WATER AND POWER DEVELOPMENT AUTHORITY (WADPA) VS FEDERATION OF PAKISTAN, MINISTRY OF FINANCE, 2015 PTD-KARACHI-HIGH-COURT-SINDH 1799 (2014)

Customs Act (IV of 1969)---

----S.33---Constitution of Pakistan, Art.199---Constitutional petition---Refund of claim---Pending proceedings---Grievance of petitioner was that despite decision of Customs, Excise and Sales Tax Appellate Tribunal in its favour, authorities had not paid its refund claims---Validity---Appellate proceedings, in fact, were continuity of original proceedings and unless matter was fully decided by the highest forum provided under the statute, implementation of order, which had been assailed before higher forum in accordance with law, could not be sought by filing a Constitutional petition under Art. 199 of the Constitution, as the same could render remedy of appeal / revision before higher forum as illusionary and would amount to frustrate such proceedings---Relief sought by petitioner seeking implementation / execution of order of Customs, Excise and Sales Tax Appellate Tribunal, which otherwise had merged into the order passed by High Court, was still pending for final adjudication before Supreme Court---Grievance of petitioner was misconceived and was also premature and could not be granted by High Court under Art. 199 of the Constitution, at such stage---Claim of refund had not been finally determined by authorities in accordingly with law---Petition was dismissed in circumstances.

Badar Alam for Petitioner.

Sarfaraz Ali Metlo for Respondents.

Date of hearing: 20th May, 2014.

ORDER

AQEEL AHMED ABBASI, J.---Through instant petition, the petitioner has sought the following relief(s):--

(i)direct the respondents jointly and/or severally to perform their statuary obligations by making compliance and to act upon the Order dated 17-2-2010 passed by the Appellate Tribunal Customs, Excise and Sales Tax (Bench-1), at Karachi, in petitioner's Customs Appeal No.10 of 2006, by making payment to the petitioner its dues/arrears on account of fifteen (15) refund claims of Rs.331,780,318 plus mark-up/profit @ 18% p.a. from the dates of their deposits shown in the Form E (annex. P/8), calculated up to 30-11-2011 as per calculation sheet (annexure P/10), total Rs.1,290,359,834.78, plus future mark-up/profit at the same rate till final payment.

(ii)further direct the respondents, jointly and/or severally, to make payment of surcharge @ 1.5% (one and half percent) per month, on the basis of equity as per provisions of Section 202-A of Customs Act, 1969, on the abovementioned arrears of Rs.1,290,359,834.78, calculated to Rs.1,462,160,461.35, as per certified calculation sheet (annexure P/11 herewith) that had become due and payable from Order dated 17-2-2010 passed by the Appellate Tribunal Customs and future surcharge at the same rate till final payment.

(iii)till final decision in the instant Const. Petition the respondents, jointly and/or severally, may be directed to deposit petitioner's dues/arrears mentioned in prayer Clauses (i) & (ii) above with the Nazir of this Hon'ble Court.

(iv)attach and sale Custom House, Karachi, and other properties belonging to the respondents by appointing official assignee as receiver, for the recovery of petitioner's above mentioned dues/arrears of Rs.1,290,359,834.78 + Rs.1,462,160,461.35 = total Rs.2,752,520,296.13, till 30-11-2011 and future markup/profit/surcharge till final payment (as shown in para 17 above).

(iv)pass any other, better, order or orders which this Hon'ble Court may deem fit and proper in the circumstances of the case.

(v)grant cost of proceedings.

2.Briefly the facts as stated in the petition are that the petitioner imported 27 consignments comprising of Towers, Conductors, Insulators, Spares, Dampers and other Hardware for the construction of 500 KV Hub-Jamshoro Transmission Line, during the period from July, 1995 to June, 1996. Release of consignments was sought by the petitioner under S.R.O. No.462(I)/95 dated 4-6-1995, whereby the exemption from payment of customs duty in excess of 10% of the import value for non-locally manufactured material of Transmission lines and grid stations was sought, which was denied by the respondent department. However, the petitioner in order to avoid incurring of demurrage charges got the consignments released by making payment of duty and taxes. Thereafter, the petitioner started to make correspondence with the respondent i.e. Central Board of Revenue and sought clarification to the effect that the items imported by the petitioner (WAPDA) were integral part of the transmission line and the same stand covered under S.R.O. 462(I)/95 dated 4-6-1995 and directed the Collector of Customs to release the items imported by WAPDA. The Board of Investment also issued Certificate dated 15-7-1996 to the effect that the imported consignments of the petitioner stand covered under S.R.O. 462(I)/95 dated 4-6-1995 and the same are not manufactured locally. Pursuant to above clarification by the CBR and the Certificate issued by the Board of Investment, the petitioner initially filed 12 refund claims out of 27 cases, which were allowed by the customs authorities vide their letter dated 12-11-1998, wherein it was stated that out of said refund claims three time barred refund claims were sanctioned by the competent authority during September 1998. However, remaining (15) refund claims filed by the petitioner on 18-5-1999 were rejected by the Collector of Customs (Appraisement) vide Order-in-Original No.10/2005 dated 19-11-2005 for being time barred, having not been filed within one year as per Section 33 of the Customs Act, 1969. The said order was impugned by the petitioner in Customs Appeal No.10/2006 before the Appellate Tribunal Customs, Excise and Sales Tax at Karachi. During pendency of the said appeal both the parties agreed to refer the matter of refund claim of the petitioner to an Alternate Dispute Resolution Committee (ADRC) under Section 195C of Customs Act, 1969, who decided the matter in favour of the petitioner, which was not accepted by the Central Board of Revenue and requested, the Customs Appellate Tribunal to proceed with the appeal on merits. The Appellate Tribunal (Customs), Bench-I, vide order dated 17-2-2010 decided the appeal in favour of the petitioner, however, since the respondent did not make payment of refund to the petitioner, the petitioner filed instant petition with the prayer to issue direction to the respondents to comply with the order of the Appellate Tribunal in the instant case and issue refund along with profit accrued thereon in favour of the petitioner.

