ROYAL FLYING COACH (PVT.) LTD VS (APPEALS), CUSTOMS AND EXCISE, LAHORE, 2002 PTD-LAHORE-HIGH-COURT-LAHORE 2838 (2002)

(a) General Clauses Act (X of 1897)---

----S. 24-A---Order/direction lacking reasons---Right of affectee---Public functionaries are obliged to pass order with reasons after applying independent mind---Order or direction of Authority would reflect reasons for its making or issuance ---Affectee may demand necessary reasons, in case those are lacking.

Zain Yar Khan v. The Chief Engineer, C.R.B.C. WAPDA, D.I. Khan and another 1998 SCMR 2419 ref.

(b) Customs Act (IV of 1969)---

----S. 33---General Clauses Act (X of 1897), S. 24-A--Constitution of Pakistan (1973), Art. 199---Cpnstitutional petition---Claim for refund of freight charged on imported vans---Assistant Collector refused such claim---Collector (Appeals) dismissed a petitioner's appeal as time -barred---Validity---Petitioner on 20-7-1988 had received order of Assistant Collector dated 26-6-1988 and had filed appeal within one month---Collector (Appeals) without applying his independent mind had decided appeal, which was not time-barred---Order of Collector (Appeals) did not contain reasons, who had, non-suited petitioner by simply reproducing notification---High Court accepted Constitutional petition, set aside impugned order and remanded the case to Collector (Appeals) for its decision in accordance with law as the matter was of technical nature.

Concise Oxford Dictionary; Chamber's Twentieth Century Dictionary; Webster's Unabridged Dictionary; Nazir Ahmad v. Pakistan and 11 others PLD 1976 SC 453; Messrs Muhammad Anwar Muhammad Iqbal Brothers Ltd. v. Collector of Customs and 3 others PLD 1976 Kar. 253; Collector of Customs, Customs House, Lahore and others v. Messrs S.M. Ahmad & Company (Private) Ltd. 1999 SCMR 138; Rehmat Ali v: Messrs Benares Silk Industries and others PLD 1967 Dacca 113; Union Bank Ltd. v. Federation of Pakistan (1987 Tax (High Court; Lahore); Prime Commercial Bank and others v. Assistant Commissioner of Income-tax 1997 PTD 605; Messrs M.Y. Electronics Industries (Pvt.) Ltd. v. Government of Pakistan through Secretary Finance, Islamabad and others 1988 SCMR 1404 and Dada Soap's case PLD 1984 Kar. 302 ref.

Zahid Hamid for Petitioner.

A. Karim Malik and Sh. Izharul Haq for Respondents.

Date of hearing: 13th June, 2002.

JUDGMENT

Brief facts out of which present writ petition arises are that the petitioner imported 94 transit van i.e. Toyota Hilux 4 x 2 Pick-ups manufactured by Messrs Toyota Trusho Kaisha Ltd., Japan in the year 1986 via Karachi and Lahore Dry Port. The manufacturers/exporters sent three invoices relating to the aforesaid vehicles. The petitioner submitted bilb of entries for clearance and assessment through agents. Respondent No.2 did not take the action in accordance with law. The petitioner being aggrieved filed appeal before the, Collector, Customs and Excise for redressal of his grievance, who remanded the case to the Assistant Collector and also directed the petitioner to lodge a petition before the Assistant Collector, Customs Refund Dry Port, Lahore under section 33 of Customs Act with regard to the refund of freight. Respondent No.2 instead of redressing the grievance of the petitioner sent show-cause notice/demand notice was sent to the petitioner whereby it was demanded from the petitioner that FOV value of the vehicles imported by the petitioner should have been 8,79,000-J/Yen instead of 8,71,000-J/Yen. The petitioner submitted reply of the show-cause notice before respondent No.2 and also filed application under section 33 of the Customs Act for"refund of freight. Respondent No.2 passed two orders on 20-6-1988 and 26-6-1988 respectively. The petitioner's claim with regard to fixation of FOV was accepted; whereas petitioner's refund to freight claim was refused. The petitioner being aggrieved filed appeal before the Collector Appeals (Customs) and Excise Lahore, who dismissed the same on merits as well as time-barred by the impugned order dated 16-8-1988.

