W.P. 1476-2013 Khawaja Saad Saleem, Vs. Federation of Pakistan ...

JUDGMENT SHEET.IN THE ISLAMABAD HIGH COURT, ISLAMABAD.JUDICIAL DEPARTMENT.W.P No.1476 of 2013Khawaja Saad Saleem,Vs.Federation of Pakistan, etc.PETITIONER BY:Syed Javed Akbar and Mr. M. Imran AmirAdvocatesRESPONDENTS BY:Mr. Tariq Mehmood Jehangiri, learned DAG.Mr. Ahmad Hassan Rana, Advocate for FBRalongwith Mr. Muhammad Saleem, Secretary,FBR.DATE OF DECISION: 19.06.2013------------------------------------------------------------------------------------------------------------SHAUKAT AZIZ SIDDIQUI; J: Petitioner invoked theconstitutional jurisdiction of this court by way of filling instant writpetition with the following prayer:-“WHEREFORE, it is respectfully prayed that(i) Notification SRO 172(I)/2013 dated 5.3.2013 introducingAmnesty Scheme for smuggled/seized vehicles be declaredillegal and unconstitutional being ultra vires, discriminatory andbased on mala fides.(ii) The respondents be restrained from acting upon SRO172(I)/2013 dated 5.3.2013 and introducing, allowing orimplementing such schemes in future.(iii) The respondents be directed to immediately seize all thevehicles which were legalized by payment of concessionalduty/tax/fine under the Amnesty Scheme and treat themaccording to the applicable law and procedure by eitherconfiscating them or subjecting them to payment of normalduty prescribed by law.The petitioner may also be awarded costs of this writ.Any other relief, which this Hon’ble Court deems proper in thecircumstances of this case, may also be granted to thepetitioner.”.

2 W.P.No. 1476/2013AND presented the facts, as under:-2. That petitioner is President of Defence of Human Rights of PublicServices Trust which is a charitable and welfare Trust, registered underthe Trust Act, 1882 having its office at Bank Road, Saddar, Rawalpindi.In exception of clause (a) of SRO 499(I)/2009 dated 13.06.2009, theFederal Government recently issued SRO 172(I)/2013 dated 5.3.2013whereby an Amnesty Scheme for smuggled/seized vehicles(hereinafter referred to as the “Amnesty Scheme”) was introducedallowing release of vehicles on payment of redemption fine along withduty and taxes on smuggled/non duty paid motor vehicles. However,the said SRO does not allow the aforesaid concessions in payment ofduty and tax on the import of vehicles through a custom station inviolation of the Import Policy Order. It is contended that AmnestyScheme is being misused in a number of ways by the persons lined upbehind the scene being authors of the said scheme. That petitionerbeing tax payer citizen of the country, is aggrieved by the AmnestyScheme, which not only caused huge loss to the GovernmentExchequer but serious infringement of rights and discriminationagainst him and more than one million other cars/vehicle owners inPakistan who have bought cars/vehicles in the past for their use afterpayment of full duties and taxes.3. Learned counsel for petitioner contended that SRO 172(I)/2013introducing Amnesty Scheme for smuggled/seized vehicles is illegaland unconstitutional being ultra vires, discriminatory and based onmala fide, inter alia, on the grounds that, this scheme has been carvedto be misused by the persons who have violated the law by avoidingnormal taxes and duties on import of automobile vehicles which hascaused loss of billion of rupees to Government Exchequer at the cost

