SHUJABAD AGRO INDUSTRIES (PVT.) LTD. VS COLLECTOR OF CUSTOMS, 2014 PTD-KARACHI-HIGH-COURT-SINDH 1963 (2014)

2014 P T D 1963

[Sindh High Court]

Before Aziz-ur-Rehman, J

Messrs SHUJABAD AGRO INDUSTRIES (PVT.) LTD. through Chief Executive Officer

Versus

COLLECTOR OF CUSTOMS and 8 others

Suit No.1544 of 2012, decided on 16/05/2014.

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

----S.217---Bar of jurisdiction of Civil Courts---Applicability---Bar of jurisdiction of civil Court in terms of provisions of S. 217 of Customs Act, 1969, can only be attracted when action taken is found to be within four corners of statute under which it was taken---If the order suffers from taint of mala fide or lack of jurisdiction then such ouster of jurisdiction is not applicable.

(b) Specific Relief Act (I of 1877)---

----S.56(d)---Official acts---Bar to issue injunction---Principle---Officials are required to perform their duties strictly in accordance with law---If officials proceed to violate law, then such action taken cannot fall within the scope of "public duties" or be treated as performance of public duties and bar contained in S. 56(d) of Specific Relief Act, 1877, is not applicable.

(c) Income Tax Ordinance (XLIX of 2001)---

----S.148(1)(5), (8) & First Sched., Part-II, Clause 9 (A)---Advance income tax---Duty of collection---Scope---Customs authorities are empowered to collect 'Advance Tax' on behalf of Inland Revenue at specified rate of 3% in view of 'Rate Reduction Certificate'.

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

----S.202---Income Tax Ordinance (XLIX of 2001), S.148 (1)(5) & (8), First Sched., Part-II, clause 9 (A)---Specific Relief Act (I of 1877), Ss.42 & 54---Suit for declaration and injunction---Advance income tax---Duty of Customs authorities---Grievance of plaintiff was that despite payment of all duties and taxes, Customs authorities did not clear its consignment---Customs authorities withheld the consignment of plaintiff on the plea that imported goods were liable to be assessed at the rate of 5% of 'advance tax' and not at reduced rate---Validity---Plaintiff paid all lawful 'taxes', 'duties' and 'cess' as provided for under various fiscal statutes including 'advance tax' at applicable rate of 3% upon production of 'Exemption Certificate'---Customs authorities, upon payment of taxes and duties were duty bound to allow release of duty paid consignment to plaintiff---Customs authorities had no power under law to restrict release of 'duty paid consignment' on the plea that imported goods were liable to be assessed at the rate of 5% of 'advance tax' [prescribed for one's own manufacturing use] and not at reduced rate of 3% of 'advance tax' [prescribed for industrial use]---Such act of Customs authorities was without jurisdiction and lawful authority in view of existing valid 'Reduced Rate Certificate'---Customs authorities under law were merely 'collection agents' acting on behalf of Inland Revenue Department for collection of 'advance tax', at prescribed and applicable rate of 3% and had no jurisdiction or authority to undertake any fishing and roving inquiry as it was 'Commissioner Inland Revenue' who was the only competent authority for determination of 'advance tax' vis- -vis imports made by plaintiff---Customs authorities had no jurisdiction to withhold plaintiff's 'duty paid consignment' on the basis of so called 'credible information'---Action of Customs authorities was not only arbitrary, mala fide but also without any jurisdiction---Such refusal on the part of Customs authorities on the basis of so-called 'credible information' was also in violation of principles of natural justice liable to be declared as such---Suit filed by plaintiff was maintainable and Customs authorities wrongly assumed jurisdiction regarding 'differential amount' of advance tax of 2% [i.e. 5%-3%]---Action / procedure adopted for recovery of differential amount of 'Advance Tax' i.e. 2% from plaintiff was illegal, void ab-initio, without any legal jurisdiction / authority and the same was also against the law of natural jurisdiction---Suit was decreed in circumstances.

Messrs Shadman Cotton Mills Ltd. v. Federation of Pakistan and others 2009 PTD 193; Messrs Shafiq Textile Mills Ltd. v. Federation of Pakistan and others 2007 PTD 1480; Messrs Rohi Ghee Industries v. Collector of Customs 2007 PTD 878; Messrs Binaco Traders v. Federation of Pakistan and others 2006 PTD 1491; Usman Punjwani and another v. Government of Sindh and another 1996 CLC 311; Messrs K. G. Traders and another v. Deputy Collector of Customs and 4 others PLD 1997 Kar. 541; Abbasia Cooperative Bank (Now Punjab Provincial Cooperative Bank Ltd.) through Manager and another v. Hakeem Hafiz Muhammad Ghaus and 5 others PLD 1997 SC 3; Messrs AGP (Pvt.) Ltd. v. Additional Collector of Customs, Karachi 2011 PTD (Trib.) 110; Messrs Al-Haj Industrial Corporation (Pvt.) Ltd., Peshawar v. Collector of Customs (Appraisement), Customs House, Karachi 2004 PTD 801; Assistant Director, Intelligence and Investigation, Karachi v. Messrs B.R. Herman and others PLD 1992 SC 485; Ch. Abdul Majid v. Sadaqat Saeed Malik and others 2004 SCMR 1325; Mst. Fehmida Begum v. Muhammad Khalid 1992 SCMR 1908; Malik Muhammad Saeed v. Federation of Pakistan and others 2006 PTD 2167; Al Ahram Builders (Pvt.) Ltd. v. Income Tax Appellate Tribunal 1993 SCMR 29; Ghulam Dastgir v. Special Tribunal, Sindh and 2 others PLD 1977 Kar. 440; Customs, Federal Excise and Sales Tax Appellate Tribunal's case 2010 PTD (Trib.) 2086; Shabir Ahmed v. Kiran Khursheed and others 2012 CLC 1236; Babar Hussain Shah and another v. Mujeeb Ahmed Khan and another 2012 SCMR 1235; Hakimuddin v. Faiz Bux 2007 SCMR 874; Malik Umar Aslam v. Sumaira Malik and another PLD 2007 SC 362 and Ghulam Rasool through L.Rs. and others v. Muhammad Hussain and others PLD 2011 SC 119 ref.

Abid Shahid Zuberi, along with Muhammad Haseeb Jamali and Rasheed Ashraf for Plaintiff.

Syed Tariq Ali for Defendants Nos. 1 to 4.

Mazhar Imtiaz Lari for Defendants Nos. 6 and 7.

Nemo for Defendants Nos.5, 8 and 9.

Date of hearing: 30th April, 2014.

JUDGMENT

AZIZ-UR-REHMAN, J.---This is a suit filed by the plaintiff against the defendants for declaration, permanent and mandatory injunction with the following prayers :-

(A)Declare that defendants Nos.1, 2, 3, 4 and 5's refusal to release/the plaintiffs duty and tax paid consignment as mentioned in para 39 above is illegal, arbitrary, mala fide, corum non judice, violative of Articles 18, 24, 25 r/w Article 4 of the Constitution of Pakistan, violative of the Section 148 read with Part II of First Schedule of the Income Tax Ordinance, 2001, violative of section 202 of the Customs Act, 1969 and principles of rights of natural justice of the plaintiff.

(B)Declare that the Customs Authority including Official defendants Nos.1, 2, 3, 4 and 5 have no jurisdiction or authority as collection agents of Inland Revenue Department to withdraw/ block the goods declaration and release of the duty and tax paid consignments of edible oils imported by the plaintiff.

(C)Declare that the so-called inquiry allegedly undertaken by the official defendants is a fishing and roving inquiry and therefore null and void.

(D)Declare that purported Enquiry Letter dated 25-10-2012 is liable to be set aside/suspended/struck down as the same is void ab initio, illegal, corum non judice, arbitrary, violative of the fundamental rights of the Plaintiff Company as enshrined in the Constitution of Pakistan including Articles 18, 24, 25 r/w Article 4, violative of the section 148 read with Part II of First Schedule of the Income Tax Ordinance, 2001, Section 202 of the Customs Act, 1969 and principles of natural justice of the plaintiff.

(E)Grant mandatory injunction by directing the defendants Nos.1, 2, 3 and 4 to allow release of plaintiff's duty paid consignments of edible palm oil and palm oil olien (as detailed in para 22 of this plaint and Annexure P/83 of the plaint) stored at the oil storage terminals operated by the defendants Nos.6, 7, and 8 and also direct the defendants Nos.6, 7 and 8 to release the said duty paid consignments of the plaintiff.

(F)Grant permanent injunction restraining defendants Nos.1, 2, 3, 4 along with their subordinates, officer/s, person/s or worker/s acting under or through them from taking any adverse or coercive action against the plaintiff.

(G)Any other relief this Hon'ble Court may deem fit and proper in the circumstances of the case.

(H)Cost of the proceedings.

2.The brief relevant facts leading to the filing of above suit are as follows:--

3.Per Plaintiffs assertions the Shujabad Agro Industries [Pvt.] Ltd., [hereinafter means 'Plaintiff'] is a Private Limited Company incorporated under the law of Pakistan in February, 2000. The plaintiff' company is a regular Tax payer having NTN No.1201758-2 since year, 2000 and Sales Tax Registration No.11-002306-008-73 since, 21-1-2001 and is paying millions of rupees to the government in terms of tax and other duties every year. Besides, the plaintiff company is an active member of the Trade Organizations viz. Karachi Chamber of Commerce and Industry, Pakistan Vanaspati Manufacturer's Association and All Pakistan solvent Extractors Association. Defendants Nos.1 to 4 and 5, per averments, are the officers of Customs Department and posted at Model Customs Collectorate of Port Qasim, Karachi and are duty bound to perform their duties, of course, in accordance with the Customs Act, 1969, Rules and SROs framed under the statute and direction of the Federal Board of Revenue as well. Defendants Nos.6, 7 and 8 are owners of private storage Terminals at Port Qasim, Muhammad Bin Qasim Town, Karachi who are undertaking storage services to importers including the plaintiff.

4.The defendant No.9 is a 'proforma party' herein and is being an officer of the Inland Revenue Department is performing its duties and functions under Income Tax Ordinance, 2001, Rules and S.R.Os. framed under the statue and direction of the Federal Board of Revenue. In compliance with section 148[1], [5] and [8] r/w the rate specified under Clause 9[A] of the Part II of the First Schedule of the Income Tax Ordinance, 2001 and in the exercise of powers conferred under section 159 of the Income Tax Ordinance, 2001, the 'proforma defendant No.9' issued 'Reduced Rate Certificate' No.46 dated 30-6-2012 in favour of the plaintiff. In terms of the certificate 'advance income tax' at the reduced rate of 3% is liable to be charged/levied on the consignment of edible Palm oil at the time of import. The plaintiff company since, the year, 2001 is running, operating and managing one of the largest fully integrated industrial units in the edible oil sector in Pakistan at Plots No.A/15 ad-measuring 2.5 Acres and A-16, ad-measuring 5 Acres situated in North Western Industrial Zone, Port Qasim Authority, Muhammad Bin Qasim Town Karachi and is also paying Annual Land Rent and Maintenance Charges etc. to the Port Qasim Authority.

