistan P L D 1958 S C 187 is cited. Seventh, that it is the duty of the Courts to see that efforts are made to save a statute, rather than strike it down on technical considerations. In this connection Mst. Mehreen Zaib‑un‑Nisa v. The Land Commissioner, Multan P L D 1975 S C 397 is referred. Eighth, that the question of imposition of any impost‑by way of fee does not arise, as the levy was basically one on imported goods. It is submitted that fees are generally imposed on persons who derive special benefit or privilege in respect of functions or matters in respect of which the, fee is imposed and since the Government was not imposing any special benefit or privilege on the importers of goods, the question of imposing any levy by way of fees on the importers did not arise.

10. Before dealing with this case it is necessary to reproduce certain sections of the Customs‑Act which are relevant in this case: Preamble: Whereas it is expedient to consolidate and amend the law relating to the levy and collection of customs‑duties and to provide for other allied matters; It is hereby enacted as follows:‑ Section

1. Short title, extent and commencement.‑‑ (1)?????? This Act may be called the Customs Act, 1969. (2)?????? It extends to the whole of Pakistan. (3)?????? It shall come into force on such date as the Federal Government may, by notification in the official Gazette, appoint. Section

18. Goods dutiable.‑‑ (1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule and the Second Schedule or under any other law for the time being in force, on‑‑ (a)?????? goods imported into or exported from Pakistan. (b)??????? goods brought from any foreign country to any customs station, and without payment of duty, there transshipped or transported for, or thence carried , and imported at any other customs station; and (c)??? goods brought in bond from one custom station to another. (2)???? The Federal Government may, by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose a regulatory duty 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 or at a rate not exceeding hundred per cent. of the value of such articles, as determined under section 25 and may, by a like Notification, levy a regulatory duty on all or any of the articles exported from Pakistan,‑‑ (i)????? in the case of articles enumerated in the Second Schedule at a rate not exceeding thirty per cent. of the rate specified in the Second Schedule or of the amount which would represent the value of such articles as determined under section 25; and (ii)???? in the case of article not enumerated in the Second Schedule, at a rate not exceeding thirty per cent. of the amount which represents the value of such articles as determined under section 25. (3)??? The regulatory duty levied under subsection (2) shall‑‑ (a)??? be in addition to any duty imposed under subsection (1)'or under any other law for the time being in force; and (b)???? be leviable on and from the day specified in the notification issued under that subsection, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day. (4)??????? Any notification issued under subsection (2) shall, if not earner rescinded, stand rescinded on the expiry of the financial year in which it was issued. Section

19. General Power to exempt from customs‑duties.‑‑ (1)??????? The Federal Government, subject to such conditions, limitation or restrictions, if any, as it thinks fit to impose, may, by notification in the official Gazette, exempt any goods imported into, or exported from Pakistan or into or from any specified port or station or area therein, from the whole or any part of the customs duties chargeable thereon. (2)??????? A notification issued under subsection (1) shall be effective from the day specified therein notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day. 11.?????? Section 2 of the Finance Ordinance, 1982, as amended in 1983, and section 5 of the Finance Act, 1985 may also be reproduced here with advantage: Finance Ordinance, 1982: 2.???????? Surcharge on imported goods.‑‑(I) There shall be levied and collected an additional customs duty as surcharge on the importation of the goods specified in the First Schedule to the Customs Act, 1969 (IV of 1969), at the rate of five per cent of the value of the said goods as determined under section 25 of the said Act: Provided that for the purposes of the Sales Tax Act, 1951 (III of 1951), the additional customs duty shall not constitute a part of the duty paid value. (2) The Federal Government, subject to such conditions, limitations, or restrictions, if any as it thinks fit to impose, may, notification in the official Gazette, exempt any goods imported into Pakistan, from the whole or any part of the additional customs duty leviable under subsection (1) and to exemption from payment of customs duty under the 'Customs Act, 1969, or any other law for the time being in force shall apply to the additional customs duty leviable under the said subsection. Finance Act, 1985: 5.???? ?? Iqra surcharge on imported goods.‑‑(1) There shall be levied and collected an additional customs duty as lqra surcharge on the importation of the goods specified in the First Schedule to the Customs Act, 1969 (IV of 1969), at the rate of five per cent. ‑ of the value of the said goods as determined under section 25 of the said Act: Provided that, for the purposes of the Sales Tax Act, 1951 (III of 1951), the additional customs duty shall not constitute a part of the duty paid value. (2)??????? The Federal Government, subject to such conditions, limitations, or restrictions, if any, as it thinks fit to, impose, may, by notification in the official Gazette, exempt any goods imported into Pakistan from the whole or any part of the additional customs duty leviable under subsection (1) and no exemption from payment of customs duty under the Customs Act, 1969, or any other law for the time being in force shall apply to the additional customs duty leviable under the said subsection.

