IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: 
MR. JUSTICE MIAN SAQIB NISAR 
MR. JUSTICE FAISAL ARAB 
MR. JUSTICE TARIQ PERVEZ 
 
CIVIL APPEAL NO. 1600 OF 2006 
(On appeal against the judgment dated 8.3.2006 passed 
by the High Court of Sindh, Karachi in C.P Nos. 223, 
224, 225 & 226 of 2003) 
 
Indus Trading and Contracting Company 
… Appellant 
VERSUS 
 
Collector of Customs (Preventive) Karachi and others 
… Respondents 
 
For the Appellant: 
Mr. Issaq Ali Qazi, ASC 
 
For the Respondent (1): Raja Muhammad Iqbal, ASC 
 
 
 
 
Raja Abdul Ghafoor, AOR 
 
For Respondents (2-3): Ex-parte 
 
Date of Hearing:  
04.01.2016 
 
 
 
JUDGMENT 
 
 
FAISAL ARAB, J.-Brief facts of this appeal are that at the end of 
1995 and early 1996, the appellant imported two consignments of 
medicines said to be living saving drugs. The import of such drugs 
was free from Customs duty on the basis of the concession granted 
under the Finance Act of 1995.  Before these consignments arrived 
at the port, the Federal Government issued SRO No. 1050(1)/95 
dated 29th October, 1995 imposing 5% ad valorem regulatory duty 
which the appellant paid and got the consignments released. 
Subsequently, the appellant challenged the levy of regulatory duty 
on the consignments in Constitution Petition No. D-1659/1996 
that was filed in the High Court of Sindh. Thereafter, on 
Civil Appeal No. 1600/2006 
2
07.08.2002, the appellant withdrew it after seeking permission to 
file it afresh. A couple of months later, the appellant filed another 
constitution petition bearing No. D-226/2003 challenging the 
imposition of the same regulatory duty. This petition was 
dismissed vide impugned judgment dated 08.03.2006, after 
holding regulatory duty was rightly charged on goods exempted 
from customs duty. The appellant then turned to this Court for 
relief in the present proceedings. 
  
2. 
 
Learned counsel for the appellant, Mr. Issaq Ali Qazi 
argued that as long as import of such goods is free from duty on 
the basis of the concession granted under the Finance Act, 1995, 
no duty, much less regulatory duty, could have been lawfully 
charged and the imposition of regulatory duty under the impugned 
SRO No. 1050(1)/95 being based on subordinate legislation was 
therefore illegal. He maintained that that imposition of regulatory 
duty in effect nullified the concession of duty free import that was 
granted under the provisions of Finance Act, 1995. He further 
submitted that had the customs duty on such drugs and 
medicines been zero-rated probably then the regulatory duty could 
have been levied but as the import was free from customs duty, no 
duty under any nomenclature could be lawfully imposed and the 
learned Judges in the High Court failed to appreciate such 
distinction. He concluded by submitting that this Court may order 
refund of the regulatory duty that had been unlawfully charged 
from the appellant at the import stage on the consignments in 
question.  
 
Civil Appeal No. 1600/2006 
3
3. 
 
On the other hand, learned counsel for the respondent 
No. 1 argued that the regulatory duty was charged and paid by the 
appellant as far back as 1995 without any protest and thereafter 
no departmental proceedings were initiated by it to challenge the 
same. He submitted that even the first Constitution petition was 
withdrawn after the decision of this Court in the case of Collector of 
Customs Vs. Ravi Spinning Ltd (1999 SCMR 412) which validated 
levy of regulatory duty, hence this appeal is liable to be dismissed. 
 
4. 
 