3.The learned counsel for petitioner, after having referred to hereinabove facts, has contended that since the Customs, Excise and Sales Tax Appellate Tribunal vide order dated 17-2-2010 in the case of petitioner has decided the issue regarding, claim of exemption from payment of duty and taxes in terms of S.R.O. 462(I) dated 4-6-1995 in favour of the petitioner and also held that the petitioner is entitled to refund in respect of (15) refund claims amounting to Rs.331,780,318, therefore, the respondents are required to immediately refund the said amount in favour of the petitioner. It has been further contended by the learned counsel that since the aforesaid amount is being withheld by the respondents without any lawful authority, therefore, the petitioner is also entitled to an amount towards markup/profit at the rate of 18% per annum from the date of payment of such amount by the petitioner to the respondents along with further markup/profit at the same rate till payment of such amount by the respondents to the petitioner. Learned counsel further submits that the respondents may be further directed to make payment of an amount towards surcharge at the rate of 1.5% per month on the basis of equity as per provision 202(a) of the Customs Act, 1969, on the above arrears whereas the Official Assignee of this Court may be appointed as receiver for recovery of aforesaid arrears outstanding against the respondents whereafter, the said amount shall be paid to the petitioner. While concluding his argument learned counsel for the petitioner has further submitted that petitioner can directly approach this Court by invoking its constitutional jurisdiction for implementation of the orders passed by Customs, Excise and Sales Tax Appellate Tribunal. It has been prayed that directions may be issued to the respondents to refund the amount of duty and taxes along with markup/profit and the surcharge as per calculation made by the petitioner on the calculation sheet attached along with this petition immediately, and in case of failure, the Customs House Karachi, and other properties belonging to the respondents may be attached and sold by appointing Official Assignee as receiver for the recovery of the amount, as detailed herein above, from the respondents.

4.Conversely, Mr. Sarfraz Ali Metlo, learned counsel for the respondents has controverted the submissions made by the learned counsel for the petitioner and has vehemently opposed the maintainability of the instant petition on the grounds that the same, besides being misconceived in facts and law, is also premature, hence liable to be dismissed in limine. It has contended by the learned counsel for the respondents that while filing instant petition, the petitioner has not disclosed a material fact that the order dated 17-2-2010 passed by the Customs, Excise and Sales Tax Appellate Tribunal in the instant case, has not attained the finality, as the respondent department has assailed the said order by filing a reference before this Court under Section 196 of Customs Act, 1969 wherein; per learned counsel, substantial legal questions have been raised with regard to the claim of refund as referred by the petitioner, which according to learned counsel, is admittedly time barred. It has been further contended by the learned counsel for the respondents that during the pendency of instant petition the said reference i.e. SCRA 149/2010 has also been decided by a division bench of this Court vide order dated 19-12-2013, whereas, that order of the High Court has also been assailed by the respondents by filing CPLA No.70-K of 2014 before the Hon'ble Supreme Court of Pakistan, which is still pending disposal. Therefore, per learned counsel, the legal issue involved in the instant case, has not yet been finally adjudicated by the Hon'ble Supreme Court. While concluding his arguments the learned counsel submits that since the matter is still sub judice before the Hon'ble Supreme Court of Pakistan and the refund claim of the petitioner has not yet been finally decided, therefore, the petitioner is not justified in law and facts to invoke the jurisdiction of this Court under Article 199 Constitution of Pakistan for implementation of the order passed by the Customs, Excise and Sales Tax Appellate Tribunal, which has merged in the order passed by this Court in SCRA No.149/2010, whereas, the Hon'ble Supreme Court of Pakistan is still seized of the matter. It has been further contended by the learned counsel for the petitioner that without prejudice to hereinabove legal objections and impropriety of the premature claim of the petitioner, the claim of the petitioner towards 18% markup/profit and 1.5% surcharge and the calculation so made by the petitioner, is otherwise misconceived and contrary to the express legal provisions as contained in the Customs Act, 1969. It has been prayed that instant petition being misconceived in law and facts is liable to be dismissed in limine with costs.

