BLACK GOLD INDUSTRY through Proprietor VS FEDERATION OF PAKISTAN through Secretary Revenue Division/Chairman (Central Board of Revenue), Islamabad
2007 P T D 2443
2007 P T D 2443
[Lahore High Court]
Before Umar Ata Bandial, J
Messrs BLACK GOLD INDUSTRY through Proprietor
Versus
FEDERATION OF PAKISTAN through Secretary Revenue Division/Chairman (Central Board of Revenue), Islamabad and 4 others
Writ Petition No. 747 of 2007, decided on 05/03/2007.
(a) Customs Act (IV of 1969)---
----S. 195---Suo motu power of Collector of Customs---Scope---Such power could be exercised where substantial grounds of impropriety or illegality of an order passed under Customs Act, 1969 were evident on record.
(b) Customs Act (IV of 1969)---
----S. 32---Constitution of Pakistan (1973), Art. 199---Constitutional Petition---Re-opening of assessment after seizure raid---Authority during raid having obtained from assessee Pay-Order for an amount to cover additional demand of duties---Order-in-Original declaring action. taken against assessee under S.32 of Customs Act, 1969 as illegal---Non payment of amount of Pay-Order to assessee---Validity---Department must obey order-in-original and could not withhold from assessee such funds, which had been adjudicated by departmental forum to have been collected illegally---Verification of declared value of imported goods and possibility of additional assessment could not authorize authority to collect an arbitrary amount in advance -from assessee---High Court directed authority to refund amount of Pay-Order to assessee.
(c) Customs Act (IV of 1969)---
----S.193---Appeal by department against order-in-original passed in Favour of assessee---Maintainability---Customs Act, 1969 did not provide such right to department.
Mian Abdul Ghaffar for Petitioner.
Izhar ul Haque Sheikh for Respondents.
ORDER
UMAR ATA BANDIAL, J.---The imported goods of the petitioner were duly assessed under bill of entry, dated, 3-10-2005 and cleared after payment of duties, and taxes. Subsequently, pursuant to allegations made in a show-cause notice, dated 25-1-2006 based upon a seizure raid, proceedings under section 32 of the Customs Act, 1969 ("Act") were launched by the respondent No.3 Collectorate against the petitioner. That matter has been put to rest by Order-in-Original No.5 of 2006; dated 30-10-2006 ("ONO") wherein paragraph 15 gives a clear finding that the allegations of misclassification and of under valuation by the petitioner could not on the facts of the case be made grounds under section 32 of the Act to reopen the assessment of the imported goods of the respondents. Learned counsel for the petitioner alleges that at the time of the raid and seizure of the petitioner's imported goods, the respondents Nos. 3 to 5 compelled the petitioner to deliver a pay order in the amount of Rs.3.196 million to cover additional demand of duties. The effect of the ONO is to cause the refund by the respondents of the amount of the pay order collected from the petitioner. The order sheet of the Court, dated 12-2-2007 recounts the action taken by the respondents in sequel to the ONO. It notes that by order, dated 10-2-2007 the respondent No.3 Collector of Customs had reopened the ONO under section 195 of the Customs Act, 1969. That sun motu power is available where substantial grounds of impropriety or illegality of an order passed under the Act are evident on the record. On its bare reading, the order, dated 10-2-2007 seems a hasty attempt to compile vague objections to the ONO. It is alleged that such a course by the respondents has been resorted to delay refund ordered in the ONO.
2. On 20-2-2007, the following date of hearing, the matter was heard on the question .whether the respondents could lawfully retain money paid by an assessee after his liability to pay the same has been declared illegal. It transpires that the Act does not provide the respondent department, with a right to appeal against an Order-in-Original made in favour of an assessee. Consequently, the respondent department must obey an ONO and cannot withhold from an assessee such funds that have been adjudicated by a departmental forum to have been collected illegally. In the foregoing background, the resort by the' respondent No.3 through his letter, dated 10-2-2007 to reopen the- ONO without disclosing substantial grounds touching its legality or propriety indicates his intent to avoid refunding the money to the petitioner. Nevertheless, in order to facilitate the respondent No.3 to determine the matter independently, the Court did not restrain him' from proceedings .further but directed that he should consider taking the security of a bank guarantee rather than retaining the funds of the petitioner during the course of his proceedings.
3. Today, however, the learned counsel for the respondents has submitted that rather than re-opening the ONO, the respondents are now verifying the declared value of the imported goods of the petitioner in the terms contemplated in para. 16 of the ONO and therefore, cannot refund the pay order amount to the petitioner. Such verification has limited scope but in the allegations are justified the result may be the liability of the petitioner to a marginally large financial obligation fixed by a second order of assessment passed by the respondents. Such a verification exercise and possibility of additional assessment cannot, however, authorize the respondents to collect an arbitrary amount in advance by withholding the petitioner's funds recovered pre-emptorily in purported action under section 32 of the Act that has been declared invalid by the aforesaid ONO.
4. Accordingly, without expressing any opinion on the strength or validity of the aforesaid or other further action being taken by the respondents in the matter, it is directed in the interest of justice that the respondents may proceed in the matter strictly in accordance with law but after returning the petitioner's funds under the pay order recovered for an additional assessment that stands revoked by the ONO. The respondents shall make such refund within one week of .the provision of bank guarantee by the petitioner to the respondent No.2 in the value equal. to the disputed amount claimed by the respondents. The respondents shall retain such bank guarantee until they decide the matter in 'issue in respect whereof they arc directed to act expeditiously. Disposed of.
S.A.K./B-32/LPetition disposed of: