PAK SUZUKI MOTOR CO. LTD. VS PAKISTAN through Secretary Finance, Government of Pakistan, 2016 PTD-KARACHI-HIGH-COURT-SINDH 2933 (2016)

Customs Act (IV of 1969)---

----Ss.13, 16, 58, 59, 62, 97 & 156(1)---Compliance of order---Petitioner was importer and manufacturer who was alleged to have violated conditions of notification, resultantly authorities directed to deposit differential and penalty---Appellate authority stayed recovery of differential and penalty subject to furnishing Bank guarantee for demand raised by authorities---Order passed by Appellate authority was in favour of petitioner who, in compliance of the same, had also furnished Bank guarantee---Validity---Petitioner could not claim that it was "aggrieved person" and could not claim that order passed by Appellate authority was passed against it---High Court declined to interfere with order passed by Appellate authority---Constitutional petition was dismissed in circumstances.

Irtaz Hussain Zaidi for Petitioner.

Nemo for Respondent No.1.

Ms. Masooda Siraj for Respondents Nos. 2 to 4.

Dates of hearing: 1st and 5th April, 2016.

JUDGMENT

IRFAN SAADAT KHAN, J.---The instant constitution petition has been filed with the following prayers:--

"a. to declare that the demand of custom duty, sales tax and etc. amounting to Rs.1,79,14,796 is not lawful and is liable to be quashed and the Respondents be restrained from demanding or realizing the same or any part thereof;

b. to grant order and direction restraining the Respondents and each of them, their officers and men from demanding and realizing or pressing for payment of the above-referred amount or any part thereof;

c. to grant costs to the petitioners; and

d. to grant such other/further/additional relief or reliefs, direction or directions, command or commands as may appeal/deem appropriate in the facts and circumstances of the case."

2.Briefly stated the facts of the case are that the petitioners are assemblers of Suzuki vehicles for which parts and accessories are imported from Japan in Complete Knocked Down ('CKD') condition. That these imported CKD parts are then inbonded in the factory, which has been declared a bonded warehouse. Those CKD parts are then assembled to give shape to them as a Complete Built Up ('CBU') units. That during the period from 04.07.1993 to 03.03.1994 the petitioners imported 5 consignments of CDK parts. That it is the claim of the petitioners that whatever duty was payable on these CDK parts had been paid at the import level. The respondent No.3 issued a show cause notice dated 18.05.1994 that since the petitioners had removed CBU units from the factory without payment of customs duty and other taxes hence they had violated the provisions of sections 13, 97 and 16 of the Customs Act, 1969 (the Act) and thus were liable to be punished under clauses 58, 59 and 62 of section 156(1) of the said Act. The petitioners were then called upon as to why their licence should not be cancelled under Section 13(3) of the said Act and duties and other taxes evaded by them may not be recovered along with the penalty thereon. The petitioners; thereafter vide letter dated 26.4.1994 clarified that they had not removed any vehicle from the bonded warehouse without payment of the due duty, hence the show cause notice issued by the respondent No.3 was illegal and may be vacated. Thereafter the Collector vide his Order-in-Original No.72/94 dated 18.10.1994 found that an amount of Rs.1,79,14,796/- was payable by the petitioners, after adjustment, and also observed that the petitioners have grossly misused the warehouse facilities and thus committed offences under Sections 13, 97 and 116 of the Act. The petitioners were then asked to pay an amount of Rs.1,79,14,796/- within ten days of the receipt of the order. The petitioners were also imposed a penalty of Rs.5,00,000/- for violating licence of private bonded warehouse. Being aggrieved with the said order an appeal was then filed before the Customs, Excise and Sales Tax Appellate Tribunal, Karachi along with an application for stay and the said Tribunal, vide order dated 11.07.1997, stayed the recovery proceedings subject to the condition that the appellants (petitioners) should furnish bank guarantee for the amount demanded by the respondent. Thereafter the instant petition has been filed.

3.Syed Irtaza Hussain Zaidi, advocate has appeared on behalf of the petitioners and submitted that the demand of Rs.1,79,14,796/- raised by the respondents is illegal and they may be restrained from demanding the said amount from the petitioners. While elaborating his view point, the learned counsel has submitted that the basis of determining the shortage of CBU units was totally incorrect. He further stated that parts were imported in CKD form were fully utilized by the petitioners in CBU units and there was neither any short fall nor evasion in payment of customs duty, sales tax or other duties. He, therefore, prayed that since the working adopting by the respondent was incorrect the demand raised by the respondents may be quashed and the respondents may be restrained from realizing the illegal demand of Rs.1,79,14,796/- from the petitioners.

4.Ms. Masooda Siraj, advocate has appeared on behalf of the respondents Nos.2 to 4 and at the very outset submitted that this petition is not maintainable since the petitioners have filed this petition against an order of stay which is in their favour. She also invited our attention to the order dated 09.08.2007 passed by this Court wherein the petitioners were specifically asked to satisfy the Court with regard to maintainability of this petition. She further invited our attention to the decision given by the Hon'ble Supreme Court of Pakistan in Civil Appeal No.16 of 2006 dated 04.01.2016. She in the end prayed that since this petition is misconceived and not maintainable, therefore the same may be dismissed with cost.

5.We have heard both the learned counsel for the parties and have perused the record and the decisions relied upon by the learned counsel for the respondents Nos.2 to 4.

6.During the course of the arguments, we asked a question from Syed Irtaza Hussain Zaidi that how this petition is maintainable and what is the impugned order against which the present petition has been filed, to which he replied that it is the order dated 11.07.1997 against which the instant petition has been filed. For the sake of brevity, we reproduce herein below the relevant observations of the said order:--

"5 I have considered the submissions made by pasties. Prima facie the appellant appears to have violated the conditions of the S.R.O. as well as provisions of customs Act. But I feel that insistence on deposit of the differential and the penalty in cash would cause hardship to the appellant. I therefore direct that proceedings for recovery may be stayed subject to the condition that the appellant furnishes bank guarantee for the amount demanded by the respondent".

From the perusal of the above order it is evident that this order appears to be in favour of the petitioners since in compliance of this order the petitioners have also furnished bank guarantee, which is available at page 115 of the file. Hence how the petitioners could now claim that they are aggrieved persons and how can they claim that the order passed by the Member (Judicial) dated 11.07.1997 has been passed against them is not understandable. The learned counsel for the petitioners at no point of time has satisfied this Court with regard to the maintainability of this petition in response to the specific question asked by this Court vide order dated 09.05.2007. Even today when we asked from Mr. Irtaza Hussain Zaidi to satisfy the Court with regard to the maintainability of this petition that which is the order against which the petitioners could claim that they are aggrieved persons has not been satisfactorily explained since, as observed above, the order dated 11.07.1997 appears to be in favour of the petitioners. Mr. Irtaza Hussain Zaidi through tried to wriggle out of the situation but could not satisfy us in this regard. We, therefore, find absolutely no merit in the instant petition and dismissed the same accordingly along with the listed applications.

Above are the reasons of our short order dated 05.04.2016 through which we have dismissed this petition.

MH/P-12/Sindh Petition dismissed.