5.Per assertions, the plaintiff company is engaged in the manufacturing of various forms of edible oils including Canola Oil, Soyabean Oil, Cooking Oil and Vegetable Vanaspati Ghee etc. from raw materials imported mostly from Malaysia, Indonesia and Australia. Besides, undertaking the business of packing, sales and marketing of their own renowned brands under its registered trademarks viz. 'Eva', 'Eva Canola Oil', 'Eva Soyabean Oil', 'Eva Cooking Oil', and 'Maan Vegetable Banaspati Ghee'. The production capacity of the plaintiffs factory for Solvent Extraction is 400 Metric Ton per day and Refinery + Batch Refinery capacity is 350 Metric Ton per day. Apart from this, the plaintiff company has also incurred/being incurred heavy expenditure in advertising and establishing its' registered brands in the local Markets. On account of affordable prices and high quality, the plaintiffs products are very much popular in the local markets throughout the country. The plaintiff company is supplying its' products to various distributors across the country. Besides, the plaintiff is also supplying its' products to Utility Stores Corporations of Pakistan [Pvt.] Limited, various hotels, restaurants and multinational entities.

6.For smooth running and effective performance of the factory, the plaintiff has employed more than 76 employees on permanent basis, who are performing their functions in various capacities thus dozens of employees are duly registered with 'Employees Old Age Benefit Institution' and 'Sindh Employees Social Security Institution'. The plaintiff is making monthly contributions, no doubt, for the benefits of the plaintiffs employees to both the mentioned governmental organizations. For meeting the energy requirements the plaintiff company has also installed self-power generation having a total capacity of 3 MW. The generators installed are not only run on natural gas but alternatively on diesel as well. No doubt, the plaintiff is also paying heavy utility bills. For the purposes of manufacturing of 'finished products' of edible oils, the plaintiff company imports crude palm oil, RBD palm oil and RBD palm olien [both processed], soyabean seeds, canola seeds and sunflower seeds from various countries. The imported raw edible oils and seeds [raw materials] are fabricated, processed, crushed and extracted through different methods/using various chemicals in order to make the finished products. After going through the process of manufacturing, per plaintiff's assertions, the specifications of the product are absolutely changed.

7.Per 'fiscal policy' for the income year, 2012-2013, the imported consignments of raw materials of edible oil for industrial use are cleared from the Port upon payment of taxes, cess and duties. All taxes, cess and duties imposed by the government are collected by the Customs' Authorities in following two capacities:--

(i)As a levy under section 18 read with rates prescribed under first schedule of the Customs Act, 1969 and

(ii)As a collecting/withholding agent under section 202 of the Customs Act or any other law empowering the 'customs department' for such collection/withholding on its behalf.

8.For collection of 'Advance Tax' on import of edible oils by an industrial undertaking for its' own use, section 148[1], [5] and [8] r/w rate specified under Clause 9[A] of the Part II of the First Schedule of the Income Tax Ordinance, 2001 indeed empowers the Customs' Authority to collect 'Advance Tax' on behalf of Inland Revenue at the specified rate of 3% in view of the 'Rate Reduction Certification' [In short RRC] issued by the 'proforma defendant No.9'. This rate of tax is 'minimum rate of tax' levied on such import. The rate of advance tax is 5% of the assessed value of the imported consignment [i.e. for commercial importers of edible oil only].

9.Per assertions, through the Finance Act, 2012 the legislature added a 'proviso' to Clause 9[A] of the Part II of the First Schedule of the Income Tax Ordinance, 2001 under which edible oil Industrial units can obtain an 'exemption certificate' from the concerned Commissioner/ authority regarding status and entitlement of Industrial undertaking for reduced rate of 3% of 'Advance Tax' in terms of 'proviso' to Clause 9(A) of the Part II of the First Schedule of the Income Tax Ordinance, 2001. Pursuant to and in compliance with the newly added proviso to 'Clause 9(A)' of the Part II of the First Schedule of the Income Tax Ordinance, 2001, the plaintiff applied before the competent authority/Commissioner Inland Revenue for the purpose of issuance of such 'exemption certificate' [Reduced Rate Certificate].

10.Upon meeting all the requisites including verification, desk audit, visit of the factory etc. the competent authority/Commissioner Inland Revenue [Zone -I] exercising its' power under section 159 of the Income Tax Ordinance, 2001, consequently issued Reduced Rate Certificate bearing No.46 vide its Letter No.CIR[Z-I]LTU/11-12/1344 dated 30-6-2012 with a validity period upto 3-6-2013 in favour of the plaintiff whereby the 'advance tax' at imports of raw material of edible oil by the Plaintiff for its own consumption is @ 3%. The plaintiff has thus become entitle to get imported edible oil cleared 'won payment of 'advance tax' at the rate of 3% along with other levyable cess and duties as prescribed under different fiscal statues. Until the payment of above mentioned taxes and levy including 'advance tax' @ 3%, the imported raw edible oil remained stored at the storage terminals of Port Qasim Authority. Only upon payment of the taxes, duties etc. and clearance of the customs' authorities, the plaintiff and/or its' agent can move/ transport the imported edible oil to its' factory premises or other storage houses.

11.The plaintiff imported the consignments of RBD Palm Oil from Malaysia and Indonesia as well as Canola seeds from Australia and thereafter, it was stored at oil storage terminals belonging to defendants Nos.6, 7 and 8 at Port Qasim. No doubt, the plaintiff also paid all the lawful 'taxes', 'duties' and 'cess' as provided for under various fiscal statues including 'advance tax' at the applicable rate of 3% upon production of the 'Exemption Certificate'. In lieu of the applicable 'duties' and 'taxes', per plaintiff, a sum of Rs.405,565,628 has already been paid to the Custom's Department. Upon such payments, the custom authorities [Defendants Nos.1 to 5] besides, duty bound, are under obligations to allow the release of the duty paid consignment to the plaintiff. The defendants Nos.1 to 5, of course, have no power under law to restrict the release of the duty paid consignment [s] on any ground whatsoever. The plaintiff on 22-10-2012, directed its' clearing Agent namely Messrs Moorad Shipping Agents to get the above mentioned duty paid consignments cleared / released from the oil terminals operated by defendants Nos.6, 7 and 8. In response on 23-10-2012, the plaintiff was deeply shocked to know that despite payment of all the lawful taxes and duties, the defendants Nos.6, 7 and 8 were un-lawfully instructed/not allowed by defendants Nos.2, 3 and 4 to clear the imported consignment of raw edible oil. Thus goods declaration was blocked by defendants Nos.2, 3 and 4 with mala fide intention.

12.Nevertheless, the plaintiff approached the office of defendants Nos.2, 3 and 4 on 24-2-2012 and sought clarification and reason for such illegal, arbitrary and mala fide restriction on the release of the plaintiff's duty paid consignments. The defendant No.3, in turn threatened the plaintiff on the plea of some alleged high level inquiry against the plaintiff and their imported consignment. The defendants Nos.2, 3 and 4, also accused the plaintiff without any proofs of selling the imported edible oil directly in open market rather than using the same for its own industrial manufacturing purpose. The plaintiff, per defendants Nos.2, 3 and 4's stand is liable to be assessed @ 5% of 'advance tax' [prescribed for commercial importers] rather than reduced rate of 3% of 'advance tax' [prescribed for industrial use]. Besides, per defendant No.3's assertions, the plaintiff, is causing losses to the national exchequer [i.e. of 2% of 'advance tax'] as being allegedly less deducted. After conveying of illegal threats, gratification was also demanded from the plaintiff, indeed, without any justification so that the whole matter is settled and resolved. Otherwise, in the event, if gratification as wished, is not paid, an inquiry would be undertaken against the plaintiff. Such demand for illegal gratification, nevertheless, was flatly refused.

13.Per plaintiffs assertions custom's authorities are merely 'collection agents' acting on behalf of the Inland Revenue Department for collection of 'advance tax', at the prescribed and applicable rate of 3% and, indeed, have no jurisdiction and/or authority in law to undertake any fishing and roving inquiry. The defendants Nos.2, 3 and 4 were further informed that under law, the 'Commissioner Inland Revenue', is the only competent authority for determination of the applicable rate of 'advance tax' viz-a-viz imports made by the plaintiff. Further the defendant No.3 was also informed, that the competent authority [Commissioner Inland Revenue] has already issued requisite 'exemption certificate' No.46 dated 30-6-2012 in favour of the plaintiff. The plaintiff is thus only liable to pay 'advance tax' @ 3% only and not otherwise i.e. @ 5%.

14.From the conduct of the defendants Nos.2, 3 and 4, it reveals that they are well aware about their lack of jurisdiction and authority but are abusing their authority by directing the defendants Nos.6, 7 and 8 verbally not to allow/release the 'duty paid consignments' of the plaintiff lying in the terminals operated by defendants Nos.6, 7 and 8 until illegal gratification per their wishes is paid. On 1-11-2012, the plaintiff also approached the defendant No.1' s office against the grievance and its' suffering at the hands of defendants Nos.2, 3 and 4 but instead it was shocked to know about the Enquiry Letter of defendant No.3. Upon an inquiry, it was transpired that such inquiry letter was prepared in the backdrop of some meeting held on 24-10-2012. This, of course, was nothing but a futile attempt on the part of defendants Nos.2, 3 and 4, to justify their illegal, mala fide and corum-non-judice action [i.e. the restraining of the defendants Nos.6, 7 and 8 from releasing the 'duty paid imported consignment' of raw edible palm oil belonging to the plaintiff], having been orally issued to the defendants Nos.6, 7 and 8. Maliciously, no copy of Enquiry Letter was served upon the plaintiff. On 4-11-2012, the plaintiff, somehow, obtained copy of the un-served inquiry letter of 25-10-2012 purportedly issued by defendant No.3 against the plaintiff, calling for enquiry regarding alleged commission of 'tax fraud'/'misrepresentation'.

15.Bare perusal of the aforesaid 'enquiry letter' would show that it was issued without any jurisdiction or sanction of law. The same is nothing but is a fishing and roving inquiry undertaken for the purposes of blackmailing and extracting money. The official defendants, since have no jurisdiction to withhold the plaintiffs duty paid consignment, therefore, the whole action is not only arbitrary, mala fide but also absolutely without any jurisdiction. Besides, the same is also in violation of the principles of natural justice. On 5-11-2012 and 6-11-2012, the plaintiff filed letters and representations with the defendants Nos.1, 2, 3 and 5 fully explained thereby their grievance. Nonetheless, defendants Nos.1 to 4 and 5, not only maliciously ignored/failed to respond any of the plaintiffs letter/representation but also failed and/or ignored to release the plaintiffs duty paid consignment which, no doubt, caused heavy loss[es] of production i.e. in the sum of Rs.351,971,041 [Rupees thirty five crores nineteen lacs seventy one thousand and forty one only]. The aforesaid action of the defendants Nos.1 to 4 besides, mala fide, illegal, corum-non-judice, arbitrary, are also in violation of the fundamental rights as being enshrined in the Constitution of the Islamic Republic of Pakistan, 1973 [i.e. Articles 18, 24, 25 read with Article 4] as well as sections 159 and 148 read with Part II of First Schedule Income Tax Ordinance, 2001 and section 202 of the Customs Act, 1969 and rights of natural justice.

