KINGCRETE BUILDERS VS CENTRAL BOARD OF REVENUE, 2013 PTD-ISLAMABAD 111 (2012)

(a) Civil Procedure Code (V of 1908)---

----S. 20---Place of instituting suit---Scope---Party would be at liberty to bring a cause in a court in territorial jurisdiction whereof cause of action had wholly or partly arisen.

(b) Constitution of Pakistan---

----Art. 199---Constitutional petition---Alternate adequate remedy, non-availability of---Scope---Aggrieved person not having just remedy could approach High Court for seeking relief, including declaration in respect of an unlawful act of person performing functions in connection with affairs of Federal, Provincial or any local government.

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

----S. 18---Constitution of Pakistan, Art. 199---Constitutional petition---Concrete Transit Mixers (CTMs) imported by National Highway Authority---Notice demanding short-paid duty on such CTMs---Petitioner's plea that 5% ad valorem duty (which was already paid) was payable on such CTMs, andnot 65% as being demanded through impugned notice---Validity---According to S.R.O. 1090(I)/2006,dated1-11-2006, only 2500 units of CTMs had been allowed to be imported @ 5% duty on first come and first serve basis---Petitioner had imported and cleared CTMs on 22-9-2006, when rate of duty leviable was 65%---S.R.O. 1090(I)/2006 was effective from 1-11-2006 and had not been given retrospective effect---Duty of 65% leviable on such CTMs at time of its import and release had not been reduced by S.R.O. 1090(I)/ 2006---High Court dismissed constitutional petition in circumstances.

PLD 1997 SC 334; 1997 MLD 1198 and 1999 PTD 1912ref.

PLD 1999 Kar. 238 distinguished.

Omer Farouk Adam for Petitioner.

Malik Ataat Hussain for Respondents Nos. 1 to 3.

Muhammad Riaz Hussain for Respondent No.1.

Tajammal Hussain for Respondent No.4.

Date of hearing: 21st June, 2012.

JUDGMENT

MUHAMMAD AZIM KHAN AFRIDI, J.---Messrs Kingcrete Builders (Pvt.) Limited hereinafter referred to as the petitioner has preferred the instant constitutional petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, hereinafter referred to as the Constitution with a prayer to declare the demand ofDeputy Collector Customs (Appraisement) respondent No.3, vide letter dated27-6-2007 to the tune of Rs.88,55,262 as without lawful authority as the petitioner was to pay customs duties @ 5% Ad Valorem in view of provisions of S.R.O. 567(I)/2006, dated 5th June, 2006.

2.Brief facts relevant for the disposal of the lis are that the petitioner, a partnership firm, executed a contract with National Highway Authority (respondent No.4) for the construction of rigid pavement on specific sections of LahoreIslamabad Motorway. Pursuant thereto, petitioner imported 13 Concrete Transit Mixers (CTMs) from Japan and provisionally got released the same from the Customs Department on 5% duty subject to final decision of the CBR. The said decision was taken by the Ministry of Finance and Revenue (Revenue Division) vide notification dated Islamabad the 1st November, 2006, whereafter the petitioner, vide letter dated 20-3-2007 was directed to pay the customs duty and taxes to the tune of Rs.88,55,262.,

3.Aggrieved of the said orders, the petitioner has impugned the same in the instant constitutional petition.

4.Learned counsel for the petitioner has argued that the petitioner imported 13 CTMs from Japan for effective implementation of the project. That the duty payable on such Concrete Transit Mixers was 65%, however, only 5% duty was payable on the same subject to exclusive use of the same by a registered firm with Pakistan Engineering Council for construction purposes and subject to condition that the same would not be disposed of within next 10 years except to another construction company subject to NOC from the Collectors concerned. That pending decision of the CBR/ECC it was agreed that the said CTMs would be provisionally released to the petitioner subject to undertaking that in case duties structure remains unchanged, NHA would deduct the amount from the petitioner's account for payment of the same to Customs Authorities. That the decision taken vide S.R.O. 1090(I)/2006, dated Islamabad, the 1st November, 2006, CTMs were allowed against levy of 5% but in spite of the same, the demand of the duty @ 65% was illegally made from the petitioner.

5.During the course of arguments learned counsel for the petitioner has placed reliance on case-law reported in PLD 1999 Karachi 238, wherein it was held that a notification impairing an existing or vested right or imposing a new liability or obligation cannot operate retrospectively in the absence of legal sanction, but a notification which confers benefit can operate retrospectively.

6.Learned counsel for the respondents have argued that in view of sections 193 and 194 of Customs Act, 1969, remedy available to the petitioner was to file an appeal therefore the writ petition against the said demand was not maintainable. That the decision of ECC was having no retrospective applicability and the petitioner was therefore obliged to pay the duty as undertaken by him. That this Court lacks territorial jurisdiction as the case pertains to the Customs Court, Karachi.

