COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE OF PACCS, KARACHI VS MUZAMMIL AHMAD, 2009 PTD-KARACHI-HIGH-COURT-SINDH 266 (2008)

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

----S. 194-C(3-A) & (4) [as amended by Finance Act (IV of 2007)]---Procedure of Appellate Tribunal---Interpretation of S.194-C(3-A) & (4), Customs Act, 1969---Limitation of a Bench of Single Member to hear a matter involving question of law has been removed by the deletion of explanation to subsection (3-A) by Finance Act, 2007 and the pecuniary jurisdiction has been enhanced by the amendment of its subsection (4).

Although no amendment has been made in subsection (3-A) of S.194-C, Customs Act, 1969 but the plain and simple interpretation of this subsection is that the Chairman has the power to constitute as many benches consisting of single members as he may desire and the only interference of the Federal Government will be to specify cases or such classes of cases which these Benches can hear. So the Central Government is not a party to the constitution of the Benches but only to the specification of cases/classes of cases which may be heard by the Single Members and, therefore, the process of constituting these Benches is not different from constituting the Benches under subsections (3-A) and subsection (4). The only limitation is that such Benches can only hear the classes of cases specified by the Central Government. These specifications have been made by the Central Government in the conditions attached to the hearing of the cases given in subsections (3-A) and (4) as to the pecuniary jurisdiction and the legal jurisdiction. The limitation of a bench of single member to hear a matter involving question of law has been removed by the deletion of the explanation to subsection (3-A) by Finance Ordinance, 2007 and the pecuniary jurisdiction has been enhanced by the amendment of subsection (4).

Aman and Amin Trading Co. v. Collector of Customs Karachi 2008 PTD 459 distinguished.

Messrs Aman and Amin Trading Co. v. Collector of Customs' 2008 PTD 459; 2008 PTD 996; 2008 PTD 1274; 2005 PTD 108; 2004 PTD 921; PLD 2003 Kar. 127 and "2002 MLD 229 ref.

(b) Interpretation of statutes---

----Non-obstante clause in a provision---Effect---Non-obstante clause in a statute overrides the provision of the statute which has been mentioned in the non-obstante clause.

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

----S. 194-C(3-A)---Procedure of Appellate Tribunal---Interpretation of S.194-C(3-A) Customs Act, 1969---Non-obstante clause in sub-section (3-A) of S.194-C, Customs Act, 1969---Purpose---Held, intent of the legislature is that if Special Bench comprising two or more technical members cannot hear a matter involving question of law then it will be illogical and absurd to conclude that the legislature intended that a technical member sitting singly can hear a matter relating to a question of law---Absurdity cannot be presumed in an interpretation.

The purpose of the non-obstante clause in subsection (3-A) of S.194-C, Customs Act, 1969 is to empower the Chairman to constitute single benches. Even if the contention that the provisos have been overridden, is accepted the intention of the legislature has to be arrived at by reading the entire section 194-C and determining what was the purpose for deleting the explanation to subsection (3-A) and whether by removal of such set of explanation both Judicial and Technical Members will become empowered to decide questions of law sitting singly. When reading the statute as a whole although prima facie it is seen that the deletion of explanation will empower both judicial member and technical member to decide questions of law sitting singly but after considering the second proviso to subsection (2) and trying to arrive at a harmonious interpretation the only interpretation which follows is that the intent of the legislature is that if Special Bench comprising two or more technical members cannot hear a matter involving question of law then it will be illogical and absurd to conclude that the legislature intended that a Technical Member sitting singly can hear a matter relating to a question of law and that absurdity cannot be presumed in an interpretation.

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

----S. 194-C(3-A) [as amended by Finance Act (IV of 2007)]---Procedure of Appellate Tribunal---Member Technical of the Tribunal does not have the jurisdiction to adjudicate in matters involving questions of law---Principles.

Aqeel Ahmed Abbasi and Ghulam Haider Shaikh for Petitioner.

Sirajul Haq and Faisal Siddiqui, Amici Curiae.

Zia-ul-Hassan, Jawaid Farooqui and Afzal Awan for Respondents.