16.The illegal and mala fide refusal of the defendants Nos.1 to 4 and 5 to release the plaintiffs 'duty paid consignment' of 'edible oil', in the above scenario, has caused serious financial and production losses to the plaintiff. Many of the plaintiffs' customers, under circumstances, have threatened to terminate their supply contract with the plaintiff. The reputation of the plaintiff in the eyes of its' clients and commerce industry has also been seriously damaged/compromised. Nevertheless, the plaintiff reserves its' right to claim damages and compensations [including but not limited to the 'tentatively assessed damages' and compensation in the sum of Rs.351,971,041] having been suffered by the plaintiff company on account of the illegalities and mala fide action committed by defendants Nos.1 to 4, inter alia, i.e. on the dates as mentioned in para 43 of the plaint. Hence this suit.

17.Along with the plaint presented in Court on 13-11-2011, an Application under Order XXXXI Rules 1 and 2 C.P.C. and section 94, C.P.C. r/w section 151, C.P.C. bearing C.M.A. No.12076 of 2012 was also filed. On 13-11-2011 when the above suit came-up before the Court, the following order was passed:--

"1. ..

2. It is intera alia contended by the learned counsel that under the garb of some inquiry the customs authorities are not releasing the duty paid goods and asking for differential amount at the rate of 2% more duty. Issue notice to the defendants as well as DAG for 16-11-2012. "

18.Upon service, no 'counter affidavit' in answer to the Injunction Application [C.M.A. No.12076 of 2012] was filed though one week's time was granted on 19-11-2012 as such the averments made in the injunction application and its' elaborate supporting affidavit have gone un-rebutted/un-challenged. Again on 27-11-2012, when C.M.A. No.12076/2012 came-up before the court, the same was 'disposed off'. The order passed on 27-11-2012 reads as follows:--

"For hearing of C.M.A. No.12076/12 [u/o XXXIX rules 1 and 2, C.P.C.]

27-11-2012

Mr. Abid S. Zuberi, advocate for plaintiff

Syed Anwar Tariq, advocate for defendants Nos.1 to 4

Mrs. Shiraz Iqbal Ch., Standing Counsel

Mr. Nazhar Lari, advocate for defendants Nos.6 and 7

Syed Mohsin Imam, advocate

Makhdoom Syed Babar Ali, Deputy Collector, Port Qasim, Pakistan Customs.

Syed Anwar Tariq submits that written statement is ready but due to some typographical error, the same could not be filed today, however, he undertakes to file written statement within three days with advance copy to Mr. Abid Zuberi. Today, Makhdoom Syed Babar Ali, Deputy Collector, Port Qasim, Pakistan Customs, has filed a statement in court and he stated that the goods can only be released subject to furnishing bank guarantee of Rs. 157, 163,069. The plaintiff has raised the plea that the defendant Nos. 1 to 5 have no jurisdiction under the Customs Act to claim any such levy, duty or amount as they are only collecting agency and grievance if any against the plaintiff can only be lodged by Income Tax Department and or defendant No.9 and after raising any such demand by competent authority, it has to be adjudicated first. Conversely the learned counsel for the defendants Nos. 1 to 4 argued that the defendants have lawfully exercised their rights and acted within their jurisdiction. Since only this question of law is involved in this case and the suit may be disposed of on issue of law hence this suit will be treated short cause. Both learned counsel agreed that the matter may be disposed of on available record and point of law. Let this case be fixed on 4-12-2012 for settlement issues. Meanwhile, the plaintiff will furnish bank guarantee in the sum of Rs. 157,163,069 to the satisfaction of the defendant No.1 and immediately upon furnishing the bank guarantee, the goods shall be released to the plaintiff. Bank guarantee will not be encashed by the defendants till further order of this court. The application is disposed of. [Underlining is mine].

19.Despite service, out of the defendants, only defendants Nos.1 to 4 filed their 'written statements'. In the written statements inter alia the following preliminary objections were raised:--

(a)That the suit is not maintainable as the plaintiff has not exhausted the remedies available under the Pakistan Customs Act, 1969

(b)That the suit is barred under section 217 of the Customs Act, 1969 [reproduced below] read with section 9 of the Code of Civil Procedure, 1908. Reliance is made on 2009 PTD 193 [Messrs Shadman Cotton Mills Ltd. v. Federation of Pakistan and others]; 2007 PTD 1480 [Messrs Shafiq Textile Mills Ltd. v. Federation of Pakistan and others]; 2007 PTD 878 [Messrs Rohi Ghee Industries v. Collector of Customs]; 2006 PTD 1491 [Messrs Binaco Traders v. Federation of Pakistan and others].

"216. No compensation for loss or injury except on proof of neglect or wilful act.---No owner of goods shall be entitled to claim from any officer of customs compensation for the loss of such goods or for damage done to them at any time while they remain or are lawfully detained in any custom house, custom area, wharf or landing place under the charge of any officer of customs unless it be proved that such loss or damage was occasioned by gross negligence or wilful act of such officer.

217. Protection of action taken under the act.---[1]. No suit, prosecution or other legal processing shall be against the Federal Government or any public servant for anything which is done or intended to be done in good faith in pursuance of this Act or the rules and notwithstanding anything in any other law for the time being in force no investigation or enquiry shall be undertaken or initiated by any government agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or direction made or used there under without the prior approval of the [Board].

[(2) No suit shall be brought in any civil court to set aside or modify, any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act] "

20.Apart from the above preliminary objections regarding Rate Reduction Certificate No.CIR[Z-1]/LTU/11-12/1344 dated 30-6-2012 [Annexure P/34 to the plaint] duly issued by Commissioner Inland Revenue Zone-I, LTU, Karachi, it was averred, that the officer of Inland Revenue Department, under law is required to furnish the basis for the issuance of the 'Rate Deduction Certificate' No.46 dated 30-6-2012 having been issued in favour of the plaintiff. [Per aforesaid Reduced Rate Certificate, it is worth to note that on the import of consignment of edible Palm Oil of the plaintiff, the applicable rate is 3% instead of 5%].

21.Per defendants Nos.1 to 4's stance, allegedly based on some so-called 'credible information', the plaintiff is involved in importing and then selling the imported goods [i.e. RBD Palm Oil and RBD Palm Olien] directly to the local markets without doing any processing and/or paying 'advance tax' @ 5% meant of commercial importers. According to the defendants Nos. 1 to 4, in order to avail the reduced rate of 'advance tax' @ 3% on imports the plaintiff is required to be 'industrial undertaking' under section 2[29C] of Income Tax Ordinance, 2001, plus holding Reduced Rate Certificate [in short RRC].

22.Per averments, the plaintiff has claimed reduced rate of 'advance tax' @ 3% merely on the basis that they are 'industrial undertaking' of the 'imported goods' whereas the ground reality, per defendants Nos.1 to 4, is contrary to the plaintiffs stand. However, in terms of Section 79 of the Income Tax Act, 1969 and upon consideration of the plaintiff's declaration/statement the plaintiff's imported goods are being processed into bonding and also allowed ex-bonded, in view of plaintiffs declaration and exemptions allowed to them.

23.The plaintiff, per defendants 'assertion, has, 'no doubt' paid government dues but it is lesser than actual dues payable i.e. 5% 'advance tax' which is payable by the plaintiff to the defendants Nos.1 to 4 in their capacity as being collecting agent of the Inland Revenue [defendant No.9] instead of 3% reduced rate available to Industrial Concerns on import of raw materials for their own use i.e. RBD Palm Oil and RBD Palm Olien. Under the provisions, of Section 148 of Income Tax Ordinance, 2001, the defendants Nos.1 to 4, are entitled/empowered to collect the 'advance tax' from every importer of goods on the value of goods at the rate specified in Part I of Ist Schedule. 'Advance Tax' shall, 'no doubt', be collected in the same manner and at the same time, as the Custom's Duty payable in respect of the import or, if the goods are exempt from the Customs Duty, at the time customs duty would be payable it the goods were dutiable.

22.Per assertions of defendants Nos.1 to 4 made in the written statement, for ascertaining the actual production capacity of the plaintiffs factory IOCO [Input Out-put Co-efficient Organization] is the only independent and competent entity to survey and report about the actual production capacity of the plaintiffs factory. The plaintiffs case, per defendants assertions, is being forwarded to IOCO for ascertaining the 'actual production capacity' of the plaintiffs factory. In the end it has been prayed by defendants Nos.1 to 4 that the plaintiffs suit besides incompetent in law is liable to be dismissed in limine as the plaintiff inter alia has not approached the Court with clean hands.

25.On 4-12-2013 when the above suit came-up before the Court then by consent of the parties, 'consent issues' were settled, of course, keeping in view order dated 27-11-2012. The Order passed on 4-12-2012 as being relevant is also reproduced herein below:--

-----

"For hearing of C.M.A. No.12076/12

4-12-2012

Mr. Haseeb Jamali, Advocate for plaintiff

Mr. Syed Tariq Ali, Advocate for defendant Nos. 1 to 4

S. Hamid Umer Principal Appraisers Port Qasim present In court.

Mr. Mohsin Imam, Advocate

Mr. Mazhar Lari, Advocate

---------

On the last date of hearing it was agreed that since questions of law are involved, this suit may be disposed of on issues of law, and this suit be treated short cause. The parties were directed to file proposed issues. Today, counsel for the plaintiff has filed proposed issues. Mr. S. Tariq Ali, Counsel for defendants Nos.1 to 4 has given his no objection.

Following issues are settled:-

"1. Whether the suit is maintainable under section 217 of the Customs Act, 1969?

2. Whether the defendants Nos.1, 2, 3, 4 and 5 acting as 'Collection agent' of Inland Revenue Department have any jurisdiction/authority under law to undertake any exercise of determination, adjudication or inquiry on the amount/rate of Advance tax/withholding tax to be paid by the plaintiff on import of edible oil?

3. What should the decree be?

Let this matter be treated short cause and fix for arguments on 10-1-2013 at 11:30. Interim order passed earlier to continue till next date." [Emphasis and underlining are mine].

26.In the above scenario, on 30-1-2014 when the suit came-up before me, I heard Mr. Abid S. Zuberi learned counsel for the plaintiff, Mr. Syed Tariq Ali learned counsel for defendants Nos.1 to 4 and Mr. Mazhar Imtiaz Lari, learned counsel for the defendants Nos.6 and 7 and with their valuable assistance also gone through the record available before me.

27.Mr. Abid S. Zuberi, learned counsel for the plaintiff vehemently contended that the plaintiff imported consignments of Crude RBD Palm Oil and RBD Palm Oilen from Malaysia etc. and thereafter for release thereof, 'goods declaration application' was filed by the plaintiff in the Custom Collectorate Port Qasim. Per learned counsel, the Custom's Authority as usual processed the goods declaration and upon paying the customs' duties and taxes, the plaintiffs goods were made out of charge.