Before examining the merits of the case, we find it 
necessary to state that at the stage when regulatory duty was 
charged, the appellant ought to have challenged the same before 
the forum provided under the Customs Act. Instead of doing that, 
the appellant invoked the jurisdiction of the High Court under 
Article 199(1) of the Constitution of Pakistan. Ordinarily, the 
jurisdiction of the High Courts under Article 199 of the 
Constitution should not be invoked where alternative forum under 
a special law, duly empowered to decide the controversy is 
available and functioning. Where a special law provides legal 
remedy for the resolution of a dispute, the intention of the 
legislature in creating such remedy is that the disputes falling 
within the ambit of such forum be taken only before it for 
resolution. The very purpose of creating a special forum is that 
disputes should reach expeditious resolution headed by quasi 
judicial or judicial officers who with their specific knowledge, 
expertise and experience are well equipped to decide controversies 
relating to a particular subject in a shortest possible time. 
Therefore, in spite of such remedy being made available under the 
Civil Appeal No. 1600/2006 
4
law, resorting to the provisions of Article 199(1) of the 
Constitution, as a matter of course, would not only demonstrate 
mistrust on the functioning of the special forum but it is painful to 
know that High Courts have been over-burdened with a very large 
number of such cases. This in turn results in delays in the 
resolution of the dispute as a large number of cases get decided 
after several years.  These cases ought to be been taken to forum 
provided under the Special law instead of the High Courts. Such 
bypass of the proper forum is contrary to the intention of the 
provisions of Article 199(1) of the Constitution which confers 
jurisdiction on the High Court only and only when there is no 
adequate remedy is available under any law. Where adequate 
forum is fully functional, the High Courts must deprecate such 
tendency at the very initial stage and relegate the parties to seek 
remedy before the special forum created under the special law to 
which the controversy relates. We could have relegated the 
appellant to seek remedy before the appropriate forum, however, 
as the dispute in the present case is now more than twenty years 
old, we for this reason only as matter of indulgence, proceed to 
decide the controversy on its merits.  
 
 
5.  
 
Under Section 18 of the Customs Act, 1969, customs 
duties are levied under different nomenclatures. Under Section 
18(1) statutory customs duty is imposed whereas under Section 
18(2) (after amendment regulatory duty is covered under Section 
18(3) of the Customs Act) the legislature has empowered the 
Federal 
Government 
to 
impose 
regulatory 
duty 
through 
notifications. Therefore, statutory duty under Section 18(1) and 
Civil Appeal No. 1600/2006 
5
regulatory duty under Section 18(2) are two distinct categories of 
duties. One should not be taken to be the same as the other. It is 
by now well settled by the judicial pronouncements of this Court 
that where import or export of any commodity enjoys exemption 
from statutory customs duty, even then the Federal Government 
can impose regulatory duty, within the confines described in 
Section 18(2) of Customs Act through sub-ordinance legislation. 
Where the legislature grants exemption from the payment of 
customs duty that falls under Section 18(1), the same cannot be 
made basis to avoid payment of regulatory duty imposed 
subsequently unless there is also a promise that such concession 
would also be applied to regulatory duty in case it is levied in 
future. As the exemption in the present case does not contain such 
a promise it is to be applied only to duty that was chargeable 
under Section 18(2) and not to a duty which can be competently 
levied under a different nomenclature. On this question, the 
decision of this Court in the case of Collector of Customs Vs. Ravi 
Spinning Ltd. (1999 SCMR 412) at page 443 can be referred with 
considerable advance. In that case it was held as follows: 
 
“………….It is not disputed that customs duties are not levied 
only under section 18(1) of the Act but they are also levied 
though under different nomenclature, under section 18(2) of 
the Act and the Finance Act. The issuance of an exemption 
notification under section 19 of the Act, therefore, presupposes 
that the goods exempted are already subject to an existing 
charge of the customs duty. The exemption notification, 
therefore, ordinarily will not have within its purview a duty or 
tax not in force or in existence, on the date of issuance of the 
exemption notification. The exemption notification, while 
exempting the goods from the existing charge of customs duty, 
Civil Appeal No. 1600/2006 
6
may, however, also provide that any future levy of customs 
duty will also be exempted on to goods exempted from the 
current and existing charge of customs duty. Therefore, the 
conclusion that the exemption notification not only applied to 
the existing charge of customs duty but also covered the 
future levy of the customs duties will depend on the language 
used in the notification.”  
 
 
6. 
 