ORDER

MUHAMMAD ATHAR SAEED, J.---In all these Special Reference Applications various questions have been proposed by the applicants. However, on examination of all these Reference Applications it is seen that in all these applications the preliminary question regarding the maintainability of the order passed by the learned Technical Member is involved as according to the applicants a Member Technical sitting singly does not have the jurisdiction to pass and order on a matter involving a question of law. Therefore, on the request of the applicants, we decided that in all these Reference Applications we will first hear and dispose of the common question regarding the maintainability of the order passed by the Member Technical and after such a decision has been reached we will direct the office of fix up all these cases for Katcha Peshi and then we will examine the factual position of the cases in light of our decision on the above question and decide these Reference Applications accordingly.

2. At this stage it will be pertinent to reproduce the common question which may have been framed differently in some cases but in essence relates to the same proposition of law.

Whether the impugned order in appeal No.K241 of 2006, dated 23-8-2007 passed by the learned Member Technical, purely on the question of law is hit with the bar of jurisdiction to determine question of law in terms of second proviso to subsection (3) of section 194-C, of the Customs Act, 1969?

3. We have heard Mr. Aqeel Ahmed Abbasi and Mr. Ghulam Haider Shaikh learned counsel for applicants and Mr. Jawaid Farooqui, Mr. Afzal Awan and Mr. Ziaul Hassan learned counsel for the respondents. We also sought the assistance of Mr. Sirajul Haq Memon senior counsel and Mr. Faisal Siddiqui an other counsel who were sitting in the Court on the date of hearing of these cases and requested them to assist us in resolving this question and furnish their written opinion on this point.

4. Mr. Aqeel Ahmed Abbassi arguing on behalf of the applicants took us through the pre and post amended provisions of section 194-C and specifically referred to second proviso to subsection (3) of section 194-C which provides that any Bench comprising of two or mute technical members shall not hear matters involving the questions of law. After reading this provision the learned counsel argued that if the legislature is not willing to allow a Bench of two or more technical members to adjudicate on a question of law then the only logical conclusion that can be drawn will be that the intent of the legislature is that even one technical member sitting singly cannot adjudicate on a question of law and, therefore, according to the learned counsel even after the amendment made in section 194-C by Finance Act, 2007 although the pecuniary jurisdiction of the Single Bench has been enhanced, the eligibility of a Single Bench comprising of one technical member to hear matters involving questions of law still remains the same. The learned counsel for the respondent conceded to this legal argument of Mr. Aqeel Ahmed Abbasi, the learned counsel for the applicant, but submitted that their cases which are before this Court have been decided on the facts of the case and no question of law has been adjudicated by the learned Technical Member.

5. At this stage we would like to express our gratitude to both the learned counsel whom we had appointed to assist this Court as amici curiae as both of them within three days submitted their comprehensive opinions on the above mentioned question of law. Incidentally, both of them have not been able to persuade themselves to the validity of the arguments of the learned counsel for the applicant and opined that there is no bar on a Technical Member sitting singly to adjudicate in cases involving questions of law.

6. Mr. Sirajul Haq Memon the learned counsel has submitted his opinion as under:--

"It is respectfully submitted that from the perusal of the entire section 194-C, it will be observed that under subsection (2) it has been laid down that subject to the provision contained in subsections (3) and (4) a Bench shall consist of one judicial member and one technical member. It, therefore, follows that there shall be a Division Bench consisting of one judicial member and one technical member.

Prior to the amendment made in subsection (3) by Finance Act, 2007, the Chairman of the learned Tribunal was empowered to constitute a Special Bench to hear every appeal against the decision or order relating, among other thing, to the determination of any question having a relation to the rate of duty of Customs or to the value of goods for purposes of assessment. The said Special Bench would not consist of less than two members and shall include at least one judicial member and one technical member.

The First proviso to subsection (3) empowered the Chairman to constitute Benches including Special Benches, by recording reasons in writing. The Benches including Special Benches consisting of:

(a) two or more technical members or

(b) two or more judicial members.

It may be respectfully submitted that through Second Proviso to subsection (3), it was laid down that Benches including Special Benches consisting of two or more technical members shall not hear the matters involving questions of law.

After the amendment in Finance Act, 2007 the only change made in subsection (3) is to the effect that Special Benches constituted under subsection (3) shall hear every appeal against the decision or order deciding a case involving duty, tax, penalty or fine exceeding five million rupees. There is no other change made by Finance Act, 2007.

Subsection (3A) and subsection (4) empowered the Chairman to constitute single member Bench.