28.Per Mr. Abid S. Zuberi learned counsel for the plaintiff, despite of payment of duties and taxes, the plaintiff's consignments could not be allowed to be released on the plea of some inquiry on the basis of so-called 'credible information' for which, however, per learned counsel no notice was issued as such the same besides illegal is against the law of natural justice. According to Mr. Abid S. Zuberi, the verbal direction of the customs' authority to the defendants Nos.6, 7 and 8 [who are owners of private storage terminals at Port Qasim, Muhammad Bin Qasim Town, Karachi and providing storage services to the importers including the plaintiff] not to get the duties/taxes paid consignment clear is not only mala fide but without jurisdiction as well. Neither 'any notice' nor 'any cause' was given/shown except the raising of false pleas and lame excuses. The customs' authority, despite 'explanation' that the charge levelled against the plaintiff was/is absolutely mis-conceived nonetheless did fail and/or avoid to allow the defendants Nos.6, 7 and 8 to get the goods cleared/released. Needless to say that the goods were admittedly duly duty paid/made out of any charge.

29.Mr. Abid S. Zuberi, Advocate further argued that the so-called 'assumed charges' against the plaintiff are false as the plaintiff is liable to pay 3% 'advance tax' instead of 5% 'advance tax' in terms and on the strength of 'Reduced Rate Certificate' bearing No. CIR[Z-I]LTU/ 11-12/1344 dated 30-6-2012 duly issued in favour of the plaintiff by the Commissioner Inland Revenue Zone-I, LTU, Karachi. Per learned counsel, if the defendants or any of them had/have any grievance then the matter would have been taken with defendant No.9 who is the only competent authority under law to take cognizance of the allegations levelled by the defendants Nos.1 to 5. In the case in hand, per learned counsel, the plaintiff, no doubt, has paid the duties and taxes as such the allegations against the plaintiff besides tainted with mala fide intention [i.e. by not allowing the release of the goods by defendants Nos.1 to 4] is absolutely illegal and without any lawful authority.

30.Mr. Abid S. Zuberi learned counsel for the plaintiff strenuously contended that verbal instructions issued to the defendants Nos.6, 7 and 8 by the customs' department besides illegal, arbitrary, corum-non-judice are against the principles of natural justice. The goods on which duties and taxes have already been paid, per learned counsel, can only be refused clearance if, the same are found either imported in breach of any restriction, or condition applicable and not otherwise. Per Mr. Abid Zuberi, in the case in hand, neither the goods are prohibited nor the imported of goods did contravene any legal and lawful condition. The refusal of release of duty paid goods is illegal, without any 'good faith' and needs to be declared as such.

31.According to Mr. Abid S. Zuberi, the goods which are not liable to confiscation could not be detained or seized. The goods imported by the plaintiff could not be confiscated as there is no violation of any law. The instruction verbally issued to the defendants Nos.6, 7, and 8 by the Customs' department, hence not only in violation of Articles 4, 10-A, 18, 24 and 25 but also of the Section 148 r/w Part II of First Schedule of the Income Tax Ordinance, 2001 [Ordinance No.XLX of 2001] as well as Sections 179 and 202 of the Customs Act, 1969 [Act IV of 1969].

30.Mr. Abid S. Zuberi next argued that the action of defendants Nos.1 to 5 besides without jurisdiction is not within the framework of law. Any action in violation of ' fair trial' and 'due process' not only deemed to be illegal but also without jurisdiction. Per Mr. Abid S. Zuberi, the verbal direction issued/given to the defendants Nos.6, 7 and 8 regarding not clearing the plaintiff's imported and duly duty paid goods indeed, can competently be challenged by way of filing a civil suit as the case in hand is.

33.Per Mr. Abid S. Zuberi, since the action of Customs Department, is illegal and without jurisdiction, as such has been validly questioned/challenged through the present suit. The suit as framed and filed is quite competent in law and not barred under Section 217 of the Customs Act, 1969 [Act IV of 1969] as alleged by defendants Nos.1 to 4.

34.In support of his contention Mr. Abid S. Zuberi learned counsel for plaintiff has placed reliance on the following case-laws:-

(a)USMAN PUNJWANI AND ANOTHER V. GOVERNMENT OF SINDH AND ANOTHER [1996 CLC 311 [Karachi] wherein inter alia while dealing with question of jurisdiction of a civil court in juxtaposition of the special provisions of Section 36 of the Colonization of Government Lands (Sindh) Act, 1912, it was observed as follows :

"5 ...the Civil Courts have jurisdiction to entertain a suit, if the order passed by the Revenue Authorities is bad in law, without lawful authority and mala fide. For reference, see the cases of Secretary of State v. Mast and Co. (AIR 1940 PC 105), Messrs Chalna Fibre Company Ltd., Khulna and others v. Abdul Jabbar and others (PLD 1968 SC 381), Karim Dad v. Arif Ali and another (PLD 1978 Lahore 679), Anjuman Talim-Ul-Islam v. W.P. Punjab Province (PLD 1983 Lahore 294), Muhammad Saleh v. Meher Shah (1980 CLC 662) and Syed Raunaq Raza v. Province of Sindh and others (1994 CLC 317). In the case of Mast and Co., it was held by their lordships of Privy Council that:

"...It is settled law that the exclusion of the jurisdiction of the Civil Courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well-settled that even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure ..." [Underlining is mine].

(b)In the case of MESSRS K.G. TRADERS AND ANOTHER V. DEPUTY COLLECTOR OF CUSTOMS AND 4 OTHERS [PLD 1997 Karachi 541] wherein the bar of jurisdiction in terms of Section 217 of the Customs Act was under debate, consequently observed as follows :-

"9 ....It is well-established that provisions barring jurisdiction of Civil Courts in terms similar to the above quoted provisions of the Customs Act are only attracted when the impugned action is found to be within four corners of the Statute under which it is taken and does not suffer from taint, mala fides or absence of jurisdiction." [Underlining is mine].

..

(c)Likewise, in the case of ABBASIA COOPERATIVE BANK (NOW PUNJAB PROVINCIAL COOPERATIVE BANK LTD.) THROUGH MANAGER AND ANOTHER V. HAKEEM HAFIZ MUHAMMAD GHAUS AND 5 OTHERS [PLD 1997 Supreme Court 3], it was held as under:--

"5... where the authority or the tribunal acts in violation of the provisions of the statutes which conferred jurisdiction on it or the action or order is in excess or lack of jurisdiction or mala fide or passed in violation of the principles of natural justice, such an order could be challenged before the Civil Court in spite of a provision in the statute barring the jurisdiction of Civil Court." [Underlining is mine].

..

(d)In the case of MESSRS AGP (PVT.) LTD. V. ADDITIONAL COLLECTOR OF CUSTOMS, KARACHI [2011 PTD (Trib.) 110], it was observed that escaped 'advance tax' cannot be followed and/or recovered by 'customs officials' under the powers conferred upon them under section 148 [5][6] of the Income Tax Ordinance, 2001 rather it is the Commissioner of Income Tax who under Section 162 of the Income Tax Ordinance, 2001 can follow and collect the short recovery of any tax collectable under Section 148 [5][6] of the Income Tax Ordinance, 2001. The relevant extract from the case reads as follows:-

"17. The appellant had contended that while the Customs is empowered to collect advance income tax on imports under section 148 of Division-II, Part-V of the Income Tax Ordinance, 2001, they (Customs) are not empowered to demand or recover the not-collected or short-collected or escaped assessment of such advance income tax because section 162 of the said Ordinance authorizes only the Commissioner of Income Tax to recover the amount of advance income tax not collected under the said section 148. On the other hand, the respondent had argued that the Customs is authorized to recover the escaped assessments under section 161(2) of the said Ordinance. During the course of hearing, the appellant's Consultant submitted copy of a judgment dated 31-7-2009 passed by the Islamabad Bench of this Tribunal in Appeal Case No. 187/CU/IB/2008 held as follows:-

"(18). The section 162(1) of the Income Tax Ordinance, 2001, is very much available and dealt with, in case of default under section 148 of the Income Tax Ordinance, 2001. To my opinion, the appropriate Income Tax officers do have the power to issue any demand for the alleged short recovery under the Income Tax Ordinance, 2001, which having contained special provisions for all short recoveries, including, under Section 148 of the Income Tax Ordinance, 2001, where the Income Tax in short collected, short levied, or not so collected, either on account of misdeclaration of the importer, or, on account or error, in advertence or mistake. The power to collect the advance Income Tax under section 148(5) of the Income Tax Ordinance, 2001 cannot have the effect of converting Income Tax into Customs Duty. Merely providing the manner of collection of tax as an advance tax under any tax enactment, the nature of the tax could not be changed, hence, the short recovery of any tax collectable under section 148(5)(6) of the Income Tax Ordinance, 2001, to a person in form of short collected, short levied, or not so collected, either on account of mis-declaration of the importer, or, on account or error, or inadvertence or under mistake, vests with the Commissioner of Income Tax alone under section 162(1) of the Income Tax Ordinance, 2001. Therefore it is of my considered opinion the Collector of Customs do not have the authority to go for the recovery, it is the only the Commissioner of Income Tax who can start the proceedings of recovery against the person in case of default on short collected, short levied, or not so collected, either on account of mis-declaration of the importer, or, on account or error, or inadvertence or under mistake, so the adjudication by the respondent's to the point, of recovery of Income Tax against the appellant's is not legal, justifiable and not tenable in the eye of law and the exercising of jurisdiction.

18. The provisions of section 148 of the said Ordinance are very clear and this empowers the Customs to collect advance tax from the importer in the same manner and at the same time as the customs duty payable in respect of import and the provisions of the Customs Act, 1969, in so far, a relevant, shall apply to collection of this advance tax. The provisions of sections 32 (relating to determination of short-levy, etc.), 179 (relating to adjudication, whether on account of short/non-levy or otherwise) and 202 (relating to recovery of government dues) of the Customs Act, 1969, are distinct as against the levy and collection procedure outlined in sections 18, 79, 80, 83 and 104 of the said 1969-Act. The procedure for recovery of escaped assessments of advance tax is given in section 162 of the said Ordinance which authorizes the Commissioner of Income Tax (and not the Customs officers) to determine and recover such short-levies and/or non-levies. [Underlining is mine].

..

(e)In the case of Messrs AL-HAJ INDUSTRIAL CORPORATION (PVT.) LTD., PESHAWAR VS. COLLECTOR OF CUSTOMS (APPRAISEMENT), CUSTOMS HOUSE, KARACHI [2004 PTD 801] Karachi High Court] it was observed that only the 'determined amount of tax' can be recovered by the Collector of Customs and customs officials cannot make resort under law to the chargeability or assessment of a tax. The relevant observations read as follows:--

"A perusal of the provisions contained in section 50(5) of the Ordinance and section 202 of the Customs Act, shows that the Collector of Customs has been empowered to collect the advance income-tax under subsection (5) of section 50 of the Ordinance, at the time of import of goods at the rates specified in the First Schedule to the Ordinance, in the same manner and at the same time as the customs duty and tax is to be collected in the same manner as customs duty, the recovery thereof can be made under section 202 of the Customs Act. it already stands decided that merely by providing the manner and time of collection of tax under any tax enactment, the nature of the tax shall not be changed, meaning thereby that if the advance tax under section 50(5) of the Ordinance can be collected as customs duty and can be recovered by the customs officials under section 202 of the Customs Act, it will not change the nature of tax and the income-tax shall not become the customs duty .The power to collect the advance income-tax under section 50(5) of the Ordinance by the Collector of Customs, shall not have the effect of converting the income-tax into customs duty and consequently the customs official shall be empowered by virtue of the provisions contained in the Income Tax Ordinance and the Customs Act, merely to collect the determined amount of tax and shall not have the Authority to resort to the chargeability or assessment of a tax. Likewise when the income-tax shall not be changed into customs duty, the applicability, of section 156 of the Customs Act, shall be excluded as a logical conclusion."