3 W.P.No. 1476/2013of all the taxpayers and citizens of country including petitioner. Thatthe impugned SRO is in violation of fundamental rights of equaltreatment under article 25 of the Constitution of Islamic Republic ofPakistan as this is a duty ordained under law that public organizationsare legally obliged to follow reasonable, rational, transparent, fair andnon-discriminatory procedure to provide equal opportunity to inspirethe public confidence, therefore, concessions in payment of duty andtaxes under SRO 172(I)/2013 have not been extended to the vehiclesimported in violation of Import Policy Order through normal channelsof custom stations. That under the Import Order Policy for importsunder normal channels, a person is allowed to import a motor vehicleup to 3 years old under the transfer of residence, gift and baggagescheme. If the allowable age limit of 3 years and available depreciationallowance of 1% per month calculated from the I stday of January,subsequent to the year of manufacture under the Custom GeneralOrder No.14/2005 dated 06.06.2005, as amended through the CustomGeneral Order No.13/2012 dated 31.08.2012, is taken into account, animporter could avail maximum depreciation allowance of up to 48%.Conversely, under the SRO 172 (I)/2013, the depreciation allowancefor the smuggled vehicle covered under PCT heading 87.03 (motor andother vehicles principally designed for the transport of less than 10persons, including station wagons and racing cars) is 1% per monthcalculated from the I stday of January subsequent to the year ofmanufacture with a maximum depreciation claim of 60% for the firstfive preceding years and a further depreciation allowance of 5% peryear subject to a minimum duty and taxes of US Dollars 500. Likewise,for all other vehicles (Motor and other vehicles principally designed forthe transport of ten or more persons including vehicles greater than1800 cc) the depreciation allowance entitlement for the smuggledvehicles is 1% per month calculated from the I stday of January

4 W.P.No. 1476/2013subsequent to the year of manufacture with a maximum depreciationallowance of 72% for the first six preceding years and a furtherdepreciation allowance of 5% per year subject to a minimum duty andtaxes of Rs.100,000/-. It is further contended that the impugned SROis based on malafide having illegitimate and illegal aim of smugglingthe motor vehicles, which cannot be brought to the country throughnormal channels and such schemes are intended to be misused and anumber of officers of the respondents have hatched a concertedscheme with those who are involved in business of smuggling thevehicles, but the responsible authorities of the respondents havemiserably failed to prevent such schemes.4. On the other hand Respondent No.1, FBR filed its reply and parawise comments and while presenting the facts of the case contendedthat Hon’ble Supreme Court of Pakistan, in CP No.77 of 2010, in themissing person’s case while taking up the issue of law and ordersituation in the province of Balochistan, also examined the issue ofsmuggled vehicles plying in the province during hearing dates21.5.2012 and 20.06.2012, it was observed that these smuggledvehicles pose a threat to law and order situation in the countrybecause of their use in crime due to availability of the same at cheaperprice and with no apprehension of being traced due to nonregistration.Therefore, Hon’ble apex Court directed Customsauthorities to take necessary steps so that no smuggled vehicle shouldply in Balochistan Province. Moreover, the Supreme Appellate Court,Gilgit Baltistan, vide order dated 08.11.2012, also directed toregularize non-duty paid vehicles plying in Gilgit Baltistan which havebeen indexed/temporarily registered by the local authorities. That inthis perspective of the matter amnesty scheme had been launched bythe Federal Government, vide Notification No.SRO 172(I)/2013 dated

5 W.P.No. 1476/201305.03.2012, after approval by the Minister for Finance & Revenue. Thescheme allowed release of smuggled vehicles, if seized or voluntarilypresented to the Customs on or before 06.04.2013 on payment of duty& taxes along with redemption fine @ 1% of total payable duty &taxes. The scheme stipulated that vehicles of Asian make havingengine capacity up to 1800cc will be assessed after allowingdepreciation @ 12% per annum, up to 5 years, (maximum 60%). Allother vehicles having higher engine capacity will be assessed afterallowing depreciation @ 12% per annum, up to 6 years (maximum72%). The afore-mentioned amounts of duties and taxes calculated atthe end of 5 and 6 years, as the case might be, would be furtherreduced @ 5% per annum for vehicles older than 5 and 6 yearsrespectively. That after allowing maximum reduction in duty andtaxes, minimum benchmark regarding payment of duty and taxes forvehicles of Asian make having engine capacity up to 1800cc was fixedat US $ 500 (or equivalent amount in Pak rupees), in case of vehicleolder than 25 years or above. For all other vehicles, minimum amountof Rs.100,000/- was payable, in case of vehicle older than 26 years orabove. The statement is suggestive of the fact that 46,169/- vehiclesout of 50,901 are more than ten years old (ranging from 10 years to26 years) as such they neither hurt the industry nor the taxpayers asthe owners of the vehicles were driving hardly serviceable vehicles andpaid huge amount as taxes to get these legitimized. It is furthercontended that amnesty scheme remained valid from 05.03.2013 till06.04.2013. Provisional data collected from the Customs fieldformations of the FBR indicates that the total revenue collectedthrough this scheme (including amount of duty, taxes and redemptionfine) amounts to Rs.15,862.27 million for legitimization of 50,901vehicles.

