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Petitioner: Messrs HAFEEZ MOTOR STORE and another VS Respondent: DEPUTY COLLECTOR OF
Court Name: Customs Appellate Tribunal Judge(s): Muhammad Nadeem Qureshi Title:Messrs HAFEEZ MOTOR STORE and another vs DEPUTY COLLECTOR OF
JUDGMENT
Reported As: 2019 PTD (Trib.) 187 Result: Appeals allowed Judgment JUDGMENT MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).--Through this common order, I intend to dispose off 05 Appeals bearing Nos, 1507-1511/2015 filed under Section 194A(1) of the Customs Act,- 1969 (Act) against theOrders-in-Appeals Nos,10520 to 10524/2015 dated 24.08.2015 passed .by Collector of Customs (Appeals) (Respondent No, 2) maintaining the Re-assessments Orders dated 27.09.2014 passed by Deputy Collector of Customs, Group IV, MCC of Appraisement East, Custom House, Karachi (Respondent No, 1) in Goods Declaration (GD) Nos, KAPE-HC-36033 dated 30.10.2013, KAPE-HC-45179 dated 26.11.2013, KAPE-HC-66834-29.01.2014, KAPE-65479 dated 25.01.2014 and KAPE- HC-52860 dated 18.12.2013. 2. Since, these (5) appeals are based on similar facts and questions of law, therefore, it is needless to . reproduce facts of each case separately. Hence, for reference the facts of Appeal No, K- 1507/2015 is taken into consideration for decision, which are. The Appellant imported a consignment of 6442 kgs of Auto Parts namely Wind Shield Glasses of Indonesian and his clearing agent transmitted GD under section 79(I) of the Act and Rule 433 of Sub-Chapter III of Chapter XXI of the Customs Rules, 2001 (Rules) and deposited upfront duty and taxes of Rs, 371854.00 vide cash No, C-KAPE-008288-30.10.2013 with the MCC of Appraisement East. Consequent to which GD was numbered as KAPE-HC-36033 dated 30.10.2013. Upon receipt of GD on his desktop the nominated Appraiser instead of passing assessment order on the basis of declaration and uploaded documents opted to get the goods examined first under 198 of the Act and Rule 435 ibid, wherein, goods were found as per declaration and the report so prepared was uploaded in the reservoir of GD. The competent authority as defined in Section 2(a) thereafter perusal of the declaration and
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examination report and uploaded documents forming integral part of the declaration as defined in Section 2(kka) of the Act, in compliance of view message transmitted to the appellant under Rule 437, in exercise of the powers vested upon him through S.R.O. 371(1)/2002 dated 15.06.2002 passed assessm ent order dated 03.11.2013 with the application of value available in Valuation Ruling issued by Director, Directorate General of Valuation, under the provision of Section 25A of the, which was not in accordance with the declaration/legal filed review before Principal Appraiser as per the contemplation of Rule 441, who after consideration of that rectified the assessment and passed reassessm ent order dated 04.11.2013 while adducing remarks reading as "declared Wt was 6442 kgs, whereas found as per KICT weighment slip 5450 kgs therefore, after deduction of tare and keeping in view the mode of packing and in the light of scanned P/list net weight is justifiable, moreover port of shipment and supplier as per B/L and invoice is also of Indonesia, therefore GD completed accordingly as per VR" and transmitted view message of even date for payment of additional amount of duty and taxes of Rs, 96,091.00, which appellant paid along with penalty of Rs, 5,000.00 imposed for non pasting of invoice in terms of Rule 389 of the Rules in the NBP on 04.11.2013, consequent to which the inbuilt authority of the WeBOC passed clearance order under Section 83 and Rule 442 ibid by the notified authority and the appellant obtained delivery of the goods from the Terminal. Subsequent after lapse of more than about 10 months, respondent No, 1 passed yet another reassessm ent order dated 27.09.2014 under the provision of Section 80(3) of the Act, through which he created recovery of Rs, 431,844.00 by amending the existing assessed quantity and value as against original assessed vide assessment order dated 04.11.2013 passed under Section 80(1), in negation of the provision of the Section 29 of the Act, while adducing remarks "Reassessed in the light of FBR's letter C.No, 4(31)/S.Val/2014 dated 19.08.2014." Ironically the said reassessm ent order was not transmitted to the appellant as the same was not available on his home page, instead was communicated verbally by respondent No, 1, resultant, after obtaining copy of the reassessm ent order/note, appellant preferred appeal before Respondent No, 2 on 05.06.2015, which he rejected on the basis of limitation, without controverting the grounds of appeal, despite mandated under law vide order dated 24.08.2015. Para 3 is relevant, hence reproduced herein-under:- "3. From the record of the case, I observed that the appeal is time barred by about two hundred and twenty two days, the impugned order was passed on 27.09.2014 and the appeal against the aforesaid order was required to be filed by 27.10.2014 (i,e, within 30 days) in terms of the time limit stipulated under Section 193 of the, whereas the same was filed on 05.06.2015. Thus the appeal is time barred. No cogent reason have been given by the applicant to explain the delay in filing the appeal within the prescribed time period. They have also not sought condonation of delay in the appeal. Under the circumstances I have no reason to condone the inordinate delay in filing the appeal. Therefore, the case is accordingly rejected as time barred." 