ORDER SHEET

IN THE HIGH COURT OF SINDH, KARACHI

Spl. C.R.A No.184 of 2009.

----------------------------------------------------------------------------------

Date                      Order with signature of Judge

----------------------------------------------------------------------------------

 

Before:                                                       Mohammad Ather Saeed J.

                                                                  Irfan Saadat Khan J.

For Katcha Peshi.

--------------

18.03.2011

 

          Mr. Raja Muhammad Iqbal, Advocate for Appellant.

          Mr. Qamar-ul-Islam, Advocate for Respondent.

------------------

 

 

Mohammad Ather Saeed:-This Special Customs Reference Application has been filed against the order of the Customs, Excise & Sales Tax Appellate Tribunal dated 15.08.2009 in Customs Appeal No.538/07/18670 whereby the following questions said to be arising from the impugned order, have been proposed for the opinion of this Court:-

1.                  Whether on facts and circumstances of the case the learned Tribunal erred to hold that the case was adjudicated under section 179 of the Customs Act, 1969?

 

2.                  Whether on facts and circumstances of the case the Learned Tribunal erred in law to hold that Assistant Collector may not pass order or raise demand under sub section 3 of Section 32 of the Customs Act?

 

3.                  Whether on facts and circumstances of the case the Learned Tribunal ignored the law that case has been decided under sub Section 3 of Section 32 of the Customs Act, 1969 and the Show Cause Notice is not required under Section 180 of the Customs Act, 1969?

 

4.                  Whether on facts and circumstances of the case the learned Tribunal failed to appreciate the Principal Appraiser is the appropriate officer to deal with the cases under sub Section 3 of Section 32 of the Customs Act, 1969 vide Serial No.3(ii) of SRO 37(1)/2002 dated 15.06.2002 and in terms of section 4 of the Customs Act, 1969, the Assistant Collector may perform the functions of his subordinate staff i.e. Principal Appraiser?

 

5.                  Whether on fact and circumstances of the case the learned Tribunal considered the provisions of Section 24A of the General Clauses Act at the time of passing the said order?

 

6.             Whether on facts and circumstances of the case the order of the learned Tribunal is misreading or non reading of the facts of the case?

 

2.  We have heard Mr. Raja Muhammad Iqbal learned counsel for the Applicant and Mr. Qamar-ul-Islam learned counsel for the Respondent and have perused the records of the case including the impugned order.

 

3.  A perusal of the order in original indicates that the order in original was passed without issuance of a proper show cause notice as stipulated in section 32(3) and only a demand notice dated 20.07.2004 was issued and the adjudication proceedings were finalized on the basis of this demand notice.

 

 

4.  When confronted with this position initially Mr. Raja Muhammad Iqbal submitted that under section 32(3) an action can be taken by issuance of a demand notice only and no show cause notice is required to be issued. We asked him to read subsection (3) of Section 32 and while reading it he pointed out that only notice has been mentioned in subsection (3). When we asked him to read further and pointed out that it has been mentioned that the notice requiring him to show-cause has been specified, he submitted that the demand notice issued fulfilled the requirement. He also wanted to differentiate between subsection (2) and sub section (3) where he said that a show cause notice has specifically been mentioned. However, a perusal of the sub section (2) also shows that the same words are mentioned in subsection(2), which are mentioned in subsection (3) i.e. requiring him to show cause and not specifically a show cause notice as contended by Mr. Raja Muhammad Iqbal. He however, still insisted that in cases of sub section (3) only a demand note  can suffice and in this connection relied on a judgment of the Hon’ble Supreme Court of Pakistan in the case of Collector of Sales Tax & CE, Lahore Vs. Zamindara Paper & Board Mills etc reported as (PTCL 2007 CL.260)whereby the Hon’ble Supreme Court has held that mere non mentioning of sub-rules (2) and (3) of Rule 10 of the Central Excise Rules 1944 will not vitiate the proceeding taken on the basis of such show cause notice which would not be illegal for this reason alone. There can be no cavil to this decision of the Hon’ble Supreme Court but it is a trite law that things have to be done as they are stated to be done in the law and under section 32(3) a show cause notice has to be issued which admittedly has not been done in this case.

 

5.  Learned counsel for the Respondent relied on a judgment of the Hon’ble Supreme Court of Pakistan in the case of Assistant Collector Customs Vs. Khyber Electric Lamps reported as (PTCL 2002 CL.1) whereby the Hon’ble Supreme Court had held as under:

 

Demand notices in absence of statutory show cause notices were without lawful authority and thus of no legal effect.—No show cause notices as required under sub-sections (2) and (3) of Section 32 of the Act were given to the respondents to show cause as to why they should not pay the defaulted amount, therefore, Demand notices in absence of statutory show cause notices were without lawful foundation. It is well settled proposition of law that a thing required by law to be done in a certain manner must be done in the same manner as prescribed by law or not at all. Since prerequisite show cause notices as required by law have not been served on the respondents, therefore, no straight forward demand notice for payment of alleged short levy could be issued.

 

Therefore, in absence of statutory notice, demand notices dated 25.07.1995 and 26.07.1995 were without lawful authority and thus of no legal effect.

 

6.  Mr. Raja Muhammad Iqbal in rebuttal again relied on the judgment of the Zamindara Paper & Board Mills quoted supra. We are of the considered opinion that the case of the present respondent is on better footing than the case of the respondent in the Khyber Electric Lamps case quoted supra and that judgment is also binding on us and this case has no nexus with the judgment of the Hon’ble Supreme Court of Pakistan in the case of Zamindara Paper & Board Mills case quoted supra.  Respectfully following the judgment in Khyber Electric Lamps case quoted supra, we answer question No.3 in negative against the applicant and in favour of the respondent.

 

7.  In view of the above answer the order of the Tribunal stands confirmed therefore we need not answer the other proposed questions. Consequently this Spl. Customs Reference Application is dismissed in limine.

 

JUDGE

JUDGE

Sajid