6 W.P.No. 1476/20135. On facts, it is contended that the petitioner has miserably failedto identify any person or group involved in manipulation of the kindnor could prove that the said scheme was engineered by anyinterested group. That the SRO introducing amnesty scheme forsmuggled/seized vehicles, draws force from relevant provisions of law,the scheme was approved by the Finance Minister and measure is inconformity with the observations of Apex Court. On grounds it iscontended that Relaxation in age limit on normal import of vehiclesunder the transfer of residence, gift and baggage scheme falls withinthe purview of Ministry of Commerce. However, FBR announcedamnesty for all those smuggled vehicles which were plying on theroads in any of the region of Pakistan and whose date of entry intoPakistan was unknown. The purpose behind such amnesty/relaxationwas to ensure the documentation of such vehicles followed by massivecampaign. The benefit to the Federal Government in the form ofrevenue was accrued in the process. The amnesty scheme was notifiedvide SRO 172(I)/2013 dated 05.03.2013, whereas, the letter referredto by the petitioner was received in the Federal Board of Revenue on15.03.2013. The points raised in letter referred to by the petitionerwere in fact examined prior to finalization of the proposal in relation toamnesty scheme notified, vide aforesaid SRO. It had already beendone by the Federal Government on two previous occasions as well.These schemes were never found detrimental to the interest of localmanufacturers and argument of the petitioner on this account is falseand without any substance, therefore, writ petition beingmisconceived may be dismissed.For convenience relevant legislation is being discussedhereunder:-

7 W.P.No. 1476/2013Relevant Legislation6. The Imports and Exports (Control) Act, 1950 (“Act”) is theprimary legislation which regulates imports into and exports fromPakistan whether by sea, land or air. Section 3 of the Act empowersthe Federal Government to prohibit, restrict, or otherwise control theimport and export of goods of any specified description, or regulategenerally all practices and procedure connected to the import or exportof such goods, by an order published in the official Gazette. Byinvoking its powers under Section 3, the Federal Government issuedSRO 193(I).2013 dated 08.03.2013 (“Import Policy Order”) settingout a general policy and procedure for Import of Vehicles under thePersonal Baggage, Transfer of Residence, and Gift Schemes.The Customs Act, 1969 (“Customs Act”), is the primarylegislation which regulates the levy and collection of customs duties,fee and services charges and to provide for other allied matters.Section 16 of the Customs Act also empower the Federal Governmentto prohibit or restrict the bringing into or taking out of Pakistan of anygoods of specified description by air, sea or land by notification in theofficial Gazette. Section 19 empowers the Federal Government toexempt any goods imported into or exported from Pakistan fromcustoms duties chargeable thereon subject to such conditions,limitations or restrictions as it thinks fit to impose by notification in theofficial Gazette.Under section 181 of the Customs Act, where an order forconfiscation of goods is passed, the owner of the goods may be givenan option to pay in lieu of the confiscation of the goods such fine asthe officer thinks fit, unless exempted by the Board. The sectionfurther explains that any fine in lieu of confiscation of goods shall be inaddition to any duty and charges payable in respect of such goods,and of any penalty that might have been imposed in addition to the