12. The Customs Act, 1969, is the general law dealing with both the subject of customs and the duties leviable thereunder. The First Schedule ' to the Customs Act 1969, constitutes the import tariff and the Second Schedule comprises the export tariff. According to subsection (1) of section 18 of the Customs Act, the rates of customs duties that can be levied under the Customs Act are those which are prescribed in the First and the Second Schedules to the said Act or those which are prescribed by or under any other law for the time being in force. Thus, where the rates are to be added, deleted or altered, or the nature of the goods imported into or exported from Pakistan on which such levy is to be made are to be added, deleted or altered, amendments can be made to the First and Second Schedules of the Customs Act or to such provisions of the other law for the time being in force dealing with customs, as may be applicable in the matter. Where there is some other law dealing with customs, subsection (1) of section 18 provides that these customs duties can also be levied at such rates prescribed by such other law. In short, if there is a charging section in any other law dealing with customs, subsection (1) of section 18 of the Customs Act 1969 becomes the charging section for levy or levies under that law as well and the machinery and procedure for the mode and manner of assessment, collection 'and recovery, exemptions from and repayment of the customs duties as provided by all of the other provisions of the Customs Act, 1969, become applicable, unless all or any of such matters are provided by the other law and, therefore, stand excluded. The words "under any other law for the time being in force,, in subsection (1) of section 18 of the Customs Act do not mean only the laws as were in force on the date that the Custom Act, 1969, was enacted. It obviously covers other laws relating to Customs as may be enacted even later. An Act dealing with taxation undergoes many amendments in its life and parallel laws dealing with the same tax can also be enacted, which also would undergo varying changes. Stroud's Judicial Dictionary, Vol.4, where the words "for the time being" are dealt with, states that these words could, according to its context, mean the time present or denote a single period of time, but its general sense is that of time indefinite and refers to an indefinite state of facts which may arise in the future and which may vary from time to time. In the instant case the words "for the time being in force" clearly refer to a state of facts which may arise in the future and which may vary from time to time. This is obvious from the fact that the legislation in which these words appear is a law dealing with taxation, which invariably undergoes changes.

