PAKISTAN PUBLISHERS AND BOOK SELLERS ASSOCIATION Versus FEDERATION OF PAKISTAN
IRFAN SAADAT KHAN, J.--- The instant petition has been filed with the following prayer:- a) Declare that, the imposition of Cargo Throughput Charge is illegal, without jurisdiction, unlawful and ultra vires. b) Declare that the said Cargo Throughput Charge is in utter violation of the Florence Agreement and the exemptions granted by the CBR. c) Direct the respondents to refrain from charging any Cargo Throughput Charges permanently. d) Grant cost of the petition. e) Refund the amount of Cargo throughput charges paid so far by the petitioners to the respondents and the Nazir of this Hon'ble Court. f) Any other relief which this Hon'ble Court may deem fit and proper.
2. Briefly stated the facts of the case are that the petitioner No.1 is an Association incorporated under the Companies Ordinance, 1984, which is engaged in the import of books, magazines, journals and newspapers. The petitioner No.2 is a Private Limited Company, which is also engaged in the similar business. The petitioners are aggrieved with the Cargo Throughput Charges (hereinafter referred as "CTC") imposed by the respondent No.2. It is the claim of the petitioners that the same is illegal, uncalled for and in utter violation of the Florence Agreement signed by the Pakistan wherein exemption has been granted on the customs and other duties on the import of books, magazines, etc. Hence, the respondent No.2 and their contractors i.e. respondents Nos.3 to 5 may be restrained from charging and collecting CTC from the petitioners.
3. Messrs Navin S. Merchant and Salim Merchant, Advocates, have appeared on behalf of the petitioner No. 1 and submitted that in order to promote free exchange of ideas and knowledge a universal agreement known as "Florence Agreement" (hereinafter referred to as "Agreement") under United Nations, Unesco Charter was executed on which a number of countries, including Pakistan, have signed. Pakistan has signed the said Agreement on 19.05.1951. The learned counsel have further submitted that as per Article 1 of the said Agreement no customs duty and other charges are to be levied on the importation of the books, magazine, etc. just to facilitate the readers in the contracting States. They have also submitted that the imposition of CTC by the respondent No.1 and collection of the same by the respondents Nos.3 to 5 is totally against the mandate of the said Agreement and the very purpose of the said Agreement would be frustrated if the respondents Nos.2 to 5 would continue to levy and recover the same from the petitioners. They have maintained that the main purpose of the Agreement was to encourage the readers in the contracting States so that they may get the books, magazines, etc. on reasonable and affordable prices, just to boost their reading habits. They further submitted that in pursuance of the said Agreement, the Government of Pakistan has exempted the imports of books, publications, magazines, etc. from the customs duty, sales tax and octroi and other charges, hence, the levy of CTC is uncalled for. While elaborating their viewpoint, the learned counsel have stated that on 07.08.1984 a meeting of the respondent No. 2 was held which was attended by its senior officials and, vide point No.15 of the minutes of the meeting, it was decided that in many countries of the world on the basis of cargo load, both at emplaning and deplaning, some charges are levied and keeping in view this aspect it was recommended by the Committee that a fees of 2% may be charged as CTC to increase their revenue, which would fetch approximately Rs.30 million to the respondent No.2 annually and from 1984 to 1994 no recovery was effected; however, from August 1994 the respondents started collecting the same from the petitioners but it was withdrawn after few months in the same year i.e. 1994, but again it was reintroduced in 1997 and remained in operation till the year 1999. In the year 1999 the levy was withdrawn but again in the year 2000 it was re imposed and in the instant petition the petitioner has challenged only the levy in operation during the period 1997 to 1999. The learned counsel further maintained that the said levy is without jurisdiction as, according to them, the Civil Aviation Authority (CAA) has no jurisdiction to levy the same. The learned counsel have also maintained that since Pakistan is one of the signatory of the Agreement, the terms of the said Agreement are binding on every institution of Pakistan and since CAA is an authority working under the Federation, the terms of the Agreement are also binding upon them and