7.Reliance was placed on case-law reported in PLD 1997 Supreme Court 334, wherein it was ruled that theprayer of the petitioner in the said case for a direction, to the Customs Authority at Karachi not to levy the regulatory duty could have been granted by the High Court of Sindh in whose jurisdiction the person performing the affairs of the Federation was discharging its functions. It was observed that practice to file a writ petition either at Peshawar or Lahore or Rawalpindi or Multan etc. to challenge the order of assessment passed at Karachi was a practice needed to be deprecated.

8.Reliance was also placed on case-law reported in 1997 MLD 1198 (Lahore) and 1999 PTD 1912 (Peshawar High Court), wherein it was observed that where alternate remedy was available constitutional petition was not competent.

9.I have heard arguments of learned counsel for the parties and perused the record.

10.Undisputed facts of the case of the parties are that the petitioner is a registered construction company and the CTMs were imported by the petitioner exclusively for the construction purposes which were not to be sold or otherwise disposed of by the petitioner. It is also undisputed that on the request of the petitioner for release of the said CTMs on provisional basis, the said release was allowed subject to undertaking of NHA that they will be bound by the final decision of the CBR. The undertaking given by the National Highway Authority is reproduced hereunder for facilitation:--

Undertaking

TO WHOM IT MAY CONCERN

"National Highway Authority undertakes to implement decision of CBR/ECC on the issue of duties on import Transit Mixers.

In case duties structure remains unchanged National Highway Authority undertakes to deduct the amount on account of duties from the contractors invoices and pay to Customs Authorities immediately."

(Sd.)

NAEEM MEHMOOD KHAN

Director (Motorway/Highways)

11.Objection raised by learned counsel for the respondents with respect to maintainability of the writ petition needs to be addressed at first instance. Perusal of record would suggest that the CTMs imported by the petitioner were allegedly required for construction of rigid pavement on Lahore-Islamabad Motorway, a project of NHA (respondent No.4) whose office is located withinterritorial jurisdiction of this Court The petitioner is seeking benefit of the communiqu s made between the petitioner, respondent No.4 and CBR, (respondent No 1). Respondent No.1 is also placed within the territorial limits of this Court. Relief sought for by the petitioner is based on the SRO issued by respondent No.1 which has allegedly given cause of action, though partly, to the petitioner within territorial limits of this Court. A person would be at liberty to bring a cause in a Court in territorial limits whereof a cause of action has wholly or partly arisen. Since the cause of action has partly arisen in favour of petitioner within territorial limits of this Court as such this Court has got the territorial jurisdiction to entertain the claim of the petitioner.

12.Section 193 of the Customs Act, 1969, provides an adequate remedy in the shape of appeal to Collector against a decision or order passed under sections 79, 80 and 179 of the said Act. The subject matter of the writ petition is not covered by the provisions of sections 79, 80 or 179 of the said Act as the petitioner is not aggrieved of any order passed by a Customs Officer under the said sections as such the petitioner is not in a position to avail the remedy of appeal provided under section 193 of the Customs Act. An aggrieved party to whom no other adequate remedy is provided by law is entitled to seek indulgence of the High Court under Article 199 of the Constitution for seeking relief including declaration in respect of an unlawful act of a person performing functions in connection with affairs of the Federation, a province or local authority. The constitutional petition of the petitioner, for the afore-stated reasons, is therefore found maintainable.

13.Vide notification dated Islamabad, the 1st November, 2006, S.R.O. 1090(I)/2006, 2500 units of CTMs were allowed on first come first serve basis subject to fulfillment of laid down terms and conditions. It is not disputable that the levy of duty on Concrete Mixer Lories at the rate of 5% was not given any retrospective effect and the same was levied with immediate effect. The petitioner has imported and released the CTMs on 22-9-2006, when the rate of duty leviable was 65% while the said notification of 5% duty was issued on 1st November, 2006 and no retrospective effect was given to the same according to which only 2500 Concrete Mixers Lories were allowed to be imported at the rate of 5% duty on first come first serve basis, with immediate effect. At the time of import of CTMs and release of the same by the petitioner duty leviable by the respondents and payable by the petitioner was at the rate of 65% and the same remained unchanged for the days and time when the petitioner imported and cleared the CTMs. Had the concerned authority reduced the dutyfrom 65% to 5% with effect from a retrospective date including the date when the CTMs were imported and cleared by the petitioner then the petitioner was in a position to claim benefit under the said S.R.O. Import and clearance of the CTMs by the petitioner during the days when the duty was leviable at the rate of 65% and which was not reduced from retrospective date would not entitle the petitioner to the benefit of the said S.R.O.

14.Case-law referred to and relied by learned counsel for the petitioner reported as PLD 1999 Karachi 238 cannot be beneficially applied to the case of the petitioner as according to the same, the competent authority has not conferred any benefit retrospectively extendable or applicable to the case of petitioner.

15.In the light of the above, the writ petition is found devoid of force. The same is therefore dismissed.

SAK/130/IslPetition dismissed.