2. The learned counsel of the petitioner submits that the respondents have no authority to charge the custom duties and other charges from the petitioner in violation of notification dated 18-10-1982. The freight with regard to transit van has been prescribed at the fixed rate Rs. 9,000 per vehicle which remained in the field till 9-9-1987. According to the new notification, the freight has been fixed at the rate of Rs.13,000 per vehicle. He further submits that both the tribunals below had decided the case against the petitioner without perusing the record; that the petitioner submitted bill of `entry on 3-6-1987, the vehicles in question were cleared Ex-Bond on 10-6-1987. The matter between the respondents was finally decided on 16-6-1987, therefore, action of the respondents is not sustainable in the eyes of law; that action of the respondents is in, violation of Notification dated 18-10-1982 which contained transit van and amount is mentioned Rs. 9,000 this fact was not considered by both the tribunals below. He further submits that the Government of Pakistan C.R.R. sent letter to the Collector of Customs, Lahore under heading "assessment of cars" which reveals that the matter has been considered in the Board and it was observed that Collectorate of Customs, Lahore should. add actual freight being charges by shipping companies for assessment to Hiace Vans and (Hilux), pick-ups etc. which will be in line with spirit of notification dated 18-10-1982,which is attached with the writ petition as Annexure-J. He also relied upon letter Annexure J/1 attached with the writ petition which was also sent by the C.B.R. to the Collector of Customs, Lahore which reveals that all these vehicles are being assessed under the head transit vans at Lahore Custom and the Ocean freight being charged is only Rs. 9,000 on the other hand Customs House, Karachi is adding actual freight charges by the shipping companies pick-ups and vans and such category of vehicles other than transit vans. The Collector of Customs, Lahore was directed to send his comments qua the aforesaid discrepancy, which results in lower yield of, revenue at Collectorate of Customs, Lahore. The Collector Customs, Lahore sent comments vide letter dated 16-6-1987 and finally C.B.R. issued the notification under section 19 of the Customs. Act on 9-9-1987 to exempt the vehicles specified in Column No.2 of the table below from the Customs Department chargeable on the freight in excess of the amount specified in Column No. 3 of the table. The relevant entry No.6 in the said Notification at Serial No. 6 which reveals amount Rs. 13,000 that it is consistent practice of the Department till clearance of vehicles of the petitioner, therefore, the action of the respondent is without lawful authority; that the matter was finally decided by the C.B.R, vide Notification dated 9-9-1987, after clearance of vehicles in question, therefore, action of the respondents is without lawful authority. He relied upon meaning of word "van" as defined in the Conscise Oxford Dictionary which is to the following effect:---

"Van, n. & v.t (nn). Large usu. Covered vehicles, for conveying furniture or other goods."

He also relied upon the word "Pick-up" and word "Van" as defined in the Chamber's Twentieth Century Dictionary which is to the following effect:--

"A light motor vehicle with front part like private car and rear in from on truck; Van, n. a large covered wagon; a light vehicle, whether covered or not, used in transporting goods."

He also relied upon the word `Pick-up" and "Van" as defined in Webster's Unabridged Dictionary of the English Language which is in the following effect:---

"Auto, a, capacity for rapid acceleration, b. Also called Pick-up truck, a small truck having a chassis comparable to that of a passenger car and a low sided open body; used for deliveries and light hauling van. (van), n.v. vanned, van-ning n. l.a covered vehicle usually a large truck or trailer, used for moving furniture, goods, animal, etc."

