Messrs HI-TECH TRADERS VS GOVERNMENT OF PAKISTAN, 2005 PTD-LAHORE-HIGH-COURT-LAHORE 2547 (2005)

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

---- Ss. 15 & 16---Prohibition---Power to prohibit or restrict importation and exportation of goods---Contravention of prohibition, according to Ss. 15 & 16, Customs Act, 1969 occurs when prohibited goods are "brought into or taken out of Pakistan".

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

----Ss. 18 & 43--- S.R.O.374(I)/92, dated 15-6-2002---S.R.O. 574(I)105, dated 6-6-2005---Constitution of Pakistan (1973), Arts.199 & 12---Constitutional petition---Goods dutiable---Date of determination of rate of import duty---Delivery of import manifest in respect of a vessel---Contention of the importer was that import of goods of the importer at all relevant times was prohibited and those were liable to confiscation, however, on the date when the IGM covering the importer's goods was filed (30-5-2005), S.R.O.374(I)/02, dated 15-6-2002 was still in the field whereunder the importer had a right to have his confiscated goods released against the payment of a redemption fine; that redemption fine constituted the applicable penalty for the import of otherwise prohibited goods; that S.R.O.374(I)/02, dated 15-6-2002 was rescinded by S.R.O.574(I)/05 dated 6-6-2005, whereby the lesser penalty of redemption fine was withdrawn; that such action constituted an enhancement of the penalty provided by law that was applicable at the time of the contravention of the prohibition; that said action amounted to retrospective increase of liability contrary to Art.12 of the Constitution and that S.R.O.574 was illegally enforced retrospectively to defeat rights of the importer---Validity---Chargeable event of import into Pakistan under S.18, Customs Act,1969 occurs when goods enter the territorial waters of Pakistan---Date of bringing into Pakistan or of import of goods, was the date when they entered the territorial waters of the country, this was also the event when a prohibition was attracted---Evidentiary documents under the Customs Act, 1969 in the present context had established that the event of import of goods was the import manifest of conveyance filed by the master of the vessel under S.43, Customs Act, 1969 with the officer of Customs authorised by Central Board of Revenue---Date of such manifest would constitute the date of bringing into Pakistan or import of goods in the present case---Goods declaration filed by the importer, in the present case, revealed the date of import manifest of conveyance as 30-5-2005---Without disclosing any reason, however, the department treated the date of manifest of the importer's Goods Declaration as 16-6-2005 under 5.30, Customs Act, 1969 to be the date of import manifest of the conveyance (30-5-2005) under 5.43, Customs Act, 1969---Such view, was factually incorrect in circumstances and had no basis in law---Penalty of confiscation got attached to importer's goods simultaneously with the contravention of the prohibition which happened on the date of import manifest of their conveyance namely 30-5-2005, as recorded on the Goods Declaration---As relief of redemption fine as a lesser penalty under S.R.O.374, a competent and binding instrument issued pursuant to S. 181 of the Act was still available on 30-5-2005, therefore, it was the lesser penalty that operated to apply simultaneously with the prohibition---Importer acquired a vested right to be burdened with the liability existing on the day when the prohibition was contravened by it---Importer in any event, was also immune from the' impairment of its right by retrospective enforcement of S.R.O.574---Notification which was an executive act could not be given retrospective effect to impair vested rights---Impugned action of the authorities was, therefore, illegal which was declared to be without lawful authority and of no legal effect---Authorities were directed to decide the case of the importer strictly in accordance with law as per the High Court judgment herein.

East and West Steamship Company v. The Collector of Customs and others PLD 1976 SC 618; Collector of Customs and others v. Ravi Spinning Limited and others 1999 SCMR 412 and Ellahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582 ref.

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

---- Ss. 79, 104, 30, 47 & 43---Declaration and assessment for home consumption or warehousing---Clearance of bonded goods for home consumption---Delivery of import manifest in respect of a vessel---Bulk not to be broken until manifest, etc. delivered and vessel entered inwards---Date of determination of rate of import duty---Date of Goods Declaration filed under S.79, Customs Act, 1969 or under S.104 of the Act was relevant for determining the quantum of liability to customs duty payable on goods liable to clearance; it was for the purpose of such assessment that S.30, Customs Act, 1969 extended the chargeable event of import to the date of Goods Declaration and by this means and change occurring in the rate of duty until clearance of the goods was made payable---Such had nothing to do with the act of import through bringing in of foreign goods into Pakistan as demonstrated by the import manifest of conveyance---It was such act of bringing in and. import of prohibited goods that was relevant to the matter of contravention of a prohibition and penalty therefor---Provisions of 5.47 of the Customs Act, 1969 established that an import manifest filed under S.43 of the Act defined and recorded the event of import of goods into the country.

