P L D 2014 Sindh 60
Before Munib Akhtar and Mrs. Ashraf Jahan, JJ
ROYAL AIRPORT SERVICES (PVT.) LTD. Through Authorised Officer and another—Petitioners
GOVERNMENT OF PAKISTAN through Secretary, Ministry of Defence and 2 others—Respondents
Constitutional Petitions Nos.D-641 and D-669 of 2012, decided on 20th November, 2013.
Qamar Abbas, Syed Iftikhar Hussain, Imdad Khan, Amel Kasi, Abdur Razzak, Asif Malik, Ali T. Ebrahim and Ms. Alia Khan for Petitioners.
Imdad Khan for Petitioner (in C.P. No.D-669 of 2012).
S. Mohsin Imam, DAG, Hasan K. Hashmi and Farooq Rashid for Airports Securty Force.
Date of hearing: 11th October, 2013.
MUNIB AKHTAR, J.–-By this common judgment, we intend disposing of the petitions listed in para 14 below. The petitioners are either airlines or companies providing services to airlines with regard to their aircraft and other operations. The employees and staff of the petitioners need access to various parts and areas of Karachi Airport, including those which are not generally open or accessible. With effect from 1-1-2012, an ‘airport entry pass fee’ (“the Fee”) has been imposed, without payment of which the employees and staff of the petitioners are denied access as aforesaid. The petitioners are aggrieved by the charging of this fee, and challenge it on the various grounds noted below. The Federal Government and the Airports Security Force (“ASF”) on the other hand contend that the fee has been lawfully levied and is payable by all concerned, including the petitioners.
2. It will be convenient to begin by setting out the terms in which the Fee has been levied. It appears that the Federal Government decided (for reasons set out in detail below) to levy a fee in the sum of Rs.5000 each “as yearly airport entry pass fee to be charged from entitled private sector organizations/individuals w.e.f. 01 Jan, 2012”. The formal intimation was issued on 26-1-2012 by the Ministry of Defence (through the Deputy Secretary (CAA)) by means of a directive to the Director General, ASF in the following terms:–
“I am directed to refer to HQ ASF’s letter No.91-17/2012/ Passes/170 dated 16 Jan 2012 and this Division’s Executive Order No.11-37/2011-ASF dated 18 Jan 2012 … and to say that after due consideration, it has been decided to charge the requisite fee of Rs.5000 each from following category of individuals/organizations:–
(a) Airport functionaries/concessionaries (excluding PIA, CAA and other Govt. deptts/orgns) working at the airports.
(b) All the private leading firms/companies/Banks/individuals recommended by BOI, Ministry of Commerce etc. as entitled Leading Investors, Leading Exporters, major tour operators etc.
(c) Former Parliamentarians (in case approved by MoD)
(d) Personnel in private capacity (but not serving Govt. officers) attached with Ministers/other VIPs.
(e) Fauji Foundation and Fauji Fertilizer Company etc.
(f) Any other category of private individuals/orgns not covered above.
(2) The following category of private individuals will be exempted from the levy of above fee:–
(a) Retired Armed Forces Officers (where authorized).
(b) Retired Federal Secretaries
(c) Retired Judges of the Supreme Court and their spouses.
(d) Ex-Governors/ex-Chief Ministers.
It is requested to take further necessary action accordingly, pl.”
After the present petitions were filed, the following intimation also appeared in the Official Gazette dated 20-3-2013:–
“With the prior approval of the competent authority, the Federal Government is pleased to levy a sum of Rs.5000 each as yearly Airport Entry Pass fee to be charged from entitled private sector organizations/individuals with effect from 1st January, 2012.”