13. Section 2 of the Finance Ordinance, 1982, as amended by the Finance Ordinance, 1983, imposes an additional customs duty as surcharge on goods which are imported as specified in the First Schedule to the Customs Act, 1969, at the rate of five per cent. of the value of the said goods as determined under section 25 of the Custom Act. The said section does not provide the machinery for the levy and collection of the said additional customs duty. By virtue of subsection (1) of section 18 of the Customs Act, the said additional customs duty can be levied and collected by the age provided under the said Act at the rate as is prescribed under section 2 of the Finance Ordinance, 1982. Subsection (2) of section 2 of the, Finance Ordinance, 1982, as amended by the Finance Ordinance,. 1983, ~ provides that the Federal Government, subject to such conditions, I limitations or restrictions, if any, as it thinks fit to impose, may, by notification in the official Gazette, exempt any goods imported into Pakistan from the whole or any part of the additional customs duty leviable under subsection (1) and 1 10 exemption from payment of Customs duty under the Customs Act, 1969, or any other law for the time being in force shall be deemed to apply to the additional customs duty leviable under the said subsection. It appear that the Finance Ordinance, 1982, by a special provision, has dealt with the conditions, limitations and restrictions under which the Federal Government may, by notification in the official Gazette, exempt any goods ,ported into Pakistan from the whole or any part of the additional custom duty leviable as surcharge. In the presence of this specific provision, the general provision regarding exemption contained in section 19 of the Customs Act, 1969, would pro tanto stand avoided by the special enactment. if any authority is required for this view the subject heading ,Curtailment with full Repeal" appearing at page 374 of Craies on Statutory Law, 7th Ed. , may be referred, wherein it is stated that it a subsequent statute creates an exemption or exception from the operation of a previous statute, the previous statute may be treated as inoperative, or, in other words, the general enactment may be treated as pro tanto avoided by the express enactment, which is entirely inconsistent with the former, He who claims an exemption must bring his case strictly within the scope of the relevant law. See muhammadi Steamship Co. Ltd. v. Commissioner ok income‑tax PLD 1966 S C 828 at 838 and Mebsrs Rehmat Ullah and Sons v. The Commissioner of Sales Tax 1974 S C M R 127 and 129, Jn Sunail Jute MRIS Ltd. v. Federation of Pakistan W.P.No.313 of 1903 decided by ,the Lahore High Court on 7‑6‑1983 this Court held that in view of subsection (2) of section 2 of the Finance Ordinance, 1982, exemption from additional customs duty could only be claimed if oriented under? this subsection and not by the Federal Government Notification S.R.O. No.700(1)/83, dated 26‑6‑1980 issued under section IS f the Customs Act, 1969. 14‑ The words "and no exemption from payment of customs duties under the Customs Act, 1969, or under any other law for the time being in force shall be deemed to apply to the additional customs duty leviable under the said subsection" appearing in subsection (2) of section 2 of the Finance Ordinance, 1982, as added with retrospective effect by the Finance Ordinance, 1983, obviously are, intended to remove any clash that may arise by two exemption provisions being operative in' the field, one under subsection (2) of the Finance Ordinance, 1982, and the other under section 19 of the Customs Act, 1969. By the addition of the said words as above quoted, the special enactment has made it clear that any exemption already granted be made under the general law, or any other law for the time being in force, would not apply to the additional customs duty leviable under that subsection. 15.? Section 5 of the Finance Act, 1985, which deals with the imposition of additional customs duty as Iqra surcharge on the importation of goods specified in the First Schedule to the Customs, Act, 1969, at the rate of 5% of the value of the said goods as determined under section 25 of the said Act, is on lines parallel to section 2 of the Finance Ordinance, 1982, which deals with the imposition of additional customs duty as surcharge. The same views as stated in paras. 13 and 14 above would apply to this additional customs duty as well.

16. The case of the petitioners that the Federal Government's Notification S.R.O.500(1)/84, dated 14‑6‑1984 is also applicable to the surcharge and lqra surcharge levied under section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1985, cannot be accepted, for the reasons already stated above and also for the special reason that the said Notification only exempts certain portions of the customs duties as are leviable on goods under the First Schedule of the said Act. Since the exemption itself is specifically E limited to customs duties as are leviable "under the First Schedule of the said Act," obviously they cannot be applicable to customs duties which are leviable under any other law.

17. The further case of the petitioners that the Federal Government's Notification S.R.O.512(1)/86 dated 29‑5‑1986 is also applicable to the surcharge and Iqra surcharge levied under section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1985, cannot be accepted, for the reasons already stated in paras. 13 to 15 above. However, since the said notification exempts such? of the petitioners whose projects have been approved for balancing, modernization or replacement from the whole of the custom duties, chargeable on the machinery imported by them and the exemption is not ‑limited to the customs duties leviable under the First Schedule to the Customs Act, an attempt has been made to show that the Iqra surcharge at least that has been imposed by the Finance Act, 1985, if not the surcharge imposed under the Finance Ordinance, 1982, is ultra vires the Constitution.

18. It is the case of the petitioners that the lqra surcharge basically is not a levy of customs duty, but a levy of educational fee to cover education. In this connection para. 66 of page 94 of the Pakistan Budget 1985‑86 has been referred to show that the Federal Ministry has not considered the said levy as customs duty, but as lqra fee for the whole nation. Item 0212 at page 183 of the Pakistan Budget 1987‑88 is also referred to show that collections under lqra surcharge are listed separately from customs duties. It is, therefore, submitted that the lqra surcharge is basically a levy for educational purpose and since education is covered by item 38 of the Concurrent Legislative List only, an educational fee should have been levied under item 44 of Part I of the Concurrent Legislative List under the Fourth Schedule to the Pakistan Constitution, 1973. Relying upon the rule of "pith and substance", it is submitted that the levy for lqra or education should have been by way of an lqra fee and not as an additional customs duty and the Federal Legislature not being competent to impose additional customs duty for the purposes of collecting revenues for education, its act must be treated as incompetent and thus, mala fide and void.

