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Petitioner: Messrs AL-AMNA INTERNATIONAL and 2 others VS Respondent: DEPUTY COLLECTOR OF CUSTOMS and another
Court Name: Customs Appellate Tribunal Judge(s): Muhammad Nadeem Qureshi Title:Messrs AL-AMNA INTERNATIONAL and 2 others vs DEPUTY COLLECTOR OF
CUSTOMS and another Case No.: Customs Appeals Nos.K-385-K-412, K-413 to 419 and K-420 to K-421 of 2014 Date of Judgment:2015-01-16 Reported As: 2015 PTD (Trib.) 1980 Result: Appeals allowed Judgment ORDER ' MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).-Through this common order, I intend to dispose of above captioned Customs Appeals filed under Section 194-A, by the appellants against Orders-in-Appeals Nos.K-385 to K-412 of 2014, K-413 to K-419 of 2014 and K-420 to K-421 of 2014, passed by the Collector of Customs (Appeals), Karachi (here-in-after referred as respondent No,2) maintaining the assessm ent orders dated 23-3-2013 passed by Deputy Collector of Customs, Group-I, MCC of PaCCS, Karachi (here-in-after referred as respondent No, 1). These appeals have identical issues of law and facts and are therefore being heard, dealt with and disposed of simultaneously through this common order in the light of judgment of the Honorable High Court of Sindh in Customs Reference No,157/2008 (S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adjudication-I) and Others, Karachi. 2. Since the subject appeals are based on similar facts and question of law, therefore, it is needless to reproduce facts of each case separately, hence for reference the facts of Appeal No,K-385/2014 are taken into consideration for decisions. Brief facts of the case are that the appellants imported a consignment of Fruit Mix in Syrup (1800 Cartons, each Carton 24 x 836 GM)" from the Philippines and filed GD vide machine No, KCSI-HC-18864-08082012. The goods were declared to be classifiable under. HS Code 2008.9700 and the value was declared to be US$ 0.4700 per unit. The declarations were accepted by Customs and the goods were cleared without payment of sales tax in terms of Serial No,16 of Table 1 of the 6th Schedule to the Sales Tax Act, 1990. However, subsequently it transpired that canned fruits were not eligible for exemption in terms of S.No, 15 of the 6th Schedule to the Sales Tax Act, 1990. Furthermore the Federal Board of Revenue vide its letter
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C.No, ST-L&P/2007/48560-R dated 16-4-2013 clarified that prepared fruits of Chapter 20 are chargeable to sales tax as the same are not covered under the 6th Schedule ibid. The goods released with inadmissible zero rating of sales tax were re-assessed accordingly. 3. After hearing the appeal, the Collector (Appeals) vide his above referred order, concluded as follows:- "7. The learned advocate for the appellants again approached this forum and informed that a CPLA has been filed in the Honorable Supreme Court of Pakistan against the above judgment of the Sindh High Court and the Appeal may still be kept pending till the final decision of the case. However, this time the request of the counsel was not acceded to because no stay was granted to the appellants by the Supreme Court in the case. Moreover, keeping in view the fact that a Double Bench of the Honourable High Court of Sindh had given a clear and detailed verdict against the appellants (re-produced above) in which the learned Bench conclusively held that no exemption of sales tax is available to tinned / bottled or canned fruits. Therefore, the case cannot be pended any longer and accordingly, the Appeal is not accepted." 4. Being aggrieved and dis-satisfied with the order-in-appeal, the appellants filed the instant appeals before this Tribunal on the grounds incorporated in the Memo. Of Appeal. 5. On the date of hearing Mr. Obayd Mirza, Advocate along with Mr. Nadeem Ahmed Mirza, Consultant, reiterated the contents of the appeal and contended that the respondent No,1 is not empowered to conduct post clearance audit, instead it rest with the Directorate General of Post clearance Audit in terms of Notification No, S.R.O. 500(I)/2009 dated 13-6-2009 Resultant, he usurped the powers of both the authorities, which is not permitted under law, the assessment passed was without power/jurisdiction, therefore null and void as held in the reported judgments "Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), (PLD 1976 SC 514) Ali Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others, 2006 PTD 2237 Pak Suzuki Motors Company Ltd., Karachi v. Collector of Customs, Karachi, 2009 PTD (Trib) 1996 and 2010 PTD (Trib.) 832". The respondent No, 1 is not designated an Officer of Inland Revenue under the provision of, Clause (c) of subsection (3) of section 25 of the Sales Tax Act, 1990 and Section 120 of the Income Tax Ordinance, 2001 and as such is not empowered to lay hand on the matter of Sales Tax and Income Tax for recovery of short payment amount under the provision of Section 11 of the Sales Tax Act, 1990 and section 162(1) of Income Tax C Ordinance. Hence, passing assessment order for recovery is without power/jurisdiction by virtue of the fact that he usurped the powers of Officer of Inland Revenue to which he is not vested, Rendering the assessment order being a flagrant violation of law and as such corum non-judice, null and void ab-initio. As stood validated from reported