3. Mr. Qamar Abbas, who appeared for petitioners providing various types of services to airlines, submitted that there was no warrant for the levy of the Fee in the Airports Security Force Act, 1975 (“1975 Act”), under which the ASF has been constituted. Learned counsel emphasized that the petitioners were duly licensed by the Civil Aviation Authority (CAA) and had paid the fees and other charges as lawfully claimed by the latter. It was submitted that even prior to 1-1-2012, the staff and employees of the petitioners had access to those parts and areas of Karachi Airport for which the Fee was now being demanded. In other words, nothing had changed in the nature and operation of the work done and access required by, and granted to, the petitioners as would justify the levy of the Fee. Learned counsel submitted that a tax or a fee was only chargeable if permissible under statute, as required by Article 77 of the Constitution. The only law that had any relevance was the 1975 Act, which, as noted, did not envisage or permit any such levy. Thus, the Fee could only have been imposed by executive order, which however was not lawful. Learned counsel denied that there was any “competent authority” within the meaning of the 1975 Act as had the authority to impose the Fee. In any case, learned counsel submitted, relying on the well known definition of a fee, the ASF did not provide any special service to the petitioners as would lawfully justify the imposition of the Fee or serve as the quid pro quo for the same. This was the primary case put forward by all the learned counsel. Mr. Qamar Abbas further submitted, referring to the terms in which the Fee was levied, that it was discriminatory. Thus, it was expressly made not applicable to PIA, CAA and other government departments and organizations, even though the nature of the work performed, and access to the Airport required, was the same as that of the petitioners. Finally, learned counsel submitted in the alternative, that even if the Fee was lawfully imposed and was not discriminatory, it was being unlawfully demanded. Referring to the intimation of 26-1-2012 (see para 2 above) learned counsel submitted that its legally correct application was that each individual or organization was only liable to pay Rs.5000 per annum. In other words, each organization had to pay only this amount as a flat rate, regardless of however many employees or staff members were deployed by it at the Airport. However, the Fee was being charged on a per-employee basis, which was completely unlawful.
4. Mr. Syed Iftikhar Hussain, who appeared for an airline (Airblue), adopted the submissions by Mr. Qamar Abbas and, referring to the intimation given in the Official Gazette on 20-3-2013 (see para 2 above) submitted that even if otherwise lawful and valid (which was denied) the Fee could not be given retrospective effect to 1-1-2012.
5. Mr. Amel Kasi, who appeared for an airline (Shaheen Air) and a petitioner that provided services to airlines, adopted the submissions by other learned counsel and referred also to the para-wise comments of the Federal Government. Learned counsel submitted that it was clear from the same that the Fee was being levied by the Federal Government and not the ASF. It was submitted that the Federal Government had no lawful authority to do so. Learned counsel referred in particular to para. 10 of the para-wise comments, where it was averred that the Fee was “very nominal, as compared to the security services being provided at the airport”. It was further averred as follows in the said para. 10:
“Such charges can be levied in the light of ICAO (International Civil Aviation Organization)/International Aviation Security Standards as required vide Chapter 4 of ICAO Annexure 17, for taking safety measures relating to access, control of airport, passengers, their baggage and for security of all infrastructures etc. at the airports. Such safety measures include restricted entries/access to airside areas at airports serving Civil Aviation Controlled, in order to prevent unauthorized entries. Such safety measures are required to be more rigid and fault-less by enhancing the resources for providing round the clock surveillance and security of the perimeter, aprons and terminals of all Civil/Joint used airport. It may be noted that in the light of the ICAO Security Manual State … is empowered to levy security charges on the users (functionaries and entities) etc using the airport.”
Learned counsel strongly contested the claim put forward in the foregoing terms. Referring to the relevant portions of the ICAO Standards, learned counsel submitted that it did not at all justify, authorize or validate the imposition of the Fee. In any case, the ICAO Convention or any standards set by it were not self-executing. The security functions to be performed by ASF were stated in section 3 of the 1975 Act, for which no fee or other charge could be levied. Indeed, learned counsel submitted, the very concept of the “state” required that it provide security to its citizens and to all persons within the State for the time being. The Fee was invalid and unlawful on any view of the matter. It was prayed that the petitions be allowed. Other learned counsel for various petitioners adopted the submissions as noted above.