19. In order to deal with the above question, it is necessary to refer to certain Articles of the Constitution of Pakistan, which are relevant; ?70. (1) A Bill with respect to any matter in the Federal I Legislative list or in the Concurrent Legislative List may ( originate in either House and shall, if it is passed by the a House in which it originated, be transmitted to the other House and, if the Bill is passed without amendment, by the other r House also, it shall be presented to the President for assent. . (2)??? If a Bill transmitted to a House under clause (1) is rejected I or is not passed within ninety days of its receipt or is passed I with amendment, the Bill, at the request of the House in which it originated, shall be considered in a joint sitting. . (3)??????? if a request is made under clause (2), the President shall .1 summon a joint sitting, and, if the Bill is passed in the joint t sitting, with or without amendment, by the votes of the majority f of the total membership of the two Houses, it shall be presented I to the President for assent. (4)??????? In this Article and the succeeding provisions of the e Constitution, "Federal Legislative List" and "Concurrent t Legislative List" mean respectively the Federal Legislative List t and the Concurrent Legislative List in the Fourth Schedule. . 77.??? No tax shall be levied for the purposes of the Federation? except by or under the authority of Act of Majlis‑e‑Shoora? (Parliament). 141.? Subject to the Constitution, Majlis‑e‑Shoora (Parliament) may V make laws (including laws having extra territorial operation)? for the whole or any part of Pakistan and a Provincial Assembly V may make laws for the Province or any part thereof.

142. Subject to the Constitution ‑‑?(a) (a)??????? Majlis‑e‑Shoora (parliament) shall have exclusive power to make e laws with respect to any matter in the Federal Legislative e list; (b)??????? Majlis‑e‑Shoora (Parliament), and a Provincial Assembly also, , shall have power to make laws with respect to any matter in? the Concurrent Legislative List; (c)??????? a Provincial Assembly shall, and Majlis‑,e‑Shoora (Parliament) ) shall not, have power to make laws with respect to any matter r not enumerated in either the Federal Legislative List or the a Concurrent Legislative List; and ?(d)?????? Majlis‑e‑Shoora (Parliament) shall have exclusive power to make a laws with respect to matters not enumerated in either of the e Lists for such areas in the Federation as are not included in any Province.

143. If any provision of an Act of a ‑Provincial Assembly is repugnant to any provision of an Act of Majlis‑e‑Shoora (Parliament) which Majlis-e-Shoora (Parliament) is competent to enact or to any provision of any existing law with respect to any of the matters enumerated in the Concurrent Legislative List, then the Act of Majlis‑e‑Shoora (Parliament), whether passed before or after the Act of the Provincial Assembly, or, as the case may be, the existing law, shall prevail and the Act of the Provincial Assembly shall, to the extent of the repugnancy, be void.

20. Some of the relevant items under the Federal Legislative List and the Concurrent Legislative List under the Fourth Schedule to the Constitution of Pakistan 1973, may also be reproduced here with advantage: FEDERAL LEGISLATIVE LIST 27.???? Import and export across customs frontiers as defined by the Federal Government, inter provincial trade and commerce, trade and commerce with foreign countries; standard of quality of goods to be exported out of Pakistan. 43.??? Duties of customs, including export duties. 44.??? Duties of excise, including duties on salt, but not including duties on alcoholic liquors, opium and other narcotics. CONCURRENT LEGISLATIVE LIST 38.????? Curriculum, syllabus, planning, policy, centres of excellence and standards of education. 39.??? Islamic education 44.?? Fees in respect of any of the matters in this List, but not including fees taken in any Court.

21. A perusal of the items listed under the Federal Legislative List and the Concurrent Legislative List in the Fourth Schedule to the Constitution of Pakistan show that they deal with fields or subjects of legislation. The power of legislation is given in Articles 141 to 144 and the other Articles of the Constitution. Taxation is a distinct matter for purposes of legislative competence. Hence the power to frame laws with regard to customs, does not necessarily imply the ancillary power to levy customs duty. Where a legislature, whilst exercising its power to frame a law on a subject, within its competence, also imposes a tax, is another matter, for it would then have to be seen whether the power to tax is also within its competence. The General subjects of legislation are dealt with in items 1 to 42 of Part I and items 1 to 4 of Part Il of the Federal Legislative List and items 1 to 43 of the Concurrent Legislative list, whereas items 43 to 54 in Part I and item 5 in Part 11 of the Federal Legislative List and item 44 of the Concurrent Legislative List deal with taxes. Thus, a conflict between power to legislate on a subject and that to tax on the same subject under the present Constitution should not arise.

