M. AMIN VS MEMBER CUSTOMS, 2017 PTD-LAHORE-HIGH-COURT-LAHORE 1654 (2017)

Customs Act (IV of 1969)---

----Ss. 194 & 196---Constitution of Pakistan, Art. 10-A---Reference to High Court---Question of law, determination of---Non-exercise of jurisdiction by Appellate Tribunal---Natural justice, fair trial and due process---Scope---Question before the High Court was whether the Appellate Tribunal, after submission of verification report by the Department regarding purchase(s) of the taxpayer, could pass an order based on such report when no date of hearing was fixed, and the taxpayer was condemned unheard---Contention of the Department, inter alia, was that the taxpayer was already heard by the Appellate Tribunal, before filing of verification report, and therefore there was no need to give further opportunity of hearing to the taxpayer---Validity----Once Department itself moved application to verify record and submit report, the Appellate Tribunal could not on its own presume that the invoices of the taxpayer were not genuine and if stance taken by the Department in its application was to be considered, then Appellate Tribunal was bound to fix the case for further hearing and could only after confronting taxpayer with the stance taken by the Department, pass final judgment---Impugned order of the Appellate Tribunal was violative of the rule of the natural justice and Art.10-A of the Constitution which guaranteed fair trial in adjudication and non-exercise of jurisdiction by the Appellate Tribunal was itself relatable to a question of law---Impugned order was set aside and matter was remanded to the Appellate Tribunal, with direction to provide opportunity of hearing to the taxpayer---Reference was answered, accordingly.

Commissioner of Tax Companies Zone-II, Karachi v. Messrs Sindh Engineering (Pvt.) Limited, Karachi 2002 SCMR 527 rel.

Syed M. Mohsin Hamdani for Petitioners.

Ahmad Raza for Respondents.

Date of hearing: 17th May, 2017.

JUDGMENT

ABID AZIZ SHEIKH, J.---This reference application has been filed under section 196 of the Customs Act, 1969 (Act) against judgment dated 07.4.2016 (impugned judgment) passed by Appellate Custom Tribunal (Tribunal).

2.Only following question of law has been raised for expression of our opinion at the time of arguments:--

"Whether any court of law/Custom Appellate forum can finalize the case without considering a specific verification report awaited in the case from the appellant/department submitted written request for adjournment on 06.4.2016 but on the face of the judgment page No.1, the hearing in this case is on 04.4.2016 and date of decision is mentioned on the face of decision on 07.4.2016 and the order is dispatched after four months on 04.8.2016 can give a judgment on the basis of just speculation/supposition under Section 194 Custom Act?"

3.Brief facts are that on information staff of ASO and MCC Multan seized HSD Oil loaded oil tanker. Subsequently, show cause notice was issued but order in original was passed in favour of the applicant. The said order was upheld by the Collector of Customs (Appeal). However, further appeal filed by the respondent department was accepted on 07.4.2016 by learned Tribunal, hence this reference application.

4.Learned counsel for the petitioner submits that impugned judgment is gross violation of rule of natural justice and applicant has been condemned unheard. He elaborates that hearing in the case was fixed by Tribunal on 04.4.2016 on which date, respondent department sought adjournment in order to file comprehensive report after due verification. Submit that subsequently on 06.4.2016, respondent department also filed formal application to this effect. Learned counsel submits that after 04.4.2016 though, no date of hearing was fixed by the Tribunal, however, impugned judgment was passed on 07.4.2016, in which contents of said application filed on 06.4.2016 were also considered and appeal was allowed. Learned counsel submits that learned Tribunal was bound to provide further hearing to the petitioner and also to confront him with stance of the respondent department in application, if at all same was to be considered in impugned final judgment.

5.Learned counsel for the respondent department could not deny that hearing in case took place on 04.4.2016 and thereafter, department filed application on 06.4.2016 and learned Tribunal passed judgment on 07.4.2016. He however submits that applicant was already heard by the Tribunal on 04.4.2016, hence, there was no need to fix another date and give further opportunity of hearing to the petitioner. He submits that even otherwise applicant has no case on merits.

6.We have heard learned counsel for the parties and perused the record.

7.It is admitted position on record that in appeal filed by the respondent department, hearing took place on 04.4.2016 but on said date, the judgment was not announced. The stance of applicant before Tribunal was that he purchased 24000 liters of HSD diesel oil seized, from Messrs Mahmood Oil Enterprises through invoice dated 24.8.2013 and sales tax return was also produced. The respondent department in response to above arguments, on 06.4.2016 filed application seeking adjournment of case for at least two weeks to enable the respondent department to submit a comprehensive report in the matter after due verification of invoice and return produced by applicant.

8.The department also took following stance in para (iii) of the application "no where the respondent has taken the plea/stance regarding purchase of impugned goods by Messrs Mehmood Oil Enterprises from M/s. Azhar Brothers, Sahiwal which needs to be verified from the concerned quarters and the record of the seller and purchaser, in the interest of natural justice". The perusal of impugned judgment shows that after recording contention of the applicants, the learned Tribunal in para 13 of the judgment reproduced in verbatim the aforesaid paragraph of respondent department application and held that the invoices are not genuine because they are not verified either by the sales tax record or return.

9.Once the respondent department itself moved application on 06.4.2016 to verify the record and submit comprehensive report, the learned Tribunal instead of giving opportunity to department to verify the record and file report, could not on its own presume that invoices produced by applicant were not genuine. Further after hearing on 04.4.2016, if stance taken by the respondent department in its application dated 04.6.2016 was to be considered, then learned Tribunal was bound to fix case for further hearing and could only after confronting the applicant/respondent with the stance taken by the department could pass final judgment. The impugned judgment is also tainted with material irregularity because the judgment was passed on 07.4.2016, which was admittedly not the date fixed for hearing.

10.On face of it, impugned judgment is not only violative of rule of natural justice and Article 10-A of the Constitution of Islamic Republic of Pakistan, 1073 (Constitution), which guarantee fair trial in adjudication but same is also suffering from jurisdictional defect. The Hon'ble Supreme Court in Commissioner of Tax Income Companies Zone-II, Karachi v. Messrs Sindh Engineering (Pvt.) Limited, Karachi (2002 SCMR 527) held that non exercise of jurisdiction by Tribunal is itself relatable to question of law.

11.In view of above discussion, question raised above is answered in negative in favour of applicant and against respondent department. Resultantly, impugned judgment is set aside and matter is remanded back to learned Tribunal to decide the case afresh after giving fair opportunity of hearing to the parties.

12.Custom Reference is allowed in above terms.

KMZ/M-88/L Case remanded.