6. Mr. Hasan Hashmi, who appeared on behalf of the ASF and made the primary submissions for the respondents, submitted that the Fee was lawfully imposed and valid. It was accepted that the Fee had not been imposed by the ASF itself, but rather was being claimed by it in order to comply “with the directive of the Federal Government for issuance of Airport Entry Passes to the entities”. There was proper statutory authority for the same, and learned counsel relied in particular on section 3(h) of the 1975 Act. Learned counsel also referred to and relied on the ICAO Standards as noted above. The need to impose the Fee, and the basis on which this was done, was also referred to. In this regard, reliance was placed on a summary (dated 5-11-2011) that had been prepared for the Prime Minister on the subject of “ensuring impeccable security at the civil airports of Pakistan”. The summary referred to the “challenging security environment” being faced by the ASF and listed the shortcomings of the service and the obstacles it faced in meeting those challenges. These included serious shortfalls in weapons and other equipment available with the ASF. The summary emphasized the need to modernize and upgrade the capacity of ASF in this regard. The financial outlays required to redress these problems were also noted. This summary (which was annexed to the para-wise comments of the ASF) was apparently approved by the Prime Minister. On this basis, it appears that the Ministry of Defence prepared certain financial proposals (also annexed to the para-wise comments), one of which was as follows: “The levying of fee through issue of Airport Entry Passes”, which was expected to generate Rs.51.386 million. The Finance Division finalized the financial proposals, which were approved by the Prime Minister. One of the financial proposals approved was: “ASF may charge Rs.5000 for each Airport Entry Pass (AEP) from private applicants only. This will generate additional income of Rs.120.965 million”. This was duly communicated to all concerned, including in particular the Director General of the ASF, and ultimately resulted in the intimation of 26-1-2012 (referred to in para 2 above) in terms of which the Fee is being charged and collected. Learned counsel for ASF submitted on the foregoing basis that the Fee was perfectly valid and being properly charged. Learned counsel also denied that there was any discrimination or that the Fee was being collected in a manner inconsistent with the terms of the intimation of 26-1-2012. It was prayed that the petitions, being without merit, be dismissed. Learned D.A.G. adopted the submissions by learned counsel for the ASF. At the conclusion of the hearing, we granted permission to learned counsel to make written submissions along with the case-law being relied upon.
7. We have heard learned counsel as above, examined the record with their assistance and considered the written submissions and case-law relied upon. We begin with two preliminary points. Firstly, the quantum of a fee or tax is not relevant when considering its constitutionality or lawfulness. It may well be “very nominal”. However, this is no answer to a proper challenge to the legality of the levy. Secondly, the distinction between a tax and a fee, and the defining characteristics of the latter, are well established. Reference may be made to a recent Full Bench decision of this Court, whereby a question referred to the Bench in a large number of petitions was answered by a common judgment (reported as Shahbaz Garments (Pvt.) Ltd. v. Pakistan and others PLD 2013 Sindh 449, 2013 PTD 969 and also as Tata Textile Mills Ltd. v. Pakistan and others 2013 PTD 1459). As presently relevant, the learned Full Bench observed as follows (2013 PTD at 995):–
“12. … From perusal of the above referred definitions and the case-law following conclusion can be drawn:–
(x) Tax is compulsory exaction of money by public authority for public purposes enforceable by law. In contrast, a fee is a sort of consideration for the services rendered, which necessitate that there should be an element of quid pro quo. Therefore co-relationship must exist between the fee charged and services rendered against it, like parking fee. It is, however, not necessary those services mathematically are proportionate or equal with the benefit to the person charged. At the same time it may not be excessively disproportionate.
(xi) Tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it.
(xii) The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. On the other hand a fee is generally defined to be a charge for special service rendered to individuals by some governmental agency.
(xiii) Tax is a common burden and the only return which the taxpayer gets is participation in the common benefits of the state. Fees, on the other hand, are payments primarily in the public interest, but for some special service rendered or some special work done for the benefit of those from whom the payments are demanded. Thus, in fees, there is always an element of quid pro quo which is absent in a tax.