3. Rival parties heard and case records perused and so the relied upon citations, on the strength of which following issues are framed for decision: (i) Whether appeal filed before respondent No, 2 by the appellant was barred by time and whether respondent No, 2 was in his right to reject it on the basis of limitation, without evaluating the circumstances in which reassessment order was passed for creating recovery in isolation by the authority not empowered under the provision of Section 32(3) of the Act and Serial No, 3(ii) of S.R.O. 371(1)/2002 dated 15.06.2002? (ii) Whether respondent No, 1 is empowered to reassess the GD under Section 80(3) of the Act, in derogation of the expression of Section 3DD ibid, S.R.O. No, 500(1)/2009 dated 13.06.2009 and Section 193 ibid? (iii) Whether reassessment by respondent No, 1 was made strictly as per the spirit of Section 80(2) & (3) of the Act?
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(iv) Whether recovery can be created in isolation through a view message without issuance of show-cause notice despite of clear expression enunciated in Section 32(3) of the Act and whether respondent No, 1 was empowered in passing order for creating recovery under section 32(3) of the Act to be read with Serial No, 3 (ii) of S.R.O. No, 371(1)/2002 dated 15.06.2002? (v) Whether the respondent No, 1 was empowered to create recovery of Sales Tax and Income Tax under Section 11 of the Sales Tax Act, 1990 and Section 162(1) of the Income Tax Ordinance, 2001? 4. That as regard to issue No, (i), the clearance of the consignment in the instant case has been made under the regime of WeBOC by the competent authority defined in Section 2(a) of the Act after passing of valid/legal appealable assessment/clearance order in exercise of the powers vested upon him through SRO 371(I)/2002 dated 15.06.2002, under the provision of Sections 80 and 83 and Rules 438 and 442 of the Act/Rules, consequent to which the appellant obtained delivery from the terminal. Any correspondence under the said regime has to be transmitted online without any exception. In case of contravention or short payment, even show cause is transmitted online and reply to that is pasted by the importer in the space allotted in the said module as "Trader Reply" and order so passed by the adjudicating authority is also transmitted online in consonance with the Section 155Q and Rule 546 of the Act/Rules prior to passing of clearance order. However, in case any contravention is framed after clearance on the strength of audit of the record of the importer by the Directorate General of Post Clearance Audit (DGPCA) or by any other allied department of the FBR, contravention report and connected show-cause notice and order- inoriginal are issued/passed by the competent authorities manually as the software of WeBOC lacks the such facility after clearance of the goods. The importers (appellant) invariably log in software of WeBOC, when they imports consignments and transmit GD for home consumption under the provision of Section 79(I) and Rule 433 of the Act/Rules and keep tracking the status of the GD for payment of additional duty and taxes if any after passing of assessment order under Section 80 and Rule 438 and subsequently passing of clearance order by the defined authority under the provision of Section 83 and Rule 442 of the Act/Rules. Thereafter they seldom log in for knowing or having information of the already cleared consignments, being passed and closed transaction if in any case the logged in and saw message popping on their home page corresponding to the already cleared consignment, specifically reading as "B/L No, JKT32158160030 dated 14.10.2013 has been sent to cashier for payment. You are requested to pay Rs, 431,844.00" Importers invariably ignore those as the goods had already been cleared and no clearance had to be obtained by him, hence payment of duty and taxes least exist. Instead of completing assessm ent vigilantly at the time when the goods were at the terminal and under clearance, the Officer of Customs/respondent No, 1 have made a habit to reassess the GDs at the back of the importer/appellants for creating reoovery and they keep those as guarded secret, till the time the importer/appellant transmit GD with the Collectorate against their consignment arrived at the terminals and then pressurized them to pay the