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Petitioner: Messrs Auto Corporation, Karachi VS Respondent: The Assistant Collector, Group-VII
Court Name: Customs Appellate Tribunal Judge(s): Jehanzaib Wahlah Title:Messrs Auto Corporation, Karachi vs The Assistant Collector, Group-VII,
JUDGMENT
Reported As: 2022 PTD (Trib.) 64 Result: Appeal allowed Judgment JUDGMENT JAHANZAIB WAHLAH, MEMBER JUDIC IAL-III .----Through this order , I intend to dispose off Appeal bearing No. 61/2019 filed under Section 194A(t) of the Customs Act, 1969 (Act) against the Orders-in-Appeal No. 1701/2018 dated 11.12.2018 passed by Collector of. Customs (Appeals), maintaining the Re-assessments Order dated 24.07.2018 passed by the Deputy Collector of Customs, Group-VI, MCC of Appraisement-W est, Karachi in Goods Declaration (GD) No.KAPW -HC-25084-09082017. 2. Brief fact of the case are, that the appellant during the course of his business activities imported a consignment of 1791 1 kgs of motorcycle parts and accessories of PCT heading 8714.1090 from China against invoice No.16- 1010 dated 21.06.2017 and B/L No. OOLU/2589953790 dated 25.06.2017. Upon receipt of shipping document delivered those to his clearing agent M/s. Khurram Brothers, Karachi for transmitting GD under the provision of section 79(1) of the Act and Rule 433 of Sub-Chapter III of Chapter XXI of the Customs Rules, 2001 (Rules), with the MCC of Appraisement-W est which he did and as per pre-requisite for availing the regime of Customs Computerized System (CCS) deposited upfront duty and taxes of Rs.1,042,790/- on 09.08.2017. Consequent to which GD was numbered as KAPW -HC-25084 dated 09.08.2017. Upon receipt of GD on his workstation, the assessing officer instead of passing assessment order on the basis of declaratio n, uploaded documents forming part of the declaration as defined in section 2(kka), opted to get the goods examined 'under the provision of Section 198 and Rule 435 of the Act, to proceed with after abusing his opinion/reasoning for that transmitted GD to respondent No.2, who gave his assent and routed the GD to the Assistant/Deputy Collector of the Terminal, who marked the same to the officer of his choice as per devised criteria. Who carried out physical verification of the goods and found those in accordance with declaration in all aspects and report so prepared was uploaded in the reservoir of GD. Upon appearance of same on his workstation, he passed assessment orders dated 06.08.2017
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against each imported items, inclusive of "main and counter shaft/gears" for levy of duty and taxes under the provision of Section 80 and Rule 438 of the Act/Rules, in exercise of the powers vested upon him through SRO. 371(1)/2002 dated 15.06.2002, while adducing remarks in assessment note reading as "VR" and transmitted view message for payment of additional amou nt of duty and taxes of Rs.155,097/-, which were paid on 16.08.2017, on the strength of which the inbuilt authority of CCS passed clearance orders in terms of section 83 and Rule 442 of the Act/Rules. The appellant clearing agent thereafter obtained the delivery from the terminal and transported the goods to appellant warehouse. After lapse of about an year after the clearance and delivery of the goods the respondent No.2 passed reassessment orders dated 24.07.2018 for the imported main and counter shaft/gear , on the basis of the formed opinion that "during the scrutiny of the import data it is observed that description and quantity have been mis-declared by the appellant, which resulted in realization of Government Revenue on account of custom duty and other taxes amounting to Rs.7,154,914/-, communicated to reassessment/demand notice in terms of section 80 read with 2(bb) of the Act and appellant was directed to make the payment of the created recovery with 7 days from the date of issue of notice, failing to which threat for initiating recovery proceeding as per the contemplation of sections 179, 32, 202 and 156(1) of the Act was communicated". Being aggrieved, appellant challenged its vires before respondent No.2 on 13.08.2018 09.11.2018 vide Appeal No.Cus-2851/2018/A-W est, who rejected it and remanded the case to respondent No.1 while maintaining the reassessment order by hirn. Paras 3 and 4 are relevant and are reproduced here-in-under: "3-. I have examined the case record. The instant appeal has been filed against demand notice dated 24.07.2018 issued under Section 80 read with Section 2(bb), of customs Act, 1969, directed the appellants to deposit short paid amount. The relevant Para' of the said notice is reproduced as under: "You, are therefore, directed to make payment of the aforesaid re-assessed amount of Rs.715,494/- within (7) days from the date of issue of this notice failing to which action for recovery proceeding shall be taken as per law, through adjudication of the matter in terms of Section 179 read with Sections 32, 202 and 156(1) of the Customs Act, 1969." 