SAJID TRADERS, LAHORE VS M/O COMMERCE, GOVERNMENT OF PAKISTAN through Secretary, Finance, 2013 PTD-ISLAMABAD 698 (2012)

(a) Customs Act (IV of 1969)---

----S.18(3)---Constitution of Pakistan, Art. 199---Constitutional petition---Import of goods---Imposition of regulatory duty by Federal Government under S.18(3) of the Customs Act, 1969---Petitioners impugned S.18(3) of the Customs Act, 1969 on the ground that the same was ultra vires the Constitution, since, inter alia, the object of S. 18(3) of the Customs Act, 1969 was to maintain a balance between prices of goods prevailing in the international market and those in Pakistan and for achieving that object three other special laws, namely, Anti-Dumping Duties Ordinance, 2000; Countervailing Duties Ordinance, 2001 and Safeguard Measures Ordinance, 2002 were already in existence and that in presence of said special laws, recourse to general law could not be made and therefore. Federal Government could not levy regulatory duty under S. 18(3) of the Customs Act, 1969---Validity---Regulatory duty could not be separated from customs dutyas it was a part ofthe same duty---Even if it was presumed that the object of the other three special laws was to maintain balance between the international market and prices prevailing in Pakistan, same would not mean that because of the said special laws, the Federal Government was debarred from levying regulatory duty Legislature had delegated powers to levy regulatory duty to the Federal Government, and therefore the Federal Government had the authority to levy regulatory dutyConstitutional petitions were dismissed, in circumstances.

PLD 1998 SC 670; PTCL 1999 CL. 553 and PTCL 1997 CL. 1 rel.

(b) Customs Act (IV of 1969)---

----S. 18(3)---Levy of regulatory duty by Federal Government under S. 18(3) of the Customs Act, 1969 Object and purpose One of the reasons for levy of regulatory duty was to control the fluctuating prices trend in the international market, but it could not be said that it was the only object of levying regulatory duty--- Object and purpose of regulatory duty was to control the fluctuating prices trend in the international market apart from generating extra funds / revenue for the State as well as the regulation of import and export of items so as to maintain a proper balance in the ever fluctuating international market.

PTCL 1997 CL. 1 rel.

(c) Interpretation of Statutes---

----Fiscal statutes were to be strictly construed and by way of interpretation, new words could not be added to statute.

Shafqat Mahmod Chohan, Niaz Ullah Niazi, Monim Sultan, Saud Nasrullah Cheema, Mlaik Naveed Suhail, Ch. Arshad Mahmood, Mudassar Ikram, Chaudhry, Tufail Shahzad and Sabir Ahmed, Ahmed Hafeez and Mian Tahir Iqbal for Petitioners.

Messrs Athar Minullah, Dr. Rana M. Shamim, Raja Muhammad Iqbal, M. Amin Feroze, M.D. Shahzad, Mojeeb-ur-Rehman Warriach, Abid Farooq Awan and Binyameen Abbasi, Shahab Imran, Tahir Abbas and Moin Afzal, Deputy Collectors/representatives for Respondents.

Date of hearing: 17th December, 2012.

JUDGMENT

RIAZ AHMAD KHAN, J.---This judgment is directed to dispose of instant writ petition along with Writ Petition Nos. 2912/2011, 3086/2011, 3092/2011, 3180/2011, 3375/2011, 28/2012, 100/2012, 143/2012, 371/2012, 542/2012, 824/2012, 1011/2012, 1133/2012, 1241/2012, 1422/2012, 1441/2012, 1838/2012, 2586/2012, 2809/2012, 2981/2012, 3208/2012, 3230/2012, 3299/2012, 3604/2012, 3912/2012, 3918/2012 and 4143/2012.

2.All the petitioners, in the aforementioned writ petitions, are engaged in the business of importing different items from different countries. The petitioners have challenged vires of section 18(3) of the Customs Act, 1969 as well as notifications dated 27-8-2008, 13-6-2009 and 3-6-2011, by virtue of which regulatory duty was imposed on the import of goods specified in column No. 3 of the table given in notification dated 27-8-2008. Through the subsequent two notifications amendments were made in the earlier notification.

