P L D 1967 Supreme Court 494 (PLP)

CORNELIUS, C. J.‑This appeal by special leave is brought by the Paracha Textile Mills Ltd., Karachi, to call in question the levy, upon cotton consumed ins the Mills, of cotton cess under the Cotton Cess Act, 1923. A Division Bench of the High Court has dismissed a writ petition moved for the same purpose by the appellant Mills on a number of grounds only one of which is raised before us by Mr. Khalid Ishaque appearing in support of the appeal. All other questions arising in the case are said to have been resolved by a judgment of this Court in the case of Sheikh Muhammad Ismail & Co. Ltd. (PLD1966SC388). The question for decision turns round the application of the provision in the Cotton Cess Act, which purports to levy the cess. It reads as follows:‑ "There shall be levied and collected on all cotton either exported from the Provinces of Pakistan to any place outside Pakistan or consumed in any mill in the Provinces of Pakistan, a cess at such rate as the Central Government may fix by notification in the official Gazette." This provision was enacted by an Amendment Act of 1948 which received the assent of the then Governor‑General of Pakistan on the 11th January 1949. The challenge to the levy of the cess on the Paracha Textile Mills is raised on the basis that being situated in Karachi, the Mill was not situated in any Province of Pakistan, if not at all material times, at any rate for part of the period so covered. The distinction between territories included in a Province of Pakistan and other territories included in Pakistan will appear from the following provision in section 5 of the Government of India Act, 1935, as it stood in April 1951: "5. (1) As from the fifteenth day of August 1947, there shall be united in a Federation by the name of Pakistan‑ (a) the Provinces hereinafter called Governors' Provinces, (b) the Provinces hereinafter called Chief Commissioners' Provinces, (bb) any other areas that may with the consent of the Federation be included in the Federation, (c) the Capital of the Federation." At that time, Karachi was the Capital of the Federation, having been so designated and its area demarcated from the Province of Sind under the Pakistan (Establishment of the Federal Capital) Order of 1948. But in 1952, this order was amended by addition of subsection (1‑A) to Article 3, which read as follows: "Karachi shall be a Chief Commissioner's Province." The amendment was effected by Governor‑General's Order No. 4 of 1952. Section 290 of the Government of India Act, 1935, enabled the Governor‑General, by Order to create a new Province, which could be a Governor's Province or a Chief Commissioner's Province. A proviso requiring consultation "with the Government of any Province which will be affected by the Order," was not attracted, as Karachi was not, at the time, a part of any Province. The effect of the Order was to include Karachi, viz., the Capital of the Federation in item (b) of subsection (1) of section 5 of the Government of India Act, 1935. It does not appear that item (c) in that subsection was deleted until sometime later, but it is clear that after the making of Governor‑General's Order No. 4 of 1952, the separate mention of the Capital of the Federation in item (c) became devoid of all effect. The Paracha Textile Mills were established in the year 1953, and would therefore appear from the outset to have been within the expression "any mill in the Provinces of Pakistan." Mr. Khalid Ishaque then argued that in consequence of certain constitutional instruments made subsequently affecting the status of Karachi and its administration, Karachi for certain intervening periods ceased to be either a Province of Pakistan or a part of Pakistan. On examination of the relevant instruments there appears to be no force in this argument. Reference may be made to the Establishment of West Pakistan Act, 1955, section 2 of which laid down in the clearest terms that Karachi was to be a part of the West Pakistan Province. This was a constitutional provision whose effect plainly was to bring to an end the separate status of Karachi, the Federal Capital territory, as a Chief Commis?sioner's Province. This section provided also that Karachi should continue to be administered under section 290‑A of the Government of India Act, 1935, which empowered the Governor ?General to demarcate an area forming part of a Province to be the Capital of the Federation, and to make provisions for inter alia its government and administration. The distinction between the territorial status of the Capital of the Federation, which was at that time Karachi, and its administrative status is to be clearly borne in mind. By virtue of section 2 (1) of the Establishment of West Pakistan Act, 1955, Karachi became