8 W.P.No. 1476/2013confiscation of goods. In exercise of the powers conferred by section181 of the Customs Act, FBR, vide SRO 499(I)/2009 dated 13.06.2009(“Customs Notification”), was pleased to direct that no option shallbe given to pay fine in lieu of confiscation in respect of inter aliasmuggled goods falling under clause (s) of section 2 of the CustomsAct.7. The Federal Government whilst exercising the variousenabling provisions of law, issued SRO 172(I)/2013 dated 05.03.2013thereby directing that smuggled or non-duty paid motor vehicles,having non-tampered engine or chassis numbers, which have beenseized or voluntary presented to Customs on or before 31.03.2013shall be allowed release on payment of redemption fine along withduty and taxes as prescribed therein (“Amnesty Scheme”). Theimpugned Scheme was issued taking specific exception to clause (a) ofthe Customs Notification and remained in effect till 06.04.2013.8. The essence of the matter in hand lies on thedetermination of the following issues:(a) Whether the Federal Government has acted in areasonable, fair, just and transparent manner byintroducing the Amnesty Scheme under the enablingprovisions of law?(b) Whether the Amnesty Scheme is discriminatory andoffensive to Article 25 of the Constitution of the IslamicRepublic of Pakistan?(c) Whether the Amnesty Scheme is akin to the NRO?(d) Whether indigent economy of Pakistan can stretch toimport luxurious vehicles at any level?9. Reply to above questions is provided under the followingparas.• The impugned Amnesty Scheme provides varyingconditions for imports under allowable age limits toimporter of vehicles through the regular normal

9 W.P.No. 1476/2013channels as opposed to persons clearingsmuggled/non-duty paid vehicles. As a matter offact, persons who have violated the laws of thecountry by smuggling vehicles of their choice and notpaying taxes/duties have been incentivized tosmuggle even more vehicles during the subsistenceof the Amnesty Scheme not only without anyimposition of allowable age restriction applying onthem but also allowing a more relaxedregistration/regularization scheme compared to thenormal scheme in vogue.• The Amnesty Scheme is also discriminatory as inthat persons importing motor vehicles through thenormal scheme have not been extended the tax/dutyconcessions where such vehicles are imported inviolation of the Import Policy Order.• The Amnesty Scheme also extends the advantage ofextra depreciation allowance benefit to owners ofsmuggled/non-duty paid motor vehicles. Under thenormal scheme, a person is allowed to import motorvehicles up-to a maximum of three (03) years oldunder the Personal Baggage, Transfer of Residence,and Gift schemes and may claim depreciationallowance up-to a maximum of forty eight percent(48%). However, under the Amnesty Scheme, noage limit has been set for smuggled/non-duty paidmotor vehicles. Furthermore, depreciation allowanceup-to 60% and 72% (depending on the category andage of car) may be claimed thereby again givingundue advantage to owners of smuggled vehicles inthe form of extra depreciation reward of even up-to100%,subject to the trifling payment of US$500 orRs.100,000/- as made applicable.• The Amnesty Scheme has also seriously affected thelocal car market and automobile manufacturers bydisrupting the competitive market and creating aparallel black or grey market for vehicles especially ifthe government continues with such amnestyschemes in the future. This whole amnesty thing has

10 W.P.No. 1476/2013put the future prospects of local auto industry injeopardy as they cannot place effective long termpolicies fearing anti-industry schemes like the one inthe instant case to harm their returns.• The roadworthiness and safety of such smuggledcars is also a cause of concern coupled with highermaintenance costs. Under the Amnesty Scheme, thesmuggled cars are not subjected to roadworthinessor emission control tests as no criteria for allowableage limit have been set as is the case for regularimport channel vehicles. Therefore, vehicles whichare 15 to 20 years old have also been cleared underthe Amnesty Scheme which are not only anenvironmental hazard but will also increase theimport bill for fuel and spare parts resulting in theloss of much needed foreign exchange.• Although the Amnesty Scheme may have beenintended for regularization of vehicles alreadysmuggled into Pakistan, it has created, in its presentform, a far worse situation by encouraging andmotivating further smuggling of cars in connivancewith customs and other government officials. Suchstate of affairs has resulted in a colossal loss to thenational exchequer in the form of loss of revenueexpected from vehicles imported under the BaggageScheme, regularization of smuggled cars with full taximpact and also those from the import of brand newcars, due to market saturation during the comingyears.• As mentioned above, the scheme was meant only forvehicles that were already smuggled into Pakistanand were being used without payment of dueduties/taxes, but reportedly a large number ofvehicles were smuggled into Pakistan forregularization under the amnesty scheme AFTER thescheme was launched. Furthermore, vehicles whichwere already confiscated by the custom authoritieshave also been released against payment of dutyunder the Amnesty Scheme whereas the auction of

