COLLECTOR OF CUSTOMS, through Additional Collector of Customs VS HAJI BALLOW KHAN, 2015 PTD-QUETTA-HIGH-COURT-BALOCHISTAN 1080 (2015)

Customs Act (IV of 1969)---

----Ss. 194C, 194 & 196---Customs, Excise and Sales Tax Appellate Tribunal (Procedure) Rules, 2006, R. 4---Procedure of Appellate Tribunal---Interpretation of S. 194C of the Customs Act, 1969---Judicial and administrative powers of the Chairman---Constitution of Benches---Exercise of discretion by Chairman---Cases of urgency / exigency---Scope---Question before the High Court was "whether Chairman of the Appellate Tribunal, without constituting a two-member bench in terms of S. 194C of the Customs Act, 1969 had the jurisdiction to decide the matter as a Single Member bench in cases of urgency"---Held, that while S. 194 of the Customs Act, 1969 postulated and defined the powers of the Federal Government for constituting the Appellate Tribunal, the appointment of judicial and technical Members and appointment of one of them as Chairman, thereof ; thereafter constituting benches was the prerogative of the Chairman of the Tribunal and procedure for distributing work among the benches had been provided under R.4 of the Customs, Excise and Sales Tax Appellate Tribunal (Procedure) Rules, 2006---Federal Government had no authority to constitute benches and distributing business among benches----While it was the sole discretion of the Chairman to distribute business among members of the Tribunal, but before doing so, he shall record reasons and after application of a judicial mind, entrust a case to any single member, subject to condition that only those matters shall be entrusted which have already been allotted to a bench of two members and said member / assignee was part of such a bench---Provision of S. 194C of the Customs Act, 1969 and Rules framed thereunder were silent about the discretion of the Chairman, as he was only empowered to the extent of administrative measures, but as far as judicial proceedings were concerned, powers of the Chairman and Member were equal, therefore, the Chairman could not himself retain a case without constituting a bench of two or more Members and in case if any Member due to any reason was not available; only then, before adjudicating the lis, the Chairman with reference to exigency and urgency of the matter and after recording reasons thereof, may hear the case, otherwise the order passed by him would be presumed to have been passed by a Single Member, which was not permissible in law---Impugned order passed by the Chairman was therefore coram non judice and not sustainable in law, and was set side---High Court directed the Chairman to reconstitute the bench and fix the matter for de novo hearing---Reference was answered, accordingly.

Director, Intelligence and Investigation (Customs and Excise), Faisalabad and another v. Bagh Ali 2010 PTD 1024 rel.

Sher Shah Kasi, Deputy Attorney General, Syed Ikhlaq Shah, Standing Counsel-II and Muhammad Azam Law Officer Customs Department for Applicant.

Naseebullah Khan Achakzai for Respondents.

Date of hearing: 18th December, 2014.

JUDGMENT

MUHAMMAD KAMRAN KHAN MULAKHAIL, J.---This Customs Reference under section 196 of the Customs Act, 1969 ("the Act") has been preferred by the petitioner-department against the order dated 30-7-2013 passed by the Chairman/Member of the Customs, Excise and Sales Tax Appellate Tribunal (hereinafter referred to as "the Tribunal").

2.Mr. Ikhlaq Ahmed Shah, learned Standing Counsel inter alia contended that according to Section 194-C of the Act, a single member of the Tribunal was not empowered and vested with the jurisdiction to decide the matter, therefore, the order impugned being corum-non-judice is not sustainable and liable to be set aside.

3.Mr. Naseebullah Achakzai, Advocate appearing for the private respondent has controverted the above plea. He stated that subject to provision of clause (c) of subsection (4) of section 194-C of the Act where the difference in duty or tax involved, or the amount of fine, or penalty involved does not exceed five million rupees, the case can be heard by a member of the Tribunal singly. He maintained that the impugned order was passed by the Chairman; therefore, he himself was authorized either to retain the same or to assign it to some other Member sitting singly. He urged with vehemence that valuable goods of the respondents are lying in Customs House, Gaddani near the coast and despite passing order by the Tribunal, when no stay was granted by this Court the Customs Authorities are not ready to release the goods. He finally prayed for dismissal of the instant reference.