..

(f)In the case of ASSISTANT DIRECTOR, INTELLIGENCE AND INVESTIGATION, KARACHI v. Messrs B.R. HERMAN AND OTHERS [PLD 1992 Supreme Court 485] while dilating upon the power of customs' authority for asking information etc. it was observed that roving inquiry and/or issuing of notice, merely for shooting in the dark without any specific purpose and/or solid specific allegations, is not permissible. The relevant observation reads as follows:-

"4.... The object of section 26 of the Customs Act is to empower the authority to ask for information or require the production of documents or inspect the same in order to determine the legality or illegality of importation or exportation of goods which have been imported or exported, the value of such goods, the nature, amount and source of the funds or the assets with which goods were acquired and the customs duty chargeable therein or for deciding anything incidental thereto. The authority can only for specific purposes of determining the legality or illegality call for such information as required by section 26. The authorized officer can call upon any importer or exporter to furnish information in case where such determination is required. It cannot make a roving inquiry or issue a notice by merely shooting in the dark in the hope that it will be able to find out some material out of those documents and then charge the party of irregularity or illegality. The authority has to state and disclose in the notice, the purpose for which the party is required to produce those documents or supply information. Unless such purpose is specified in the notice, it will be a matter of anybody's guess and the accused party will be put to inquiry without any specific allegation or fact disclosed to him. It does not permit any authority to employ the provisions of section 26 to make indiscriminate, roving and fishing inquiry irrespective of the fact whether any determination of legality or illegality in import, export or funds with which the goods were acquired is 'to be determined. Even in cases of suspicion of commission of illegality, details should be provided to' the party-to enable him to have an opportunity to produce all the relevant documents and. Disclose information. Depending on the facts and circumstances of a case, any notice without disclosing any fact or particulars, for which information or document: are required will be in violation of the principles of natural justice and may be struck down as illegal and without jurisdiction". [Underlining is mine].

..

35.Conversely, Mr. S. Tariq Ali learned counsel for the defendants Nos.1 to 4 forcefully argued that this court has no jurisdiction to entertain the above suit in view of Section 217 of the Customs Act, 1969 [Act IV of 1969] which ousters / bars the jurisdiction of a Civil Court. Mr. S. Tariq Ali learned counsel for the defendants Nos.1 to 4 also argued that the plaintiff, instead of filing a civil suit, could have invoked the extra-ordinary jurisdiction of this court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973. Mr. S. Tariq Ali also contended in vehemence that in view of Section 56 [d] of the Specific Relief Act, 1877 [I of 1877] the plaintiff also is not entitled for any injunctive relief as prayed.

36.Per Mr. S. Tariq Ali, in view of Section 217 of the Customs Act, 1969 [IV of 1969] which is a Special law, this court has no jurisdiction at all to entertain the instant suit. No doubt, Mr. Tariq contended that section 9, C.P.C. confers jurisdiction upon the civil courts to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred as the case in hand is. The entertaining of the instant suit, per learned counsel would amount to colourable exercise of powers by this court.

37.Mr. S. Tariq Ali next argued that the pleadings of the parties are not the substitute of evidence. The averments made in the pleadings would carry no weight until and unless proved through sufficient evidence or otherwise, the same are admitted by the parties. Since the plaintiff, according to learned counsel, has alleged mala fides on the part of defendants Nos.1 to 4 thus despite passing of 'consent orders' dated 27-11-2012 and 4-12-2012, the case in hand, in any event requires evidence.

38.Lastly the learned counsel forcefully prayed for dismissal of the suit with costs.

39.In support of his contentions Mr. S. Tariq Ali learned counsel for the defendants Nos.1 to 4 placed reliance on the following case laws:--

(a)From the case of Ch. ABDUL MAJID v. SADAQAT SAEED MALIK and others [2004 SCMR 1325], Mr. Syed Tariq Ali, learned counsel for the defendants Nos.1 to 4 while arguing the powers of a Special Court referred to paragraphs 7&8 thereof which read as follows:--

"7. By the provisions of sections 2(f) and 6(1)(a) of the Ordinance, as they stood at the relevant time, the High Court in exercise of its original civil jurisdiction was vested with all the powers of a Civil Court under the Code of Civil Procedure, 1908, in respect of a case in which the outstanding amount of the loan executed one million rupees. Subsection (4) of section 6 expressly provided that no Court other than a Special Court would have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Special Court extended under the Ordinance, including a decision as to the execution of a decree passed by a Special Court. It was further provided that all proceedings, including the proceedings for the execution of a decree within the jurisdiction of a Special Court, by whatever Court passed, pending in any Court would stand transferred to the Special Court. By virtue of section 8(3) of the Ordinance, as it originally existed, a Special Court was required, on the application of the decree holder, to pass an order for execution of the decree as arrears of land revenue or such other manner as it might deem fit. Therefore, there was nothing to prevent the Special Court to follow the procedure provided by the C. P.C. in appropriate cases, for execution of the decree. [Underlining is mine].

"8. Section 3 of the Ordinance provides that the provisions of the Ordinance shall be in addition to and, save as hereafter expressly provided, not in derogation of any other law for the time being in force. The impact of section 3 of the Ordinance was examined by this Court in some cases. In the case of Industrial Development Bank Limited v. Messrs Nadeem Flour Mills and others 1981 SCMR 143, an application was filed in the original side of the High Court of Sindh under section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961, for attachment and sale of the mills on account of default of payment of loan. The High Court of Sindh returned the plaint for presentation before the proper forum. It was held by this Court that the application filed by the banking company to the High Court stood transferred to the Special Court on the plain language of section 6 of the Ordinance. It would defeat the very object of the Ordinance if the litigants were permitted to institute or to continue parallel proceedings before various forums in respect of a matter which could be determined by the Special Court, Banking. In the case of Mst. Yasmeen Nighat and others v. National Bank of Pakistan and others PLD 1988 SC 391 it was held that even the pending proceedings in all the suits falling within the ambit of the Ordinance would stand transferred to the Special Court. In-Muhammad Ayub Butt v. Allied Bank of Pakistan Limited PLD 1981 SC 359, a Bank instituted civil suits before the Civil Court for recovery of different sums of loans along with applications for permission to the sale of goods which were lying as security. In the meantime, the Ordinance was promulgated. Therefore, all the pending cases were transferred to the Special Court. A guarantor of the loan submitted applications before the Special Court for dismissal of the suits on the ground that there had been illegal conversion of the pledged goods on the part of the Allied Bank of Pakistan by selling them without permission of the Court. The Special Court (Banking) dismissed all the applications."

[Underlining is mine].

(b)In the case of Mst. Fehmida Begum v. Muhammad Khalid [1992 SCMR 1908] the civil suit was found competently filed. The relevant observation regarding section 9 C.P.C. runs as under:--

"17. It may be observed that section 9 of the C.P.C. provides that the Court shall, subject to the provisions herein contained, have jurisdiction to try all suits of civil nature excepting suits of which their cognizance is either expressly or impliedly barred. I am unable to find any provision in the Ordinance on the basis of which it can be concluded that the jurisdiction of the Civil Court in a case like the 'one in hand is either barred expressly or impliedly. I am, therefore, of the view that the respondents' suit was competently filed and the view taken by the appellate Court and the High Court seems to be in consonance with law. I would, therefore, dismiss the above appeal, but there will be no order as to costs. [Underlining is mine].

(c)In the case of Malik MUHAMMAD SAEED v. FEDERATION OF PAKISTAN and others [2006 PTD 2167 (Karachi High Court)] it was observed that the plea as to bar of jurisdiction could only be sustained if it could be shown that the impugned order was passed in bona fide exercise of powers conferred by the Customs Act and Rules framed thereunder and not otherwise. Regarding jurisdiction of civil courts the relevant observation reads as follows:--

"Now it is an established principle of law that the provisions barring jurisdiction of Civil Courts were only attracted when the impugned action was found to be within four corners of statutes under which it was taken and did not suffer from mala fide and want of jurisdiction. The Court of general jurisdiction would have jurisdiction to resolve all disputes of civil nature unless barred by any law and the provisions of special law purporting to take away their jurisdiction ought to be strictly construed. Mala fide order or one without jurisdiction being fraud on law could never be assumed to have been passed under any particular statute. Plea as to bar of jurisdiction could only be sustained if it could be shown that the impugned order was passed in bona fide exercise of power conferred by the Act and the Rules and not otherwise".

[Underlining is mine].

(d)In the case of ABBASIA COOPERATIVE BANK (NOW PUNJAB PROVINCIAL COOPERATIVE BANK LTD.) THROUGH MANAGER AND ANOTHER V. HAKEEM HAFIZ MUHAMMAD GHAUS and 5 others [PLD 1997 SC 3] regarding ouster of jurisdiction of civil courts it was observed as follows:--

"5. The next question which arises for consideration in the cases is, whether the Civil Court was competent to examine the validity of the auction conducted by the authorities? The Civil Court 'under section 9 of the Code of Civil Procedure are competent to try all suits of civil nature except those or which their jurisdiction is barred either expressly or by necessary implication. It is a well-settled principle of interpretation that the provision contained in a statute ousting the jurisdiction of Courts of general jurisdiction is to be construed very strictly and unless the case falls within the letter and spirit of the barring provision, it should not be given effect to. It is also well-settled law that where the jurisdiction of the Civil Court to examine the validity of an action or an order of executive authority or a special tribunal is challenged on the ground of ouster of jurisdiction of the Civil Court, it must be shown (a) that the authority or the tribunal was validly constituted under the Act; (b) that the order passed or the action taken by the authority or tribunal was not mala fide; (c) that the order passed or action taken was such which could be passed or taken under the law which conferred exclusive jurisdiction on the authority or tribunal; and (d) that in passing the order or taking the action, the principles of natural justice were not violated. Unless all the conditions mentioned above are satisfied, the order or action of the authority or the tribunal would not be immune from being challenged before a Civil Court. As a necessary corollary, it follows that where the authority or the tribunal acts in violation of the provisions of the statutes which conferred jurisdiction on it or the action or order is in excess or lack of jurisdiction or mala fide or passed in violation of the principles of natural justice, such an order could be challenged before the Civil Court in spite of a provision in the statute barring the jurisdiction of Civil Court." [Underlining is mine].