11 W.P.No. 1476/2013such released vehicles would have yielded quadruplethe amount recovered via the Amnesty Scheme.• It is also reported that large number of vehicles dutyof which have been received are still not brought inPakistan and are parked at “Dubai, Bandarbass Port,Iran, Harrat and Qandhar and some vehicles are onthe Chamman and Miran Shah boarders for makingentry into Pakistan. It is double crime and showsabout the inefficiency, dishonesty, malafide, ulteriormotives and inferious designs of officials being paidfrom the public ex-chequer to protect the rights ofcountry but for their personal interest and motivatedobjects they allowed manipulation to cause loss toPakistan.• The direct loss of this scheme can be determined orestimated from the fact that the price of aconfiscated vehicle is normally Rs.1000,000/-(Rupees One Million) in open auction. The expensiveand fancy cars, 4wds, SUV’s fetch more valuewhereas the rest are sold for less but the averageprice is around Rs.1000,000/- per unit. Thus, for50,901 smuggled vehicles, the auction proceedswould have been 50,901 x Rs.1000,000/-=Approximately Rs.51 Billion whereas under theamnesty scheme only Rs.15.8 billion has beencollected. Thus the Amnesty Scheme has resulted ina direct loss of Rs.35 billion to the nationalexchequer, in addition to the environmental hazardsand rising import bill for fuel and spares.• It is beyond comprehension that why the AmnestyScheme has been made applicable to vehiclesalready confiscated by the custom authorities whichcould have fetched far more revenue through openauction. Perhaps the government officials would alsodesire reaping fruits of their sullied hands by taking apiece of the pie.The Amnesty Scheme has alsoaccommodated import of vehicles which were stuckat ports or in transit after age limit reduction from 5years to 3 years.

12 W.P.No. 1476/2013• From the custom data collected, it appears that50,901 vehicle have been regularized by payment ofRs.15,862.27 million as duties and taxes which couldhave been much more had the regular rate ofduties/taxes been applied to such vehicles. Therecovery would have been three to four timesgreater than what FBR claims.• Apart from discrimination, the common man is alsobeing manipulated into buying imported cars whereits odometers are tempered by local auto dealers soas to show lesser kilometers or miles on theimported vehicles. Such tempering will be furtherencouraged where older smuggled cars are floodedin the market. Since the last decade or more,vehicles have been smuggled into Pakistan fromAfghanistan. Influential and opportunists uponbecoming aware of the Amnesty Scheme bookedused vehicles in Kandahar through links settled inPakistani areas bordering Afghanistan. Most of thesesmuggled vehicles are registered in Quetta andKarachi with the connivance of FBR officials whofacilitate their movement in Pakistan without beingchecked by border security and law enforcementagencies. Others smuggle vehicles into KPK via theKohistan District and from Chitral via Shandoor Paland find safe haven in the Gilgit-Baltistan region aswell.10. Therefore, in proposing and issuing the SRO, the FederalGovernment has failed to appreciate the serious adverse consequencesof the stimulus provided under the Amnesty Scheme and without fullydeliberating on the same. The SRO is, accordingly, bad in law for thefollowing reasons:• It favours tax evaders and puts the honest taxpayersat a disadvantage.• Such schemes, announced at random, are againstArticle 25 of the Constitution as these violate the

13 W.P.No. 1476/2013guarantee against arbitrary decisions under thewhims and fancies of the rulers in power.• It favours unscrupulous taxpayers, leading tounjustified and hostile discrimination resulting in aviolation of equality clause of the Constitution.• This scheme, amounting to approving the crimes oftax evasion, rent-seeking and money laundering willhave pernicious effect on the general moral fabric ofsociety.• All such moves put integrity at a discount and placea premium on vulgar and ostentatious display ofwealth. This shatters the faith of the common man inthe dignity of honest labour and virtuous living.• It does not provide a level playing field for allstakeholders, especially the local automobilemanufacturers to benefit from the Amnesty Scheme.• It promotes anti-competitive market behavior bysaturating the market with cheaper, older and highmaintenance vehicles; effectively collecting longterm junk and attracting the middle class to opt forsuch affordable cars as opposed to buying new orrelatively less used and more efficient importedvehicles.• It creates a black/grey market for vehicles or aspecial deal offer to the corrupt elements of societyby not only financially incentivizing but alsoencouraging smuggling of more and more vehicles ifsuch Amnesty Scheme is allowed to persist.• It discriminates against law abiding and taxpayingcitizens and discourages them from gainingconfidence in the legal system, especially in the taxregime which is to be administered justly and fairlyacross the board.11. It is imperative that the tax dodgers should be punished,not pampered with pardons. If the perpetrators of law are not checkedand placed in order, the impression that it does not pay to follow therules and that there are ways to defeat the law will manifest itself in