they cannot absolve themselves by stating that the terms of the Agreement are not binding upon them. They have submitted that as per section 5 of the Civil Aviation Authority Ordinance, 1960 (the Ordinance) it imposes restriction on the levy of any charge without making rules through a notification, which aspect in the present case is totally missing. They further submitted that the matters with regard to fiscal interpretation are to be applied strictly. They further submitted that even otherwise if it is assumed that the levy of 2% CTC is valid, since it was decided in a meeting held in 1984, what was the justification available with the respondent No.2 to collect the same for more than 2% from the petitioners? The learned counsel have also submitted that the levy is also illegal on the ground that it is a fee and not a tax and for levying any fee some service has to be provided by the respondents to the petitioners. According to the learned counsel, the respondent No.2 has rendered no service in respect of fee charged by them and hence on this aspect also the levy is uncalled for. They have, therefore, submitted that since the levy is in violation of Articles 4, 7 and 25 of the Constitution, the same may be declared as illegal. In support of their contentions, the learned counsel have produced before us a copy of the Florence Agreement and have also placed reliance on the following decisions:
1. Collector of Customs and others v. Sheikh Spinning Mills (1999 SCMR 1402)
2. Hyderabad Cantonment Board v. Raj Kumar and others (2015 SCMR 1385)
3. Royal Airport Services (Pvt.) Ltd. through Authorised Officer and another v. Government of Pakistan through Secretary, Ministry of Defence and 2 others (PLD 2014 Sindh 60)
4. Mr. Munawwar Ghani, Advocate, has appeared on behalf of the petitioner No.2 and has adopted the arguments of M/s. Navin S. Merchant and Salim Merchant and stated that the respondent No.2 has no authority to charge CTC. He has submitted that a representation was made with the respondent No.2 by the petitioner which was declined without assigning any reason and in this regard he invited our attention to page 135 of the file wherein a letter dated 23.07.1998 was addressed to the respondent No.3 by the respondent No.2 mentioning that the respondent No.2 had not agreed to the request of exemption on CTC and the said respondent was directed to take action as per the provisions of the License Agreement executed between the contactor and the CAA for recovery of the CTC. He, therefore, in the end has submitted that since the respondents have acted illegally, the levy of CTC may be declared to be illegal and uncalled for.
5. Mr. Farooq Rashid, Advocate, has appeared on behalf of the respondents Nos.2 to 5 and at the very outset submitted that the instant petition is not maintainable, since the levy was reintroduced in the year 1997, whereas the petition was filed on 21.07.1998, hence, the same is not maintainable on the ground of laches. He has further submitted that this petition is also not maintainable on the ground that the person who has filed the petition on behalf of the petitioner No.1 has failed to enclose the relevant documents authorizing him to file the same; hence, on this ground also the instant petition is liable to be dismissed. The learned counsel has next contended that Government of Pakistan is not a signatory of the Florence Agreement; hence, on this score also this petition is liable to be dismissed. The learned counsel has further contended that CAA being an authority is competent under section 16(3) of the Ordinance to impose any fee. The learned counsel, while reading out sections 7 and 16 of the said Ordinance, has contended that the issue under discussion has already been laid at rest by a Division Bench of this Court in the case of Hilton Pharma (Pvt.) Ltd. through Manager Finance v. Pakistan through Secretary, Ministry of Defence, Rawalpindi (2009 CLC 812) and; therefore, on this point also the petition is liable to be dismissed. The learned counsel has also contended that in the case of Askari Aviation (Pvt.) Ltd. Rawalpindi and another v. Civil Aviation Authority, Islamabad and others (Civil Petition No.1454 of 2011) an identical issue was raised and the Hon'ble Supreme Court of Pakistan was pleased to dismiss the petition. He has further contended that this petition also is not maintainable on the ground that the issues raised involve factual controversies, which require evidence. The learned counsel has contended that the respondent No.2 introduced this levy for the first time in the year 1994 which continued for some months and then was withdrawn. However the same was then reintroduced in the year 1997 and the petitioner has not challenged the levy which was introduced for the first time in 1994 and continued for some months, hence, according to the learned counsel, when the levy was not challenged in the year 1994 when it was introduced for the first time, the challenge of the levy reintroduced in the year 1997 by filing the present petition is not understandable. He has further stated that when the levy was again reintroduced in the year 2000 the petitioner has challenged the same by filing suits, which proves wavering attitude of the petitioner. The learned counsel has submitted that enforcement of an agreement could not be sought in a writ petition. He has also submitted that special services are being provided by the respondents and books, magazines, etc. arriving at the airport are cleared within shortest possible time; hence, according to the learned counsel, it could not be said that no services were provided by the respondents in respect of CTC. In support of his above contentions, the learned counsel has placed reliance on the following judgments:
1. Khan Iftikhar Hussain Khan of Mamdot (Represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore (PLD 1971 SC 550)
2. Rafiq Dawood and 4 others v. Messrs Haji Suleman Gowa Wala and Sons Ltd. through Director and others (2009 CLC 1070)
3. Pakcom Limited and others v. Federation of Pakistan and others (PLD 2011 SC 44)
4. Jawad Hussain Jafri v. Azad Government and 4 others (1999 MLD 33)
6. Mr. Abdul Sadiq Tanoli, Standing Counsel, representing the respondent No.1, has adopted the arguments of Mr. Farooq Rashid and has stated that the petition is meritless and may be dismissed.
7. Mr. Salim Merchant, in his rebuttal, has reiterated the above facts and has stated that no laches are involved in the present petition, as the levy was discontinued in the year 1999 and the petition was filed well within time, hence, there was no delay and even otherwise since the default was a continuing default hence no laches are involved in the instant petition. He has further submitted that levy was introduced for the first time in the year 1994 when several correspondences were made by the petitioner No.1 with the respondent No.2 with regard to the impugned levy, hence, it could not be claimed that levy, which was introduced in the year 1994 for the first time, was not agitated before the respondent No.2. He has further stated that the suits, which are pending, were filed in respect of levy reintroduced in the year 2000, which is a separate cause of action. The learned counsel submitted that in the instant petition the petitioner has challenged the authority of the respondent No.2 to impose the levy of CTC and since there was no efficacious remedy available to them, the instant constitutional petition was rightly filed before this Court. He has also submitted that the decisions relied upon by the learned counsel for the respondents Nos.2 to 5 are distinguishable, therefore, the levy may be declared as illegal and uncalled for.
8. We have heard all the learned counsel at considerable length and have also perused the record and the decisions relied upon by them.
9. We will first take up the grounds taken by the learned counsel for the respondents Nos.2 to 5 with regard to maintainability of this petition and laches. The learned counsel for the respondents Nos.2 to 5 has stated that since the petition has been filed by an unauthorized person, the same is not maintainable. We, in this regard, disagree with the submission made by the learned counsel for the respondents Nos.2 to 5 as the resolution annexed with page 85 of part-II of the file is clearly showing that Mr. Ahsan Jaffery was authorized to file the petition before the High Court of Sindh. Even otherwise at page 187 of part-II of the file a resolution is available empowering Mr. Shams Qureshi to file writ petition on behalf of the Company before the High Court. Hence, so far as filing of the petition by a competent person is concerned, we reject the objection raised by the learned counsel for the respondents Nos.2 to 5 and held that the petition has been filed by an authorized person. So far as the issue of laches is concerned here again we tend to disagree with the submissions made by the learned counsel for the respondents Nos.2 to 5, the levy was re-introduced in the year 1997 and was withdrawn in the year 1999, whereas the petition was filed on 21.07.1998, which means that the issue of laches is not involved in the instant petition and repel the argument of the learned counsel for the respondents Nos.2 to 5 on this aspect also.
10. The learned counsel for the respondents Nos.2 to 5 has further stated that Pakistan is not a signatory of the Agreement. We are afraid we cannot endorse this view taken by the learned counsel for the respondents Nos.2 to 5, as the documents produced before us clearly reveal that Pakistan is a signatory of the Agreement which it has signed on 19.05.1951, hence, we reject this contention of the learned counsel for the respondents Nos.2 to 5 also taken in this regard.
11. We will now deal with the matter with regard to the imposition of CTC whether the same is valid or not. In our view, the answer of this question is given in the case of Hilton Pharma (Pvt.) Ltd. (supra) in the following manner:
"We have considered the arguments advanced on behalf of the parties and have gone through the material available before us. Admittedly the affairs of respondent No.2 are being governed under the provision of Ordinance, 1982 and by virtue of section 5 of the powers have been vested in the authority who has to prepare plan for development of infrastructures for the treatment of CIF to indicate the economical and proprietary coordinated jurisdiction service and control and regulate Civil Aviation Authority Pakistan. Subsection (6) of section 6 empowers the authority to undertake execution of any scheme relating to Civil Aviation Authority activities as framed or sponsored by any local body or agency or exercise technical supervision and administrative and financial control over the execution thereof any terms and conditions as may be agreed to between the authority and the local body or agency. The respondent No.2 has, therefore, been empowered to prepare and introduce any such scheme relating to the Civil Aviation Authority and admittedly the levy of CTC and PRAL system falls under the powers vested in the authority. Section 16 also empowers the authority regarding generation of funds for meeting the charges in connection with the functions of the authority including the payment of salaries and remuneration to the employees of the authority and by virtue of subsection (3) of section 16 of the authority had been invested with the powers to levy and collect all such rates as maybe prescribed by the authority by regulations from time to time the fees and charges in respect of the commercial exploitation of the authorities property including land and aircraft. Thus, there is no cavil to the proposition that the authority has all the powers and authority vested in him by virtue of Ordinance, 1982 to frame scheme for betterment of the authority and also to generate the funds by imposing and collecting the fees and shares in respect of the commercial exploitation of the authorities property etc."
Moreover, in Suit No.1095 of 2001 also, a Single Judge of this Court, vide order dated 19.04.2005, observed as under:
"Having heard the arguments and perused the record, prima facie contention of learned counsel for the defendants appears to be persuasive. Tentatively I am of the view that the CAA under section 16(iii) and (iv) may impose fees and charges in respect of commercial exploitation or the authority's property including land, aircraft, landing and housing charges, contention of learned counsel for the plaintiffs that since no regulations are framed, therefore, such jurisdiction cannot be exercised do not appears to be convincing. Since the CAA operate and function within the mandate of the Ordinance, 1982 and the power and function of the authority vest in its Board. It is the Board, of the CAA, that regulates its operational mechanism. It is the function of the Board to frame policy matters and so also the regulations. No format or the procedural requirement is provided for framing such Regulations. Decision of the Board dated August 07, 1984, in exercise of power under section 16 the Ordinance, 1982 may be construed and could be treated as regulation within the contemplation of the Ordinance, as regards imposition and collection of throughout charges."
In the judgment referred by the learned counsel for the respondents Nos.2 to 5, given in Civil Petition No.1454 of 2011, the Hon'ble Supreme Court of Pakistan, while dismissing the appeal filed by Askari Aviation (Pvt.) Ltd. Rawalpindi and another, through judgment dated 28.01.2013, observed as under:
"Turning to the arguments of the learned counsel that no Regulation was made in terms of section 27 of the Ordinance empowering respondent No.1 to levy the embarkation fee, the said levy has been made, as stated above, under the Aeronautical Information Publication Pakistan (AIP). The said AIP Pakistan though is not referred to as Regulations it has been published by the "authority of the Pakistan Civil Aviation Authority". Under section 27 read with section 2(iii) it is the Civil Aviation Authority which is empowered to make Regulations. Levy of charges under section 16(3) can be made as prescribed by the Authority through Regulations. It was this very Authority on whose authority AIP was published. In pith and substance the aeronautical Information Publications were made by the Competent Authority, notwithstanding that no reference was made to the provision of the Ordinance under which the power was exercised. This argument of the learned counsel thus fails."
