P L D 1993 Supreme Court 132 (PLP)

SAAD SAOOD JAN, J.‑‑These are 22 connected appeals by special leave from two separate judgments dated 11‑2‑1988 of the Sindh High Court whereby the Constitutional petitions preferred by the respondents were allowed. As the questions of law arising in the appeals are the same, these have been heard together.

2. By a notification issued on 17‑4‑1986 under section 19, Customs Act, the cutoms duty on palm oil was reduced by the Federal Govemjnent to Rs.2,350 per metric tonne and complete exemption was granted in respect of soyabean oil. By another notification issued on 17‑&1986 the exemption in respect of soyabean oil was partially withdrawn and it was subjected to customs duty at a rate of Rs.2,350 per metric tonne. Similarly by another notification issued on 22‑8‑1986 the exemption in respect of palm oil was also modified and the rate of duty was raised to Rs.5,350 per metric tonne.

3. The respondents in Civil Appeals Nos.441‑K to 460‑K and 462‑K imported palm oil in Pakistan. They entered into contracts with foreign suppliers and except the respondent in Civil Appeal No.453‑K opened letters of credit prior to 22‑8‑1986. However, the shipments of the palm oil arrived in Pakistan after 22‑8‑1986. The respondent in Civil Appeal No.453‑K entered into a contract with the foreign supplier before 22‑8‑1986 but opened the letter of credit subsequent to that date. The respondent in Civil Appeal No.461‑K was an importer of soyabean oil. It entered into a contract with the foreign supplier and opened the letter of credit in March, 1986 but the shipment arrived at Karachi on 10‑9‑1986.

4. The Customs Department demanded duty from the respondents at the rates which were in force at the time when they presented the bills of entry in accordance with the provisions of section 30, Customs Act. The respondents resisted the demand on the ground that they were liable to pay the duty at the rate which was in force at the time when they entered into contracts with their foreign suppliers. The dispute in this regard was taken by the respondents in writ jurisdiction to the High Court. Relying upon the judgment of this Court in the case of Al‑Samrez Enterprise (1986 SCMR 1917) the High Court accepted the Constitutional petitions of the respondents and upheld the stand taken by them. From the judgment of the High Court the Federal Government has come in appeal to this Court. S. During the pendency of these appeals the Federal Legislature amended the Customs Act by inserting section 31‑A therein. The new section was clearly intended to eclipse the judgment delivered by this Court in the case A of Al‑Samrez Enterprise, ibid. However, it was contended on behalf of the respondents that as the quantum of duty payable by them stood crystallized as soon as they presented the Bills of Entry these, were past and closed transactions and as such were not affected by section 31‑A, ibid, which was enacted by the Finance Ordinance, 1988. Precisely the same contention was raised before this Court on similar facts in Civil Appeals Nos.915‑K to 918‑K of 1990 and was accepted by the judgment delivered on 24‑9‑1991. Respectfully following the judgment in the said appeals we would dismiss these appeals with no order as to costs. (Sd.) NASIM HASAN SHAH, J (Sd.) ZAFFAR HUSSAIN MIRZA,.J (Sd.) SAAD MOOD JAN, J NAIMUDDIN, J.‑‑‑I have written separate judgment allowing all these appeals. Judgment is annexed. (Sd.) SAJJAD ALI SHAH, J NAIMUDDIN, J ‑‑I have had the benefit of reading the judgment proposed to be delivered by my learned brother Saad Saood Jan. I have already expressed my opinion in Civil Appeals Nos.915‑K to 918‑K of 1990 and I would follow the same in these appeals too. I may add that the customs duty is payable in accordance with the provisions of section 30, read with section 79 or, as the case may be, section 104 of the Customs Act, 1969, on the rate prevailing on the date when the bill of entry was presented and, if the bill of entry was presented before the arrival of the vessel carrying the goods, on the date when the manifest of the vessel carrying the goods was presented to the Customs authorities. The dates of licence or the contract or the opening of Letter of Credit are not relevant for the purposes of determination of the rate of customs duty. The duty is payable on the rate prevailing on the dite of filing of bill of entry and, if the same is filed in advance of the arrival of the vessel carrying the goods, then the date when the manifest of the vessel carrying the goods is presented to the customs authorities. The insertion of section 31‑A in the Customs Act, has successfully destroyed the effect of the judgment in the case of Al‑Samrez Enterprises (1986 SCMR 1917) as held in Civil Appeal No.915‑K of 1990. In this case too the question of past and closed transaction does not arise because the customs duty was claimed in accordance with the provisions of section 30 of the Act at the rate prevailing on the date when either the bill of entry was filed or, if the bill of entry was filed in advance of the arrival of the vessel carrying the goods, on the date when the manifest of the vessel carrying the goods was first presented to the. Customs authorities. The transaction wouldhave been past and closed if the respondents had got the goods cleared after payment of customs duty levied and the duty was increased subsequently and'a demand was made for the payment of balance of the enhanced duty with re‑strosp ective effect.

2. It may be remembered that the contract was between the respondents and foreign suppliers to which the Government was not a party. The contract created rights and liabilities thereunder between the parties. It does not affect the respondents' liability to pay duty in accordance with law. The liability to pay duty is contained in section 30 of the Act.

3. The quotion of promissory estoppel also does not arise because the Government never promised in the notifications that the exemption in duty granted by the notifications shall be for a particular period or time or it shall not be varied or changed or withdrawn for any particular period or time.

4. Further, merely entering into a contract does not create any vested right qua the Government who are entitled to charge customs duty in accordance with the law, prevailing on the date of filing of bill of entry and, if the bill of entry is filed in advance of the arrival of the vessel carrying the goods,. then when the manifest of the vessel carrying the goods was first presented to the Customs authorities. 5. 1 am, therefore, of the opinion that the transactions in question are fully covered by section 31‑A of the Customs Act, for, the amendment is effective from the date the Customs Act was enforced and any decision contrary to the provisions of section 31‑A has lost its efficacy. 6. 1 would, therefore, allow all these appeals and set aside the orders passed by the High Court and impugned in these appeals. M.BA./G‑376/`S Appeals dismissed.