4. The above notice is simply an intimation or short paid/detected amount, wherein, appellant have been provided an opportunity to deposit, the same within a week. Failure to deposit the same amount was to follow adjudicating proceeding under section 179 of the Act ibid. The appeal at this stage against an intimation letter in in-fructuous and unwarranted. The same is therefore dismissed. The appellant should either justify his position before the Assessment officer , or, in case of contravention is framed by department to argue the case accordingly at original adjudication stage." 3. The appellants filed the appeals on the basis of grounds enumerated therein, the consultant/advocates on the date of hearing argued the cases strictly in accordance with those. No cross objection under Section 194A(4) of the Act has been filed within the stipulated period of 30 days or not even todate by the respondent No.1. However , the representative of the respondent No.1 vehemently defended the passed reassessm ent orders and orders-in-appeal passed by respondents Nos.1 and 2 respectively and prayed for maintenance of those, irrespective of apparent deficiencies /illegality . 4. Rival parties heard and case records perused and so the relied upon citations. Prior to deliberating on the merit/legality of the order passed by respondent No.1, it is apt to determine that whether the order dated 24.07.2018 against which appellant preferred appeal before respondent No.2, falls within the definition of order . Upon perusal of that, it has been notic ed that it with prominence contains the word "re-assessment/demand notice", reassessment of GD could be made under the provision of Section 80(3) of the Act, whereas a demand notice has to be issued for initiating recovery proceeding under the provision of Section 202 and Recovery Rules embodied in Chapter XI of the Rules Could only be under taken by the authority defined in Rule 133(ix) upon referring by the authority defined in Rule 133(x), which should be equivalent to the rank of Assistant Collector of Customs, appointed under section 3 of the Act and that also after crystallization of adjudged amount of duty and taxes, fine and penalty through an order-in-original passed by the competent authority under the provision of Section 179, after due process of law i.e. serving of show-cause notice as per the contemplation of section 215 issued under the provision, of Section 180 and upon attaining finality of that after crossing all the forums where it
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can be challenged and the decision of the last forum i.e. Hon'ble Supreme Court of Pakistan as held in reported judgments 1993 SCMR 39 CBR v. Chanda Motors and (2013 PTD 581) Ghulam Nabi v. FOP of the Honorable Supreme Court of Pakistan . paras 17 to 22 are relevant and which are: 17. Word "finalized" is derived from the word "final" which is define in Chambers 20th Century Dictionary to mean "last decisive, conclusive; respecting the end or motive of a judgment ready for execution-last of series". "Finality" is defined as state of being final completeness or conclusiveness. In Black's Law Dictionary Fifth Edition, word "final" is defined as, "last; conclusive, decisive, definitive; terminated, and completed." In it's used in reference to legal actions this word is generally contrasted with "inter-locatory". Viewed in the light of meanings of the word "assessments" and "finalized", it appears that assessment order as such do not have touch of finality unless all the forum are exhausted in which such orders can be challenged so that the order take the final decision. 18. Legally speaking order of assessmen t passed by Income Tax Officer is an order of original authority but is not final for the reason that it can be challenged in appeal or revision as the case may be and would be final only when it goes through all the forums and the finding of the last forum shall be binding as conclusive. 19. The question whether appeals and other remedies provided under the law formed part of proceedings or not came up for consideration before the Supreme Court of India in the case of Garikapati Veeraya v. N. Subbiah Choudhry and others reported in PLD 1957 Supreme Court (India.) 448 it is held as per majority opinion that legal pursuit of a remedy , suit, appeal and 2nd appeal are really but steps in a series of .proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. Reference can be made to the case of Commissioner of Wealth Tax v. Vimlaban Vadilal Mehta reported in (1984) 145 ITR 11, in which it is held that it is well settled that when an appeal is filed against assessment order before AAC the assessment is thrown open and Appellate proceeding constitute a continuation of a assessment proceeding." 