From the perusal of the provisions of section 194-C before the amendment made through Finance Act, 2007 under sub-section (3A) it would be observed that it starts with the non obstante clause in relation to subsections (2) and (3) which confer powers to constitute Benches consisting of a single member as the Chairman may deem necessary to hear such cases or class of cases as the Federal Government specifies by order in writing.

The Explanation appended to subsection (3A) put a prohibition to decide matters involving a question of law. Consequently a Bench constituted by the Chairman under section (3A) i.e. a single member Bench could only decide factual controversies under the Customs Act, 1969, Central Excise Act, 1944 and Sales Tax Act, 1990.

It may be submitted that subsection (4) also authorizes the Chairman or any other member of the Appellate Tribunal duly authorized by the learned Chairman to hear a case sitting singly. The disposal of the case which is allotted to a single member Bench, the matters to be disposed of in any case has been qualified by clauses (a)(b) and (c) respectively. The pecuniary limit has also been given for disposal of such cases.

Through the Finance Act, 2007 three amendment were made namely: --

(a) in subsection (3) the words appearing after "every appeal against a decision or order" "relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purpose of assessment" have been substituted by words "deciding a case involving duty, tax, penalty or fine exceeding five million rupees".

(b) Explanation added to subsection (3A) has been omitted.

(c) Clause (b) of subsection (4) omitted.

The effect of the amendments in respect of subsection (3A) (i.e. omission of Explanation) is that prohibition contained in the Explanation for a single Member Bench not to decide a case in relation to question of law, has now been removed. Consequently after the omission of Explanation by Finance Act, 2007, under subsection (3A), a single Member Bench can hear and decide case involving question of law as well.

My above view is supported by the observation in para. 5 of a decision of a Division Bench of this Hon'ble Court in the case of Messrs Aman and Amin Trading Co. v. Collector of Customs Appraising Intelligence Branch, Karachi reported as 2008 PTD 459.

It is further submitted that the decision referred supra has been followed by other learned Division Benches of this Hon'ble Court in cases reported as 2008 PTD 996 and 2008 PTD 1274."

Whereas Mr. Faisal Siddiqui has concluded his submissions in the following manner:--

"Single member benches constituted under subsection (3-A) cannot be related to, or compared to, the single member benches constituted under subsection (4) and two or more member benches constituted under the First Proviso to subsection (3) because of two reasons. Firstly, the Chairman solely constitutes the benches under subsections (3) and (4), read with sub-section (1) whereas under subsection (3-A), the Chairman can only constitute the bench with the written directions of the Federal Government. Therefore, the benches envisaged in subsection (3-A) are constitutionally different from the benches constituted under subsections (3) and (4) read with sub-section (1). Secondly, the `notwithstanding clause' clearly indicates the intention of the legislature that the restrictions contained in subsections (2) and (3), and by implication in subsection (4), will not apply to subsection (3-A). Therefore, there is no contradiction or conflict or absurdity between the bench constituted under subsection (3-A) hearing questions .of law and fact without pecuniary limitation and a bench constituted under clause (a) of the First Proviso of subsection (3) and subsection (4) having subject-matter of limitation [i.e. questions of law barred under second proviso to subsection (3)] or pecuniary limitation [i.e. under five million].

Single member benches constituted under subsection (4) cannot be related to the two or more technical members benches constituted under clause (a) of the First Proviso of subsection (3) because single member benches under subsection (4) only relate to cases below the five million pecuniary jurisdiction whereas the two or more technical members benches constituted under clause (a) of the First Proviso of subsection (3) can hear cases above the five million pecuniary jurisdiction. In other words, the benches envisaged in subsection (4) are different in terms of the pecuniary subject-matter from the benches constituted under clause (a) of the first proviso to subsection (3). Therefore, there is no contradiction or conflict or absurdity between the bench constituted under clause (a) of the first Proviso of subsection (3) hearing cases without pecuniary limitation but involving no questions of law and a bench constituted under subsection (4) having pecuniary limitation [i.e. under five million] but legally entitled to hear questions of law.

7. We have examined the question in the light of the arguments of the learned counsel and have carefully perused the written opinion furnished by the two amici curiae appointed by the Court.