(e)In the case of Messrs ROHI GHEE INDUSTRIES (PVT.) LTD. v. COLLECTOR OF CUSTOMS and others 2007 PTD 878 [Karachi High Court] at page 883 while making reference to the case of MALIK MUHAMMAD SAEED V. FEDERATION OF PAKISTAN AND OTHERS [2006 PTD 2167] and the principle laid down therein as referred to in the aforementioned case reads in the following words:--

"From the reading of the above subsection (1) of section 217, it also appears that the exercise of powers by the Customs Authorities is conditional and an exercise which is in good faith or intended to be done in good faith are protected. Whereas, no such condition of good faith is attached to the exercise of jurisdiction by Customs Authorities while exercising their functions under subsection (2) it appears that when it is the intention of legislature to protect official acts done in good faith the legislature makes use of the words "good faith" but in subsection (2) of section 217 there is no condition that the act must be done in good faith to claim protection. Non-using of word "good faith" clearly means that all actions mentioned in subsection (2) of section 217 are protected and cannot be challenged before civil Courts." [Underlining is mine].

(f)In the case of Messrs SHADMAN COTTON MILLS LTD. through Director v. FEDERATION OF PAKISTAN THROUGH THE CHAIRMAN, CENTRAL BOARD OF REVENUE (REVENUE DIVISION), ISLAMABAD AND ANOTHER [2009 PTD 193 Karachi High Court] while dilating upon the ouster of jurisdiction on the basis of Section 217 of the Customs Act, 1969, it was observed as follows:--

"....A plain reading of section 217 of the Act, 1969, completely shows that no suit or other proceedings or prosecution can be entertained or challenged by way of filing civil suit before a civil Court nor suit can be entertained by the Court for the act which has been done under the Act of 1969. The provision of Acts, 1969 and 1990 are independent and have been promulgated by way of special statute and no provision of special Act or Statute could be made dormant or redundant by filing a civil suit under section 42 of the Specific Relief Act. Since the provision of Acts, 1969 and 1990 could not be examined or limited by filing a suit, therefore S.R.Os. issued under the provisions of the aforesaid Acts could not be checked or examined on any ground in civil Courts. Even the mala fide have not been alleged against the defendants regarding issuance of S.R.Os. issued by the defendants therefore, I do not find any mala fide on the part of the Customs Authorities in issuing the S.R.Os. impugned herein.

[Underlining and emphasis are mine].

(g)In the case of AL AHRAM BUILDERS (PVT.) LTD v. INCOME TAX APPELLATE TRIBUNAL [1993 SCMR 29] regarding 'switch-over' of remedy under one statute to another remedy under another statute the relevant observation reads as follows:--

"10... the appellant had opted to avail of the hierarchy of forums provided for under the Ordinance upto the stage of filing of appeal before the Tribunal and, therefore, it would have been proper on the part of the appellant to have invoked section 136 of the Ordinance for making a reference to the High Court instead of filing a constitutional petition. In our view, once a party opts to invoke the remedies provided for under the relevant statute, he cannot at his sweet will switch over to constitutional jurisdiction of the High Court in the mid of the proceeding in the absence of any compelling and justable reason.

[Underlining is mine].

(h)In the case of MESSRS BINACO TRADERS THROUGH PROPRIETOR V. FEDERATION OF PAKISTAN THROUGH REVENUE DIVISION/CHAIRMAN, CENTRAL BOARD OF REVENUE ISLAMABAD AND 3 OTHERS [2006 PTD 1491], it was held that where legality of an act or omission, is challengeable before the Special Forum under a Special statute, then until the main controversy is resolved, filing of civil suit for 'damages' would be improper and pre-mature. The relevant observations being read as follows:--

"In the present suit plaintiff has also claimed damages. A claim for damages is always agitated under the general law by way of civil suit. Claim for damages arises on account of some act or omission, which results in injury. Where legality of an act or omission is challengeable under the general law by way of a civil suit, the claim for damages can also be simultaneously agitated in the same suit. However, where legality of an act or omission is challengeable only before a special forum provided under a special statute, then until the main controversy is put at rest before such special forum, filing of suit for damages in Civil Court would be premature. In such circumstances, the person who has sustained injury has to waite until the controversy is decided by the special forum, all appeals taken thereunder or time for filing appeal has gone by and the decision has attained finality. Only then the person who has sustained injury on account of some act or omission can file suit for damages in Civil Court. A party cannot be allowed to agitate a claim for damages in Civil Court at a time when the main controversy is either pending or is required to be agitated before the special forum but the aggrieved person has chosen not to take it before such forum. Filing suit for damages in such a situation would be premature and liable to be so declared"....

[Underlining is mine].

(i)From the case of GHULAM DASTGIR V. SPECIAL TRIBUNAL, SINDH AND 2 OTHERS [PLD 1977 KARACHI 440] the learned counsel for the defendants Nos. 1 to 4 quoted the following paragraph:--

"7. We find no force in the submission of the learned counsel for the petitioner that the word 'preventing' does not include prohibiting or making it a penal offence to do an act specified in the said clause. In Black's Law Dictionary, the word 'prevent' has been defined as: "to hinder, frustrate, prohibit, impede, or preclude; to obstruct; to intercept". It is thus clear that the word 'preventing' would include prohibition of an act and one of the modes of preventing the doing of an Act is if the doing of it is made a, penal offence No doubt, the commission of an act can be prevented in certain cases by the detention of the person proposing to do the act, or 'C imposing some other restriction on him, and this power is conferred on the Federal Government by clause (xi) of section 3(2) of the Defence of Pakistan Ordinance, 1971, but this is not the only mode of preventing the commission of an offence. As already pointed out, making an act punishable would be one of the modes of preventing the commission of such an act, for persons would be reluctant to do such an act for fear of the consequences which it would entail to them."

[Underlining is mine].

40.Mr. Mazhar Imtiaz Lari, learned counsel for the defendants Nos.6 and 7 while supporting the case of the plaintiff further submitted that the goods imported by the plaintiff are lying/stored at the private storage terminals at Port Qasim, Mohammad Bin Qasim Town, belonging to defendants Nos.6, 7 and 8 indeed were 'duty paid'/' out of charge' but the same could not be cleared / released in view of 'verbal instructions' issued by the Customs' Authorities.

41.Per learned counsel, defendants Nos.6 and 7 or defendant No.8 are/is, at no fault, as far as non-clearance/release of the goods is concerned. It was well known to all including defendants Nos.6 and 7 that the goods were/are lying / stored in the private terminals operated by the defendants Nos.6, 7 and 8 are 'duly duty' paid [i.e. out of charge]. According to learned counsel, defendants Nos.6, 7 and 8 per direction of plaintiffs clearing agent were, of course, duty bound to release the same. The same, however, could not be released on account of the verbal instructions issued by the customs' authorities.

42.Heard learned counsel for the plaintiff, defendants Nos.1 to 4 and defendants Nos.6 and 7. My issue-wise findings are as follows:--

43.Issue No.1.---Whether the suit is maintainable under Section 217 of the Customs Act, 1969? Before answering this issue, it would be beneficial to reproduce herein Section 217 of the Customs Act, 1969 [Act IV of 1969], which read as under:--

"217. Protection of action taken under the Act.---(1) No suit, prosecution or other legal proceeding shall lie against the Federal Government or any public servant for anything which is done or intended to be done in good faith in pursuance of this Act or the Rules and notwithstanding anything in any other law for the time being in force no investigation or enquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or directions made or issued thereunder without the prior approval of the Central Board of Revenue.

(2) No suit shall be brought in any civil Court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act."

44.Mr. Abid S. Zuberi, learned counsel for the plaintiff while, advancing his arguments on the maintainability of the suit focused the court's attention on the words 'good faith' used in subsection (1) of Section 217 of the Customs Act, 1969 [Act IV of 1969] and forcefully argued that the action of defendants Nos.1 to 5 regarding non-releasing/clearing the plaintiff's imported goods duly 'made out of charge' was not taken in 'good faith' rather it was absolutely 'mala fide', 'illegal', 'arbitrary' and 'corum-non-judice'. To show the mala fide and/or lack of any 'good faith', the learned counsel for the plaintiff, made reference to the 'Reduced Rate Certificate' dated 30-6-2013 available on record [i.e. Annexure 'P/34' at Page 339 of the court file] and forcefully submitted that despite existence of such 'Reduced Rate Certificate' valid till 30-6-2013, the Customs Authorities in their own wisdom refused to allow the duties/tax paid consignment/goods on the basis of 'pseudo' and 'false pleas'. Being relevant the aforesaid 'Reduced Rate Certificate' is reproduced as below:--

"COMMISSIONER INLAND REVENUE

(ZONE-I)

Tele # 9210188 - Fax 9210343 UAN 111-920-920 Ext:239

e-mail: <mailto:>

No. CIR(Z-I)/LTU/11-12/1344Dated 30/6/2012

REDUCED RATE CERTIFICATE NO. 46

UNDER SECTION 159(1)(b)

OF THE INCOME TAX ORDINANCE, 2001

In exercise of the powers conferred by Clause (b) of subsection (1) of Section 159 to the Income Tax Ordinance, 2001 read with clause (9A) of Part II of Second Schedule to the Income Tax Ordinance, 2001, it is hereby directed that advance tax @ 3% shall be collected/deposited under subsection (1) of Section 148 of the Income Tax Ordinance, 2001 in the case of Messrs Shujabad Agro Industries (Pvt.) Limited Karachi, being assessed to tax as an industrial undertaking having National Tax Number 34-01-1201758-2, in respect of import of raw material for its own manufacturing use at their factory premises situated at following address:

1-Plot No. A/15 A/16 North West Industrial Zone, Port Qasim Authority, Karachi.

The certificate is being issued on the specific request of the taxpayer and is not valid for commercial imports.

This certificate is valid upto 30-6-2013

Sd/-

(DR. FAZAL M. ABREJO)

COMMISSIONER INLAND REVENUE

ZONE-I, LTU, KARACHI"

45.From the bare reading of the above 'Reduced Rate Certificate' it is evident that the plaintiff is liable to pay 'advance tax' @ 3% on the import of edible Palm Oil and Palm Oil Olien for own manufacturing purpose. Per learned counsel, in compliance with Section 148 [1], [5] and [9] r/w rate specified under Section 9 [A] of the Part II of the First Schedule of the Income Tax Ordinance, 2001 [Ordinance XLIX of 2001] and in the exercise of powers conferred under Section 159 of the Income Tax Ordinance, 2001 [Ordinance XLIX of 2001], the 'proforma defendant No.9' has issued 'Reduced Rate Certificate' bearing No.46 dated 30-6-2012 in favour of the plaintiff for application of Reduced Rate of 3% of 'advance tax' levied at the relevant time of import of consignment of edible oil. Despite validity of such 'Reduced Rate Certificate', the defendants Nos.1 to 5, indeed, with the mala fide intention to have some illegal money/gratification from the plaintiff, unlawfully and without any lawful authority, in a calculated manner, refused to allow the plaintiffs 'duty paid goods' on the basis of some inquiry pursuant to so called 'credible information'.

