P L D 1958 Dacca 276 (PLP)

The Rule originally came up before me for hearing but as the point raised by the learned Advocate for the petitioner was one of first impression and of considerable importance to the mercantile community of the Country, I thought it desirable that the matter should be decided by a Division Bench. Hence this Rule has come up before this Bench. The facts are mostly undisputed and lie within a very short compass. The plaintiffs‑opposite party imported from New York flash‑light bulbs per S.S. City of Birminghum, owned and controlled by the defendant‑petitioner. On the landing of the consignment at Chittagong, the plaintiffs found that the consign ment was in damaged condition and that 3260 pieces of flash‑light bulbs were missing from the cartons. The plaintiffs‑opposite party claimed compensation for the shortage against the carriers who are the petitioners in this Rule. The carriers admitted the liability to compensate the plaintiffs‑opposite party for the short landing of the bulbs but they refused to compensate the plaintiffs for the sale tax paid on the bulbs that were never imported. They maintained that [lie sales tax amounting to Rs. 82‑6‑0 on these 3260 pieces of bulbs were not payable under the law relat ing to sales tax and, as such, even if the plaintiffs had paid the same, the carriers could not be called upon to compensate the plaintiffs for the same. The learned Subordinate Judge on the facts, as stated above, framed the following issue amongst others for his decision. "Can he plaintiffs recover sale tax" ? His answer was in the affirmative. The learned Subordinate Judge held that in terms of paragraph 18 of the bill of ladnig the carriers contracted to pay the invoice cost plus disbursement; in the event of ally liability being Adjudged against the carriers in respect of the merchandise. He held that the plaintiffs having paid the amount of the sales tax, this should be considered a disbursement within the terms of the contract between the importer and the carrier and, as such, the carrier is liable for the amount. The learned Subordinate Judge was also influenced in coming to his. decision by the fact that the carriers did not resist the recovery of the import duty by the plaintiffs in connection with the bulbs that have short‑landed and with respect to which the sales tax was sought to be recovered by the plaintiffs. The learned Advocate who appears in support of the Rule contends that in view of section 3 and section 27 of the Sales Tax Act, 1951, the plaintiffs are not entitled to recover the amount claimed by them but they are free to get refund of the same from the tax authorities if they so choose. The relevant provisions of sections 3 and 27 are as follows Section 3 "There shall be levied and collected a tax on the value of‑ (b) All goods imported into the Provinces or the Capital of the Federation payable by the importer". Section 27.‑Sub‑clause 2 : "If any person satisfies the Sales Tax Officer that the amount of tax paid by him exceeds the amount with which he is properly chargeable under this Act, he shall be entitled to a refund of such excess, and the provisions of this Act in respect of appeal and revision shall apply to an order passed by the Sales Tax Officer under this subsection as they apply to an assessment". The learned Advocate for the petitioner argues that inasmuch as these 3260 pieces of flash‑light bulbs were never imported into the Provinces or the Capital of the Federation, no sales tax was payable by the importer and, if the importer has made any payments towards the sales tax on goods not imported into the Country, he must either bear the burden himself or resort to the provisions for refund in the Sales Tax Act itself. In any case, he cannot demand compensation from the carrier who failed to bring the goods to any port in the Country. The learned Advocate for the plaintiffs opposite party firstly contends that the payment of the sales tax on the 3260 pieces of bulbs that never landed at Chittagong is a disbursement and, as such, in terms of the to recover the same. We do not think that the payment of sales tax, when the same was not payable under the law relating to, sales tax, could be said to be a disbursement so as to be recover able in terms of the contract between the parties. The goods A not having been imported at all, no sales tax was payable on the same and an improper payment cannot constitute disbursement so as to entitle the plaintiffs to recover the same. The learned Advocate for the opposite party next argues that the carriers not having objected to the payment of the import duty they cannot consistently object to the payment of the sales tax, because the principles on which both the import duty and sales tax are realised are the same. We do not see any force in this argument of the learned Advocate. If the carriers have not resisted the demand of the plaintiffs for the import duty, it benefits the plaintiffs and the plaintiffs will not certainly gain anything by asking us to hold that the import duty was also wrongly paid and is not recoverable from the carriers. : The fact that the carrier did not object to the payment of the import duty does not certainly take away any right they may have under the law to object to the payment of the sales tax. The learned Advocate for the opposite party also made a grievance that the carriers having refused to, issue a short‑landing certificate for the goods which have not landed, the plaintiffs have been debarred from applying for refund under, the Sales Tax Act. We do not see any legitimate grounds for this grievance because neither the Act nor the rules framed thereunder make it obligatory for an applicant for refund to produce a short‑landing certificate. The language of the section is "if any person satisfies the Sales Tax Officer, etc.," we do not see why it should be held that such satisfaction can be obtained only on production of short‑landing certificates and not by any other evidence. Lastly, the learned Advocate for the opposite party contended that the cartons having landed according to marks as in the bill of lading it must be held that the goods were imported and the sales tax was properly levied under section 3 of the Sales Tax Act. We find it difficult, to accept this argument in view of the finding of the learned Subordinate Judge that 3260 pieces of flash light bulbs never landed at Chittagong and, as such, were never imported into the County. To accept the learned Advocate's argument that the goods should be notionally taken to have landed if the container, have landed will lead, according to us, to absurdity. Goods have been defined in the Sales Tax Act as all kinds of movable property and if the goods that are sought to be imported are in fact not imported it is impossible to hold that a tax is payable on them. The learned Advocate for the opposite party also draws our attention to rules which exhaust all the provisions with respect to the circumstances under which refund can be claimed and the procedure for making such claim and a case of the present nature is not covered by any of these rules. In our opinion, it was not necessary to make any rules for an obvious situation. When goods have not actually been imported but the sales tax has been paid, on the basis that they have been imported, the Act itself authorises a refund. The right to make' an application for refund in the circumstances that have happened is there under the Act and even if there are no rules, as pointed out by the learned Advocate for the opposite party, the right cannot be argued to have thereby been taken away. To us it seems that section 3 of the Sales Tax Act is clear enough and the contention of the learned Advocate for the petitioner must be upheld. The result is that this Rule is made absolute but, having regard to the fact that the point is of first impression, we do not award any costs to the petitioner. The decree of the Court below will be modified by deducting an amount of Rs. 83‑6‑0 therefrom which was claimed on account of sales tax. AMIN AHMED, C. J.‑‑I agree. Z. A. S. Rule made absolute.