4.Heard.

5.Although, as many as ten questions have been formulated in the reference, but the first three questions are relevant being question of law and determination of these questions pertain to the jurisdiction of the appellate Tribunal, while the rest are immaterial being related to factual controversy. Therefore, the relevant three questions are reproduced hereunder:--

(1)Whether in terms of Section 194-C of the Act, the Chairman, Appellate Tribunal, can constitute a "Single Member" Bench, without specific orders by the Federal Government?

(2)Whether the Chairman can appoint himself as Member of the Single Member Bench constituted under subsections (3A) of section 194-C of the Act?

(3)Whether in the light of facts and circumstances of the case and in the absence of any Bench, constituted under subsections (2) and (3) of Section 194-C of the Act, the Chairman Appellate Tribunal's order is without jurisdiction?

In order to consider the proposition involved in this case, it would be advantageous to reproduce the relevant provision of section 194-C of the Customs Act, 1969, which reads as under:

"194-C. Procedure of Appellate Tribunal.---(1) The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the Chairman from amongst the members thereof.

(2)Subject to the provisions contained in subsections (3) and (4), a Bench shall consist of one judicial member and one technical member.

(3)Every appeal against a decision or order deciding a case involving duty, tax, penalty or fine exceeding five million rupees shall be heard by a Special Bench constituted by the Chairman for hearing such appeals and such Bench shall consist of not less than two members and shall include at least one judicial member and one technical member:

Provided that the Chairman may, for reasons to be recorded in writing, constitute Benches including special Benches consisting of:

(a)two or more technical members; or

(b)two or more judicial members:

(3A)Notwithstanding anything contained in subsections (2) and (3), the Chairman may constitute as many Benches consisting of a single member as he may deem necessary to hear such cases or class of cases as the Federal Government may, by order in writing, specify.

(4)The Chairman or any other member of the Appellate Tribunal authorized in this behalf by the Chairman may, sitting singly, dispose of any case which has been allotted to the bench of which he is a member where

(a)the value of the goods confiscated without option having been given to the owner of the goods to pay a fine in lieu of confiscation under section 181; or

(b)[***]

(c)in any disputed case, the difference in duty or tax involved or the duty or tax involved, or the amount of fine or penalty involved does not exceed five million rupees.

(5)If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ and the case shall be referred by the Chairman for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including those who first heard it:

Provided that, where the members of a Special Bench are equally divided, the points on which they differ shall be decided by the Chairman.

(6)Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of the Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.

(7)The Appellate Tribunal shall, for the purposes of discharging its functions, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (V of 1908), when trying suit in respect of the following matters, namely:-

(a)discovery and inspection;

(b)enforcing the attendance of any person and examining him on oath;

(c)compelling the production of books of account and other documents; and

(d)issuing commissions.

(8)Any proceeding before the Appellate Tribunal shall be deemed to be judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Pakistan Penal Code (Act XLV of 1860), and the Appellate Tribunal shall be deemed to be a Court for all the purposes of sections 480 and 482 of the Code of Criminal Procedure, 1898 (Act V of 1898)."

6.The subsection (1) of section 194-C of the Act itself contains the reply to question No.1, which provides that "the powers and functions of the Appellate Tribunal may be exercised and discharged by the benches constituted by the Chairman from amongst the members thereof". While section 194 of the Act postulates and defines the powers of Federal Government for "constituting the Appellate Tribunal, the appointment of judicial and technical members and appointment of one of them as chairman thereof". Thereafter, constituting the benches is the prerogative of the Chairman of the Tribunal and procedure for distribution of work among the benches has been provided under Rule 4 of the Customs, Excise and Sales Tax Appellate Tribunal (Procedure) Rules, 2006, and it is instructive to reproduce the Rule 4, which provides as under:--

4. Distribution of work among the Benches.---(1) A Bench shall hear and decide such appeals and applications relating thereto made under the Act as the Chairman may, by general or special order, assign.