46.Mr. Abid S. Zuberi, learned counsel for the plaintiff strenuously urged that roving inquiry merely by shooting in the dark with a hope to get some materials for involving/charging the plaintiff's company with any illegality and/or irregularity, in an afterthought manner, is not permissible under the law. As such the blockage of the plaintiffs goods besides, based on mala fide is violative of the fundamental rights of the plaintiff.

47.Moreover, it is defendant No.9 and not Customs' Authorities to take/initiate any action against the plaintiff in terms of Section 162 of the Income Tax Ordinance, 2001 [Ordinance XLIX 2001]. The defendants Nos.1 to 5 as being 'collecting agents' of defendant No.9, has no authority and/or jurisdiction to withdraw the reduced rate [i.e. 3% instead of 5%] or block the release of 'duty paid' imported goods/consignments of the plaintiff.

48.In contra, Mr. S. Tariq Ali, learned counsel for the defendants Nos.1 to 4 has raised two folds contentions. Firstly, that this Court has no jurisdiction in the matter in view of the ouster provisions of section 217(2) of the Customs Act [Act IV of 1969]. Secondly, the plaintiff could have invoked the extra-ordinary jurisdiction of this court by way of filing a Constitutional Petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 and not through the filing of the present suit for declaration, permanent and mandatory injunction. Per learned counsel, the prayers sought in the suit besides mis-conceived are mis-leading as such cannot be granted.

49.The pleas raised by the learned counsel for defendants Nos.1 to 4 besides mis-conceived are mis-leading. The provisions of barring the jurisdiction of civil Courts in terms of provisions of section 217 of Customs Act, 1969 can only be attracted when the action taken is found to be within four corners of the statute under which it was taken. However, if it does suffer from taint of mala fide or suffers from lack of jurisdiction then such ouster, indeed, would not be applicable as the case in hand is.

50.From bare perusal of subsection (1) of section 217 of Customs Act, 1969 it transpires that only that exercise of powers by the Customs' Authorities based on 'good faith' or 'intended to be done in good faith' are protected. No such condition of 'good faith', however, is attached to the exercise of jurisdiction by Customs' Authorities while, exercising their functions under subsection (2). No doubt, when the intention of legislature is to protect official acts done in good faith then it use the words 'good faith'. As far as subsection (2) of section 217 is concerned no such condition, that the act must be done, in 'good faith' is attached. Non-using of words 'good faith' clearly means that all actions mentioned in subsection (2) of Section 217 are protected and cannot be challenged before civil Courts. However, if the action taken is based on 'mala fide' then such actions, of course, would be without jurisdiction and can appropriately be questioned before the civil court by way of filing a civil suit. Moreover, since in the instant suit, no order is passed, assessment made tax levied, any penalty imposed or collection of any tax under the Customs Act, 1969 has been assailed, therefore, the case of the plaintiff otherwise, also does not fall within the ambit of subsection (2) of section 217 of the Customs Act, 1969 (IV of 1969). In the instant case, the refusal of defendants Nos.1 to 5 to release the plaintiffs duty and tax paid consignment, in my view, is illegal, mala fide and violative of Articles 4, 18, 24 and 25 r/w Article 10-A of the Constitution of the Islamic Republic of Pakistan, 1973.

51.With regard to the contention of Mr. Syed Tariq Ali that the plaintiff is not entitled for any relief due to the bar also contained in Section 56 [d] of the Specific Relief Act, 1877 (I of 1877). Regarding such contention, it is sufficient to observe that the officials of the defendants Nos.1 to 5, under law, are required to perform their duties strictly in accordance with law. Otherwise, if they proceed to violate the law then such action taken would not fall within the scope of public duties or be treated as performance of public duties. In such eventuality the bar contained in section 56 [d] of Specific Relief Act, 1877 (I of 1877) would not be applicable as well.

52.In view of above discussions and case-law cited at bar pertaining to the maintainability of the suit I am of the considered opinion that the suit as framed and filed is quite maintainable and not barred under Section 217 of the Customs Act, 1969 (Act IV of 1969). Issue No.1 thus answered in AFFIRMATIVE.

53.Issue No.2:- Whether the defendants Nos.1, 2, 3, 4 and 5 acting as 'Collection agent' of Inland Revenue Department have any jurisdiction/authority under law to undertake any exercise of determination, adjudication or inquiry on the amount/rate of Advance tax/withholding tax to be paid by the plaintiff on import of edible oil? As far as this issue is concerned, it is worth to note that for collection of 'Advance Tax' on import of edible oils by an industrial undertaking for its own use, section 148(1), (5) and (8) r/w rate specified under Clause 9(A) of the Part II of the First Schedule of the Income Tax Ordinance, 2001 the Customs' Authority indeed is empowered to collect 'Advance Tax' on behalf of Inland Revenue at the specified rate of 3% in view of the 'Rate Reduction Certification' [In short RRC] issued by the 'proforma defendant No.9'. This rate of tax is 'minimum rate of tax' levied on such import. The rate of advance tax is 5% of the assessed value of the imported consignment, however, it is for commercial importers of edible oil only. With regard to reduced rate of 3% 'advance tax', the legislature through the Finance Act, 2012, added a 'proviso' to Clause 9(A) of the Part II of the First Schedule of the Income Tax Ordinance, 2001 under which edible oil industrial units, can obtain an 'exemption certificate' from the concerned Commissioner/authority regarding status and entitlement of Industrial undertaking for reduced rate of 3% of 'Advance Tax' in terms of 'proviso' to Clause 9[A] of the Part II of the First Schedule of the Income Tax Ordinance, 2001. The plaintiff herein is an Industrial Undertaking in terms of subsection (29C) of section 2 of the Income Tax Ordinance, 2001 [Ordinance No.XLIX of 2001] and also holding 'Reduced Rate Certificate' dated 30-6-2012 and was valid upto 30-6-2013.

54.From the record, it is evident that upon meeting all the requisites including verification, desk audit, visit of the factory etc. the competent authority/Commissioner Inland Revenue [Zone -I] exercising its' power under section 159 of the Income Tax Ordinance, 2001, consequently issued 'Reduced Rate Certificate' bearing No.46 vide its Letter No.CIR[Z-I] LTU/11- 12/1344 dated 30-6-2012 with a validity period upto 3-6-2013 in favour of the plaintiff whereby the 'advance tax' at imports of raw material of edible oil by the plaintiff for its own consumption is @ 3%. The plaintiff under law has thus become entitled to get the imported edible oil cleared upon payment of 'advance tax' at the rate of 3% along with other levyable cess and duties as prescribed under different fiscal statutes.

55.No doubt, the plaintiff also paid all the lawful 'taxes', 'duties' and 'cess' as provided for under various fiscal statues including 'advance tax' at the applicable rate of 3% upon production of the 'Exemption Certificate'. In lieu of the applicable 'duties' and 'taxes' a sum of Rs.405,565,628 has been paid to the Custom's Department. The customs authorities [defendants Nos.1 to 5] upon payment of taxes and duties were thus duty bound to allow the release of the duty paid consignment to the plaintiff. The defendants Nos.1 to 5 have no power under law to restrict the release of the 'duty paid consignment [s]'. Per defendants Nos.2, 3 and 4's stand that the imported goods are liable to be assessed @ 5% of 'advance tax' [prescribed for own manufacturing use], and not at reduced rate of 3% of 'advance tax' [prescribed for industrial use] indeed, is without jurisdiction and lawful authority in view of existing a valid 'Reduced Rate Certificate'.

56.Because the custom's authorities under law are merely 'collection agents' acting on behalf of the Inland Revenue Department for collection of 'advance tax', at the prescribed and applicable rate of 3% have no jurisdiction or authority to undertake any fishing and roving inquiry as it is the 'Commissioner Inland Revenue' who is the only competent authority for determination of 'advance tax' viz-a-viz imports made by the plaintiff. The official defendants Nos.1 to 5 have no jurisdiction to withhold the plaintiff s 'duty paid consignment' on the basis of so-called 'credible information', therefore, the whole action is not only arbitrary, mala fide but also absolutely without any jurisdiction. Moreover such refusal on the part of the defendants Nos.1 to 5 on the basis of so-called un-specified 'credible information' is also in violation of the principles of natural justice thus liable to be declared as such.

57.Bare perusal of the relevant provisions contained in Section 148 of the Income Tax Ordinance, 2001 and Section 202 of the Customs Act, 1969 would show that the Collector of Customs has been empowered to collect the 'advance income-tax' at the time of 'import of goods' at the rates specified in the First Schedule to the Ordinance, in the same manner and at the same time as the customs duty and tax. Nonetheless, merely by providing the manner and time of collection of tax under any tax enactment, the nature of the tax, of course, shall by no means can be changed, however, it can be collected by the customs officials under section 202 of the Customs Act, 1969 [I of 1969]. The customs officials, indeed, are empowered by virtue of the provisions contained in the Income Tax Ordinance, 2001 and the Customs Act, 1969 to merely collect the 'determined amount of tax' and shall not have the Authority to resort to the chargeability or assessment of a tax.

58. In the case of CUSTOMS, FEDERAL EXCISE AND SALES TAX APPELLATE TRIBUNAL [2010 PTD (Trib.) 2086] it was observed as follows:--

..

"17. Having carefully considered the provisions of sections 148(5)(6) and 162(1) of the Income Tax Ordinance, 2001 and recovery definition as described by the Black's Law Dictionary, it is very much clear that the customs officials merely working under section 148 of the Income Tax Ordinance, 2001, as Collector of tax as they have been given only powers to collect the amount by virtue of legislation made by the legislature under section 148 of the Income Tax Ordinance, 2001. Section 148 of the Income Tax Ordinance, 2001, also does have the corresponding section, which is section 162, wherein the Commissioner of Income Tax has the authority to recover the amount from a person to whom the amount of tax was due and was not collected by the collecting officer. Meaning thereby only the Commissioner of Income Tax can exercise his powers under section 162 of the Income Tax Ordinance, 2001, on account of default or non-payment of tax or if there is a lapse on the part of collecting officer, it could not be said that the collecting officer can himself automatically presume the jurisdiction of recovery of amount of Income Tax on the basis of assumptions or being the officer of Customs or as a collecting officer under section 148 of the Income Tax Ordinance, 2001, until the specific powers have been given to him under the law. Hence is observed that the Collector of Customs does not have the authority to recover the Income Tax later on, but he is only getting the power of collection of tax under section 148 of the Income Tax Ordinance, 2001, therefore mere collection does not mean that he can go for the recovery at the later stage, if the default is made by the person to whom the amount of Income Tax is due, the best possibility of recovery according to scheme of law is that after realizing the amount of Income Tax in form of audit or investigation, the collecting officer can refer the matter to the Commissioner of Income Tax for taking the action of recovery under section 162 of the Income Tax Ordinance, 2001. This is also a settled principle of law that a person cannot be tried on the same offence by two forums, he could be tried only where the clear cut provisions of law are available, therefore, in my opinion Section 148 of the Income Tax Ordinance, 2001, is only giving the power of collection to the Customs Department and the power of recovery in case of default under section 148 of the Income Tax Ordinance, 2001, vests with Income Tax Department and the Commissioner of Income Tax as prescribed can go for recovery.