recovery created by them in isolation, then the importer/appellant came to know about the same and files appeal after retrieving the reassessm ent order before the respondent No, 2. Although the entire exercise carried out by the Officer of Customs and the respondent No, 1 is without lawful authority and as such of no legal .,effect. It was/is mandated upon them to intimate in regards to passing of reassessment order and creating of recovery manually in accordance with the adopted procedure of framing contravention report and issuance/ passing of show-cause notices/order-in-original after clearance of the goods through WeBOC regime as enunciated in Section 215 of the Act that Service of Order, decision, etc. shall be served (a) "by tendering the order, decision, summon or notice or by sending vide registered post or the courier service or by any other mode of transmission subject to acknowledgment receipt to the person for whom it is intended or to his agent or (b) if the order, decision, summon or notice cannot be served in any manner provided in clause (a), by
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affixing it on the notice board of the Custom House", for making the service good/valid and enabling the importers /appellants to avail the remedy under the provision of Section 193 or section 194A of the Act. To the contrary, the aim of the Officers of Customs including Respondent No, 1 keeps the importers/ appellant in dark, for snatching the right of appeal and making the created recovery good/valid, despite having no warrant of law. 5. Upon perusal of the reassessm ent order dated 27.09.2014, I have observed that despite mandated under law, view message as contemplated in Sections 155Q and 215 of the Act for payment of created recovery amount of Rs, 431,844.00 was not transmitted/served, instead the reassessm ent order was kept as guarded secret and surfaced only when the appellant intended to file fresh GD for his arrived consignment at the terminal and he was pressurized to pay the recovery created through reassessment, to which he agitated and asked the respondent No, 1 to supply him with the copy of reassessment order and view message through which recovery has been created. He was supplied with the reassessment order sans view message of recovery. On the strength of which he filed appeal before respondent No, 2 on 05.06.2015 as evident from the affixed stamp on the memo of appeal, without any objection of time barred by his office, meaning thereby it was admitted for regular hearing on merit. Hence, it was mandated upon respondent No, 2 to decide the appeal on merit, in consonance with the appeals filed with him by other importers against the reassessm ent orders detail of which has been incorporated by the appellant in ground 1 of memo. of appeal, which were although barred by time, but were decided on merit, without raising the objection of time barred or rejecting those summarily as time barred. The said act of his was just and in consonance with the Article 10A (Fair Trial) of the Constitution of Islamic Republic of Pakistan. Even otherwise, it is principal of law that Appellate Authority have to examine the reason for delay sympathetically when admittedly registered person was proceeded ex-parte during the adjudication proceeding, as held by ITAPTP in reported judgment 2010 PTD (Trib.) 1491. The case of the appellant is on the same footing as reassessment - order was passed by respondent No, 1 ex- parte and in isolation without adherence of due process of law. Likewise in 2010 PTD (Trib.) 1359 it has been held that "Collector was bound to have condoned such delay for the sake of justice and fairplay" and in 2012 PTD (Trib.) 637, it has been held that "the rules of procedure are enacted for fostering the ends of justice and preserving the rights rather than to stifle the dispensation of justice and, unless they are un-surmountable; ends of justice always out way the manner of practice and procedure". In the same judgment further held that "there is no doubt that the appeal filed before the First Appellate Forum was time barred by 127 days yet the higher Court has repeatedly held that the cases should be decided on merit instead on technical grounds and technicalities of law and fact should always be avoided and discouraged in order to do complete justice and to ensure that justice is not only done but also seen to have been done". The respondent No, 2 in fact abused vested discretionary powers, which are to be invariably exercised for the benefit of tax payer and that also without evaluating the fact that the registered person/importer does not stand to gain, neither any thing nor a delay on his part give rise to or create a valuable right in favour of the Revenue-department and the judiciary is respected not on account of its power to legalized injustice under the garb of technicalities, but because, it is capable of removing injustice and the tax payer being citizen of Pakistan has a right under its Constitution to expect so. Whereas, the Hon'ble Lahore High Court held in reported judgment 2002 PTD 549. Laser Praxis Deplix Clinic Lahore v. Customs Central Excise and Sales Tax Appellate Tribunal held that delay in filing appeal of the litigant has to be condoned on the strength of the observation made in Controller of Land Acquisition v. Mst. Katiji and others [1987] 56 Tax 130 (S.C. India) by Mr.M.P.Thakkar, J. Speaking for the Court favoured adjusted oriented approach by finding that (i) A litigant does not stands to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice
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being defeated. As against this, when delay is condoned, the highest that can happened is that a cause would be decided on merits after hearing the parties. (iii) "Every day's delay must be explained" does not means that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense and pragmatic manner. (iv) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice reserved to be preferred for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay. (v) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala-fides a litigant does not stand to benefit by resorting to delay infact he runs a serious risk. (vi) It must be grasped that judiciary is respected not on account of its powers to legalized un- justice on technical ground but because it is capable of removing un-justice and is expected to do so" The respondent No, 2 through rejection of appeals of the appellants as tiwe barred, not only gave harsh and unjust treatment. Instead, additionally gave differential treatment, which `nntamount to discrimination and barred under Articles 4 and 25 of Lire Can si;tu:.; Ai despite standing on the same pedestal as other importers, whose appeals were decided on merit, without touching the aspect of limitation, validating that he has no urge, will, passion and ability to decide the case/dispute put before him on merit. 6. The respondent No, 2 intentionally and willfully also ignored the settled principle of law by the Superior Judicial fora that no limitations runs against ab-initio void order, despite admitted and apparent position that the recovery was created in isolation without issuance of show-cause notice under Section 180 as contemplated in Section 32(3) of the Act and in usurpation of the powers delegated to the authority under the said D provision of Act through clause 3(ii) of S.R.O. 371(1)/2002 dated 15.06.2002, namely Principal Appraiser. These vital defects available in the reassessm ent order, render it palpably illegal and a such ab-initio, null and void, no limitation runs against such types of orders, litigant is entitled to challenge the vires of such orders immediately upon having the knowledge, which appellant did. I have arrived on the said opinion, while, driving assistance from reported judgment 1986 SCMR 962 Rehmat Bibi and others v. Punno Khan and others, 1996 SCMR 2296 Syed Haji Abdul Wahid and another v. Syed Sirajuddin and PLD 1976 Supreme Court 37 Ali Muhammad v. Hussain Bux and another, wherein, the Hon'ble Judges of the Supreme Court of Pakistan "On the question of limitation, referred to a number of decision of Apex Court and held that if an order is without jurisdiction and void then it needs not to be formally set aside. In Yousuf Ali v. Muhammad Aslam Zia and others in reported judgment PLD 1958 SC (Pak.) 104 (1) it was said by this Court "Where the legislature clothes an order with finality, it always assume that the order which it declares to be final is within the power of the authority making it and no party can plead as final and order made in excess of powers of the authority making it, in the eyes of law, such order being void and non existent". In PLD 1965 SC 68 Ch. Altaf Hussain and others v. The Chief Settlement Commissioner (2) it was said that an order without jurisdiction is a nullity in law and it does not require to be set aside formally. Again in PLD 1967 SC 294 Syed Ali Abbass and others v. Vishan Singh and others (3) it was observed that where an authority has passed an order in excess of jurisdiction, the petitioner cannot be refused relief and penalized for not throwing himself again by way of revision or review on the mercy of the authority who were responsible for such excess this being the rule firmly established, the dismissal of writ petition by the learned single judge on finding that the appeal before the Additional Settlement Commissioner was barred by time and in dismissing it he had acted with jurisdiction was not warranted in law." The Hon'ble High Court of Sindh in adherence of the ratio decidendi held in reported judgment 2002 PTD 87 FOP v. Metropolitan Steel Corporation held that "when a Court or a Tribunal assume jurisdiction not vested, its order is void and nullity to law and no limitation runs against a void order". Hence, now it's a legal fiction that no limitation runs against a void and ab-initio order without any exception,