22. Before dealing with the question of vires, the question as t o what is the difference between "customs duty" and "surcharge" requires to be cleared. Customs duties are nothing but charges or exactions upon goods imported into or exported from a country, as opposed to excise duties which are payable upon goods produced,' manufactured and/or consumed within the country. Section 2 of the Finance Ordinance, 1982, speaks of an additional customs duty as surcharge and section 5 of the Finance Act, 1985, speaks of , additional customs duty as lqra surcharge. The word "additional" obviously means another or further and the word "surcharge" means something added to the normal charge or exaction, e.g. a duty added to a duty, or a charge added to a charge. In Abdur Rahim v Federation of Pakistan P L D 1976 Lah. 886 this Court held thaj regulatory duties levied under notifications issued under section 18(2), of the Customs Act were also a form of additional customs duty ' as they were levied in addition to those specified in the First Schedule .IG In the Treasurer of Charitable Endowments v. Central Board of Revenue 1986 M L D 1731, the flood relief surcharge. added by the Finance (Supplementary) Ordinance, 1973, to the Central Excises and Salt Act, 1944, was held to be no more than excise duty. Reading sections 2 and 5 above stated, what is apparent is that a customs duty is to be charged on the imported goods specified in the First H Schedule to the Customs Act, 1969, and since the bulk of the said goods specified in the First Schedule, apart from some stray exceptions, are leviable to Customs duty, the said charge is obviously over and above that leviable under the First Schedule. The additional, duty being a customs duty over and above the normal customs duty, the exaction is a surcharge.

23. With the above question answered, I would now turn to the basic question. What does section 2 of the Finance Ordinance, 1982, or section 5 of the Finance Act, 1985, propose to achieve. This is the main "pith and substance" of the case. As held by Lord Simonds in Governor‑General‑in‑Council v. Province of Madras A I R 1945 PC 98, what is to be seen is not the name of the tax or legislation, but its real nature, to determine the category in which the legislation falls. Suleman, J. , in United Provinces v. Atiqa Begum A I R 1941 FC 16, held that the Act as a whole was to be considered, to decide whether it fell within a particular category or not and this could be inferred only from the design and purposes of the Act, as disclosed by its language and the effect which it would have in its actual operation. Hamood‑ur‑Rehman, J, in F.B. Ali v. State P L D 1975 SC 506 at 524, held that what was to be seen was in reality the true nature and character of the impugned legislation and that what incidentally would be the consequences of the legislation could not be said in pith and substance to be the object of the legislation. Reading the relevant sections of the Finance Ordinance 1982 and the Finance Act 1985 it is obvious that the Federal Government proposes to levy additional customs duty at 5% of the value of the imported goods specified in the First Schedule to the Customs Act, 1969, in addition to the customs duty already payable thereon under section 18 of the, said Act. The object of the special enactment is not to sponsor develop or encourage education or centres of educational excellence,? to collect customs duties pure and simple, under the power to taxation available to it under item 43 of Part I of the Federal Legislative List under the Fourth Schedule to the Constitution. Since the texts of these two special enactments that impose the two additional customs duties by way of surcharges are so clear, the same are conclusive and I cannot infer any object or any intention other than taxation in the said provisions. It is well‑settled law that the validity of an Act is not affected if it incidentally trenches upon matters outside the authorised field, if otherwise, by the rule of "pith and substance", it substantially falls within the powers expressly conferred upon the legislature which enacted it. If the basic object of section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1985',l was to levy nothing more than additional customs duty, the fact that incidentally the whole of the customs duty under the latter Act was to be or still is diverted to education, the legislation cannot be held to be invalid merely because funds from the common pool have been specifically earmarked by the legislature for a particular purpose. It cannot be denied that all customs duties fall into the common poor and from there can be diverted into various channels to meet expenditure regarding a host of subjects and activities. The fact that the legislature has diverted the income of one particular item of additional customs duty for a specific purpose, does not alter the "pith and substance" of the legislation, which is taxation. Once legislation, which specifically deals with taxation, is within the express powers, then it is not invalidated if incidentally the total income derived from such taxation is directed to meet the expenditure on a particular subject. The legislature has powers to divert the income falling in the common pool into various activities and if the income of one source, which normally falls in the common pool, is channelized specifically to a particular purpose, the true object of the legislation, which initially was taxation, is not lost.

