AHMAD ABDUL GHANI TEXTILE MILLS Versus CHAIRMAN, CENTRAL BOARD OF REVENUE

WAJIHUDDIN AHMED, J‑‑ Petitioners are a partnership firm engaged in the manufacture of Cotton Fabrics. For the year 1975‑76 they were liable to a levy of Excise duty on Production Capacity, as determined under the Excise Duty on Production Capacity (Cotton Fabrics) Rules, 1968 (herein referred to as the Rules). Under such Rules, per Rule 4 thereof, a factory situated in the then Province of West Pakistan was expected to work 897 shifts in a year. However, if the Central Board of Revenue was satisfied that any shifts, short of the above‑said number, "could not be worked for reasons which were beyond the control of the manufacturer, then for each shift in respect of which it is so satisfied, the Central Board of Revenue may allow an abatement from the duty leviable under Rule 3 "but, some exclusions from such abatement were, also, envisaged and these included "any closure of the factory for a period of less than six days at a time". In other words, for the purposes of this petition, as to closures only such closures, beyond the control of the manufacturer, qualified for abatement as exceeded six days at a time. But the rule of six days, it seems to us, applied only to closures and not to any shifts which "could not be worked for reasons which were beyond the control of the manufacturer", and of which no advance notice could be given.

2. As it turned out, the petitioners were constrained to claim abatement in the sum of Rs.15,90,701.58, in lieu of 762 shifts, short worked for the year 1975 76, vide their claim of abatement dated 5‑8‑1970. They maintained that they had only been able to work 253/254 shifts during that period. The Collector of Central Excise and Land Customs, through letter dated 2‑2‑1977, observed that the petitioners were, prima facie, entitled to an abatement of 644 shifts and asked them as to why excess claim of Rs.1,25,125.02, on their part, be not rejected. A hearing took place on 3‑2‑1977 but that was followed by another show‑cause notice dated 1‑3‑1977, this time maintaining that an abatement claim in the sum of Rs.3,14,011.44 was not admissible. A further hearing was fixed and took place on 5‑3‑1977, which was followed by order dated 9‑3‑1977 whereby abatement for 561 shifts alone, as short worked, was allowed corresponding to an abatement claim of Rs.12,76,690.14. In so doing, in the number of shifts actually worked namely, 253 for the relevant year, 83 closures for periods less than six days at a time, as in Rule 4 above, were added bringing the total for actually worked shifts to 336, which figure when deducted from the minimum 897 shifts for a factory in the erstwhile Province of West Pakistan, abatement for 561 shifts was allowed. The petitioners appealed to the Central Board of Revenue but failed, as reflected in order dated 10‑7‑1977. In revision before the Federal Government they succeeded in obtaining a remand, vide an order dated 31‑12‑1977, for examination of the question whether the mode of calculation adopted in their case had never before been adopted in any other case in the past.

3. On remand, however, success once again eluded the petitioners, the Central Board of Revenue holding, per its order dated 9‑3‑1978, that it was completely irrelevant whether similar mode of calculation was adopted in any other case in the past, since an incorrect decision could not form a precedent. In revision, against such order, the Federal Government, in its order dated 25‑2‑1986, agreed with the Board and dismissed the petitioners' revision. Tais led to the invocation of the Constitutional jurisdiction of this Court.

4. In the first place, we agree with the finding of the forums below that an erroneous decision, in itself, cannot form a precedent and may be deviated from A in favour of a correct pronouncement, at the first opportunity. However, where an erroneous view, finds favour with departmental authorities, consistently. and over a long period of time it, matures into a practice, entailing enforcibility, as those concerned or affected by it come to fashion and regulate their conduct in accordance therewith. Indeed, such a course of practice is protected by and g ensured continuity by a rule, more or less akin to the evidentiary rule of estoppel and termed, generally as Promissory Estoppel, involving a representation or promise from one person or authority and a corresponding alteration of position by the other, seeking continuity and protection. Such practice, or even anything close to it however, was neither established by the petitioners before the departmental authorities nor before us, to render any ground of attack permissible on that score.