14 W.P.No. 1476/2013permanently detrimental ways. Also, considering the fact thatPakistan’s tax to GDP ratio is abysmal, such unwarranted, capriciousand senseless Amnesty Scheme will only further encourage therampant culture of tax evasion. The Amnesty Scheme and any suchsimilar schemes encourage tax evasion and might offer short termadvantages to the state, if at all. It would appear more akin to thestate settling/compromising with the tax evaders where the state ispositioned with the weaker bargaining position. The failure of stateinstitutions to apprehend the violators and subject them to the law ofthe land must not be an excuse to allow for amnesty schemes toprevail and again suggests a failure of the state to establish its writand protect its boundaries from illegal transit of goods.12. Corruption must be uprooted and all state agencies mustbe regulated, scrutinized and held strictly accountable, but such typeof schemes encourage illegality in the financial sphere, by promising toturn ‘black’ money into ‘white’. If Amnesty scheme for smuggledvehicles is stamped, it will set an erroneous precedent and a certainsection of society will claim benefits at the expense and detriment oflaw-abiding citizens who pay full taxes on their vehicles. The AmnestyScheme is benefitting only a few influential, tax evading citizens andcorrupt government officials at a time when the country requires alevel playing field where the protected stakeholders are also taxedsimilar to the common man.13. It is a common perception that persons having influence inFBR can procure the issuance of SRO for their illegitimate benefits andgains by exercising lucrative influence upon the officials of FBR. It isthe right time to inquire about the motives, considerations, objectivesand theme of SRO’s issued on different occasions in order to benefit aparticular class or group of persons. Such type of tainted devices,disrupt the economic fiber of the country which promotes classism

15 W.P.No. 1476/2013through illegal modes, polluted approach, irrelevant considerations andmockery of the rule of law. This aspect has also been well understoodby the intellegentia of the country that there is no other mechanismexcept upholding the rule of law to salvage the economy from theshackles of economic and social depression.14. It is worth mentioning that Competition Commission ofPakistan warned the Federal Government and FBR about thepessimistic consequences of Amnesty Scheme but no credence wasgiven by the persons who had conspired to yield bounties forthemselves at the cost of country interest. The electronic and printmedida also raised questions about the vindication of impugnedscheme but ignored by officials, who were bent upon to cause loss tothe country’s economy. As per the report of the Federal TaxOmbudsman, the Amnesty scheme has caused billions of rupees’ lossto the national exchequer and that such amnesty schemes have alsosubsisted in the past during the period 1998 to 2007 where around17,381 vehicles were cleared under six similar schemes. As per FTO’sreport, total 1405 vehicles were cleared on only 61 ID cards and 50/50vehicles were cleared on just one ID card indicating the KarachiCollectorate to have cleared most of such vehicles. He further reportedthat several hundred cars are still parked at Tokyo Auction Yard butthey have been cleared in the country under the Amnesty schemeindication a mega corruption to be underway through the Tax AmnestyScheme.15. The leading English Newspaper “DAWN” in the auditorialon 21.06.2013 responded by the order annexed by this court in thefollowing words:-“By nullifying an amnesty scheme initiated by the lastgovernment granting duty and tax concessions for smuggledvehicles, the Islamabad High Court has sent the rightmessage. As High Court noted, the FBR’s amnesty

