Messrs TOKYO AUTOMOBILE through Proprietor VS DEPUTY COLLECTOR, CFS, NLC THOKAR NIAZ BAIG, LAHORE, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 2551 (2006)

Customs Act (IV of 1969)---

----S.25---Constitution of Pakistan (1913), Art.199---Constitutional petition---Assessment of imported goods---Valuation ruling, procedure of---Grievance of petitioner was that prices fixed by Customs Authorities through valuation ruling without there being any enabling provisions in Customs Act, 1969, and application of, such prices to the goods imported, was without lawful authority---Validity---Valuation ruling was at the best of evidentiary 'value and to possess any sanctity, it must reflect material on which it was based; it would also be necessary that price materials from market used to arrive at a valuation should satisfy test of contemporaneousness embedded in S.25 of Customs Act, 1969, and Valuation Rules, 2004---Failing such validating measures demonstrating substantive adherence to statutory requirements, a valuation ruling would derogate from specific terms of S.25 of Customs Act, 1969 and would be illegal---Valuation ruling applied to goods imported by petitioner was devoid of such attributes and was declared to be without lawful authority---Assessment of goods imported by petitioner was set aside and matter was remanded to Customs Authorities for reassessment in accordance with S.25 of Customs Act, 1969---Constitutional petition was allowed accordingly.

Messrs STB International v. Collector of Customs etc. W.P. No. 11802 of 2005, dated 30-9-2005 fol.

Malik Muhammad Arshad for Petitioner.

Izhar-ul-Haq and Mian Shahid Iqbal for Respondents.

Date of hearing: 15th May, 2006.

JUDGMENT

NASIM SIKANDAR, J.---In this constitutional petition following prayer has been made:---

"Under the circumstances, it is most respectfully prayed that this Hon'ble Court may be gracious enough to declare:--

(a) That the prices fixed by respondent No.4 through valuation ruling without there being any enabling provisions in the Customs Act, 1969 and application of such prices to the goods of the .petitioner by respondents 'Nos. l to 3 are illegal, void, without lawful authority and of no legal effect.

(b) That the fixation of prices by respondent No.4 through valuation ruling, application thereof by respondents Nos. 1 to 3 to the goods imported by the petitioner, demanding duty and other taxes on the basis thereof and all other acts and actions on the part of respondents Nos. 1 to 4 in this behalf are illegal, void and without lawful authority.

That while granting such declaration, the Hon'ble Court may be further gracious enough to declare assessment on the basis of valuation ruling issue by respondent No.4 void, illegal, without jurisdiction and of no legal effect and direct respondents Nos. 1 to 3 for re-assessment in terms of section 25 of the Customs Act, 1969."

2. Heard the learned counsel for the parties. It is not disputed that the ratio settled by this Court in Writ Petition 11802 of 2005, dated 30-9-2005 re: Messrs STB International v. Collector of Customs etc. is equally applicable to the issues raised in this petition. The operative part of that order as contained in para.6 reads as under:--

"Be that as it may, the impugned valuation ruling proceeds upon the allegation of massive fraudulent declarations. This allegation, its prima facie basis and preventive action initiated to demonstrate veracity of the charge should first mention in the record for resorting to action under section 25(7) of the Act. Such disclosure would lend credibility to the impugned action and satisfy the test of reason and relevance laid down in the case Montgomery Flour and General Mills Ltd. v. Director Food Purchase (PLD 1957 Lahore 914). That test remains just as applicable today to the respondents proceedings as any other administrative action because the exercise of statutory discretion by the respondents is in issue. The statutory mandate that price material from the market be used to rebut declared value of imported goods is meant for the assessment to be realistic and verifiable. Therefore a valuation ruling is at best evidentiary and to possess any sanctity it must reflect the material on which it is based. It would also be necessary that the price materials from the market used to arrive at a valuation should satisfy the test of contemporancity embedded in section 25 of the Act and the Valuation Rules, 2004. Failing such validating measures demonstrating substantive adherence to the statutory requirements, a valuation ruling would derogate the specific terms of section 25 of the Act and be illegal. The impugned valuation ruling that is devoid of the foregoing attributes and is therefore declared to be without lawful authority. The matter is accordingly remanded to the respondents who shall reassess the imported goods in accordance with section 25 of the Act and the law declared above."

3. For the aforesaid and other reasons recorded in that order this petition is also allowed. The matter shall accordingly be remanded to the Revenue for assessment of the imported goods in accordance with section 25 of the Customs Act.

M.H./T-28/LCase remanded.