He further urged that the Collector, Lahore had given benefit on the, basis of notification dated 18-10-1982 till 1986, therefore, the petitioner is entitled the same benefit on the basis of well-known principle of departmental practice which attained status of rule by afflux of time. In support of his contention, he relied upon the following judgments:--

Nazir Ahmad v. Pakistan and 11 others (PLD 1970 SC 453)

Messrs Muhammad Anwar Muhammad Iqbal Brothers Ltd. v. Collector of Customs and 3 others. (PLD 1976 Karachi 253).

He further submits that fiscal statute should be interpreted in favour of subject in case of any ambiguity in the word of notification or statute. In support of his contention, he relied upon the following judgments:---

Collector of Customs, Customs House, Lahore, etc. v. Messrs S.M Ahmad & Company (Private) Ltd. (1999 SCMR 138)

Rehmat Ali v. Messrs Benares Silk Industries etc. (PLD 1967 Dacca 113).

He further urges that the impugned order is passed by the Appellate Authority without applying his independent mind, therefore, the same is not sustainable in the eyes of law. In support of his contention, he relied upon "Union Bank Ltd. v. Federation of Pakistan (1987 Tax (High Court, Lahore). He further submits that the first notification dated 18-10-1982 was not amended till date by the respondents and in fact clarification notification dated 9-9-1987 was issued by the respondents, therefore, the petitioner is entitled for the benefit of the first notification. In support of his contention, he relied upon "Prime Commercial Bank and others v. Assistant Commissioner of Income-tax" (1997 PTD 605). He further urged that the notification of 1982 remained in the field till date but this fact was not considered by the Appellate Court, therefore, the impugned order was not sustainable in the eyes of law. In support of his contention, he relied upon "Messrs M.Y. Electronics Industries (Pvt.) Ltd. v. Government of Pakistan through Secretary Finance, Islamabad and others" (1988 SCMR.1404). He further urged that the Collector dismissed the appeal of the petitioner on merits as well as time-barred. The petitioner received the order of the Collector dated 20-6-1988 on 20-7-1988 and the petitioner filed appeal before the Collector within 30 days, therefore, the learned collector was erred in law to dismiss the appeal of the petitioner as time-barred. The petitioner has mentioned this fact in para. No. 12 of the writ petition which was not denied by the respondent in reply of para. No.12 in the written statement. He summed up his arguments that the respondents have no authority whatsoever under the law to take away vested right of the petitioner with retrospective effect through notification.

3. The learned counsel for the respondents submits that Pick-up was not granted, any exemption as is evident from Item No. 7 i.e. Transit Van of Notification dated 18-10-1982, therefore, the order of the tribunals below, are valid in the eyes of law and he relied upon meaning of word "Pick-up" and "Van" from Longman Dictionary which is to the following effect:---

"Pick-up trucks a light van having an open body with low sides a person, esp. a woman, who is picked up (pick-up). Am Erate of increasing speed, ACCELERATION; a car with good pick-up. A road vehicle, usu. larger than a car but smaller than a truck, having an enclosed box-shaped body and used for carrying goods and sometimes people; a delivery van ! a police van ! van driver."

He further submits that the question of vetted right of the petitioner has been taken by the respondents by notification, has no force as the respondents did not grant any exemption to pick-up till subsequent notification dated 9-9-1987. He further urges that the word "Pick-up" is mentioned first time in the notification dated 9-9-1987 in Item No. 6 which is to the following effect:---

"Pick-up Hiace Van Transit Vans and the like."

He further urges that it is the duty of the petitioner to show that exemption was already granted to the petitioner by the respondents through any notification but the petitioner failed to discharge his onus before the Tribunal below as well as before this Court. He further urged that as mentioned above, the vehicle in question is not mentioned in the notification dated 18-10-1982, therefore, the action of the respondents is valid in the eyes of law. He further urges that notification cannot override provision of statute of Customs Act i.e. section 25(2)(b). He further urges that it was not inconsistent and uniform practice of the department as is evident from the correspondence between the Collector Custom, Lahore and C.B.R. which are attached as Annexures-J/1, J/2 and Annexure-K with the writ petition which clearly show that practice of Collector Custom, Lahore and Collectorate Custom, Karachi are not uniform, therefore, the connection of the learned counsel of the petitioner that action of the respondents is in violation of consistent practice of the department is not sustainable in the eyes of law. In support of his connection, he relied upon Dada Snap's case (PLD 1984 Kar. 302). He further submits that instructions issued by the Central Board of Revenue cannot be legislative instruments.