20. In the case of F.A Khan v. The Government of Pakistan (PLD 1964 Supreme Court 520), question came up for consideration that in the case of dismissal of a Government servant for filing a declaratory suit whether limitation would start from the date of order of dismissal to be reckoned under Article 120 of the Limitation Act or from the date of order of Appellate Authority confirming the first order to be reckoned under Article 58 of the Limitation Act. It is held that such right accrued on the date of dismissal but, where there is an appeal on the date of Appellate order upholding dismissal. It is further held that the legislature when its provided a hierarchy of the Tribunal for the determination of a dispute it is really providing one complete procedure ' for such determination, proceeding before different Tribunal being only step in this procedure. 21. On the question construction, in the light of what is stated above, it can be said without fear of contradiction that order passed in original proceedings is not final unless it crosses all the forums set up under that law in which it can be challenged and the order of the last forum would become final. Mr. Rehan Hassan Naqvi, learned counsel for the respondent has submitted before us that there is plethora of case law on the point that even within the frame work of Income Tax law, appeals and other remedies provided therein formed part of the same proceedings regarding assessment. In this context our attention is drawn to the case of Chattur am and others v. Commissioner of Income Tax, Bihar reported in (1947) 15 ITR 302. In the reported case assesses of partially excluded areas were served with the notices under section 22(2) of the Income Tax Act fore furnishing returns. Subsequently Governor of Bihar by notification directed that India Income Tax (Amendment) Act, 1939, the Income Tax Law Amendment Act, 1940 should be deemed to have been applied to the Chotanagpur Division containing partially excluded areas with retrospective effect. Subsequently Regulation I of 1941 was also issued by the Governor to remove doubts as to the retrospective applicability of the Act mentioned in the Notification. Assesses were assessed and their appeals were pending when Regulation 1 of 1941 was issued. It was contended that assessment proceedings initiated and completed against them were invalid and neither the notification nor the Regulation were competent in law to validate those proceedings, it was held by the Federal Court of India, inter alia, that appeals to the Appellate Assistant Commissioner were an integral part of the machinery of assessment and therefore it could not be contended that assessment proceedings were over when Regulation I of 1941 was made and the Regulation could not apply to the proceedings covered by those appeals.
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5. In the present case, the respondent No.1 without adhering due process of law, deceptively at the back of the appellant first passed reassessment order , date of which is not known and then issued demand notice for initiation of recovery proceeding under the provision of Section 202 of the Act in exercise of the powers of recovery officer, which he obviously not, without crystalliza tion of the created recovery amount, despite not attaining finality . Through the impugned reassessment order/demand notice, he tried to kill three birds with a stone i.e. the 'impugned communication 24.07.2018 to the appellant, is in fact self contained" show-cau se notice, order-in-original and demand notice", as evident from the narration made therein which speaks about allegation/holding of mis- declaration of description and quantity . Hence, on the face of it, it is an order as defined in Black Law Dictionary Sixth Edition was perused, which says that an order means "command, direction or instruction": Whereas, the word order has been defined in PLD 1986 Lah. 237 as " the word 'order' is not being a term of art has no fixed legal meaning. According to Prem's Judicial Dictionary . it covers commands or directions that something shall be done...the term order -in-general is comprehensive enough to include all kinds of order including ,a formal order ." Perusal of it confirms without any ambiguity that it contains command and direction for the appellant for payment of duty and taxes, failing to which threat of proceeding under the provision of sections 179, 32, 202 and 156(1) of the Act has been communicated to appellan t. Therefore, it is by an means falls within the definition of an order and vires of which are assailable before respondent No.2 under the provision of Section 193(1) of the Act without any exception. Hence, appeal was