SHAFIQ TEXTILE MILLS LTD., KARACHI VS FEDERATION OF PAKISTAN through Secretary, Ministry of Finance, Islamabad, 2008 PTD-KARACHI-HIGH-COURT-SINDH 950 (2008)

Customs Act (IV of 1969)---

----S. 33---Constitution of Pakistan (1973), Art.199---S.R.O. 563(I)/88, dated 1-7-1988---Constitutional petition---Refund of excess duty---Limitation---Department while adjudicating the amount towards statutory provisions, had not taken the ground of limitation/laches rather had justified the absorption of duty paid---Before taking the issue in such contested position on merit, point of abnormal delay in the form of laches was to be seen first---Reference had been made by the petitioner on the notification S.R.O. 563(I)/88, dated 1-2-1988, while the first notice on record was sent after about 12 years and then the constitutional petition had been filed after about 3 years---No justification for the petitioner existed in such a situation, to exhume the dead issue---Constitutional petition suffering from laches, was dismissed.

Messrs Pfizer Laboratories Limited v. Federation of Pakistan and others PLD 1998 SC 64 and Pakistan Post Office v. Settlement Commissioner and others 1987 SCMR 1119 rel.

Khalid Jawed Khan for Petitioner.

Ms. Soofia Saeed Shah, Standing Counsel for Respondents Nos.1 and 2.

Raja M. Iqbal for Respondents Nos.3 and 4.

ORDER

MUNIB AHMAD KHAN, J.---This petition has been filed in respect of refund of Rs.23,298,654 on the ground that this is excess export duty which has been charged by the respondents, the Customs Authorities. The petitioner's claim is based on interpretation of Notification No.S.R.O. 563(I)/88, dated 1-7-1988. Learned counsel has argued that the above amount was due in terms of the notification but excess duty has been charged without calculating the same in terms of above S.R.O. He submits that prior to that notices were issued in the year 2000-2001. He has also drawn our attention to the Annexures "F" and "G" which are letters, dated 5-12-2000 and 4-5-2001 and stated that the said claim has wrongly been denied by the respondents by their letters, dated 26-4-2001 and 26-5-2001 (Annexure "H" and "I" to the memo. of petition).

Learned counsel for the respondents denied the claim of petitioner on merit and also on the ground of laches. After observing that the laches point can be a material point to proceed as apparently the claim is based on the Notification of 1988 while the petition has been filed in November, 2003, therefore, learned counsel for the petitioner was called upon to show as to how this petition may not be dismissed on point of laches. To satisfy the Court, learned counsel has relied upon the case law reported as Messrs Pfizer Laboratories Limited v. Federation of Pakistan and others PLD 1998 SC 64 and referred the sub-paras. (iii) and (v) of para 13, which reads as follows:---

(iii) "If, however, the customs duty or any other levy was realized and its realization was outside the statutory authority, the provisions of providing limitation of six months was not attracted."

(v) Payment of excise duty or any other tax without knowledge that the same was exempted under a notification, was refundable on the same footing as if there was no lawful imposition."

In aid of his above contention, learned counsel has further relied upon the case law reported as Pakistan Post Office v. Settlement Commissioner and others 1987 SCMR 1119 and has invited our attention to the following observation made by the Court in the said case:---

"When, however, order was void and also unjust and improper besides being illegal, High Court would have no hesitation in setting aside same despite objection regarding laches because High Court would then be acting on a still higher principle than that of laches i.e. injustice is not perpetuated with the blessings of the Court in its discretionary jurisdiction."

After hearing the arguments of learned counsel for the parties, it has been observed that the matter in hand depends upon the interpretation of the above S.R.O. and that the claim of petitioner has been denied on merit by the respondents specifically by their letter, dated 26th April, 2001 (Annexure "H" to the memo. of petition) available at page 63 of the Court file in the following wordings:---

"I am directed to refer to your letter No.STML-1021/2000, dated 5-12-2000 on the subject noted above and to say that the position has been ascertained from Collector of Customs (Exports), Karachi and it is observed that before the issuance of amending Notification No. S.R.0.972(I)/90, dated 15th September, 1990 (original S.R.O.703(I)/90, dated Ist July, 1990), the conversion of FOB value of cotton into Pakistani currency was carried out on the basis of exchange rate prevalent on the date of filing of shipping bills in accordance with section 31 of the Customs Act, 1969. As the amending Notification No.S.R.O.972(I)/90 was made applicable only to the export certificates registered on or after 15th September, 1990 and was not given retrospective effect, the refund claims are not tenable. The Central Board of Revenue, therefore regrets its inability to accede to your request."

In such a situation, when there is a claim and its rebuttal and no acknowledgment on the part of the respondent that their calculation of duty and rejection of petitioner's claim is not correct while it has been asserted that it is in accordance with the statutory provision then it will be clear from the above that the referred authorities are not applicable as the claim of petitioner has been refused on merit and not on the ground of limitation or laches in which later situation the authorities could be attracted but, in the case in hand, the respondents while adjusting the amount towards statutory provisions have not taken the ground of limitation/laches rather have justified the absorption of duty paid, therefore, in such a situation, before taking the issue in such contested position on merit, the point of abnormal delay in the form of laches is to be seen first. In the petition, reliance is based on the Notification of 1988 while the first notice on record was sent after about 12 years on 5-12-2000 and then the petition has been filed after about 3 years in November, 2003. In such a situation, there is no justification for the petitioner to exhume the buried bodies, hence, the petition suffers from laches and is hereby dismissed.

H.B.T./S-19/KPetition dismisse