16 W.P.No. 1476/2013discriminated against citizens who lawfully purchase vehiclesand pay their requisite state dues. By declaring suchamnesties and schemes, the state seems to imply that it isokay to dodge taxes and the formal economy as long as onepays a lower cost at a later date. Similar schemes have beenannounced in the past, for example the amnesty declared lastyear under which no questions would be asked regarding thesource of funds invested in the Karachi Stock Exchange. Theseschemes appear to encourage illegality in the financial sphere,by promising to turn “black” Money into “white”. Those whohonestly pay their taxes are given the impression that itdoesn’t pay to follow the rules and that there are ways tobreak the law and still work the system. Considering the factthat Pakistan’s tax-to-GDP ratio is abysmal, such amnestiesonly encourage the rampant culture of tax evasion. And whileefforts are being made to document the informal economy,which is almost as big as the formal one, official moves thatencourage smuggling and illegal imports make no sense.Simply put, such moves are not sustainable as they work onlyto strengthen the status quo, where tax dodging is tolerated,and offer very short-term advantage to the state. Apart fromquestions of financial ethics and loss to the exchequer, thelocal automobile industry is also affected and jobs are lostwhen vehicles are smuggled and later legalized. As for theFBR’s claims that billions of rupees were collected when over50,000 vehicles were regularized under the amnesty, it wouldbe fair to ask how much revenue the state could havecollected had the vehicles been imported legally. The court’sdecision should prompt the tax authorities to avoid coming upwith such dubious schemes in the future.”16. The Amnesty Scheme is not only a slap on the face ofhonest taxpayers but also aimed at decriminalizing the crime of taxevasion and plundering of national wealth. It is rightly termed by someas a ‘financial NRO’ as the corrupt government has decided to exempt

17 W.P.No. 1476/2013the beneficiaries from questioning by National Accountability Bureau(NAB) and Federal Investigation Agency (FIA).Amnesty SRO has not been framed for the welfare of thepeople of Pakistan rather framed by certain influential’s for their ownbenefits and the benefit of certain privileged class.Simply put, such amnesty schemes are not sustainable asthey work only to strengthen the corrupted status quo, where taxdodging has become the norm, and offer no sustainable advantages tothe state. The extent of tax evasion is truly immeasurable andreprehensible and must be scrutinized and implemented with an ironhand.Supreme Court Judgment17. Drawing application from Dr. Mubashar, Hassan’s case PLD2010 SC 265, whereby the constitutionality of NRO 2007 waschallenged and held to be arbitrary and irrational without disclosingany particular reason there for. Similar application can be made to theAmnesty Scheme which is irrational and discriminatory in every senseas is it not based on intelligible differentia and deserves to be struckdown. Honourable Supreme Court held that “validity of any law can betested by its results or fruits. If a law evokes healthyfeelings/atmosphere, then it is valid otherwise it is void. An illegalmorsel gives birth to evils. Similarly, any legislation which hurts thewelfare of the people should not be allowed to stand among thepeople.”The impugned Amnesty Scheme was issued in direct violationof the above laid dictum by august Supreme Court.” It is also asettled principle of law that where a statute is ex faciediscriminatory but is also capable of being administered in adiscriminatory manner and it appears that it has actually beenadministered to the detriments of a particular class in particular,

18 W.P.No. 1476/2013unjust and oppressive manner, then it is void ab initio – since itsinception. (PLD 1957 SC 157, PLD 1988 SC 416, PLD 1993 SC341, 1991 SCMR 1041).18. The relevant observation is that equal protection of lawdoes not envisage that every citizen is to be treated alike in allcircumstances, but it contemplates that persons similarly situated orsimilarly placed are to be treated alike. However, a law applying to oneperson or one class of persons may be constitutionally valid if there issufficient basis or reason for it, but a classification which is arbitraryand is not founded on any rational basis is no classification as towarrant its exclusion from the mischief of Article 25. That equalprotection of law means that all persons equally placed be treatedalike both in privileges conferred and liabilities imposed. That in orderto make a classification reasonable, it should be based on anintelligible differentia which distinguishes persons or things that aregrouped together from those who have been left out and thatdifferentia must have a rational nexus to the object sought to beachieved by such classification.19. “Intelligible differentia” means in the case of the lawdifferentiating between two sets of the people or objects, all suchdifferentiations should be easily understood as logical and lucid and itshould not be artificial or contrived. Intelligible differentia distinguishespersons or things from the other person or things, who have been leftout.Art. 25--Equality of Citizens--Reasonable classification-- Principles.In order to make classification reasonable, it should be based:--(a)(b)on an intelligible differentia which distinguishes persons orthings that are grouped together from those who have been leftout;that the differentia must have rational nexus to the objectsought to be achieved by such classification.Any classification which is arbitrary and which is made withoutany basis is no classification and a proper classification must