(d) Notification---

----Retrospective effect---Notification being an executive act cannot be given retrospective effect to impair vested rights.

Ellahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582 ref.

Shehzada Mazhar for Appellant.

Aazar Shabbir and Ahmer Bilal Soofi for Respondents.

Date of hearing: 10th August, 2005.

JUDGMENT

UMAR ATA BANDIAL, J.---Learned counsel submits that the import of goods of the petitioner at all relevant times was prohibited and these were liable to confiscation. However on the date when the IGM covering the petitioner's goods was filed, namely, 30-5-2005 S.R.O. No.374(I)/02, dated 15-6-2002 ("S.R.O. 374") was till in the field whereunder the petitioner had - a right to have his confiscated goods released against the payment of a redemption fine. Learned counsel says that the redemption fine constituted the applicable penalty for the import of otherwise prohibited goods. The said S.R.O., however, was rescinded by S.R.O. 574(I)/2005, dated 6-6-2005 ("S.R.O. 574") whereby the lesser penalty of redemption fine was withdrawn. In the result, the petitioner's imported goods have been confiscated by the respondents. This action is alleged to constitute an enhancement of the penalty provided by law that was applicable at the time of the contravention of the prohibition. The impugned action is challenged for amounting to retrospective increase of liability contrary to Article 12 of the Constitution alternatively, it is attacked for illegally enforcing S.R.O. 574 retrospectively to defeat rights accrued to the petitioner.

2. According to sections 15 and 16 of the Customs Act, 1969 (`Act') the contravention of a prohibition occurs when prohibited goods are "brought into or taken out of Pakistan." The respondent department has filed written comments. These identify the date of import of the goods to be the relevant date for determining the penalty for contravening a prohibition. In the present case, consequently, the admissibility of the petitioner's claim to be burdened with redemption fine under S.R.O. 374 rather than confiscation, is said to depend on the legal position of S.R.O. 374 on the said date. According to the respondents, the date of delivery of the manifest of conveyance under section 30 of the Act is to be considered the date of import. The import date in the fact of the case is claimed by the respondents to be 16-6-2005 rather than 30-5-2005 as contended by the petitioner. It is urged that by 16-6-2005 the impugned rescinding S.R.O. 574 had already come into effect whereby the lesser penalty of redemption fine stood withdrawn and consequently the petitioner is disentitled to the relief claimed.

3. The date of delivery of manifest of the conveyance under section 43 of the Act does provide evidence of the date when foreign goods arc "brought into" Pakistan in terms of section 15 of the Act. However, this event under section 43 of the Act, which is relevant to prohibition and penalty is implausibly linked by the learned counsel for the respondents with section 30 of the Act. That section deals with the "date of determination of rate of import duty" and connects it to the date of the Goods Declaration ("GD"), the customs clearance document of the imported goods under section 30 supra which has relevance to the quantification of liability to customs duty in respect of lawfully imported goods rather than to the date of bringing into Pakistan of prohibited goods and the penalty attracted thereto. The Hon'ble Supreme Court of Pakistan has equated the act of bringing in of foreign goods which is the crucial event in the present case to the act of import thereof into Pakistan in the case of East and West Steamship Company v. The Collector of Customs and others (PLD 1976 SC 618) wherein it wag held as follows:--

"The word `import' carries the natural meaning of `bringing in' and has no technical meaning. Mr. A.K. Brohi construed the word `import' as entailing the entire process of filing Bill of Entry, discharging from the vessel at a wharf, assessment of value of the goods and the .duty payable on them. We, however, see no warrant for placing this artificial meaning on the word 'import'. In Black's Law Dictionary, `importation' is defined as `The act of bringing goods and merchandise into a country from a foreign country and `imported' in general, has the same meaning in the Tariff laws that its etymology shows, in porto, to carry in. To `import' is to bear or carry into. An imported article is one brought or carried into a country from abroad. In Wharton's Law Lexicon `import' is given the meaning goods or produce brought into a country from abroad". (underlining supplied)

4. The date of import as visualized above for bringing the foreign goods into Pakistan is different from the date of their GD that is the relevant event provided under section 30 of the Act. As the present case does not involve clearance of lawfully imported goods, therefore, there is no dispute about the rate of duty chargeable thereon or the quantum of liability accrued. Clearly, section 30 of' the Act is inapplicable to the facts or the case. The dispute, if at all, is about the date of import of the petitioner's goods under the foregoing test of import? Secondly, whether on such date the petitioner's goods having been confiscated on their import was S.R.O. 374 available in the field to apply the lesser penalty of redemption fine for contravention of the prohibition.