8. Before we dilate on the arguments and the opinion it will be beneficial to reproduce the comparative provisions of section 194-C both prior to the and after the amendment made in the Customs Act vide Finance Act, 2007.

9. The opinion of Mr. Sirajul Haq Memon that a Single Bench was restricted before the amendment from adjudicating on a question of law due to the presence of the explanation to subsection (3-A) which provided that cases referred to in subsection (3-A) meant the matters involving decisions other than decisions in relation to a question of law and since by Finance Act, 2007 this explanation was omitted, therefore, the prohibition on hearing of cases involving question of law was no longer there. This opinion prima facie carries a lot of weight. The opinion also negates the opinion of Mr. Faisal Siddiqui who has opined that since under subsection (3-A) the Chairman can only constitute a Single Bench under the written directions of the Federal Government, therefore, the restriction which has been imposed under the proviso to subsection (3) is not available to these Benches. Both the amici curiae have also opined that since the subsection (3-A) starts with non-obstante clause which reads as `notwithstanding anything contained in sub-sections (2) or (3), therefore, the restriction which are imposed on the powers of the Benches constituted under these subsections shall not apply to a Single Bench constituted under subsection (3-A) and, therefore, according to them the Member Technical is empowered to hear appeals in which the questions of law are involved. The learned amicus curiae Mr. Faisal Siddiqui had also referred to the clarification issued by the Federal Board of Revenue vide their Letter No. C-No.6(i)/ 2007-CB, dated 9th June, 2007 in which the F.B.R. had issued budget instructions and had clarified salient features of budget 2007-08. In sub-clause (ii) of clause (vi) of this letter F.B.R. has clarified that clause (c) of subsection (4) has been substituted to enhance the powers of Technical Member to Rs.5.00 million. The learned amicus curiae has also referred to a number of cases including those reported in 2005 PTD 108, 2004 PTD 921 to stress upon that absurdity is never presumed in the interpretation. However, he has also relied on a judgment of this Court reported in PLD 2003 Karachi, 127 in which it has been laid down that no provision or section is to be read in isolation. Another judgment on which the learned amicus curie has relied on is the judgment reported in 2002 MLD 229 wherein it has been held that non obstante clause will have the effect of overriding the other provisions of the statute.

10. As already pointed out above, we have very carefully gone through the opinion of the learned amici curiae and have also perused the judgments relied on by them.

11. We would initially discuss the opinion of the learned amicus curiae Mr. Faisal Siddiqui in the light of the judgments which have been relied on by him. The learned amicus curiae while interpreting the provisions of subsection (3-A), has opined that the Chairman can only constitute the Single Benches with the written directions of the Federal Government. Therefore, the Benches envisaged in subsection (3-A) are constitutionally different from the Benches constituted under subsections (3) and (4) read with subsection 1. We have once again read the provisions of subsection (3-A) and our interpretation is that although no amendment has been made in this subsection but. the plain and simple interpretation of this subsection is that the Chairman has the power to constitute as many benches consisting of single members as he may desire and the only interference of the Federal Government will be to specify cases or such classes of cases which these Benches can hear. So it is our considered opinion that the Central Government is not a party to the constitution of the Benches but only to the specification of cases/classes of cases which may be heard by the learned Single Members and, therefore, the process of constituting these Benches is not different from constituting the Benches under subsection (3) and subsection (4). The only limitation is that such Benches can only hear the classes of cases specified by the Central Government. These specifications have been made by the Central Government in the conditions attached to the hearing of the cases given in subsections (3-A) and (4) as to the pecuniary jurisdiction and the legal jurisdiction. As rightly pointed out by Mr. Sirajul Haq Memon, that the limitation of a bench of single member to hear a matter involving question of law has been removed by the deletion of the explanation to subsection (3-A) by Finance Ordinance, 2007 and the pecuniary jurisdiction has been enhanced by the amendment of subsection (4). In this case we are not concerned with the change in pecuniary jurisdiction but only if the deletion of explanation has removed the limitation of Member Technical sitting singly to hear a question of law.