5.We have heard both the learned counsel and perused the record with their assistance. On 8-5-2014, when instant petition was fixed for hearing before this Court, the learned counsel for the respondents was directed to place on record the copy of the CPLA filed by the respondents before the Hon'ble Supreme Court of Pakistan against the order passed by this Court in SCRA No.149/2010,whereas, the learned counsel for the petitioner was directed to satisfy this Court as to the maintainability of the instant petition, through which the petitioner has sought execution and enforcement of an order of Customs, Excise and Sales Tax Appellate Tribunal which was subsequently challenged by the respondents by filing reference under Section 196 of the Customs Act, 1969, before this Court and after its disposal a CPLA has been filed before the Hon'ble Supreme Court of Pakistan which is still pending decision. Pursuant to Court's directions, the learned counsel for the respondent has placed on record the copy of SCRA No.149/2010 filed against the order dated 17-2-2010 passed by the Customs, Excise and Sales Tax Appellate Tribunal, is Court and the copy of CPLA No.70-K/20l4 filed by the respondents before the Hon'ble Supreme Court against the order of this Court in SCRA No.149/2010. However, learned counsel for the petitioner could not satisfactorily respond to the query of this Court with regard to maintainability of the instant petition, whereby, the petitioner has sought implementation and execution of the order passed by the Customs, Excise and Sales Tax Appellate Tribunal, which order admittedly, has not yet attained finality, whereas the legal controversy involved in the instant case relating to the petitioner's claim of exemption from payment of duty and taxes and entitlement of the petitioner in respect of the claim of refund, is still subjudiced before the Hon'ble Supreme Court of Pakistan. Learned counsel for the petitioner was also directed to refer to any provision of law, which requires the respondents to immediately give effect to the order passed by the Customs, Excise and Sales Tax Appellate Tribunal and to issue the refund of Custom duty and taxes, which in the instant case was voluntarily paid by the petitioner at the time of import and clearance of the subject consignment, along with claim of 18% markup/profit and 1.5% surcharge, for the alleged default in payment of refund by the respondents to the petitioner. However, learned counsel for the petitioner could not refer to any such provision in the Customs Act, 1969, nor could satisfy this Court as to how, the petitioner is entitled to any relief claimed through instant petition, when the legal controversy involved in the instant case has not yet been finally decided and still prejudiced before the Hon'ble Supreme Court of Pakistan.

6.It will not be out of place to observe that under the Customs Act, 1969, the order passed by the Customs, Excise and Sales Tax Appellate Tribunal in appeal under section 194 of the Customs Act, 1969 is not the final order, as a reference to High Court under section 196 of the Customs Act, 1969 can be filed against such order of the Appellate Tribunal by formulating question(s) of law arising out of the order of the Appellate Tribunal. However, the order passed under section 196 of the Customs Act, 1969 in a reference tiled before this Court is also not a final order as the same can be still assailed by any aggrieved party by filing CPLA under Article 185 of Constitution of Islamic Republic of Pakistan 1973 before the Hon'ble Supreme Court of Pakistan. In the instant case, admittedly, CPLA No.70-K/2014 has already been filed by the respondent department against the order dated 19-12-2013 passed by divisional bench of this Court in SCRA No.149/2010, wherein, the controvery involved in the instant case regarding claim of exemption from duty and the refund of such amount is still sub-judiced before the Hon'ble Supreme Court of Pakistan. We may further observe that the appellate proceedings, in fact, are the continuity of the original proceedings and unless the matter is finally decided by the highest forum, which may be provided under the statute, the implementation of an order, which has been assailed before a higher forum in accordance with law, cannot be sought by filing a Constitutional Petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, as the same may render the remedy of appeal/revision before the higher forum as illusionary and would amount to frustrate such proceedings. In view of hereinabove facts and circumstances of this case, the relief sought by the petitioner through instant petition, seeking implementation/ execution of the order of Customs, Excise and Sales Tax Appellate Tribunal, which otherwise, has merged into the order passed by this Court in SCRA No.149/2010, and is still pending for final adjudication before the Hon'ble Supreme Court of Pakistan in CPL No.70-K/2014, besides being misconceived in fact and law, is also premature and cannot be granted by this court under Article 199 of Constitution of Islamic Republic of Pakistan, 1973 at this stage. Moreover, the claim of refund has not yet been finally determined by the department in accordance with law.

7.Accordingly, we do not find any merits in the instant Constitution Petition, which was dismissed vide our short order dated 20-5-2014 and these are the reasons for such short order.

MH/W-12/SindhPetition dismissed.