WAHAJ ENTERPRISES through Sole Proprietor VS PAKISTAN through Secretary Revenue Division, Islamabad and 4 others, 2007 PTD-LAHORE-HIGH-COURT-LAHORE 2018 (2007)

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

----Ss.25 & 32---Constitution of Pakistan (1973), Art.199---Constitutional petition---Imported goods, valuation of---Demand of deficient duties raised without issuing show-cause notice in terms of S.32 of Customs Act, 1969---Validity---Such demand would be illegal and liable to be set aside on such ground alone---Authority, only after issuing such show-cause notice could make an assessment in accordance with S.25 of the Customs Act, 1969 without being influenced by Motiwala formula---High Court accepted constitutional petition in circumstances.

Writ Petition No. 14987 of 2005 fol.

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

----Ss.25 & 32---Constitution of Pakistan (1973), Art.199---Constitutional petition---Imported goods, valuation of---Show-cause notice, demanding deficient duties in terms of Motiwala formula---Validity---Such formula could not form a valid basis for valuation of goods---Authority would be bound to make assessment in accordance with S.25 of Customs Act, 1969 without being influenced by such formula---High Court disposed of constitutional petition, in such terms.

Writ Petition No. 14987 of 2005 fol.

Athar Minallah for Petitioner.

Farhat Zafar and Syed Anwar Ahmad Shah for Respondents Nos.1 to 4.

Farhat Nawaz Lodhi for Respondent No.5.

Raja Muhammad Bashir (under instructions from C.B.R.).

Date of hearing: 21st May, 2007.

JUDGMENT

MAULVI ANWARUL HAQ, J.---This judgment shall decide Writ Petitions Nos. 496 to 501 of 2007 as common questions are involved.

2. The petitioners in all these cases arc involved in the import of, inter alia, textile fabrics from foreign countries. The goods imported by the petitioners were cleared after payment of duties and taxes in the following manner:---

(i) W.P. No.496 of 2007

Vide goods declaration No.729 dated 11-9-2006.

(ii) W.P. No. 497 of 2007

Vide goods declaration No. 1581 dated 21-11-2006.

(iii) W.P. No. 498 of 2007

Vide goods declaration Na. 979 dated 3-10-2006.

(iv) W.P. No. 499 of 2007

Vide goods declaration No. G-1207 dated 19-10-2006.

(v) W.P. No.500 of 2007

Vide goods declaration No. 1277 dated 19-10-2006.

(vi) W.P. No. 501 of 2007

Vide goods declaration No. 1319 dated 1-11-2006.

3. In the first instance, in all these cases demand notices were served by the Deputy Commissioner-respondent No.3 upon all the petitioners informing them that as a result of audit, it has been pointed out that the assessment of duties/taxes was not properly made and they were called upon to pay deficient amount as pointed out in the said-notice. Thereafter, except in the case of W.P. No.497 of 2.007 show-cause notices were issued on various dates with reference to C.B.R. letter dated 12-12-2006 (at page 13 of W.P. No. 496 of 2007). The addressees were called upon to appear before the respondent No.3 and to explain as to why the deficiency in duties and taxes pointed out in each of the said notices calculated in accordance with the said C.B.R, letter be not recovered.

4. Mr. Athar Minallah, Advocate/learned counsel for the petitioners has contended that the said letter dated 12-12-2006 of C.B.R. directs the Adjudicating Authority to assess the taxes anti duties in accordance with what is commonly known as Motiwala Formula. It has been argued with reference to a judgment dated 6-10-2005 in W.P. No. 14987 of 2005 wherein it has been held that unless consented to by the petitioners, the said Motiwala Formula, cannot form a valid basis for valuations. Raja Muhammad Bashir, Advocate, leading arguments for the respondents, on the other hand, points out that since show-cause notices stand issued by a competent Authority, the petitioners should raise objections before the same and let the matter be adjudicated upon in accordance with law. He has also referred to some proceedings which arc pending in terms of section 195(c) of the Customs Act, 1969, by way of alternate dispute resolution and according to him, the writ petitions have been filed mala fide to bring the matter within the scope of the said provision of law.

5. I have gone through the files. So far as W.P. No. 497 of 2007 is concerned, it is apparent that demand has been raised vide notice dated 13-2-2007 (Annex-D) to the writ petition) without a show-cause notice in terms of section 32 of the Customs Act, 1969 and the said demand as such is liable to be set aside on this ground alone.

6. So far as the remaining cases are concerned, it is true that show-cause notices have been served upon the petitioners in terms of section 32 of the said Act. However, the contents of the said notices do give the impression that the Deputy Collector intends to proceed with reference to the said Motiwala Formula regarding which directions have been issued by the C.B.R. vide letter dated 12-12-2006 referred to in the said show-cause notices. The judgment being relied upon by the learned counsel leaves no manner of doubt that the said Formula cannot form a valid basis for valuation of the goods. This judgment, admittedly, has not been questioned in any manner prescribed by law. In absence of any grounds raised in support of the said Formula dealt with in the said judgment, I am inclined to follow the same. AC the same time, I do agree with Raja Muhammad Bashir, Advocate, that ultimately the adjudication has to be made by the Deputy Collector strictly in accordance with the provisions of section 25 of the Customs Act, 1969 as pointed out in the said judgment dated" 6-10-2005 of this Court in W.P. No.14987 of 2005 (copy Annex-D to W.P: No.496 of 2007). All these writ petitions accordingly are disposed of with a direction to the respondent No.3 that he shall proceed further in the matter after hearing all concerned and to make an assessment in accordance with section 25 of the Customs Act, 1969. Needless to state that he will not at all be influenced by the said Motiwala Formula as impressed upon him vide letter dated 12-12-2006 of the C.B.R. refereed to in the show-cause notices. Same direction would apply if the respondent No.3 deemed it proper to issue a show cause notice to the petitioner in W.P. No. 497 of 2007. No orders as to costs.

S.A.K./W-7/LOrder accordingly.