(xiv) The distinction between “tax” and “fee” lies primarily in the fact that a tax is levied as a part of common burden while a fee is paid for a special benefit or privilege.
(xv) No doubt both tax and fee are compulsory exactions, but the difference between the two lies in the fact that the tax is not correlated to a particular service rendered but is intended to meet the expenses of the Government and a fee is meant to compensate the Government for expenses incurred in rendering services to the person from whom fee is collected.”
8. When the 1975 Act is examined, it is apparent that it confers no express statutory power to levy any charge, whether in the nature of the Fee or otherwise. The core provision of the said Act is section 3, which provides as follows:–
“3. Power to constitute and maintain the Airports Security Force and its functions.–(1) The Federal Government may constitute and maintain a force to be called the Airports Security Force for performing the following functions, namely:-
(a) ensuring security of all airports, aerodromes, aircraft and civil aviation installations (within the limits of airports and aerodromes) and for safeguarding civil aviation against acts of unlawful interference or threats of such interference;
(b) ensuring security of all structures, equipments, material and installations belonging to operators and other Government or non-Government organizations within the limits of airports and aerodromes;
(c)-(d) [omitted by an amending Ordinance of 1984]
(e) ensuring the proper conduct of persons at airports and aerodromes including control of surface vehicles and drivers within the limits of airports and aerodromes;
(f) ensuring security of aircraft passengers, baggage, cargo and mail within the limits of airports and aerodromes;
(g) general maintenance of law and order within the limits of airports and aerodromes in conjunction with the police and taking cognizance of all offences committed at the airports and aerodromes under any law for the time being in force; and
(h) such other functions as the Federal Government may by notification in the official Gazette, require the Force to perform.”
The matters specifically listed in clauses (a) to (g) are the functions which the ASF is expressly required to perform. They constitute the core. Reference may also be made to section 4, which lists the powers and functions of the officers and members of the ASF, and where the functions enumerated in section 3 are by and large reproduced. The functions to be performed under section 3 are statutory duties, and are the raison d’ tre for the creation of the ASF. It necessarily follows that in the discharge of these functions (i.e., the performance of the statutory duties), no fee or other amount can be charged, especially since there is no express authority for such a charge in the 1975 Act. For present purposes, the functions enumerated in clauses (a) and (b) are of particular relevance. Clause (a) imposes a general duty to ensure “security” of all airports, aerodromes and aircraft, and the second clause emphasizes the point by imposing a duty to ensure the security of “all structures, equipments, material and installations” therein, whether belonging to operators, the Government or non-Government organizations. It is crucial to note that the duty to ensure “security” is cast in broad and general terms. It may be that it is for the ASF to determine how this duty is to be performed, and it can also be readily understood that the levels of security required may vary both in time and space. Thus, in times of heightened threat perceptions, the security may have to be ratcheted up at airports and aerodromes across the country. Even at any given time, different areas or parts of an airport may require different levels of security. However, these variations should not detract attention from the central and fundamental point, which is that the statutory function to be performed is the ensuring of “security”. The discharge of this function may, for operational or other reasons, require ASF to divide its actions into different “components”, each of which may have to be tackled in a different manner. But it must always be kept in mind that in its legal nature, the duty is one and unified: that of ensuring “security”. This, in our view, is the correct approach to, and application of, section 3.
9. Once the foregoing is kept in mind, it follows that the charging of the Fee does not have the required characteristics of a fee in the legal sense. None of the well-established elements that must exist in this regard (as conveniently identified in the Full Bench decision) are to be found in relation to the Fee. The only “service” that the petitioners get is their security (and that of their employees and staff) is ensured. But this is simply the duty imposed by section 3, and as noted above, this security must be provided at all airports and to everyone and everything there. Thus, the petitioners got exactly the same thing after 1-1-2012 as they were getting prior thereto. There is no special service or benefit being conferred on the petitioners as could constitute the quid pro quo for the fee. Indeed, there cannot be, since it is only the core duty already imposed by statute that is being performed. Reliance was sought to be placed on clause (h) of section 3. However, no notification of the Federal Government issued in terms thereof was produced, and even if there had been such a notification, it would not have overcome the other obstacle noted earlier, namely, that the 1975 Act simply does not have any provision for the charging of a fee.