judgment Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 Supreme Court 514 Ali Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others, 2006 PTD 2237, Pak Suzuki Motors Company Ltd, Karachi v. Collector of Customs, Karachi, 2009 PTD (Trib) 1996 and 2010 PTD (Trib.) 832. He further contended that under the provision of sections 80 and 83 of the Customs Act, 1969 and 438 and 442 of Customs Rules, 2001, the order passed under the said provision of the Act become appealable order before respondent No, 2 under the provision of Section 193 of the Customs Act, 1969. The proper course of action was to file an appeal which was not filed resultant, the order dated 19-10-2012 attained finality by, virtue of expiry of the stipulated period of 30 days as held in reported judgment 1989 MLD 4310 World Trade Corporation v. CBR, wherein it has been held
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that "A fortiori, the Central Board of Revenue could not open an order that had attained finality under the Sea Customs Act, 1878". 6. He argued that, in the instant case the respondent No, 1 piled upon order dated 23-3-2013 upon an existing order dated 9-8-2012 passed under sections 80 and 83 and Rules 438 and 442 of Customs Rules 2001, this is completely in derogation of section 80 of the Customs Act, 1969 and not permissible under the Constitution of Islamic Republic of Pakistan and this stood validated from the order of Hon'ble Sindh High Court in the case of Messrs. Smith Kline French v. Pakistan reported as 2004 PTD 3020 held that "once an order is passed, which attains finality, the same cannot be subject to a show-cause notice again, considering that no appeal or revision is filed against the first order. This was held by the learned High Court to be in derogation of the principles of administration of justice". "That with the passing of "Assessment/Clearance Order" by the authority defined in Section 2(a) of the Customs Act, 1969 the transaction stood past and closed in every aspect, and the said order cannot be substituted with any other order as a subsequent order cannot be allowed to pile upon an existing order, as it is not permitted under law besides the said exercise amounts to "double jeopardy" and negates the Article 13 of the Constitution of Islamic Republic of Pakistan besides also being in derogation of the law laid down by the Superior Courts of Pakistan. The respondent No, 1 was not empowered to disturb the said order, instead he passed yet another assessm ent order in the presence of earlier infield order under the provision of Section 80 and Rule 438 of the Act/Rule, despite barred by law and communicated amount of taxes of Rs,801,566.00 and pressurized the appellant to pay that and for implementation of his order he got the ID of the appellant blocked. He further argued that after the transmitting of assessment against the impugned good declaration against which Appeal No,4639/2013 dated 12-4-2013 was filed with the respondent No,2, the Collector of Customs, Adjudication-II issued show-cause notice No, ADJ.II/COLL/DIT/Amna/2013/14 dated 24-6-2013 and subsequently passed Order-in-Original No, 13 of 2013 dated 13-12-2013 are nullity in the eyes of law. 7. The learned Consultant further contended that reassessment under subsection (3) of Section 80 of the Customs Act is permitted after calling for the documents as expressed in Section (2) ibid after release of the goods and the declaration or documents or any information or statement so furnished is found to be incorrect in respect of earlier assessment. In the absence of availability of any mis-declaration, misstatement false documents/statement, reassessment is not permitted. As evident from the reassessm ent order, which is silent in this regard confirming that no mis- declaration in regards to any aspect i,e, declaration, documents, information or statement has been made by the appellant, rendering the assessment so made by the respondent is nullity to the provision of Section 80 of the Customs Act, 1969. The Board or Collector of Customs has the power to examine at their own the record of any proceeding for the purpose of satisfying itself or as the case may be, himself as to the legality or propriety of any decision or order passed by subordinate officer and may pass such order to as it or he may deem think fit as expressed in section 195 of the Customs Act, 1969. The assessm ent/clearance order passed under Sections 80 and 83 and Rules 438 and 442 of the Act/Rules by the authority defined in Section 2(a) of the Customs Act, 1969, can only be reopened by the Collector under section 195 of the Customs Act and by none else as was done by the Collector of Customs, PaCCS as evident from the case of Messrs World Trading Communication, wherein order-in-original dated 13-1-2012 was passed by the competent authority after the original infield order was reopened by the Collector of Customs, PaCCS. The respondent No,1 is not vested with the powers under section 195 ibid. He usurped the power not vested with him, resultant the act of reopening of assessment/clearance order and piling upon with an other order under the provision of Section 80 and Rule 442 of the Act and Rule suffers from lack of powers and jurisdiction, hence void ab-initio as held by Tribunal and Superior Courts of Pakistan in umpteenth unreported/ reported judgments PLD 1975 SC 331, S.T. Appeal No 984/98, S.T. Appeal 72/04, S.T.