validly filed by the appellant before the respondent No.2 for decision strictly in accordance with its expression of Section 193(1) reading as "any person including an officer of customs aggrieved by any decision or order passed under Sections 33, 79, 80 and 179 by an officer of Customs, below the rank of Additional Collector may prefer appeal to the Collector (Appeal). The appeal filed before him was neither in- fructuousnor unwarranted as opined by the respondent 'No.2, therefore, it was mandated upon him to decide the appeal on merit after controverting the adopted grounds by the appellant in the memo of appeal, instead of dismissing summarily and that also on the basis of pre-determined formed opinion and inapt interpretation of the word "order" and provision of Sections 80(3), 193(1) and 202 of the Act. ' 6. The respondent No.2, while deciding the appeal made yet another illegality by dismissing the appeal with the observation given in para 4, which confirms that he maintained the order passed by respondent No.1 and gave protection to the illegal and mala fide act of respondent No.1 by inscribing his opinion in last line of the order of remanding the case to the respondent No.1 despite no power under the provision of Section 193 of the Act. It is now well settled law that that a thing has to be done as it has been asked to be done or not to be done at all as held in-reported judgment. It is well settled law that when a law required and act to be done in a particular manner it had to be done in that manner alone, not otherwise. Reference in this regard can be made to Muhammad Hussain and another v. Muhammad Shafi and another (2004 SCMR 1947 and Munawar Hussain and 2 others v. Sultan Ahmed, (2005 SCMR 1388 ). And in 2006 SCMR 129 titled as DGI&I and others v. Al-Faiz Industries (Pvt.) Ltd. and others that "If the law have prescribed method for doing a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or retaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted--each and every words appearing in a Section is to be given effect and no other word is to be rendered as redundant or surplus -- when the regislature required the doing of a thing in a particular manner then it is to be done in that manner and all other manner or modes of doing or performing that things are barred--if the doing of a thing is made lawful in a particular manner the doing of that thing in conflict with the manner prescribed will be unlawful as per maxim "Expression facit cessare taciturn" Hence,' respondent No`2 acted without power/jurisdiction and as such the direction given by him to the respondent No.1 is without lawful authority/jurisdiction and as such ab-initio, null and void. 7. Reverting back to, the main case, the legislature through a money bill framed and inserted section 3DD in the Act through which Directorate General of Post. Clearance Audit (DGPCA) has been established and its officers have been delegated powers through SRO 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 26(2) after serving notice/summon under clause (a) of Section 26A of the Act, they are empowered to look into every aspects of the declaration made by the importer and assessment order passed by the competent authority of the Clearance
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Collectorate under Section 80 and Rule 438 of Act/Rules and prepare audit observation and forward that to the importer for clarification, if the reply fail to settle the issue, frames contravention report and forward it to the Collector -of Customs of Clearance Collectorate, who 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 by the authority defined in Section 179 ibid. The respondent. No.1 as evident from the impugned communication in fact conducted audit of the GD of the appella nt by assuming the powers officials of DGPCA and conducted the Audit Post Clearance of the GD of the appellant under Section 26(2) while exercising the powers specifically delegated to the officials of the DGPCA. Respondent No.1 is not 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 through SRO 500(1)/2009 dated 13.06.2009 redundant. Hence, respondent No.1 acted without power/jurisdiction, renderin g the act of conduction of audit and passing of reassessment order ab- initio, null, void. Carrying out such type of exercise is not permitted under law, 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 conduction of audit post clearance of the GD of the appellants under Section 26(2) of the Act is without lawful authority/jurisdiction. Hence, ab-initio null and void and as such coram non judice. The superstructure built thereupon ought to be crumble down no matter how strong it may be. 8. It is now a legal fiction that the consignment which has undergone the process of passing assessment order under the provision of Section 80 and