Then in the same judgment at page 458, this Court 
further held as follows:- 
 
“The statutory duty prescribed under the First Schedule to the 
Act has nexus only with the duty levied under section 18(1) of 
the Act. Therefore, on the language of these S.R.Os., it is not 
possible to hold that the exemption granted under these 
notifications also applied to the customs duty levied in 
addition to the statutory duty under section 18(2) of the Act or 
under other laws for the time being enforced. We have already 
pointed out earlier in this judgment that in contradiction to the 
customs duty levied under section 18 (1), of the Act, which is 
prescribed and predetermined, the regulatory duty is neither 
prescribed nor pre-determined but is levied at a rate which 
may 
vary 
according 
to 
the 
circumstances. 
Therefore, 
regulatory duty imposed by the Government under section 
18(2) of the Act though a species of customs duty, is a duty in 
addition to the duty prescribed under the First Schedule to the 
Act to meet a particular situation, not covered by the statutory 
duty. The notification issued by the Government under section 
19 of the Act granting exemption wholly or partially from 
payment of customs duty prescribed under the First Schedule 
to the Act, could not therefore, in our view, cover the customs 
duty subsequently levied by the Government by way of 
additional customs duty to meet or cover a situation arising 
subsequent to the issue of the exemption notification. If the 
Government intended to exempt any future levy of the customs 
duty as well while granting exemption from the existing 
Civil Appeal No. 1600/2006 
7
prescribed customs duty, it could provide so in the exemption 
notification as has been done on a number of occasions. As 
the exemption notifications referred to above, did not exempt 
the goods which were exempted from statutory customs duty, 
also from the payment of regulatory duty, the exemption did 
not apply to the regulatory duty imposed by the Government 
subsequently although the regulatory duty may be a species 
of the customs duty.”  
 
7. 
 
As to the distinction which the learned counsel for the 
appellant tried to make between “duty free imports’ and “zero-rated 
import” to justify that regulatory duty cannot be imposed where 
goods are free from customs duty, suffice is to state that in the 
impugned judgment it has been sufficiently explained that the 
term “zero-rated” is not used in Customs Act as such a term is 
used in the Sales Tax only and that too for the purpose of 
adjustment of input-tax with the output-tax. Hence, nothing turns 
on making such a distinction. We may also mention here that a 
question may arise where the import is totally exempted from 
customs duty how can then the regulatory duty, which is to be 
charged ad valorem be computed. Such a question came up before 
this Court in the case of Yousuf Re-Rolling Mills Vs. Collector of 
Customs (PLD 1989 SC 232). It was held that such a levy is to be 
computed on the basis of the value of the goods to be determined 
under the provisions of Section 25 of the Customs Act. At page 241 
of the Yousuf Re-Rolling Mills supra it was held as under:- 
 
“If the rate of duty of the articles is specified in the 'First 
Schedule then no, discretion is left to the Federal Government 
to exceed the limit prescribed namely fifty per cent. But if no 
rate is prescribed in the First Schedule such as in the case of 
those articles which are imported free of customs duty, it is 
Civil Appeal No. 1600/2006 
8
only then that the maximum of the second part can be levied 
on the value of the articles determined under section 25. The 
restriction to levy regulatory duty is accordingly explicit in 
case the articles imported fall under the first part in regard to 
which the rate of duty is prescribed in the First Schedule and 
while imposing the levy of regulatory duty the Federal 
Government is under this restraint.” 
 
8. 
 
The judgment above cited not only established as to 
how a regulatory duty is to be computed where the import of any 
item is free from customs duty but it also supports our finding that 
the Federal Government can impose regulatory duty even on goods 
which are free from customs duty.  
 
9. 
 
From the above discussion, it is evident that 
chargeability of regulatory duty has no nexus with the 
chargeability or grant of exemption with regard to the statutory 
customs duty falling under Section 18(1). We, therefore, find this 
appeal as having no merit and the same is accordingly dismissed.   
 
 
JUDGE 
 
JUDGE 
 
 
 
JUDGE 
Islamabad, the 
4th of January, 2016 
 
Approved For Reporting 
Khurram 
 