12. Mr. Sirajul Haq in his opinion has relied on the judgment of this Court in the case of Aman and Amin Trading Co. v. Collector of Customs Karachi (2008 PTD 459) and has relied upon para..5 of the said judgment wherein it has been held by this Court as under:--

"(5) This being the position and following an earlier view, contained in the order, dated 30-8-2007, passed in Special Customs Appeal No. 53 of 2007, we answer the question No. (a) in the negative and consequently set aside the impugned order, 'dated 16-4-2007 and remand the case to the Customs, Excise and Sales Tax Appellate Tribunal Karachi for re-hearing of the appeal. We may clarify that after the amendment in section 194-C by virtue of Finance Act, 2007 w.e.f. 1-7-2007 the learned Single Member of the Tribunal has now the jurisdiction to proceed with the appeal looking to the controversy involved therein."

13. On the basis of reading of this extract the learned counsel has impliedly opined that this Court has already held that after the amendment in subsection (194-C) by Finance Act, 2007 the jurisdiction of the Single Member of the Tribunal has been enhanced. We have, therefore, perused the entire judgment of this Court passed by a Division Bench of this Court in which one of us (Muhammad Ather Saeed J.) was a member. In paragraph 5 of the judgment this Court has noted that at the time of passing of impugned order the Single Member of the Customs and Sales Tax Appellate Tribunal had no jurisdiction to proceed with the matter as one of the controversy involved in the appeal was about the dispute of valuation and therefore when we. read paragraph 5 relied on by the learned Amicus Curiae and reproduced above, we can reasonably conclude that the clarification issued by this Court that the learned Single Member of the Tribunal has now the jurisdiction only relates to the controversy involved in that appeal which was about the dispute of valuation. Even otherwise, this extract can only be considered as an observation as the matter about the jurisdiction of the Member Technical after the amendment was not in dispute before the Court in that case and, therefore, we are of the considered opinion that this case will not stand in the way if we decide that the Member Technical sitting singly does not have the jurisdiction to decide a question of law.

14. As stated by us earlier, the learned Amicus Curiae Mr. Faisal Siddiqui has relied on cases in which it has been held that absurdity should never be presumed in interpretation and statute should be construed as a whole. He has also relied on a judgment about the non obstante clause. There can be no cavil to the proposition that non obstante clause in a statute overrides the provisions of the statute which have been mentioned in the non-obstante clause. In this case, when we read subsections (2) and (3) we find that these provisos relate to the powers of the Chairman to constitute Benches comprising of at least one Judicial Member and one Technical Member or special benches which may comprise two or more technical members or two or more judicial members and if the non-obstante clause had not been inserted in subsection (3-A) then the Chairman could not have assumed the power to constitute benches consisting of Single Member. So in our opinion, the purpose of the non-obstante clause in subsection (3-A) is to empower the Chairman to constitute single benches Even if we accept the opinion of Mr. Faisal Siddiqui that the provisos have been overridden, we are of the opinion that the intention of the legislature has to be arrived at by reading the entire section 194-C and determining what was the purpose for deleting the explanation to subsection (3-A) and whether by removal of such set of explanation both Judicial and Technical Members will become empowered to decide questions of law sitting singly. When reading the statute as a whole we are of the opinion that although prima facie it is seen that the deletion of explanation will empower both judicial member and technical member to decide questions of law sitting singly but after considering the second proviso to subsection (2) and trying to arrive at a harmonious interpretation the only interpretation which follows is that the intent of the legislature is that if Special Bench comprising two or more technical members cannot hear a matter involving question of law then it will be illogical and absurd to conclude that the legislature intended that a Technical Member sitting singly can hear a matter relating to a question of law and as the learned Amicus Curiae has already opined that absurdity cannot be presumed in an interpretation.

15. We are, therefore, of the considered opinion that the deletion of the explanation to subsection (3-A) has empowered a Judicial Member sitting singly to hear a question of law but when the statute is interpreted as a whole the only interpretation which can be drawn is that the technical member sitting singly is not empowered to decide a matter involving a question of law. We would therefore, answer the common question in these reference applications in affirmative i.e. we hold that the member technical does not have the jurisdiction to adjudicate in matters involving questions of law.

16. Before parting with this order we would once again like to express our gratitude to the learned amici curiae Mr. Sirajul Haq and Mr. Faisal Siddiqui for their invaluable assistance and opinion. Although we have to been able to agree with their contentions but their opinions have proved to be invaluable to us in deciding the issue in dispute. We would also direct the office to fix all these cases independently for Katcha peshi as now all these cases will be decided on the relevant facts of each case in the light of this judgment.

M.B.A./C-21/KReference answered.