territorially a part of West Pakistan, and that was the sole condition for the applicability of the cotton cess to any mill situated in Karachi. By Article 211 of the Constitution of 1956, Parliament was empowered to determine the area of the Federal Capital, but until a fresh determination was made the existing Capital, namely, Karachi was to continue to be the Federal Capital. Article 211 also made provision for the administration of the Federal Capital to vest in the President. Nothing in this Article can be deemed to have any effect with respect to the territorial status of Karachi, as a part of West Pakistan, for by Article 1 of the 1956 Constitution it was provided in an explanation to Paragraph 2 that "the Province of West Pakistan shall mean the Province of West Pakistan set up by the Establishment of West Pakistan Act, 1955," and as has been seen that Province included Karachi. Mr. Khalid Ishaque attempted to refer to a number of instruments issued from time to time with particular reference to the administrative status of Karachi and the administrative arrangements provided for Karachi. These go to show that from the year 1948 onwards until the making of the President's Order No. 9 of 1961, namely the West Pakistan Administration (Merger of the Federal Territory of Karachi) Order 1961, the Federal Capital Area was administered by an agent of the Central Government tinder powers delegated to him. At different times, the Agent was variously described as Administrator or Chief Commissioner or Commissioner but as from the date of the Establishment Act, 1955, up to the making of the President's Order No. 9 of 1961, there is no doubt whatsoever that the territory of Karachi being the Federal Capital, was included in the West Pakistan Province. Certain words occurring in that Order have the appearance of casting a doubt upon that position. It commenced with the words "whereas the Federal Territory of Karachi is to be merged into the Province of West Pakistan" and Article 2 of this Order reads as follows:‑ "The territories hitherto known as the Federal Territory of Karachi (hereafter to be called as specified territory) shall as from the appointed day be a part of West Pakistan." The impression conveyed by these expressions is that up to` the making of this Presidential Order, the territory of the Federal Capital was not a part of the West Pakistan Province. Such appears to have been the belief in the mind of these draftsman, but the fact was clearly otherwise and consequently the declaration of intent occurring at the commencement of the Order and the direction for merger contained in Article 2 thereof must be regarded as mere surplusage. It was not necessary to take any step to carry out a territorial merger of the Federal territory in the West Pakistan Province, for there had been no separation of that territory from the West Pakistan Province ever since the passing of the Establishment of Wes! Pakistan Act, 1955. That position had been continue by the Constitution of 1956 and it was not varied by the laws (Continuance in Force) Order, 1958, which gave legal status to the Government of Pakistan under Martial that came into being on the 7th October. 1958. That made no alteration in the existing division of Pakistan into two Provinces, namely, East Pakistan and West Pakistan. By subsection (1) of Article 2 of that Order, it was provided that "Pakistan shall be governed as nearly as may be in accordance with the late Constitution," meaning the Constitution of 1956, and in that Constitution a major provision as to the governance of Pakistan was that contained in Article 1, to which reference has already been made. Therefore, the reference contained in the President's Order No. 9 of 1961 to al supposed need for merging the Federal territory of Karachi in the West Pakistan Province and the positive direction to than effect were clearly otiose and of no effect and from the mere) existence of these words, it is not possible to reach a conclusion such as that desired by the appellant Mills. The Province of West Pakistan continues unchanged under Article 1 of the present Constitution of 1962, and there is thus no doubt whatsoever that, as from the coming into force of the Establishment of West Pakistan Act, 1955, onwards and to the present day, the territory of Karachi has been throughout a part of the West Pakistan Province. From the date of the establishment of the Paracha Textile Mills, up to the enforcement of the Establishment of West Pakistan Act, Karachi was a Chief Commissioner's Province. Consequently, the cess was clearly leviable throughout material period and we hereby dismiss this appeal with costs. A. H.??????????????????????????????????????????????????????????????????????????????????????? ?????????? Appeal dismissed.