1991 PLP 729 (CLC)

In parawise comments, it is stated by the respondents that as per Certificate No.699 dated 20‑5‑1984 issued by the agents of Mercedez, Benz Car in Pakistan namely Shahnawaz Limited, the car was manufactured during 4‑1‑1982 to 26‑7‑1982. This certificate later proved to be incorrect vide subsequent certificate/letter dated 28‑4‑1985 confirming that the vehicle in question was manufactured in October, 1982 and its actual ITP was DM 19,487 and not DM 18429 and short levy duty in the sum of Rs.82,130 was payable by whosoever owns the said car. It is contended by Mr. Khursheed Anwar Shaikh that the Respondent No.3 had acted high‑handedly and in violation of law by confiscating the Car which was neither liable to confiscation under section 162 nor under Section 163 of the Customs Act. Besides no search warrant as required under Section 162 or notice as contemplated under Section 180 were issued before the confiscation. In support, learned counsel had placed reliance on 1973 S C M R 411, 1968 S,C M R 603, 1989 S C M R 311, P L D 1981 Kar. 250 and P L D 1977 Lah. 1318. It is stated by the petitioner's counsel that it is neither a case of smuggling of the car into Pakistan nor a case of imposition of penalty. It is rather a case of short levy, of Custom duty on discovery of new facts. The respondents in their parawise comments while relying on the judgment of Lahore High Court in W.P. No.545/76 have stated that no person can use the car until the duty is paid on it but have conceded that in such case the vehicle cannot be confiscated. We therefore agree with the learned counsel that the seizure of the car was illegal and without jurisdiction. It was next contended by Mr. Khursheed Anwar Shaikh that the impugned notice under section 32 by the Customs Act speaks of the evasion of custom duty but there is nothing on the face of it to indicate whether notice was given under subsection (2) or subsection (3) of Section 32 of the Act. In case of subsection (2) notice must be served on the person liable to pay duty or charge within three years of the relevant date, whereas in case of subsection (3) notice must be served on him within four months. According to him, the petitioner's case falls under subsection (3) and hence it was further urged that the show‑cause notice is time‑barred and the entire proceedings thereunder are void ab initio. In order to appreciate the objections raised by the learned counsel, it would be worthwhile to reproduce section 32 of the Act as under:‑ "

32. Untrue statement error, etc.‑‑(l) If any person, in connection with any matter of Customs.‑

(a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of Customs any declaration, notice, certificate or other document whatsoever, or (b) makes any statement in answer to any question put to him by an officer of Customs which he is required by or under this Act to answer, and such document or statement is untrue in any material particular, he shall be guilty of an offence under this section. (2) Where, by reason of any such document or statement as aforesaid or by reason of some collusion, any duty or charge has not been levied or has been short‑levied or has been erroneously refunded, the person liable to pay any amount on that shall be served with a notice within three years of the relevant date, requiring him to show cause why he should not pay the amount specified in the notice. (3) Where, by reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within four months of the relevant date requiring him to show cause why he should not pay the amount specified in the notice. (4) The appropriate officer, after considering the representation, if any, of such persons as is referred to in subsection (2) or subsection (3) shall determine the amount of duty payable by him which shall in no case exceed the amount specified in the notice, and such person shall pay the amount so determined. (5) For the purpose of this section, the expression "relevant date" means‑ (a) in any case where duty is not levied, the date on which an order for the clearance of goods is made; (b) in a case where duty is provisionally assessed under section 81, the date of adjustment of duty after its final assessment; (c) in a case where duty has been erroneously refunded, the date of its refund; and (d) in any other case, the date of payment of duty or charge." It is true that the show‑cause notice does not indicate whether the petitioner is liable to short levy of duty under subsection (2) or (3) but the notice on the face of it expressly makes out a clear‑cut case of misdeclaration, fraud and collusion against the petitioner to which subsection (2) of section 32 of the Customs Act is applicable and not subsection (3) thereof which comes into play only in case of inadvertance, error or misconstruction of statement. Besides the petitioner's letter on record and the averments made by him in the petition clearly disclose that the petitioner had treated the impugned notice as a notice under subsection (2) of section 32 of the Customs Act and as such it was within time. Hence both the contentions raised by the learned counsel have no force. Next, it was maintained by the learned counsel for the petitioner that there was no proper service of notice on the person liable to pay the said short levy of duty who in the present case is Mr. Habibur Rehman, the importer of the car. At this stage learned counsel for the respondents Mr. Kazim Hussain, brought to our notice section 215 of the Customs Act, 1969 which specifically deals with the subject of service and runs as follows:‑

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215. Service of order decision etc.‑‑Any order or decision passed or any summons or notice issued under this Act shall be served. (a) by tendering the order, decision, summons or notice or sending it by registered post to the persons for whom it is intended or to his agent; (b) if the order, decision, summons or notice cannot be served in any manner provided in clause (a), by affixing it on the notice. board of the .Custom‑house." As per record, the impugned show‑cause notice dated 11‑5‑1985 was issued to Mr. Habibur Rahman, the importer of the car and also to his agents M/s. Naveed Umar & Co. This show. cause notice, was duly replied by the advocate for the petitioner but it does not disclose the name of the petitioner. However in his letter dated 1‑7‑1985, reference is made to the petitioner. Section 215 of the Customs Act envisages service either on the person for whom it is intended or on his agent. When however service cannot be made on either of them, it can be affected by affixation of notice on the notice board of the Custom House. But it is not the case of the petitioner that service of the show‑cause notice was not effected on the agent. The petitioner has clearly stated in the petition that he came to know of the contents of the show‑cause notice from the clearing agents. The contention, therefore, stands repelled by the record itself and cannot be accepted. Lastly it was urged by the learned counsel for the petitioner that the short levy of duty, if any, is payable by the importer of the car and not by the petitioner who is an innocent purchaser/transferee thereof. Learned counsel for the respondent on the other hand had maintained that the petitioner as owner and transferee of the car is liable to pay the same. Reliance was placed on Rana Tufail Muhammad v. Deputy Collector of Custom Lahore and 2 others, 1980 PCr.LJ 721, M/s. Gulkand & Company Limited v. Government of Pakistan 1983 S C M R 522 and Shiv Poojan Rai Indarasan Rai Limited v. Collector of Customs A I R 1952 Cal.

789. In Rana Tufail Mohammad v. Deputy Collector of Customs, Lahore and 2 others, 1980 P Cr. L J 721, it was held that "the law had placed the onus on the transferee of the car and unless he is able to show that he acquired possession of the car with lawful excuse and exercised due diligence and care ensuring that the car was properly imported in the country it cannot be said that he was an innocent transferee/purchaser of the car. In M/s. Gulkand Company Ltd. v. Govt. of Pakistan reported in 1983 S C M R 522 reference was made to levy of Custom duty and sales tax on a Mercedez car possession whereof had created the liability and the High Court in the circumstances of the case had held that "incidence of custom duty and sales tax had fallen on goods imported and the person who is for the time being the owner is liable to pay them if he wishes to retain them". The Supreme Court declined to interefere with the order of the High Court, rejected the plea that the goods were imported with intention of re‑exporting and refused leave to appeal. The position here is not different. Since the petitioner has not been able to establish that he is not liable to pay the short levy duty, the question of release or refund of the Bank Guarantee to the respondents does not arise. In the result we dismiss the petition with costs. H.B.T./S‑709/K Petition dismissed.