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Appeal 54/09, S.T. Appeal No, 2352/99, S.T. Appeal No,106/03, 2002 CLC 705, 2004 PTD 624, 2004 PTD 3020, 2007 PTD 1895, 2009 PTD (Trib.) 1926, 2005 PTD (Trib.) 135, 2010 PTD (Trib.) 759, 2010 PTD (Trib.) 1283, Customs Appeal No, K-44/ 2010 and Customs Appeals Nos. K-435/08 to 455/08, SBLR 2002 Karachi 5, 2010 PTD (Trib.) 1759, 2010 PTD (Trib.) 2523, 2011 PTD (Trib.) 2480 PLD 1971 SC 197, PLD 1973 SC 236, PLD 1971 SC 184, PLD 1976 Supreme Court 514, 1992 ALD 449 (1) Karachi, 2006 PTD 624, 2006 PTD 2237, 2010 PTD (Trib.) 832. 8. He further argued that the respondent by passing reassessment order infact committed a grave illegality as evident from the fact that he created a recovery on the basis of earlier assessment for which a mechanism has been provided in Section 32(3) come into play, verbatim of which is "Where, by reason of inadvertence, error or mis-construction any duty or charge has not been levied or has been short-levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within 3 years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice". Prior to passing an order for recovery of short paid amount of duty and charge under the provision of Section 32(3) it is prerequisite to issue a show-cause notice under the provision of section 180 of the Act by the authority defined in Section 179 ibid because the main objective of show-cause notices is that the person to whom the notice is given is enable to fully know what are the charges leveled against him." It is mandated to issue show-cause notice under section 180 of the Customs Act, 1969. Even otherwise in cases where request for summary adjudication is made, in the words of Customs, Excise and Sales Tax Appellate Tribunal, Peshawar recorded in his judgment reported as 2004 PTD (Trib.) 1324 it was stated that "It is not understood as to under what law such right, which is primarily the duty of the Adjudicating Officer under Section 180 of the Customs Act, 1969 to issue show-cause notice before confiscation of goods or imposition of penalty, could be waived of by the owner of the goods or person, for imposition of penalty on him. Section 180 stipulates that three mandatory conditions are to be fulfilled step by step in chronological order and not simultaneously by the Adjudicating Officer before confiscation of goods or imposition of penalty. The provisions of section 180 of the Customs Act, 1969 does nowhere provide for the waiver of show-cause notice on the part of any person who has limited choice under it. The provisions of Section 180 of the Customs Act, 1969 do not absolve the Adjudicating Officer of discharging his responsibility to comply with the given charter." 9. He further argued that the assessment order reveals with clarity that no show-cause notice has been issued to the appellant by the respondent. Issuance of show-cause notice is a mandatory requirement for the adjudicating officers while adjudicating issues before them. This is also in violation of the principle of natural justice as held by Superior Courts in umpteenth reported judgments that:-- (i) It is the first principle of natural justice to issue a show-cause notice to the person concerned. It is a mandatory requirement for crystallization of monetary liability against the taxpayer through stating of material particulars of the case along with applicable provisions of the relevant law. (ii) It is a well settled proposition of law that if a thing is required by law to be done in certain specific manner must be done in the same manner as prescribed by law or not at all as per maxim "Expressum facit cessare taciturn" as observed by the Apex Court in their judgments reported as PLD 1964 SC 536, 2003 SCMR 1505, 2006 SCMR 129. (iii) Violations of principle of natural justice can be equated with violations of provisions of statutory instruments. (iv) It is the common principle which governs the administration of justice in Islam that in case of liability with penal or quasi penal consequences and /or deprivation of basic rights, a notice as well opportunity of hearing is absolutely necessary. This by itself has to be recognized as a basic