24. The petitioners have not been able to show any clash between the power of the Federal Legislature and provincial legislature to legislate within an area common to both. In the absence of this clash, the rule of "pith and substance" can hardly be attracted. If I understand the arguments of the learned counsel for the petitioners correctly, it is suggested that the Federal Legislature was competent to legislate both with regard to customs and education, but since the additional customs , duty levied under the Finance Act, 1985, is specifically to be diverted to education, the levy should have been by way of some fee, such as educational fee and not by way of additional customs duty as lqra surcharge. The distinction between a tax and a fee is that the tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege accruing to the individual. A fee is a sort of return of consideration for services rendered and is generally correlated to the expenses incurred by Government in rendering the services and the money received is as a rule set aside specially for the performance of such work and is not merged in the general revenues that constitute the ?common pool. See the Commissioners of Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (A.I.R. 1954 S C 282). Though this is the general scheme, there is really? generic difference between a tax and a fee and the taxing power of a State may manifest itself in various ways, which may be seen contradictory. In Muhammad Ismail and Co. v. Chief Cotton Inspector (P L D 1966 S C 388 at 401), the Supreme Court of Pakistan itself held that no hard and fast rule could be laid down which could serve to distinguish a tax from a fee and each case would have to be decided on its own facts and circumstances. In the instant case, the exaction by way of additional customs duty was not to be imposed on persons for any special benefit or privilege accruing to them and the same was not correlated to the expenses to be incurred by Government in rendering any services. The exaction could not, therefore, be categorised as fee or Iqra fee. Its proper placement was as tax or duty and its nomenclature as additional customs duty by way o‑^ surcharge appears to be correct. But even if I were to accept the argument that a fee should have been imposed, the misdescription of the exaction would not make section 2 of the Finance Ordinance, 1982 or section 5 of the Finance Act, 1985, ultra vires the Constitution, as the power to legislate on the subject of customs and education and the power to impose tax or fees in respect of the said subjects. vest with the Federal Government.

25. Only few words remain to be stated about the Finance Minister's Budget speech and the Annual Budget Statements. What is constitutionally required to be laid before the National and the Provincial Assemblies under Articles 80 and 120 of the Constitution are the Annual Budget Statements to show separately (a) the sums required to meet expenditures described by the constitution as expenditures charged upon the Federal and the Provincial Consolidated Funds and (b) the sums required to meet the other expenditures proposed to be made from the Federal and Provincial Consolidated Funds and the said statements have to distinguish expenditures on revenue account from other expenditures. Under Articles 78 and 118, all revenues received by the Federal and the Provincial Governments, all loans raised by the ' said Governments and all moneys received by them in repayment of any loans, are to form part of consolidated funds, to be called the Federal and Provincial Consolidated Funds. What the Annual Budget Statements of 1985‑86 and 1987‑88 of the Government of Pakistan show are the Customs receipts under the chapter "Detailed Statement of Tax Revenue" and the expenditure on education under the chapter "Detailed Statement of Expenditure met from Revenue". In the Annual Budget Statement of 1987‑88, the receipts under Customs are shown under two heads, one against item 0210 as "Customs (A)" and the other under item 0212 as "Land Customs others: lqra Surcharge". It is thus clear that the additional customs duties are shown under the head "customs", which comes under the common pool. There is no entry showing the receipt under lqra surcharge as a separate item of expenditure under Education, though the possibility that it has been diverted under that general head cannot be excluded. Thus, the Annual Budget Statements only support in the conclusion that the exaction has been imposed by the Federal Government as additional customs duty and not by way of any feel and the revenues therefrom go to constitute the common pool. As regards the Finance Minister's Budget Speech for the year 1985‑86, it does show that a National Education Fund was being set up under the Prime Minister for financing education for which a surcharge of 5% was being imposed on the bulk of the imports, to be called the Iqra Surcharge", which was to be in addition to the already existing development surcharge, but this does not change the levy from additional customs duty to an educational fee, for basically the levy is for the common pool. As held in K. P. Varghese v. 1. ‑T.