10. In addition to the foregoing, when the reason for the charging of the Fee is kept in mind (see para. 6 above) it is at once clear that it is the very opposite of a fee in the legal sense. As noted, an urgent need was felt to upgrade the weaponry and other equipment at the disposal of the ASF. For this purpose funds were required and one means adopted for raising such funds was the levy of the Fee. But for what purpose did the ASF need to be upgraded? Was it for the performance of some special function or a duty different from or in addition to its envisaged role? It is clear from the summary approved by the Prime Minister that the need was only to enable the ASF to better perform the functions and discharge the duties already specifically enumerated in section 3. The record clearly shows that the defining elements of a fee in the legal sense were wholly absent. Thus, the Fee is without any justification, basis or authority in law.
11. Learned counsel for the respondents also sought to place some reliance on the fact that the charging of the Fee was notified in the Official Gazette on 20-3-2013 (see para. 2 above). In our view, this submission cannot be accepted. Simply by recording an act done by an authority in the Official Gazette cannot clothe that authority with a competence which it otherwise lacks. The legal power to levy the Fee must necessarily be found in some lawful place other than the Official Gazette. That authority is lacking in the present case. Likewise, the reliance placed on the ICAO Convention or Standards cannot be accepted. These are not self-executing documents, which by themselves empower or authorize an authority to act. The only statute to which we were referred was the 1975 Act and it does not contain or convey the requisite authority.
12. Turning now to the second ground taken by learned counsel for the petitioners, we are of the view that the levy of the Fee on (at the very least) airlines is discriminatory inasmuch as PIA has been exempted from the same. Learned counsel for ASF sought to justify this exclusion on the ground that PIA is in the public sector and saddled with huge losses. However, in our view, this does not justify the exclusion. It is not tantamount to that reasonable classification which alone permits a categorization that is not to be condemned as discriminatory (see the well-known observations of the Supreme Court in I.A. Sharwani v. Government of Pakistan and others 1991 SCMR 1041). As presently relevant, namely access to different parts and areas of Karachi Airport, the employees and staff members of PIA are in exactly the same position as those of (e.g.) Airblue and Shaheen Air. They cannot reasonably be classified or placed in some other category. The non-charging of the Fee from PIA therefore makes it discriminatory.
13. While the foregoing discussion is sufficient to dispose off the matter, we would also like to consider the alternative submission by learned counsel, namely, that in any case the intimation of 26-1-2012 has been misinterpreted and misapplied. It will be recalled (see para.3 above) that the submission was that each organization (i.e., petitioner) was liable only to pay the Rs.5,000 annual fee as a flat rate, regardless of however many employees or staff members were deployed by it at the Airport, and not on a per-employee basis. We find considerable force in this submission. The Fee after all is a fiscal measure. The principles applicable to the interpretation and enforcement of such measures are well established. At the very least, the interpretation put forward by learned counsel for the petitioners is reasonable, and is therefore for that reason alone to be preferred over that advanced by learned counsel for the respondents. Had we concluded that the Fee was legally valid and not discriminatory, we would have, on the basis of the submission presently under consideration, granted appropriate declatatory and injunctive relief accordingly.
14. This judgment shall dispose off the following petitions: C.Ps. Nos. D-641, 644, 669, 673, 697 and 699, all of 2012.
15. In view of the foregoing discussion and analysis, these petitions are allowed. We declare the Fee to be without lawful authority and of no legal effect and quash it as such. The respondents are restrained from charging or demanding the Fee from the petitioners. Any Fee paid by them must be refunded within 90 days or, at the option of the petitioner concerned (to be irrevocably exercised in writing) be adjusted against any amounts due and payable by it to the Civil Aviation Authority.
SAK/R-24/K Order accordingly.