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right as observed by Honourable Supreme Court, Shariat Appellate Bench in the case of Pakistan v. Public at large reported as PLD .1987 Supreme Court 304. (v) Even issuance of a proper show-cause notice to a person is an essential ingredient of the expression "audi alterm partem" which literally means that no man shall be condemned unheard. The right of being issued with a show-cause notice and the right of being personally heard are inseparable and inalienable rights of the defendant and cannot be denied to the person 'concerned under any circumstances. (vi) In one case, the suspension without issuance of a show-cause notice was quashed by Dhaka High Court and was later confirmed by the Supreme Court that the rule of natural justice applies though there may not be any positive words in the statute, for such requirements and such rules are minimum requirements of fairness as reported in the case of University of Dhaka v. Zakir Ahmed PLD 1965 Supreme Court 90. This has also been followed by the Honourable Supreme Court of Pakistan in their judgment reported as 1994 SCMR 2232. As observed by the Honourable Supreme Court in the judgment M.D the Bank of Punjab v. Syed Shahzad Hussain reported as 2006 SCMR 1023, it is also a settled principle of law that principle of natural justice must be read in each and every statute unless and until it was prohibited by the wording of the statute itself as the law laid down by this Court in Sir Edward Nelson's case PLD 1961 SC 237, Fazal-ur-Reham's case PLD 1964 SC 410, Zakir Ahmed's case PLD 1965 SC 90, Pakistan Crome Mines' case 1983 SCMR 1208 and Pakistan's case PLD 1987 SC 304 10. He further contended that, Appraiser is the only authority to proceed in the matter instead of respondent because it is settled elementary principle of law that action of executive functionaries are to be restricted to specific sphere permitted by the statute. In S.R.O. 371(1)/2002 dated 15-6- 2002 respondent No,1 figures no where rendering the assessment order as ab-initio void. If the opinion oftenly adopted by the authorities that Superior Authorities can exercise the powers of their subordinate under section 4 of the Customs Act, 1969 is considered valid for a while then the hierarchy of distribution of jurisdiction explicitly provided under Section 179 of the Act and S.R.O. 371(1)/2002 dated 15-6-2002 shall be rendered redundant. Also the consequent result would be a total anarchy where the superior officers would be making all efforts to exercise the adjudication powers clearly conferred by law upon their subordinates. The powers of adjudication are specific and empowered by the statute. It is an elementary principle of law that where there is a conflict between special and general provision of law, the special provision shall prevails (reference is invited to the case of Lt.-General (Retd) Shah Rafi Alam v. Lahore Race Club 2004 CLD 373). The power of adjudication is special in nature. This cannot be eclipsed by any other general provision. Even otherwise there is another settled principal of interpretation of statute i,e, that the courts can supply, construction with a view to avoiding absurdity (reference is invited to the case of Khalid Qureshi v. UBL 2001 SCMR 103). Equally it must be kept in mind that if it is held that sections 4 and 179 occupy the same fields, there is likely to be redundancy in respect of powers conferred under section 179 and S.R.O. 371(1)/2002 dated 15-6-2002. The Supreme Court in the case of East West Steamship v. Queen Land Insurance PLD 1963 SC 663 has been pleased to hold that redundancy is to be avoided in respect of any provision of the statute. There is also plethora of case-law on the point that where there is a conflict between two provision of the statutes, the later provision prevails and has to be given precedents (reference is invited to the case of Sahibzada Sharfuddin v. Town Committee, 1984 CLC 1517. Apart from this law favour actions of the authorities to be confined to their own spheres of jurisdiction conferred by the statute. An action taken by a state functionary beyond the ambit of his jurisdiction is nullity. In this respect the judgment reported as Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587 is referred. Their lordship observed as "it is trite law that power vested in an authority should only be exercised by that authority, in default whereof, the exercise of power and authority becomes without jurisdiction,
