Messrs KHAN TRADE INTERNATIONAL through Proprietor VS ASSISTANT COLLECTOR CUSTOMS (GROUP-VII) APPRAISEMENT COLLECTOR, KARACHI, 2006 PTD-KARACHI-HIGH-COURT-SINDH 2807 (2006)

Customs Act (IV of 1969)---

----S.25---Constitution of Pakistan (1973), Art.199---Constitutional petition---Customs duty---Determination---Clearance on the basis of transaction value---After examination of goods imported by petitioner, the Customs Authorities found them exactly in accordance with the declaration but assessment was not finalized---Subsequently the assessment was valued and assessed on the basis of valuation advices issued: by Controller of Customs Valuation---Plea raised by petitioner was that all necessary material in support of declared value was submitted but customs officials ignored them and made assessment in violation of mandatory requirements' of law---Validity---Action of authorities resorting to assessment on the basis of valuation advice in pursuance of provisions contained in S.25 (7) of Customs Act, 1969, without resort to subsections (1) to (6) was illegal, without lawful authority and not sustainable in law---High. Court directed the Authorities to accept the transaction value declared by petitioner in terms of S.25 (1) of Customs Act, 1969---High Court further directed the Authorities to return excess amount of duty and taxes recovered from petitioner in violation of mandatory requirement of law---High Court declined to allow compensation for payment of wharfage, container and port charges as it was a matter of evidence which could not be resorted to in the proceedings in exercise of jurisdiction under Art.199 of the Constitution---Petition was allowed accordingly.

Rehman Umer v. Collector of Customs, Karachi, 2006 PTD 909 rel.

Glaxo Laboratories v. A.V. Venkateswran AIR 1959 Bombay 372; Union of India v. Tarachand Gupta and Bros. AIR 1971 SC 1558; H. Shaikh Noor-ud-Din and Sons Ltd. v. C.B.R. PLD 1989 Kar. 60; Saleem Ahmed v. Central Board of Revenue 1990 CLC 812 and Collector of Customs v. Abdul Razzak PLD 1996 Kar. 451 distinguished.

Mian Abdul Ghaffar for Petitioner.

Haider Iqbal Wahniwal for Respondents.

Date of hearing: 17th August, 2006.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The relevant facts giving 'rise to this petition are that the petitioner imported a consignment of stationery items and on arrival thereof, filed the Bill of Entry on 8-6-2004, seeking clearance on the basis of transaction value in term of section 25(1) of the Customs Act, 1969. On filing Bill of Entry, the goods were examined and found exactly in accordance with declaration made by the petitioner. However, assessment was not finalized. It was delayed resulting in accumulation of wharfage as well as container and other Port charges. On insistence of petitioner, the imported consignment was valued and assessed on the basis of valuation advices issued on 25-2-2004 and 9-4-2004 by the Controller of Customs Valuation. The petitioner contested the validity of assessment on the basis of valuation advices, placing reliance on the judgments of Lahore High Court and Sindh High Court. It is alleged that the petitioner requested for assessment under subsection (1) of section 25 or if it was not acceptable then under subsection (5) or (6) of section 25 of the Customs Act, 1969. The respondents however, resorted to subsection (7) of section 25 in violation of mandatory requirement of subsection (10) of section 25 under which they were obliged to apply subsections of section 25 in sequential order. It is alleged that all the necessary material in support of the declared value was submitted but the customs officials ignored them and made the assessment in violation of the mandatory requirements of law. Sufficient time had already passed, therefore, the petitioner had no option but to pay the duty assessed illegally and to get the consignment released in order to save himself from further losses and payment of huge wharfage/demurrage.

2. The petitioner has prayed as follows:--

"This Hon'ble Court may be gracious enough to declare:--

(a) That refusal acceptance of transaction value in term of section 25(1) of the Customs Act, 1969 read with Rule 113(1) of the Customs Rules, 2001 as well as not assessing the goods on the basis of evidence, provided by the petitioner, conducting so called market inquiry from retailers and that too without associating the petitioner, condemning the petitioner unheard and enhancing the value to exorbitant extent in utter disregard of mandatory provision contained in section 25 of the Customs Act, 1969, Customs Rules, 2001 and the law laid down by the superior Courts of the country and consequently all subsequent acts and actions on the part of respondent Nos.1 to 3 are illegal, void ab initio without lawful authority and of no legal effect.

(b) That refusing acceptance of declared value, not considering the evidences, violating mandatory provisions contained in section 25(4) of the Customs Act, 1969 and Rule 109(3) of Customs Rules, 2001, delaying assessment for long 4 months, making the petitioner to pay huge amount towards duties and taxes as well as wharefage, container and other port charges which he was not liable to pay are void, illegal, un-just, arbitrary, mala fide, without lawful authority and of no legal effect.

That while Granting Such Declaration, this Hon'ble Court may be further kind enough to direct respondent Nos.] to 3 to accept transaction value in term of section 25(1) of the Customs Act, 1969 read with Rule 113(1) of Customs Rules, 2001 or as the case may be re-assessed the goods in term of subsection (5) of section 25 of the Customs Act, 1969 and return of excess taxes recovered from him without any further undue delay and also compensate this petitioner for paying huge amount towards wharefage, container and port charges."