5. The other point in dispute and touching merits namely, the inclusion or exclusion of the 83 shifts aforesaid on account of the closures in relation thereto being less than six days is really simple enough. From the record we find that the total annual shifts, which a factory was expected to work, was 1098 being the multiple of 366 days involving 3 shifts a day. However, apparently, on account of weekly holidays and ascertained or anticipated public holidays, Rule 4 of. The Rules fixed a minimum of 897 shifts, leaving a balance of 201 shifts, covering 67 days. If this were the basis, which is not unlikely, it is obvious that a known weekly holiday or a pre‑determined and/or notified public holiday, in isolation, would not fall to be included irk 4 claim of abatement covered under Rule 4 aforesaid. However, it may amount to extending this probability too far in cases where such a weekly or public holiday falls within or abuts a period of enforced closure exceeding six days. Such ‑ days or shifts cannot be excluded from calculating abatement, for there is no express provision for exclusion in that behalf and even a single shift under rule 4 ibid would qualify for a claim of abatement, if that is part of a continuous closure beyond control and exceeding six days. Like would be the situation of a sudden or non‑pre‑determined closure, brought about, for any reason beyond the control of a manufacturer. In those situations, the operative part of Rule 4 would apply and the proviso envisaging continuity of closure extending to six days shall have no relevance, as the State cannot be heard to itself declare an unforeseen stoppage and yet term it as a closure within the meanings of the proviso. Thus where a national calamity occurs and an enforced holiday is declared or where a pre‑determined public holiday falls so close to a weekly holiday that the Government declares a day intervening or touching the two to be an additional holiday (applicable to factories), any closure brought about on that score would be available for a claim of abatement in isolation and for a period involving less than 6 days. This is so as even single shift short worked for reasons beyond control of the manufacturer can sustain a claim of abatement under Rule 4 of the Rules.

6. Looking into the matter against the background of the above discussion, we observe that the undermentioned continuous stoppages, claimed by the petitioners have not been disputed by the respondents:‑‑

APPROVED STOPPAGES

Details of Continuous Stonnaees. Days Shifts

From 11 p.m. To 11 p.m,= 15 45 on 25‑7‑1975_ on 9‑8‑1975.

From 7 a.m. To 7 a.m. on 15‑10‑1975_ on 11‑12‑1975. 57 171

From 7 a.m. To 7 a.m. on 1‑1‑1976 on 1‑7‑1976= 182 546

Total= 254 76_2

Besides, in the list attached to the petition in relation to petitioners' claim for weekly and odd closures the following appear to qualify for being considered:‑‑

WEEKLY HOLIDAYS AND ODD CLOSURES

S. No Period Number Reason for of Shifts Closure

A. 10‑8‑75 a.m. to 7 a.m. 3 Sunday. on 11‑8‑1975

B, 12‑9‑75 a.m. to 7 a.m. on 13‑9‑1975. 3 Fridays Weekly

Holiday.

C. 1‑1‑76 7 a.m. to 7 a.m. on 1‑7‑1976 As worked Intervening out. Fridays.

Regarding `A' in the preceding table, such Sunday was part of the closure ending on 9‑8‑1975, as in the above list of stoppages. As to `B' in the above table, the declaration of Friday as a weekly holiday was an unforeseen event and cut short a couple of days before the next weekly holiday (Sunday) which was pre determined and, therefore, was a closure beyond control of the petitioners. At S. No: C' in the foregoing table, Weekly Friday holidays, falling within the period of closure w.e.f. 1‑1.‑1976 to 1‑7‑1976 would equally qualify in terms of the construction herein determined.

7. As a result, therefore, this petition succeeds but only to the extent of the claim for abatement pertaining to the periods mentioned at S.Nos: A' to `C' above. We are inclined to allow it to such extent, even though it may bring small monitory advantage to the petitioners, on the basis of the qualify well‑known principle denoted by the golden words: "Where there is a right there is a remedy" or their Latin source "Ubi Jus IN Remedium". In a true manifestation of rule of Law, howsoever insignificant or infinitesimal a right may be and whether it be, on prevailing standards, of any consequence or not, if it is threatened or transgressed and sought to be remedied, must be so remedied.

We, therefore, allow the above petition but partly and to the limited extent indicated.

A.A./A‑695/K Petition allowed