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illegal, void, ab-initio and of no legal effect. The term "without jurisdiction" has been judicially interpreted to include usurpation of power warranted by law (the Chief Settlement Commissioner Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 @ p.339) an act done which the person doing, it has no jurisdiction at all to do or which was clearly outside the scope of his activities (The State v. Zia-ur-Rehman PLD 1973 SC 49) and a judgment or order delivered by a court or a judicial or a quasi judicial authority not competent to deliver it (Muhammad Swaleh and others v. Messrs United Grain and Fodder Agencies PLD 1964 SC 97. The Constitution jurisdiction can thus be exercise when it is shown that the order is passed without jurisdiction or in excess of jurisdiction. As observed earlier the respondent No, 1 has no jurisdiction to pass the impugned order. As such we declare the same to be of no legal effect. Accordingly, we allow this petition but leave the parties to bear their own cost". 11. The learned Consultant further argued that any action, taken in the absence of availability of powers or show-cause notice, the order has been passed, such order are of no legal effect as held by their Lordship of Supreme Court of Pakistan that "it is an element to principle that if a mandatory condition for the exercise of jurisdiction by Court, Tribunal or Authority is not fulfilled then the entire proceeding which follows become illegal and suffer from want of jurisdiction/powers. Any order passed in continuation of these proceedings in appeals or revisions equally suffers from illegality and are without jurisdiction" Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd., v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 Supreme Court 514 All Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others, STA 444/03, STA 465/07, 2010 PTD (Trib.) 1636 and 2010 PTD 465,2010 PTD (Trib) 2158, 2011 PTD (Trib) 1010, 2011 PTD (Trib) 1680, 2011 PTD (Trib) 2086. He further argued that the law had prescribed method for doing of a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objectives of performing or doing of a thing in a manner other than provided by law would not be permitted as declared in the landmark judgment of Director, Directorate General of Intelligence and Investigations and others v. Messrs Al-Faiz Industries (Pvt.) Ltd. And others reported as 2006 SCMR 129. 12. He also contended that the appeal with the respondent No, 2 was filed on 12-4-2013, the appeal before him was against assessm ent order and not against an order passed by an adjudicating authority under Section 179 of the Customs Act, 1969, against the contravention report prepared by Directorate General of Intelligence and Investigation against which Constitutional Petition with the High Court of Sindh was filed, resultant, the decision is not applicable on the appellant in any manner. Even otherwise the Hon'ble Supreme Court of Pakistan through its order dated 3-2-2014 in Civil Petitions Nos. 2163 to 2166 of 2013 has infact set aside the order of the Hon'ble High Court of Sindh and directed the concerned authority wherein the appeals are pending to decide the case strictly as mandated in law and Rules uninfluenced by any finding on merit of the case rendered in the impugned judgment, hence the order of the respondent No, 2 is in derogation of the order of the Hon'ble Supreme Court of Pakistan and as such of no legal effect, hence void ab-initio. 13. No cross objection under subsection (4) of Section 194A has been filed within the period specified therein not till the date of hearing instead Mr. Ghani Soomro (Examiner) argued and stated at the time of hearing the assessment order passed by respondent No, 1 and the orderin- appeal passed by respondent No, 2 are correct in fact and law being based on. Order of the High Court of Sindh and the advanced arguments by the Advocate/consultant of the appellant are irrelevant. On the basis of the clarification of the Board through letter dated 16th February, 2013, the re-assessm ent was accordingly conducted under Section 80(3) of the Customs Act, 1969. In accordance with the law and the subject case was not re-opened under Section 195 of the
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Customs Act, 1969. In support of his arguments, he submitted a copy of the judgment dated 6-8- 2014 passed by the Tribunal wherein the same controversy has been decided in favour of the department, he prayed that the subject present appeal is liable to be dismissed in the interest of natural justice. 14. Arguments heard and concluded. After the perusal of the contents of the appeal as well as arguments extended…
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