3.Brief facts of the cases are that in the year 1994, subsection (2) of section 18 of the Customs Act, 1969 was amended and it was provided that the Federal Government [may on the recommendation, of the National Tariff Commission, constituted under the National Tariff Commission Act, 1990 provided the National Tariff Commission follows the same procedure as prescribed in the said Act] by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose regulatory duty on all or any of the goods specified in the First Schedule

4.In the year 2005, section 18 of the Customs Act, 1969 was again amended and provision regarding the National Tariff Commission was removed; however, in sub section 3 of section 18 ibid, it was provided that 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 goods specified in the First Schedule

5.The Federal Government, in exercise of the powers conferred under section 18(3) of the Customs Act, 1969 issued S.R.O. No. 896(I)/2008 dated 27-8-2008, which was to he following effect:--

"In exercise of the powers conferred by subsection (3) of section 18 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to levy regulatory duty on import of goods specified in column (3) of the Table below, falling under the PCT code of the First Schedule to the Customs Act, 1969 (IV of 1969)

This notification was superseded by notification dated 13-6-2009 and than amended by notification dated 3-6-2009. The petitioners have basically challenged all the three notifications, through present writ petitions.

6.Learned counsel for the petitioners submitted that object of the regulatory duty is to maintain a balance in the prices of goods imported into Pakistan, so that a proper balance is maintained in the prices prevailing in Pakistan and those prevailing in international market. Advancing this argument, the learned counsel submitted that keeping in view the International Prices, the National Tariff Commission was constituted and then section 18 of the Customs Act, 1969 was amended. Thereafter, the Anti Dumping Duties Ordinance, 2000, the Countervailing Duties Ordinance, 2001 and the Safeguard Measures Ordinance, 2002 were introduced. Object of all these laws was to maintain a balance in the prices prevailing in International Market and those prevailing in Pakistan. Since, these laws were introduced, therefore, section 18 of the Customs Act, 1969 was suitably amended and provision regarding the National Tariff Commission was removed from the section. However, in subsection (3) of section 18 ibid, powers for levy of regulatory duty were conferred upon the Federal Government. It was further contended by the learned counsel that the Federal Government under subsection (3) of section 18 ibid, could not levy regulatory duty because object of the regulatory duty was to maintain balance between prices and for achieving that object three other laws were in existence; so, the notifications regarding levy of regulatory duty are illegal and liable to be struck down. It was further submitted that the Anti Dumping Duties Ordinance, 2000, the Countervailing Duties Ordinance, 2001 and the Safeguard Measures Ordinance, 2002 were special laws and in presence of special law recourse to general law could not be made and as such even in presence of sub section 3 of section 18 ibid, the impugned notifications cannot be acted upon.

7.On the other hand, learned counsel for the respondents submitted that the petitioners have not come to the Court with clean hands; in the prayer clause, they are challenging vires of subsection (3) of section 18 of the Customs Act, 1969 but no case is being made out to challenge the vires of said section. The learned counsel further submitted that it is wrong to presume that object of the regulatory duty is to maintain a balance between the prices, rather regulatory duty is in essence customs duty and under section 18 of the Customs Act, 1969 the Government has authority to levy customs duty as well as regulatory duty. It was further submitted that objects of Anti Dumping Duties Ordinance 2000, the Countervailing Duties Ordinance, 2001 and the Safeguard Measures Ordinance, 2002 are totally different and the petitioners are trying to confuse the issue by mixing up different laws.

8.I have heard learned counsel for the parties and have also perused the record.

9.In the present petitions, the manner in which the Federal Government has exercised powers under subsection (3) of section 18 of the Customs Act, 1969 has been challenged. So, for the purpose of understanding, relevant portion of section 18 of the Customs Act, 1969 is reproduced hereunder:--

"18. Goods dutiable.---(1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule or under any other law for the time being in force on,--

(a)goods imported into 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 to, and imported at any other customs station; and

(c)goods brought in bond from one customs station to another.

(2)No export duty shall be levied on the goods exported from Pakistan.

(3)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 goods to be imported or exported, as specified in the First Schedule at a rate not exceeding one hundred per cent of the value of such goods as determined under section 25 [or, as the case may be, section 25A]."