0. Ernakulam) (AIR 1981 SC 1922), a practice has recently developed by which Courts take into consideration the speech made by a mover of a Bill explaining the reason for its introduction as aid for the purposes of ascertaining its object and purpose, or to ascertain the mischief sought N to be remitted. In the case of Rab Nawaz (P L D 1974 SC 210) the intent of the legislature was scrutinized to find out the reason for the remedy. In the case of Messrs Abbasi Textile Mills Ltd. v. Federation of Pakistan (P L D 1958 S C 187)t it was held that speeches delivered in debates in the legislature were hardly relevant? if the language of the enactment was clear and there was no ambiguity The Finance Minister's Speech, in the presence of the clear language of section 2 of the Finance Ordinance, 1982, and section 5 of the Finance Act, 1985, would not have the effect of altering their scope and object, which was no more than to realize additional customs duty by way of surcharge. ???

27. W.P. No.5581 of 1987 also covers another legal point. In this case the petitioner imported Toyoda Ring Spinning Frame from TOYODA TSUSHO (Hong Kong) Co. Ltd., Hong Kong, through letter of credit dated 21‑2‑1987. Under Notification S.R.O. No.500(1)/84, dated 14‑6‑1984, "cone winding machines, ring spinning machines and such machinery as is manufactured locally" are not entitled to the exemption from the customs duty available under the said notification. It is the case of the petitioner that it entered into two agreements with Spinning Machinery Company of Pakistan Limited, Kotlakhpat, Lahore, on 28‑5‑1986 for purchase of thirty‑two ring frames from them, which order was confirmed by the said company in writing on 28‑5‑1986, but in view of the said company having gone into liquidation and its assets having been advertised for sale on 27‑7‑1983 in newspapers, the petitioner pressed the said supplier for refund of the advance which they had paid in the said connection, which advance was returned to them on 7‑9‑1986. Documents in the said connection have been filed with the writ petition. It is the case of the petitioner that after they realised that there was nobody in Pakistan manufacturing ring spinning machines, they placed the order with TOYODA TSUSHO (Hong Kong) Co. Ltd., Hong Kong, for ring spinning machines, for which they opened letter of credit on 21‑2‑1987. It is submitted that the exclusion of ring spinning machines from exemption granted by the Federal Government under its notification dated 29‑5‑1986, is only valid if the said machines are manufactured locally. Since ring spinning machines were not being manufactured in Pakistan in 1986 and in the early part of 1987, it is pleaded that the petitioner was entitled to the exemption of the customs duty.

28. It is clear from the notification of 14‑6‑1984 that cone winding machines, ring spinning machines and such machinery as is manufactured locally is not entitled to exemption. The words "and such machinery as is manufactured locally" clearly show that "cone winding machines and ring spinning machines" must also be of the same category i.e. manufactured locally. Earlier, in S.R.O. 702(1)/80, dated 26‑6‑1980, Explanation (ii) to the said notification provided that automatic cone‑winders being a substitute for locally manufactured cone‑winders would not be eligible for the concession under that notification. In Naveed Textile Mills' case (P L D 1985 S C 92), it was attempted to show that imported cone winders were no substitute for local cone winders and that no manufacturer in Pakistan manufactured cone winders and, therefore, imported cone winders were entitled to exemption, which argument was rejected. Under notification of 14‑6‑1984, if cone‑winding machines are manufactured locally, only then the exemption is not available; otherwise it is. The order of the Assistant Collector (Appraisement) Customs Dry Port, Lahore, does not indicate whether ring spinning machines were being manufactured locally. Unless they were, the petitioner would be entitled to the exemption. In these circumstances, the case of the petitioner require to be remanded so that the Assistant Collector of Customs (Appraisement); customs Dry Port, Lahore, can determine the question Whether ring spinning machines were being manufactured locally in early 1987, when the letter of credit was opened by the petitioner, and, if not, whether the petitioner is entitled to the exemption of the customs duty under the notification dated 14‑6‑1984.

29. For the foregoing reasons, writ petition (W.P.No.5581 of 1987) is partly accepted and the order of the respondent is set aside and the case is remanded to the Assistant Collector of Customs (Appraisement), Customs Dry Port, Lahore, for determination, of the matters stated in para. 27 above. This writ petition, however, is dismissed with regard to the petitioner's claim for exemption of surcharge and Iqra surcharge. Since the success is divided in this case, there shall be no order as to costs. As regards the remaining writ petitions, there is no merit in the same, which are dismissed with costs. Counsel's fee in each case is fixed at Rupees Two Thousand (Rs.2,000). The Customs Department shall be entitled to counsel's fee in each case. M. B. A. /L‑3 1/ L ????????????????????????????????????????????????????????????????????????????? Order accordingly.