19 W.P.No. 1476/2013always rest upon some difference and must bear a reasonableand just relation to the things in respect of which it isproposed.”20. Any classification which is arbitrary and which is madewithout any basis is no classification and a proper classification mustalways rest upon some difference and must bear a reasonable and justrelation to the things in respect of which it is proposed.21. The Amnesty Scheme besides being discriminatory hasalso been applied in a discriminatory manner to achieve certainpolitical objectives with malafides. Furthermore, the Amnesty Schemehas not given the country any benefit as a whole. Rather, questionsarise whether a law which instead of eliminating, has encouraged theoffence of corruption and moral turpitude can ever be allowed tosubsist or allowed inception. Amnesty Scheme being discriminatory innature deserves to be declared void ab initio, and is inconsistent withArticle 25 of the Constitution as it has created inter alia anunreasonable classification, having no rational nexus with the object ofthe amnesty. Besides the above, equality is an essential requisite ofjustice because when there is discrimination and partiality betweenpeople, there is no justice. The Code of Allah demands absoluteequality of rights between all people without any discrimination orfavoritism between man and women on any count. Therefore, withoutany fear of doubt, it can be held that Article 25 of the Constitutionmandates all citizens to be equal before the law and are entitled toequal protection of law and there shall be no discrimination on thebasis of sex alone, has its origins in Quranic Injunctions. Once it hasbeen held that any law is void, insofar as, it is inconsistent with or inderogation of fundamental rights, therefore, it would also be againstthe injunctions of Islam and no such law shall be enacted which isrepugnant to such injunctions.

20 W.P.No. 1476/2013If one looks at the needy economy of Pakistan, culture ofcorruption, budget deficit, per capita income, begging for financialassistance by all Governments and ever increasing gap between richand poor, there is hardly any justification to import luxury vehiclesthat too through illegal modes and by exercising lucrative influence. Itis the right time to take some bold steps and promote the domesticmanufacturing Industry of vehicles by putting ban on import of luxuryvehicles.22. For the reasons discussed above, instant writ petition isallowed and it is hereby declared that impugned scheme with S.R.ONo.172(I)/2013 dated 05.03.2013 are illegal, unconstitutional, voidab-initio, besides the dictums laid down by the Hon’ble SupremeCourt, discriminatory, cryptic device to protect criminal act, therefore,same is set aside, with the following directionsi. All cars registered under the Amnesty Scheme must beceased and reverted back to pre-SRO position.ii. Corrupt customs/government officials must be uprooted –and legal action by way of initiating criminal proceedings tobe investigated by FIA against all Government officialsincluding Chairman FBR involved in introducing, approvingand executing Amnesty scheme.iii.A committee may be established to examine the corruptpractices and suggest a code of ethics to be strictlycomplied with by all Government departments, so thatagainst the cancer of commerce i.e corruption law muststrike hard at it.iv.Vehicles smuggled after announcement of scheme beconfiscated forthwith and entry of those vehicles whichhave still not been brought to Pakistan be banned and ifbrought be confiscated and auctioned in according with

21 W.P.No. 1476/2013law. All vehicles above the age of three years may also beconfiscated.v. Tighter border controls must be placed to ensure thatsmuggling is prevented and all violators severely punished.vi.In these peculiar condition and the economy, it is directedthat in future no government department be allowed toimport luxury vehicles and all the departments may bedirected to use the locally manufactured vehicles, but inorder to improve the standard ofmanufacturing/assembling of vehicles in Pakistan, someremedial steps may be taken. There should be a completeban on Government, Semi Government Departments,Statutory bodies/organizations and corporations to importany kind of luxury vehicle on any pretext whatsoever.However, Jeeps (SUVs) like vehicles used for defencepurpose and for law enforcement agencies, are exemptedfrom this direction.(SHAUKAT AZIZ SIDDIQUI)JUDGEApproved for Reporting.“Waqar Ahmad”