Rule 438 of the Act/Rules for levy of duty and taxes, which were paid and thereafter valid clearance order dated 16.08.2017 as contemplated in Section 83 and Rule 442 ibid has been passed by the competent authority in exercise of the powers vested upon him through SRO 371(1)/2002 dated 15.06.2002. Such order is an appealable order and can't be disturbed by any other authority including respondent No.1 or his superior with the exception of preferring an appeal under the provision of Section 193 of the Act as was/is invariably done by an importer , in case he felt the assessment order so passed is nullity to the fact/law . Similarly , if the respondent No.1/superior were of the view in the instant case of the appellant proper assessment has not been carried out, the only optio n left with them to adopt the mechanis m available in the Act, for the reopening of the impugned assessment order by filing an appeal before the Collector of Customs, Appeals under the provision of Section 193 of the Act either by him directly or through Superior in which they should 'had incorporated all of their apprehensions, opinions/findings, including contravening provisions of the Act and so the applicable penal clauses. Upon 'receipt of that the Collector of Customs, Appeal have to go through the facts and grounds of that, thereafter if he think fit that in the case under appeal correct duty and taxes have not been either levied or paid on the basis of found goods, is empowered to issue a notice under Section 32 of the Act as enunciated in 3rd proviso of Section 193A to the respondent (importer/appellant) and after receipt of reply to the said notice, the Collector of Customs has to decide the appeal in the light of the issued show-cause notice and reply . In the instant case no appeal has been filed either by the respondent No.2 or his superior despite mandated under law, instead respondent No.1 assumed the powers under Section 195 of the Act and reopened valid assessment/clearance orders dated 16.08 .2017 passed under the provision of sections 80, 83 and Rules 438 and 442 of the Act/Rules. Neither respondent No.1 nor his superior are empowered to reopen valid assessment order passed by the authority defined in Section 2(a) of the Act, in exercise of powers vested upon, him through SRO 371(1)/2002 dated 15.06.2002. All acted without power/jurisdiction, hence his action deems to be without any lawful authority and as such ab-initio, null and void as held by Superior Judicial Foras in umpteenth reported judgments e.g. 2014 PTD 1256 Messrs Paramount International (Pvt.) Ltd. v. Federation of Pakistan and others , wherein their lordship of High Court opined 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 parties, therefore option to reopen and order pass under the adjudication hierarchy was not available to the
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Collector . Even the Collector of Customs Adjudication could not oversee or exercis e any right of re-opening of any order which has been passed by an officer lower in rank but acting as an adjudicating authority . Impugned order was set-aside and Constitution Petition was allowed." The C.P.L.A. No.105-K of 2014 filed by Collector of Customs and others against the order of the High Court has been dismissed by the Hon'ble Supreme Court of Pakistan while refusing leave to appeal. Whereas, the High Court of Balochistan in 2019 PTD 1712 titled as Collector of Customs, MCC, Quetta v. Al-Habib Enterprises and Engineering and others , while dismissing the SCRA of the department held that "after assessment of leviable duty and taxes under Section 80 of Customs Act, 1969 and payment thereof and after clearing the vehicle under Section 83 Customs Act, 1969, the available remedy of filing appeal under Section 193 of the Customs Act, 1969 was not availed by the concerned officials of the Collectorate of Customs, Additional Collector of Customs. (Adjudication) had no jurisdiction under the provision of Customs Act, 1969 to issue show-cause notice and to pass order-in-original. No question of law having arisen out of the impugned of the judgment passed by Appellate Tribunal warranting interference by High Court under Section 196, Customs Act, 1969. Reference were dismissed in circumstances." 9. It is also settled proposition of law that in the presence of an appealable order , fresh order cannot be passed even through issuance of show-cause notice under section 180, while exercising powers under the provision of Section 179 ibid. The said act is piling upon yet another order on the existing appealable order not permitted under law as held by Hon'ble High Court of Sindh in reported judgment 2004 PTD 3020 Messrs Smith Kline French v. Pakistan that "once an order is passed, which attain…
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