3. Parawise Comments have been filed on behalf of respondents. Preliminary objection has been raised to the effect that the transaction stands finalized in terms of section 80 read with section 83 of the Customs Act, 1969, taxes have been paid by the petitioner and the goods have been released, therefore the petitioner is not maintainable. It is further contended that the factual controversy is involved and on this account as well, the petitioner is not maintainable. It is admitted that the petitioner imported the consignment and filed Bill of Entry and that the assessment was made on the basis of valuation advice given by the Controller of Valuation. It is also admitted that the assessment was made under section 25(7) of the Customs Act. According to respondents, the importer is not authorised to suggest under which clause and section, the value of consignment should be assessed. It is averred that, the Custom Officer is authorized to examine and assess the value of the imported goods under section 25 of the Customs Act. The ease of the respondents is that section 25 along with its subsections is mandatory and no subsection can be chosen and asserted as mandatory and they while making assessment straightaway under subsection (7) of section 25 have acted within four corner of law.

4. We have heard Mr. Mian Abdul Ghaffar, learned counsel for the petitioner and Mr. Haider Iqbal Wahniwal, learned counsel for the respondents.

5. The learned counsel for the petitioner has submitted that the point of law to the effect that the provisions of section 25 of the Customs Act are to be followed in sequential manner and no resort can be made to subsection (7) of section 25 of the Customs Act, without visible exercise under the earlier subsections already stands decided through a detailed judgment of this Court in the case of Rehman Timer v. Collector of Customs, Karachi, 2006 PTD-909. He has urged that this petition may be allowed in terms of the above cited judgment and the assessment made by the respondents directly under subsection (7) of section 25 of the Customs Act, be declared as illegal and invalid with consequential order for acceptance of the declared value and refund of the excess amount collected by the respondents in pursuance of the order made in violation of the mandatory requirement of law.

6. Mr. Haider Iqbal Wahniwal, learned counsel for the respondents has not disputed that the proposition of law already stands decided by this Court in favour of the petitioner in the judgment cited above. He has, however, contested the maintainability of the petition for two reasons. First, the petitioner has already paid the customs duties and taxes as assessed and got the consignment released, thereby, forfeiting his right to assail the assessment order having been acted upon and, secondly, that the assessment order is an administrative order against which no petition is maintainable under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973. In support of his contention, he has placed reliance on two judgments from Indian jurisdiction and three judgments from Pakistan jurisdiction.

7. The first judgment is by the Bombay High Court in the case of Glaxo Laboratories v. A.V. Venkateswran AIR 1959 Bombay, 372.

8. A perusal of this judgment shows that while considering the nature and attributes of a quasi-judicial order and administrative order, it has been held that an order of assessment under section 87 of Sea Customs Act is an administrative order: It has been further held that even if reasons are not given in such assessment order but they are disclosed in affidavits at trial, then the Court will look into those reasons and consider those reasons as if they were the reasons embodied in the order itself. We are of the considered view that after insertion of section 24A in the General Clauses Act, 1897 in Pakistan the above view is no more valid in Pakistan. For the sake of convenience section 24A is re-produced below:-

"24A. 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, justify and for the advancement of the purposes of the enactment.

(2) The authority, office of person making any order or issuing any direction under the powers conferred by or under any enactment shall, so far as necessary or appropriate, given reasons for making the order or, as the case may be, for issuing the direction and shall provide a copy of the order of, as the case may be, in direction to the person affected prejudicially."

9. Be that as it may, we further find that even in this judgment the view taken by the Bombay High Court in contrary to the contention of Mr. Haider Iqbal Wahniwal, as the principle of law pertaining to the maintainability of Writ Petition has been laid down as follows:

"Where an order of assessment is an administrative order, there can be no doubt that by a writ of mandamus the High Court could compel the assessing authorities to act according to law, But before such a writ could be issued, it must be clear on the language of the statute itself that the action of the authorities was in contravention of the law. The petitioners must satisfy the Court that there was a clear duty incumbent upon the assessing authorities to act in accordance with certain specific provisions of the law and that they had failed to discharge that duty and have acted in contravention of the law."

10. The second judgment is in the case of Union of India v. Tarachand Gupta and Bros. AIR 1971 SC 1558. Reliance on this judgment in the context of issue before us is misplaced and therefore, requires no consideration.

11. The third judgment which is from Pakistan jurisdiction is by a Division Bench of this Court in the case of H. Shaikh Noor-ud-Din and Sons Ltd. v. C,B.R. PLD 1989 Kar. 60. The facts and the issue in this case are distinguishable from the facts under consideration and, therefore, the ratio of the judgment, that amendment of a bill of entry or bill of export, relating to goods assessed for duty on the declared value, quality or description thereof, except as provided in section 68, will not be allowed after such goods have been removed from the customs area. In the cited case a particular value was shown in the bill of entry and on account of subsequent development amendment in the bill of entry and consequential refund was sought. In the present case, no amendment is sought in the bill of entry or any other document, but the legality of the assessment made by the Customs Department is assailed.