12. From the perusal of the above citations, it is evident that CAA has the authority under the law to regulate its own affairs with regard to generation of funds and is also empowered to levy and collect the charges as may be prescribed by its Regulation from time to time for the said purpose. In this regard, we deem it appropriate to reproduce herein after the provision of section 16(3) of the Ordinance:-
"16. Civil Aviation Authority Fund.- (1) ---------
(2) -------------------------------------------------------
(3) The Authority shall be competent to levey and collect, at such rates as may be prescribed by the Authority by regulations from time to time.
(i) air route navigation charges, @ LEFT NO. =
(ii) embarkation charges to be paid by the passengers traveling by air;
(iii) fees paid by individuals in respect of issue and renewal of licences and any examination prescribed by the Authority;
(iv) fees and charges in respect of commercial exploitation of the Authority's properties, including land and aircraft and
(v) landing and housing charges".
13. We will now take up the argument advanced by the learned counsel for the petitioners that in view of the Agreement, CAA has no authority to charge any fee from the petitioners. In this regard, Article-1 of the Agreement is reproduced herein below for the sake of brevity:
1. The contracting States undertake not to apply customs duties or other charges on, or in connexion with, the importation of:
(a) Books, publications and documents, listed in Annex A to this Agreement;
(b) Educational, scientific and cultural materials, listed in Annexes B, C, D and E to this Agreement; which are the products of another contracting State, subject to the conditions laid down in those annexes.
2. The provisions of paragraph 1 of this article shall not prevent any contracting State from levying on imported materials:
(a) Internal taxes or any other internal charges of any kind, imposed at the time of importation or subsequently, not exceeding those applied directly or indirectly to like domestic products;
(b) Fees and charges, other than customs duties, imposed by governmental authorities on, or in connexion with, importation, limited in amount to the approximate cost of the services rendered, and representing neither an indirect protection to domestic products nor a taxation of imports for revenue purposes.
As per sub-article (2), the contracting States are not prevented from levying fees and charges, other than customs duties imposed by the government authorities, meaning thereby that no restriction has been imposed on the contracting States from levying fees and charges by the government authorities and admittedly CAA is a government authority. Hence, on this aspect also we do not find any merit in the submissions made by the learned counsel for the petitioners that CAA has no authority to impose fees and charges in respect of the books, publications and documents imported by the petitioners.
14. However, so far as the contention raised by the learned counsel for the petitioners that since CAA has rendered no services hence they cannot charge any fee from the petitioners, suffice to say that since we have already observed that CAA has the authority under the law to levy the fees as per the relevant provisions of Civil Aviation Laws, which have been discussed in the above referred judgments, the question with regard to levy of fees without there being any services, in our view, would only become academic, therefore, the decisions relied upon by the learned counsel for the petitioners on the issue of fees and tax are found to be not applicable on the facts obtaining in the instant petition.
15. In view of the above, we do not think that any detailed deliberation is further required in this matter, since it has already been held by the Hon'ble Supreme Court of Pakistan and a Division Bench of this Court, respectively, in the case of Askari Aviation and Hilton Pharma (supra) that CAA is empowered to make its own Regulations and impose a levy under section 16(3) of the Ordinance through its Regulations, we, therefore, find the subject levy to be in accordance with law and no interference in this regard is warranted. The petition; therefore, stands dismissed along with all the listed applications.
MH/P-11/Sindh Petition dismissed.