18. The section 162(1) of the Income Tax Ordinance, 2001 is very much available and dealt with, in case of default under section 148 of the Income Tax Ordinance, 2001. To my opinion, the appropriate Income Tax officers do have the power to issue any demand for the alleged short recovery under the Income Tax Ordinance, 2001, which having contained special provisions for all short recoveries, including, under section 148 of the Income Tax Ordinance, 2001, where the Income Tax is short collected, short levied, or not so collected, either on account of misdeclaration of the importer, or, on account of error, inadvertence or mistake. The power to collect the advance Income Tax under section 148(5) of the Income Tax Ordinance, 2001 cannot have the effect of converting income tax into customs duty. Merely providing the manner of collection of tax as an advance tax under any tax enactment, the nature of the tax could not be changed, hence, the short recovery of any tax collectable under section 148(5)(6) of the Income Tax Ordinance, 2001, to a person in form of short collected, short levied, or not so collected; either on account of misdeclaration of the importer, or, on account or error, or inadvertence or under mistake, vests with the Commissioner of Income Tax alone under section 162(1) of the Income Tax Ordinance, 2001. Therefore it is of my considered opinion the Collector of Customs does not have the authority to go for the recovery, it is only the Commissioner of Income Tax who can start the proceedings of recovery against the person in case of default on short collected, short levied, or not so collected, either on account of misdeclaration of the importer, or, on account or error, or inadvertence or under mistake, so the adjudication by the respondents to the point of recovery of Income Tax against the appellants is not legal, justifiable and not tenable in the eye of law and the exercising of jurisdiction on this point by the respondents and also the adoption of recovery procedure by them are hereby set aside."

.

59.Besides the customs officials could not be allowed to make a roving inquiry or issue a notice without cogent and specified reasons merely by shooting in the dark with hope to find out some materials/documents and perhaps thereafter will be able to charge the party with irregularity or illegality. The purpose for which a party is required to produce documents or supply information must be specified in the notice. The customs' officials cannot be permitted to initiate roving and fishing inquiry. Any notice without disclosing the particulars, for which 'information' or 'documents' are required will be in violation of the principles of natural justice. In such eventuality the same can be struck down as illegal and without jurisdiction.

60.Even in the written statement of defendants Nos.1 to 4 it has been specifically averred that for ascertaining the actual production capacity of the plaintiffs factory IOCO [Input Out-put Co-efficient Organization] is the only independent and competent entity to survey and report about the actual production capacity of the plaintiffs factory. In view of this position since the IOCO as being the only competent authority has not ascertained the 'actual production capacity' of the plaintiffs factory. On this score as well, the defendants' refusal besides illegal, mala fide is without jurisdiction.

61.Mr. Abid S. Zuberi further argued that after incorporation of Article 10-A in the Constitution of Islamic Republic of Pakistan, 1973 [i.e. through 18th Amndt] a 'fair trial' and 'due process' has now become a fundamental right of every litigant. To enjoy the protection of law and to be treated in accordance with law, per Mr. Abid S. Zuberi, learned counsel for the plaintiff, is the inalienable right of every Pakistani. Besides, no action detrimental to the life, liberty, body, reputation or property of any person is permissible under the Constitution of Islamic Republic of Pakistan, 1973 save and except in accordance with law. Per learned counsel, all citizen of Pakistan are entitled to have equal treatment and protection of law under the Constitution of Islamic Republic of Pakistan, 1973 and in no way they can be denied and/or deprived of their legitimate rights in violation of law and law of natural justice, which of course, is inherit part of every statute. 'Fair trial' and 'due process' as being now a fundamental right covers both the 'substantive' and procedural 'due process' as well. For ready and convenience purpose, Article 10-A of the Constitution of Islamic Republic of Pakistan, 1973 is reproduced as under:--

"10-A, Right to fair trial.---For the determination of his civil rights and obligations or in any criminal charge against him a person shall be entitled to a fair trial and due process."

62.Regarding this aspect of the matter the relevant observations from the case of SHABIR AHMED v. KIRAN KHURSHEED and others [2012 CLC 1236], read as below:--

..

"Article 10-A, morphs Article 4 into a more robust fundamental right, covering both substantive and procedural due process. While substantive due process provides a check on legislation and ensures the protection of freedoms guaranteed to a person under the Constitution, procedural due process, which concerns me here, provides that 'each person shall be accorded certain 'process' if they are deprived of life, liberty or property---The question then focuses on the nature of the process' that is 'due'. The government always has the obligation of providing a neutral decision maker one who is not inherently biased against the individual or who has personal interest in the outcome". Due process is now available to every person as a fundamental right and underscores procedural fairness and propriety in determining his civil or criminal rights. The procedure adopted in determining the rights of the parties must at every step-pass the test of fairness and procedural propriety and at all times must honour the law and the settled legal principles. Article 10-A is not limited to a judicial trial in its strict sense but requires fairness from any forum which determines the rights of a person." [Emphasis and underlining are mine].

63.Any order passed or action/proceedings taken by any forum in violation of 'fair trial' and 'due process', of course, would be null and void. In this regard I would like to cite the case of BABAR HUSSAIN SHAH AND ANOTHER V. MUJEEB AHMED KHAN AND ANOTHER [2012 SCMR 1235], wherein it was held as under:--

..

" 11. ....Although from the very inception the concept of fair trial and due process has always been the golden principles of administration of justice but after incorporation of Article 10-A in the Constitution of the Islamic Republic of Pakistan, 1973 vide 18th Amendment, it has become more important that due process should be adopted for conducting a fair trial and order passed in violation of due process may be considered to be void." [Underlining is mine].

64.In the case in hand it is worth to note that all the contesting parties are not only agreed that the instant suit be 'disposed off on the basis of available record as a 'short cause matter' but also agreed that the case be fixed for arguments.

65.No doubt, pleadings by themselves are not evidence but, of course, it is subject to the consent of the parties. Besides, the burden of proof is on the party who alleges claim in plaint or 'written statement'. Manifestly, the defendants Nos.1 to 4, in the case in hand, is claiming amounts against the plaintiff but regarding such alleged claim no proceeding has been filed by any of the defendants against the plaintiff in a competent forum/court of law.

66.The relevant observations regarding pleadings from the case of HAKIMUDDIN v. FAIZ BUX [REPORTED IN 2007 SCMR 874] reads as follows:--

"5...... It is an admitted fact that respondent did not appear before the trial court to prove the content of the plaint. It is established law that pleading of the parties are not substitute of evidence and it being not a substantive evidence, the averments made in the pleadings would carry no weight unless proved from the evidence in court or admitted by the other party. The respondent No. 1 failed to prove the factum of his superior right of preemption, therefore, trial court as well as learned High Court erred in law to decree the suit of the respondent. It is also settled law that initial burden of proof is on the party who alleges in the plaint or written statement of its claim. See MUHAMMAD SAJJAD HUSSAIN 's case 1991 SCMR 703 and MUHAMMAD SIDDIQUE'S case 2001 SCMR 1443. It is a settled law that written statement/plaint is not a substantive evidence". [Underlining is mine].

67.Moreover, at the stage I would like to refer to Rule 22 of Sindh Chief Court Rules (O.S) [S.C.C.R] which defines short causes matters being relevant the same rule is reproduced here-in-below:--

"22. What are short causes.--The following suits or matters shall be deemed to be short causes:--

(1)ex parte suits;

(2)undefended suits;

(3)suits in which written statement filed discloses no defence;

(4)suits under O.XXXVII (in which leave to defend has been granted);

(5)mortgage suits, rent suits, suits on bonds or acknowledgements;

(6)objections to commissioner's report;

(7)such other suits or matters as may, by special order of the Judge, be directed to be tried as short causes.

(8)Any other suit or matter shall be deemed to be a long cause." [Underlining is mine].

68.It is also worth to mention that in the case of MALIK UMAR ASLAM V. SUMAIRA MALIK AND ANOTHER [REPORTED IN PLD 2007 SC 362] the Hon'ble Supreme Court of Pakistan while, dilating upon the verification of the pleadings on oath, observed as follows:--

"It may not be out of context to note that the verification of the pleadings on oath was introduced by the Law Reforms Ordinance (XIIl of 1972) read with Section 6 of the Oaths Act, 1873, by adding the words "on oath or solemn affirmation" after the words verified in Rule 15(i) of Order VI, C.P.C. It is also pertinent to note that after the said importance of the same amendment in presence of verified pleadings on oath, the court has been empowered to proceed case ex parte against the opponents and pass a decree, under Order IX, Rule 6(1), C.P.C. without calling for an affidavit in ex parte proof. " [underlining is mine].

69.Reading the above observation in juxtaposition of consent order dated 27-11-2012 and 4-12-2012 and Rule 22 of SCCR [O.S] reproduced hereinabove fully supports the treating of the case in hand as a short cause matter and decision thereof on the basis of available record.

70.Not only this, the averments made by the defendants Nos.1 to 4 in their 'written statement' are vague and evasive. Under law 'evasive denial' is 'no denial'. On the aspect of the matter reliance can be placed on the case of GHULAM RASOOL through L.Rs. and others v. MUHAMMAD HUSSAIN and others [PLD 2011 SC 119] wherein it was observed as follows:--

"6 rather made an evasive denial in their written statement expressing their lack of knowledge in this regard, which is no denial as per the provisions of Order VIII Rules 3, 4 and C.P. C., rather such a denial may be constructed as an admission on their part."

71.As far as Section 216 of the Customs Act, 1969 is concerned the same needs no debate in view of the 'consent issues' settled vide order dated 4-12-2012.

72.The case-laws cited by Mr. Syed Tariq Ali, learned counsel for the defendants Nos. 1 to 4 beside distinguishable rather support the case of the plaintiffs. The case-laws cited by Mr. Abid S. Zuberi, learned counsel for the plaintiff are not only fully applicable and support the case of the plaintiff but also belie the case of the defendants Nos.1 to 4.

73.In view of the above, I am of the considered opinion that defendants Nos.1, 2, 3, 4 and 5 have no jurisdiction/authority under law to undertake any exercise of determination, adjudication etc. in the matter viz-a-viz 2% 'Advance Tax' allegedly payable by the plaintiff [i.e. differential amount of 'advance tax' 5% - 3%], in view of 'REDUCED RATE CERTIFICATE' No.CIR [Z-1]/LTU/11-12/1344 dated 30-6-2012 [Annexure 'P/34' ]. Accordingly issue No.2 is answered in NEGATIVE.

74.ISSUE No.3.---For the foregoing reasons and discussion it is declared that the suit filed by the plaintiff is maintainable and the defendants Nos.1 to 5 have wrongly assumed the jurisdiction regarding 'differential amount' of advance tax of 2% [i.e. 5% - 3%].

75.It is further declared that the defendants Nos.1 to 5's action/ procedure adopted for recovery of the differential amount of 'Advance Tax' i.e. 2% from the plaintiff is illegal, void ab initio, without any legal jurisdiction/authority and the same is also against the law of natural justice. Consequently the plaintiffs suit is decreed in the above terms with costs. Accordingly, Bank guarantee furnished in compliance with order dated 27-11-2012 stands discharged.

MH/S-49/SindhSuit decreed.