(2)When for any reason a Bench is not functioning, the Chairman may transfer an appeal or an application from such Bench to any other Bench."

Thus, the question No.1 is resolved in negative and Federal Government has no authority to constitute the benches and distribute the business among the benches and this is the prerogative of the Chairman of the Tribunal.

7.Addressing the questions Nos.2 and 3 with reference to relevant provisions of the Act and the Customs, Excise and Sales Tax Appellate Tribunal (Procedure) Rules 2006, Section 194-C of the Act, makes it very clear that, a single member bench of the Tribunal can decide certain classes of cases, but the jurisdiction is subject to the certain conditions, as contained in subsections 3(a) and (4) of the referred to provision. The entrustment of the case by the Chairman also contains certain limitations, particularly, when such matter/case was earlier allotted to a bench of which the single member was a part, which was comprising of more than one member bench, but on certain circumstances, which may be unavoidable due to any reason, the Chairman has authority of entrusting the case keeping in view the urgency and exigency of the matter. The Chairman while exercising this authority shall allocate the case to a single member, who was already a member of the bench, comprising of two members, to which the matter was originally allocated. Further, this authority of Chairman is not ministerial in nature, rather it requires a proper application of mind, such a matter can be handled singly by a member when it is going to be entrusted on account of its nature and the question involved therein. The expression used in referred to provision in subsection (4) of Section 194-C of the Act postulates that only those cases shall be entrusted to a single member, which were heard by a bench comprising of two members and due to non-availability of one of the members same can be heard by that single member. The intention of legislatures is clear and discretion of Chairman for entrustment/ allocation of the cases shall be exercised judicially keeping in view the urgency and exigency of the matter. The member of the Tribunal sitting singly cannot adjudicate upon the matter and if any such entrustment is made by the Chairman without recording the reasons thereof, it shall be without jurisdiction. Reference is made to Director, Intelligence and Investigation (Customs and Excise), Faisalabad and another v. Bagh Ali, (2010 PTD 1024).

8.The questions Nos.2 and 3 can better be addressed and can be formulated in more concise term in the following manner:--

"Whether it is the sole discretion of the Chairman and he can retain the matter and can hear it while sitting singly".

It is a sole discretion of the Chairman, to distribute the business of the Tribunal among the learned Members of the Tribunal, but before doing so he shall record the reasons and then after application of his judicial mind shall entrust the case to any single member, subject to condition that only those matters, shall be entrusted which have already been allotted to a bench of two members and said member/assignee was a part of that bench.

8.The provision of Section 194-C itself and the rules framed thereunder are completely silent about the discretion of the Chairman, as the Chairman of the Tribunal, is only empowered to the extent of administrative measures, but as far as the judicial proceeding is concerned, powers of the Chairman and the Member are equal, therefore, the Chairman himself cannot retain the case, without constituting a bench of two or more members and, in case if any of the members due to any reason is not available, only then, before adjudicating the lis the Chairman with reference to exigency and urgency of the matter and after recording the reasons thereof, may hear the case, otherwise the order passed by him will be presumed to have been passed by a single member, which is not permissible under the law.

9.In view of above discussion we are of the considered opinion that the impugned order passed by the Chairman was corum-non-judice and is not sustainable under the relevant provisions of the law. Consequently, the impugned order dated 30-7-2013 passed by the

Chairman/Member Judicial-I, Islamabad is hereby set aside and the case is remanded to the Appellate Tribunal. The Chairman is directed to reconstitute the bench if not already constituted and fix this case for de novo hearing.

Before parting with this judgment, we are also mindful of the fact that due to error on the part of Customs Appellate Tribunal, the private respondent has not only been through mental agony but is still facing financial losses, therefore, it is directed that the respondent's case be proceeded with expeditiously and be disposed of, possibly within two months after receipt of this judgment.

Copy of this order be sent to the Chairman Federal Board of Revenue, Islamabad and the Chairman of the Excise and Sales Tax Appellate Tribunal for information and compliance.

KMZ/27/BalOrder accordingly.