Section 18 ibid is charging section in the Customs Act and sub section 1 provides that customs duties can be levied; the word duties has been used and not duty. Subsection (3) of section 18 ibid has given discretionary powers to the Federal Government to levy regulatory duty. So, in other words regulatory duty is also customs duty with the only difference that it is charged under subsection (3) and not under subsection (1) of section 18 ibid. In addition to that inbuilt conditions have been provided in subsection (3) of section 18 ibid; that the Federal Government may levy a regulatory duty subject to such conditions, limitations or restrictions as the Federal Government may deem fit to impose. Regulatory duty is to be imposed on the goods specified in the First Schedule at a rate not exceeding hundred per cent of the value of such goods. As such regulatory duty cannot be separated from customs duty as it is part of customs duty. In judgment reported as PLD 1998 SC 670, it was held that:

"Referring to subsection (2) of section 18 of the Customs Act, 1969 "regulatory duty" is a levy on all or any of the articles specified in the First Schedule which are chargeable to customs duty. The First Schedule under its separate heads prescribes the rates of duties chargeable on goods imported into Pakistan. The regulatory duty has, therefore, direct nexus to the goods imported which are liable to customs charge. If one were to give to it its dictionary meaning then it now here in the context in which it occurs exerts that meaning. In essence, therefore, it can have no other sense, but that of a customs charge imposed to maintain a proper balance in a fluctuating market although it is described by a different nomenclature which does not make it distinct from customs duty. Subsection (3) of section 18 of the Act further reinforces the concept of its being an additional customs charge."

10.Regulatory duty, however can be examined at the touch stone of subsection (3) of section 18 ibid, which provides the inbuilt conditions or at the touch stone of any provisions of the constitution. In the present case, the regulatory duty has not been challenged on any of these grounds. In this respect, it was held in case reported as PTCL 1999 CL. 553, that:--

"The imposition of regulatory duty by the Government under section 18(2) (now section 18(3) is subject to only those limitations and conditions which are mentioned in sub-section (2) (now subsection (3) to (4) of section 18 of the Act. These limitations and conditions do not cast any obligation on the part of Federal Government to state the reasons for imposing regulatory duty. To hold that the Government could not impose regulatory duty unless it disclosed the reasons in justification of its imposition, would amount to curtailing the discretion given to the Government to impose the regulatory duty by reading something in the provision of the statute not provided for by the legislature. Such interpretation in our view, is not justified on any known canon of interpretation. "

11.The contention that subsection (3) of section 18 of the Customs Act, 1969 or the impugned notifications are to be examined at the touch stone of Anti Dumping Duties Ordinance, 2000, the Countervailing Duties Ordinance, 2001 and the Safeguard Measures Ordinance, 2002, is not correct, because that would amount to adding words into the impugned notifications. It is established principle of law that fiscal statutes are to be strictly construed and by way of interpretation new words can not be added to the statute. Even, for the sake of arguments, if it is presumed that object of three special laws is to maintain balance between the International Market and the prices prevailing in Pakistan, that would not mean that because of the special laws, the Federal Government is debarred to levy regulatory duty.

12.There is no doubt that one of the reasons for levy of regulatory duty is to control the fluctuating prices trend in the International market, but it can not be said that it is the only object of levying regulatory duty. In judgment reported as PTCL 1997 CL. 01, it was held that object and purpose of regulatory duty is to control the fluctuating prices trend in the international market, apart from generating extra funds/revenue for the State. It is to regulate the import and export of the items so as to maintain proper balance in the ever fluctuating international market. Even, if it is presumed for the time being that only object of the regulatory duty is to maintain a balance between the International market and domestic trade, then it is not possible for the Court to determine the upward and downward trends in the international market, unless all the balances are placed before the Court. It is because of this, that even the legislature has left it to the Federal Government and the powers to levy regulatory duty has been delegated to the Federal Government. The Federal Government, therefore, has the authority to levy regulatory duty.

13.Keeping in view the above mentioned facts, the petitioners have failed to show that levy of regulatory duty as provided in the impugned notifications was ultra vires of any provision of the constitution, therefore, finding no force in these petitions, the same are hereby dismissed.

KMZ/7/IslPetition dismissed.