5. The point of view that the `import' and therefore "bringing into" Pakistan of prohibited goods takes place when they enter the territorial waters of the country was considered and acknowledged by the Hon'ble Supreme Court in the case of Collector of Customs and others v. Ravi Spinning Limited and others (1999 SCMR 412). This judgment also explains the importance of section 30 of the Act with reference to determining the relevant event and date for assessing liability to customs duty on goods that have been lawfully imported into the country. It was observed that:-

"Even if it is assumed that chargeability to the customs duty arises under section 18 of the Act as soon as the goods enter the territorial waters of Pakistan, the rates of customs duty of all items are prescribed in the 1st and 2nd Schedules to the Act, and therefore, if the imported goods are one of those mentioned in the 1st or the 2nd Schedule the chargeability arises immediately the goods enter the territorial waters of Pakistan according to the rates prescribed in the Schedule to the Act. The chargeability to the duty having arisen any change in the rate of the customs duty or imposition of any additional duty of customs is to be determined with reference to the dates of filing of bill of entry for home consumption or taking out of the goods from bonded warehouses as provided in section 30 of the Act. Under section 30 of the Act, the rate of duty applicable to any imported goods is the duty which is applicable on the date of filing of bill of entry for home consumption under section 79 of the Act and in case of goods cleared from bonded warehouse on the date the goods are ex-bonded from the warehouse (See Abdul Wahid Abdul Majid v. Government of Pakistan (1993 SCMR 17)." (underlining supplied).

6. The law laid down by the Hon'ble Supreme Court elucidates that under section 18 of the Act, the chargeable event of import into Pakistan occurs when goods enter the territorial waters of Pakistan. Accordingly in the present case, date of bringing into Pakistan or of import of the petitioner's goods, is the date when they entered the territorial waters of the country. As already noted, this is also the event when a prohibition is attracted. The evidentiary document under the Act that establishes the event of import of the petitioner's goods in the present context is the import manifest of conveyance filed by the master of the vessel under C section 43 of the Act with the officer of customs authorized by the C.B.R. The date of this manifest would constitute the date of brining into the Pakistan or import of goods for the present purposes. According to the Goods Declaration ("GD") filed by the petitioner for the said goods, the date of import manifest of conveyance is 30-5-2005. Without disclosing any reason, however, the respondents treat the date of manifest of the petitioner's GD (16-6-2005) under section 30 of the Act to be the date of import manifest of the conveyance (30-5-2005) under section 43 of the Act. This view is factually incorrect and has no basis in law.

7. The date of GD filed under section 79 or under section 104 of the Act is relevant for determining the quantum of liability to custom duty payable on goods liable to clearance. It is for the purpose of such assessment that section 30 of the Act extends the chargeable event of import to the date of the GD. By this means any change occurring in the rate of duty until clearance of the goods is made payable. But this has nothing to do with the act of import through bringing in of foreign goods D into Pakistan as demonstrated by the import manifest of conveyance. It is such act of bringing in and of import of prohibited goods that is relevant to the matter of contravention of a prohibition and penalty therefor. The provisions of section 47 of the Act establish that an import manifest filed under section 43 of the Act defines and records the event of import of goods into the country. It provides:

"(47) Bulk not to be broken until manifest, etc., delivered and vessel entered inwards. No vessel arriving in any customs-port shall be allowed to break bulk, until an import manifest has been delivered as hereinbefore provided of until copy of such manifest together with an application for entry of such vessel, inwards, has been presented by the master to the appropriate officer and an order has been given thereon for such entry. "

8. The penalty of confiscation got attached to the petitioner's goods simultaneously with the contravention of the prohibition. This happened on the date of the import manifest of their conveyance, namely, 30-5-2005, as recorded on the GD. As the relief of redemption fine as a lesser penalty under S.R.O. 374, a competent and binding instrument issued pursuant to section 181 of the Act was still available on 30-5-2005, therefore it is the lesser penalty that operated to apply simultaneously with the prohibition. The petitioner acquired a vested E right to be burdened with the liability existing on the day when the prohibition was contravened by it. In any event, the petitioner is also immune from the impairment of its rights by retrospective enforcement of S.R.O. 574. As declared by the Hon'ble Supreme Court of Pakistan in the case of Ellahi Cotton Mills Ltd. v. Federation of Pakistan (PLD 1997 SC 582) a notification which is an executive act cannot be given retrospective effect to impair vested rights. To be treated in accordance with S.R.O. 374, a legally valid and binding instrument on 30-5-2005, is such a vested right of the petitioner. The impugned action, dated 4-7-2005 holding to the contrary is, therefore, illegal. It is declared to be without lawful authority and of no legal effect. The respondents Nos.2 & 3 and 4 are consequently directed to decide the case of the petitioner strictly in accordance with the law declared above. Petition allowed.

M.B.A./H-88/LOrder accordingly.