COLLECTOR OF CUSTOMS VS ALBA INTERNATIONAL, 2017 PTD-LAHORE-HIGH-COURT-LAHORE 793 (2017)

Customs Act (IV of 1969)---

----S.196---Reference to High Court---Jurisdiction of High Court under S.196 of the Customs Act, 1969---Nature and scope---Department contended that certain questions of law had arisen out of the order of Appellate Tribunal---Interpretation given by the Appellate Tribunal in its order being clearly in accordance with law, no question of law arose---High Court declined to exercise its jurisdiction under S.196 of the Customs Act, 1969---Reference was decided against the taxpayer, accordingly.

Pfizer Laboratories v. Federation of Pakistan PLD 1998 SC 64 rel.

Javed Athar for Applicant.

ORDER

This is a Reference under Section 196 of the Customs Act, 1969 (the "Act").

2.Following question of law is proposed for our opinion, which is asserted to have arisen out of order dated 06.09.2016 of the Customs Appellate Tribunal Bench-II, Lahore (the "Appellate Bench"):--

QUESTION OF LAW

Whether in the, facts and under circumstances of case, the learned Customs Appellate Tribunal was justified to hold that substantive right of the respondents to claim refund of the recovered/ retained money by the state flows automatically as an absolute right whereas the application filed by the respondent for issuance of refund was barred by time limitation by 05 years, 01 month and 28 days?

3.Brief facts of the case are that the Respondent imported a consignment from Malaysia and filed G.D. dated 20.05.2007 declaring the 'goods as Paper Board valuing 11780 US $. Representative samples were sent to the Lahore Dry Port Laboratory for test in which variations were found. A show-cause notice was issued to the Respondent for recovery of Rs.13,60,025/- along with sales tax etc. for mis-declaration. After adjudicating proceedings Order-in-Original was passed and the goods were put to auction by the Custom Authorities. Feeling aggrieved thereby the Respondent filed writ petition before this Court which issued restraining order dated 13.04.2010 despite that the goods were delivered to the bidder vide delivery Order dated 10.04.2010. The Respondent then filed claim of refund of the sale proceeds vide application dated 08.06.2015 which was dismissed due to barred by time and appeal thereagainst was also dismissed. The Respondent then filed an appeal before the Appellate Bench which accepted the same vide the impugned order. Hence, the instant application.

4.Arguments heard record perused.

5.We agree with the findings of the learned Appellate Bench which in the impugned order in paragraph 16 has observed that subsection (1) of Section 33 of the Act creates an exception with regards to customs duties or charges inadvertently paid or over paid while keeping a statutory silence over the other species of refunds. It was further observed that in case the Appellant is denied refund, the retention of illegally retained money by the State would tantamount to violation of the constitutional mandate enshrined under Article 77 of The Constitution of the Islamic Republic of Pakistan, 1973, thus Appellant's right to refund cannot be diluted or affected by any plea such as the application of objects of limitation envisaged under Section 33 of the Act.

6.The Honourable Supreme Court in Pfizer Laboratories v. Federation of Pakistan, (PLD 1998 Supreme Court 64) has held that if one party under a mistake whether of fact or law paid some money to another party (which includes a Government Department) which was not due by law or contract or otherwise, that must be repaid in view of section 72, Contract Act, 1872. If, however, the customs duty or any other levy was realized and its realization was outside the Statutory Authority, the provision providing limitation of six months was not attracted.

7.We have heard that learned counsel for the Appellant and find that the question of law as argued by the Applicant does not arise in this case as the interpretation given by the Appellate Tribunal is clearly in accordance with law and the judgment of the Pfizer case supra.

8.Under the circumstances, we decline to exercise our jurisdiction. Reference application is decided against the Applicant Department.

9.Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as required under the law.

KMZ/C-4/L Order accordingly.