4. I have given my anxious consideration to the contentions of the learned counsel of the parties and perused the record myself.

5. After addition of section 24-A in the General Clauses Act, it is the duty and obligation of the public functionaries to pass the order after applying independent mind with reasons. It is better and appropriate to reproduce section 24-A of the General Causes Act which has prospective effect being procedural in nature:---

"24-A. Exercise of power under enactments. ---(1) Where, by or under any enactment, a power to make any order or give- any direction is conferred on any authority, office or person such power shall be exercised reasonably, fairly, justly and for the advancement of the purpose of the enactment?

(2) The authority, office or person making any order or issuing any direction under the powers conferred by or under any enactment shall, so far as necessary or appropriate, give reasons for making the order or, as the case may be, for issuing the direction.

(3) Where any order made or any direction given in exercise of the powers conferred by or under an enactment affects any person, prejudicially such person may require the authority, office, or person making the order or giving the direction to furnish the reasons for the order or, as the case may be, the direction and such authority, office or person shall, furnish the reasons to such person."

Mere reading of the aforesaid section reveals that order or direction of the authority would reflect reason for its making or issuance, in case the same is lacking, effectee may demand the necessary reasons. The Hon'ble Supreme Court has interpreted the aforesaid section 24-A of the General Clauses Act in 1998 SCMR. 2419 "Zain Yar Khan v. The Chief Engineer, C.B.R.C. WAPDA, D.I. Khan and another" and laid down the following principle:---

"In departmental appeals, equally covered by section 24-A (ibid); but belonging to a higher genus, as the same attract quasi-judicial functions, necessary treatment of reasons therein, cannot but be a sine qua non for orders issuing therefrom. Even so, the fora, in which such orders are questioned, in the instant case the Service Tribunal and ultimately this Court, have a discretion either to simply set side the departmental appellate orders for want of necessary reasons or, where the justice of a case so demand, to- discover the reasons, if discernible from the record, to uphold the findings, if the finding appears to be otherwise just, convenient and purposeful."

6. The impugned order of the Collector Appeal dated 18-12-1988 does not contain reasons. He simply reproduced the aforesaid notification and non-suited the petitioner. Since the matter is of technical nature, therefore, the case is remanded to the Collector Appeal to decide the case afresh after providing proper hearing to all the concerned strictly in accordance with law as the impugned order as mentioned above, does not contain reasons, and the Collector did not decide the issue in question in terms of section 24-A of the General Clauses Act. It appears that Collector Appeal decided the case without applying his independent mind as the appeal of the petitioner was not time-barred but the same was dismissed also as time-barred in view or reply of the department of para. No. 12 of the writ petition. The petitioner received the impugned order of the Assistant Collector dated 26-6-1988 on 20-7-1988 and the appeal was filed by the petitioner within one month, therefore, the same was not time-barred. This fact was not denied as mentioned above by the respondents in written statement in reply of Para. No. 12 and this fact was also mentioned in the title of the appeal.

7. In view of what has been discussed above, the impugned order of the Collector Appeal dated 28-12-1988 is set aside meaning thereby, the appeal filed by the petitioner shall be deemed to be pending adjudication before the Collector Appeal. Parties are directed to appear before the Collector Appeal on 22-6-2002, who is directed to decide the appeal of the petitioner preferably within 4 months after receiving the order of this Curt, even at the cost of day-to-day proceedings.

With these observations, this writ petition is disposed of.

S.A.K./R-175/LCase remanded.