2022 PLP 1163 (PTD)

MUHAMMAD JUNAID GHAFFAR, J.

Through this Petition, the Petitioner has impugned a demand1 created in respect of four Goods Declarations2 which has been generated in the computer inbox of the Petitioner. Learned Counsel for the Petitioner submits that the Respondents have re-assessed these Goods Declarations pertaining to the year 2013 by making re-assessment which is impermissible in terms of Section 80 of the Customs Act, 1969, ("Act") and without issuance of show cause notice and Adjudication by the competent officer. Notice was ordered and on perusal of the Para wise comments the contention of the Petitioner's Counsel appears to have been admitted, as it is the case of the answering Respondent that they have re-assessed the Goods Declaration under Section 80 of the Act. While confronted, learned Counsel for the Respondent has not been able to controvert the stance taken in the comments.

2. We have heard both the learned Counsel and perused the record. The averment to the effect that a direct demand has been created through some re-assessment appears not to have been disputed in the comments as it has been stated that "answering respondent re-assessed the goods under section 80 of the Customs Act, 1969" and that "the answering respondent is empowered to proceed the case through demand notice for the payment of evaded duty and taxes". Perusal of subsections (1) and (3) of Section 803 of the Act, reflects that on receipt of a Goods Declaration under section 79, an officer of Customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration, assessment, and in case of the Customs Computerized System, payment of duty, taxes and other charges thereon, whereas, subsection (3) provides that if during checking of Goods Declaration, it is found that any statement in such declaration or documents or information furnished is incorrect in respect of any matter relating to the assessment, the goods shall, without prejudice to any other action which may be taken under this Act, be re-assessed to duty and taxes. It has been further provided that in case of Computerized system, if any re-assessment is being made a proper notice and opportunity of hearing is to be provided. It appears to be an admitted position that neither any hearing notice was issued; nor, any other opportunity was provided to the Petitioner, whereas, even no reasoned order was ever passed. Notwithstanding this, in it is pivotal to note that in terms of section 80(3) powers can only be exercised during checking of Goods Declaration, and not thereafter. Here subsection (3) cannot be read in isolation to subsection (1) as it refers to a Goods Declaration filed under section 794 of the Act, which requires filing of a true declaration of goods, giving therein complete and correct particulars of such goods, duly supported by requisite documents required for clearance of such goods in such form and manner as the Board may prescribe and is further required to assess and pay his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs Computerized System. It is this self-assessment of the GD and payment of duty and taxes by the Importer in the Customs Computerized System that can be re-assessed in terms of subsection (3) ibid after it has been presented in terms of section 79 read with subsection (1) of section 80 of the Act. It is not that this power would continue to be available at all times. It stops once the GD has been assessed to duty / taxes and consignment has been released. Thereafter, no re-assessment can be made under Section 80(3) ibid. The only way out is either through a proper show-cause notice issued under Section 32 of the Act, or by way of an Appeal in terms of section 193 ibid and lastly in exceptional circumstances5 by way of re-opening of the assessment order in terms of section 195 of the Act. Insofar as the purported re-assessment order, if it may be so called, as it is not even an order; but only a calculation and change of HS codes is concerned, it could not have been done in the manner it has been so done. No jurisdiction or authority vested in the officer to re-asses the GD's in terms of section 80(3) of the Act, after the goods were out of charge and cleared by the Customs. Notwithstanding this, admittedly, this is a case of a computerized assessment system and in that case the very provision and the proviso thereof, on which respondent has placed reliance, requires that in case of reassessment, a notice shall be served to the importer through Customs Computerized System and opportunity of hearing shall be provided, if he so desires. This is also lacking in this matter. We are at a loss to understand as to how the Respondent department has acted in derogation of law and the Act itself. Not only this, even the Petition has been contested before us as reflected from the comments without any justifiability and support from the Act.

3. The august Supreme Court has consistently maintained6 that demand notices in absence of statutory show cause notices were without lawful foundation. It was observed that in the absence of the pre-requisite show cause notice no demand notice requiring payment of any alleged short levy could be issued. The superior Courts have maintained7 the primacy of the show-cause notice in proceedings emanating from section 32 and have also illumined that the said instrument is required to be issued within the statutorily mandated time frame

8. This we have already reiterated in somewhat identical facts9.

4. In view of hereinabove facts and circumstances of the case, we are of the considered view that the impugned action of the Respondent department whereby re-assessment of the petitioners GD's10 has been made in terms of section 80(3) of the Act, after release of the goods cannot be sustained and is hereby set-aside. The demand so created in the computer system is also set-aside, and the Respondent department shall immediately recall and or reconcile the same in the computer system.

5. Petition stand allowed in the above terms along with pending applications. SA/H-23/Sindh Petition allowed.