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akin to the reassessm ent order passed in the appellant case without lawful authority/jurisdiction. Hence, not enforceable under law and as such, ab-initio, null and void / coram non judice The issue No, (i) is answered in negative. 7. That as regard to issue No, (ii), the legislature has inserted Section 3DD in the Act through which Directorate General of Post Clearance Audit (DGPCA) has been created and its official had been delegated powers through S.R.O. No, 500(1)/2009 dated 13.06.2009 for conducting audit of the importer books of account maintained under Section 211 of the Act under the provision of Section 26A of the Act, which includes every aspects of the declaration made by the importer and assessm ent order passed 'by the competent authority of the Clearance Collectorate under Section 80 and Rule 438 of Act/Rules and prepare audit observation and forward to the importer for clarification and if the reply fail to settle the issue, frames contravention report and forward it to the Clearance Collectorate which onward forward to the respective Collectorate of Customs Adjudication for issuance of show-cause notice under Section 180 of the Act, and passing of order- in-original as per the expression of Section 179 ibid. The respondent No, 1 assumed the powers of officials of DGPCA and conducted the Audit Post Clearance of the Goods Declaration of the appellant under Section 26A while exercising the powers specifically delegated to the officials of the DGPCA. Neither he nor his higher officials are empowered to encroach the sovereign jurisdiction of DGPCA under any circumstances as this will render the formation of DGPCA by the legislature under Section 3DD of the Act, and the powers delegated under SRO No, 500(1)/2009 dated 13.06.2009 as redundant. I have observed with concern that the respondent No, 1 and his higher officials are running a parallel department to the DGPCA in derogation of Section 3DD ibid. This is not permitted under law, by virtue of the fact that if it is left to be perpetuated, anarchy will prevail within the different organs of FBR to encroach powers/jurisdiction of each other, despite, having no lawful authority/jurisdiction. This type of intention/act cannot be validated under any circumstances and has to be crushed in the initial stages for maintaining the integrity and sanctity of the different sovereign organs of FBR. Therefore, the re-assessm ent made by the respondent No, 1 of the Goods Declaration of the appellant after clearance amounts to conduction of audit under section 26A of the to which he is not empowered, rendering his act without power/jurisdiction as such ,void and ab-initio and coram non judice. 8. Upon passing of assessm ent order under section 80 and Rule 438 of the Act/Rules, and thereafter passing of clearance order under Section 83 and Rule 442 ibid by the authority defined in section 2(a) of the Act, S.R.O. 371(1)/2001 dated 15.06.2001, it cannot be disturbed by any authority for the purpose of re-assessm ent, preparing contravention report and adjudication proceedings. The only course left for the respondent No, 1 was to challenge the said order before the Collector of Customs (Appeals) under section 193 of the Act which empowers an officer of customs below the rank of Additional Collector to file an appeal and in that he could incorporate all of his apprehensions, misreading of the facts and contravention of the provision of the Act/Rules. The Collector of Customs, upon receipt of the appeal and after going through the facts and grounds, if thinks fit that the contention of the respondent No, 1 seems to be correct and the duty and taxes has not been either not levied or short paid on the basis of the goods assessed earlier for clearance, is empowered to issue show-cause notice under section 32 ibid to the respondent (importer) as expressed in 3rd proviso to the subsection (3) of Section 193A of the Act. Instead of the prescribed method the respondent No, 1 reopened the assessment/ clearance order under section 195 of the Act, under which powers are either vested with the Board or the Collector of Customs. Even otherwise, when the right of appeal has been accorded by the legislature in the provision of Section 193 of the Act, the provision of Section 195 is un-operational and cannot be exercised even by the authority defined therein and this has been validated by the Hon'ble High
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Court of Sindh in reported judgment 2014 PTD 12'56 Messrs Paramount International (Pvt.) Ltd., Karachi v. Secretary Revenue Division that "department or an officer of customs, if aggrieved, by any decision or order passed by an officer of customs below the rank of additional collector could prefer an appeal before the Collector (Appeal) --- 1st order in original passed in the subject matter was an appealable order for both the…
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