12. The fourth judgment is also by a Division Bench of this Court, in the case of Saleem Ahmed v. Central Board of Revenue 1990 CLC 812. In this case the importer assailed the assessed value of the consignment in appeal and the appellate authority reduced the assessed value. Still aggrieved, the importer filed revision which was dismissed. The order passed in revision was assailed through a Constitution of Petition and it was held that the officers below applied their mind to the facts of the case properly. It was held that this Court cannot sit as a Court of appeal in a writ petition for the purpose of assessing the value of goods. We are in respectful agreement with the ratio of the judgment but it is of no help to Mr. Haider Iqbal Wahniwal, because through the present petition we have not been called upon to assess the value of the imported consignment but the assessment made has been assailed on the ground that it is violative of the mandatory requirement of law and thus without jurisdiction.

13. The last judgment on which Mr. Haider Iqbal Wahniwal has placed reliance is a Single Bench judgment of this Court in the case of Collector of Customs v. Abdul Razzak PLD 1996 Karachi, 451. In this case Mr. Haider Iqbal Wahniwal, learned counsel appearing for the Custom Department, was appearing for the importer/assessee and the facts and circumstances were similar as in this case. In the cited case, the importer submitted the shipping documents manifesting the value of the goods but the Appraisement Officer of the Custom did not accept the declared value and without prior notice to the importer assessed the duty at higher rate. The importer cleared the goods after payment of duty on the consignment and filed a suit in Civil Court seeking a declaration to the effect that the applicants had illegally fixed higher rate on imported items and wrongly charged customs duty thereon. The excess amount charged was also claimed with interest. The Custom Department resisted the suit and challenged the jurisdiction of Civil Court as well as maintainability of the suit. The suit was however, decreed and the first appeal was also dismissed where after the Collector of Customs submitted revision application before this Court. The contention of Mr. Haider Iqbal Wahniwal, was recorded in the judgment as follows:

"On the other hand, Mr. Haider Iqbal Wahniwal, learned counsel for the respondent submitted with viguor and all emphasis at his command that the applicants having acted in violation of the 'statutory provisions and assessed the goods at higher rate than normal value of the goods declared by the respondent without any prior notice their act is always subject to judicial review and scrutiny by the Civil Court which is a competent Court of general jurisdiction."

14. Rana Bhagwan Das, J. (as his lordship then was) accepted the contention of Mr. Haider Iqbal Wahniwal and repelled the submission made on behalf of the Collector of Customs on the point of jurisdiction. It was observed that, the customs officials did not act within the scope of their authority and they transgressed the limits of their jurisdiction in assessing the goods at a higher rate without, any lawful justification. It was further held by his lordship, that, the action taken by the applicants in the circumstances cannot be said to have been taken under the provision of the Act and it is evident that they acted beyond the scope of their authority and therefore, the importer was entitled to seek his remedy before the Civil Court as the act complained of being illegal and without jurisdiction.

15. The ratio of the above judgment is not in consonance with the present view of Mr. Haider Iqbal Wahniwal. On the contrary it demolishes the entire superstructure of arguments raised by Mr. Haider lethal Wahniwal, in the present case. We are in respectful agreement that the ratio of this judgment and agree with the earlier arguments of Mr. Wahniwal in the cited judgment.

16. For the foregoing reasons, it is held that so far, the jurisdiction of customs officials in assessing the value of imported goods on the basis of valuation advice under subsection (7) of section 25 of the Customs Act, without visible exercise under the earlier subsections is concerned, it already stands decided against the respondents in the case of Rehan timer v. Collector of Customs (supra). As regards the objection raised by Mr. Haider Iqbal Wahniwal on the point of maintainability of the petition, we are of the opinion that it has no substance and the judgments on which he has placed reliance are not in support of his contention. On the contrary the ratio of the judgments on which he has placed reliance is directed towards the maintainability of the Writ Petition.

17. For the foregoing reasons, the petition is allowed and it is declared that the action of respondents resorting to the assessment on the basis of valuation advice in pursuance of provisions contained in subsection (7) of section 25 of the Customs Act, 1969 without resort to subsections (1) to (6) is illegal, without lawful authority and not sustainable in law. In the facts and circumstances of the case, the respondents are directed to accept the transaction value declared by the petitioner in terms of section 25(1) of the Customs Act, 1969. The respondents are further directed to return the excess amount of duty and taxes recovered from the petitioner in violation of the mandatory requirement of law within a period of two months from today. So far, the prayer for compensation for payment of wharfage, container and port charges are concerned, they cannot `be allowed as it is a matter of evidence which cannot be resorted to in the proceedings in exercise of Writ Jurisdiction under Article, 199 of the Constitution.

18. After hearing the learned advocates, the petition was allowed by short order. These are the detailed reasons in support thereof.

M.H./K-34/KPetition allowed.