1990CLC511 (PLP)

‑‑‑S. 32‑‑‑Constitution of Pakistan (1973), Art.199‑‑Customs duty‑‑‑Initiation of proceedings against misdeclaration, fraud or collusion‑‑‑Time limit‑‑‑In case of inadvertence or error, Departmental Authority could initiate proceedings within six months, while in case of false declaration, production of false documents, collusion or fraud, three years' time has been provided for taking proceedings for recovery‑‑‑Where there was no charge of misdeclaration, producing false documents, collusion and fraud, period of four and a half years taken by the department for making final assessment could not be deemed to be a reasonable time‑‑‑Final assessment and demand notice were thus declared to be as without lawful authority and of no legal effect. Khursheed Anwar Shaikh for Petitioner. Shaikh Hamid Hassan for Respondents. Date of hearing: 26th September, 1989.???????? SALEEM AKHTAR, J: ‑The petitioner imported Transfer paper/ Stamping printing paper from U.K., valued at Rs.41,270, which arrived on 27‑12?1976. The petitioner had declared the rate of the imported goods at 5.5 pence per meter, but respondent No.3 did not accept it and provisionally assessed the duty under section 81 of the Customs Act at the rate of 6 pence per meter and a sum of Rs.48,173 was recovered from the petitioner as duty. After a lapse of 4/1‑2 years, on 24‑8‑1981 respondent No.3 issued a demand order claiming a short recovery of Rs.32,117 by enhancing the value of goods further from 6 pence per meter to 10 pence per meter and increasing the value of the imported goods from Rs.41,270 to Rs.75,

037. The petitioner filed an appeal before respondent No.2 which was dismissed and the revision application filed by him also met the same fate. 1n the counter‑affidavit the respondents have stated that as the declared value was not accepted, the goods were released under section 81 of the Customs Act provisionally pending finalization of value by the valuation department. The amount of Rs.4,015 was not recovered as customs duty but the same was received as a deposit pending finalization of value. After thorough investigation and enquiries Valuation Department finalized the value and advised the Customs House to finally assess the goods at the rate of h.0.1 per meter. Accordingly a demand show‑cause notice was issued to the importer. Mr. Khursheed Anwar Shaikh, the learned counsel for the petitioner has contended that the respondent had relied upon the valuation fixed by the valuation department obtained behind his back and no opportunity to rebut it was afforded to him. It is clear from the counter‑affidavit that on receipt of the report' from the Valuation Department respondent No.3 made final assessment and issued demand note. Before framing the final assessment on the basis of fresh evidence, no notice was issued to the petitioner nor copy of the report of the A Valuation Department was furnished to him muchless to afford an opportunity to rebut the fresh evidence which was used against him. The petitioner was entitlea to an opportunity to rebut the fresh evidence procured by respondent No.3. This l is a clear breach of the principles of natural justice. Mr. Shaikh Hamid Hassan,1 the learned counsel for the respondents had contended that although opportunity to rebut the charges at all the three stages viz. original, appeal and revision was given, the petitioner failed to substantiate the declared value. Respondent No.3 had provisionally assessed the Customs Duty as further inquiry was required for determining the value of the goods. The final assessment was to be made as provided by section 81 of the Customs Act which reads as follows:‑ "

81. Provisional assessment of duty.‑‑(1) Where it is not possible immediately to assess the customs‑duty that may be payable on any imported goods entered for home consumption or for warehousing or for clearance from a warehouse for home consumption or on any goods entered for exportation, for the reason that the goods require chemical? or other test (for a further enquiry) for purpose of assessment, or that all the documents or complete documents or full information pertaining to those goods have not been furnished, an officer not below the rank of Assistant Collector of Customs may order that the duty payable on such goods be assessed provisionally: Provided that the. importer (save in the case of goods entered for warehousing) or the exporter pays such additional amount as security or furnishes such guarantee of a scheduled bank for the payment thereof as the said officer deems sufficient to meet the excess of the final assessment of duty over the provisional assessment. (2)??????? Where any goods are allowed to be cleared or delivered on the basis of such provisional assessment, the amount of duty actually payable on those goods shall, as soon as may be, finally assessed and on completion of such assessment the appropriate officer shall order that the amount already paid or guaranteed be adjusted against the amount payable on the basis of final assessment, and the difference between them shall be paid forthwith to or by the importer or exporter as the case may be." Provisional assessment is made when it is not possible to assess the duty immediately because further inquiry has to be made in the light of chemical test or other tests or all particulars, documents or further information in respect of the goods have not been furnished. The final assessment for determining the amount of duty actually payable is to be made as soon as may be. The Assistant Collector is therefore cast with a duty to finalise assessment as soon as possible in the circumstances of the case. Such determination depends on availability of test, g information or documents therefore final assessment should be completed within a reasonable time keeping in view the nature of tests or documents or information required for such determination. What should be the time limit for final assessment. The Legislature has not fixed any time and has left it to be determined by the assessing authority with a rider that it should be as soon as possible. Therefore the respondent cannot take unreasonably long time which cannot be justified by the nature of inquiry required to be made. The essence of the matter is that the assessing authority should act with despatch without any delay and complete the assessment within a reasonable time. In the counter?affidavit the respondents have not explained the delay of 4/1‑2 years particularly as only documents relating to the value of the goods had to be obtained. The Valuation Department would be expert in assessing the value and many instances of import of similar goods and their value should normally be available with them. In such circumstances delay of 4/1‑2 years was not reasonable particularly is it has not been explained. The law favours finality and decision without delay. 'Therefore where an authority is charged to decide a case as soon as possible, unreasonably fails to decide within a reasonable time for which there is no obvious valid explanation, the order is tainted with illegality. The learned counsel for the petitioner has referred section 32 to show that where due to 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 six months from the date of clearance of goods requiring him to show cause why he should not pay the amount specified in the notice. In cases where the duty has not been levied or short levied due to misstatement, misdeclaration, or production of false documents or collusion the person liable to pay 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. It is thus clear that in case of inadvertence or error the Department can initiate proceedings within six months and in case of false declaration, production of false documents and collusion three years has been provided for taking proceedings for recovery. How then can in cases where there is no charge of misdeclaration, producing t) false documents, collusion or fraud the department can take 4/1‑2 years and still maintain that it a reasonable time. Section 32 merely indicates what in certain circumstances, would be a reasonable period for initiating any action or making recovery. We therefore, declare that the final assessment and demand notice were made and issued without lawful authority and are of no legal effect. A.A./S‑511/K ???????????????????????? ??????????????????????????????????? ??????????? Petition accepted.