Provisional assessment

Petitioner / importer claimed that after lapse of limitation, provisional assessment of goods imported had become final assessment

Validity

Authorities were supposed to finalize assessment by 15-07-2020 or in such extended period which in no case could exceed 90 days by 14-10-2020, which had not been done

High Court declined to grant any lease, as authorities did not make final assessment after provisional assessment within stipulated period and provisions of S. 81(4) of Customs Act, 1969, were not followed nor complied with by authorities

High Court declared that provisionally assessed goods of petitioner were to be considered as finally assessed

Constitutional petition was allowed, in circumstances.

Petitioners / importers got their consignments released on provisional assessments and sought revision of valuation rulings

Validity

Ruling under S. 25A of Customs Act, 1969, was by Directorate of Customs Valuation to determine customs value and category of goods

Ruling so issued was in field and applicable on declared goods for the purpose of Ss. 80 & 81 of Customs Act, 1969, unless changed in exercising powers under S.25D of Customs Act, 1969, by Director General Valuation

Provisions of S.81 of Customs Act, 1969, did not allow, even through implication that during proceedings under S.25D of Customs Act, 1969, provisional assessment could be passed for releasing the goods

High Court depreciated tendency of filing petition for release of goods provisionally after filing a revision under S.25D of Customs Act, 1969, as the same was against scheme of law

High Court declined to interfere in the matter

Constitutional petition was dismissed in circumstances.

Goods imported by petitioner / importer were released on the basis of provisional assessment as there was dispute with regard to transactional value of goods

Validity

By the time order was passed by Collector of Customs to finalize provisionally assessed cases of goods imported by petitioner / importer in terms of Ss.25(5) & 25(6) of Customs Act, 1969, limitation period provided under S.81(2) of Customs Act, 1969 had already expired

Provisional determination made in respect of subject Goods Declarations was deemed to be final determination by virtue of S.81(4) of Customs Act, 1969

Valuation purportedly conducted under Ss.25(5) & 25(6) of Customs Act, 1969 was without satisfying pre-requisites and conditions stipulated therein nor was it in accordance with the applicable Customs Rules, 2001

High Court set aside orders passed by the forums below

Provisional determination had attained finality therefore security lying with authorities was to be released to petitioner/importer

Reference was allowed, in circumstances.

Held, that the appellant/importer had discharged his onus with regard to the declared transactional value of imported goods by providing a valid invoice and other allied documents and it was the duty of the respondent/Department to disprove the same with cogent reasons

Respondent/Department had failed to bring on record any evidence for rejecting and refusing the declared value of the impugned goods; and instead, had only relied upon import data of identical goods imported by other importers in the past

In order to negate the declared value of the consignment, the Department was under obligation to procure evidence to discard the value declared by the appellant

Appellant could not be held guilty and transactional value of the impugned consignment declared by the appellant was valid, which shall be accepted in accordance with the provisions under S.25(1) of the Customs Act, 1969, for the subsequent assessment of the consignment accordingly

Impugned assessment order and Order-in-Appeal were set aside

Appeal was allowed, under circumstances.

If it was final determination or final assessment, there was no occasion of releasing of consignment on securing differential amount through Bank guarantee

Authorities did not ask for entire amount as was determined finally

Requirements of S.81 of Customs Act, 1969, were not complied with by authorities

High Court set aside notice issued by authorities to importer for re-validation of Bank guarantee as the same was of no effect

Constitutional petition was allowed accordingly.

Assessment order under S.81(2) of Customs Act, 1969, was to be passed prior to expiry of period 6 months from the date of provisional assessment

Assessment order passed was barred by limitation by 62 days and was without power / jurisdiction and not enforceable under law

Declared value of importer stood final under S.81(4) of Customs Act, 1969

Principle that every judicial or quasi-judicial finding should be based on reasons containing justification for finding in order itself was an established principle of dispensation of justice

Order in appeal was in violation of basic principle of good governance and mandatory requirement of S.24A of General Clauses Act, 1897

Customs Appellate Tribunal set aside the order as the same was not only illegal and void but also not sustainable under law

Appeal was allowed in circumstances.

When Customs Officer would allow clearance under S.81 of the Customs Act, 1969, it was mandatory for him to secure the difference of duty and taxes, between the declared and ascertained description/PCT, and value in the shape of pay order; or bank guarantee.

Amount deposited as security could not be termed as paid duty/taxes while determining the value provisionally under S. 81 of Customs Act, 1969

Such an act will make S. 81 rendundant and the assessment made at time of clearance of goods under S. 81 would be deemed to be an assessment under S. 80 and R. 438 of Customs Rules, 2001

Such an interpretation denied the return of pay order to importer on pretext of S. 19A, which is against the intention of Legislature and expression of S. 81.

Importer was not supposed to file refund claim for paid amount of duty/taxes at the time of provisional determination of value by Department and if Department had encashed such security for meeting revenue target in absence of determination of value within stipulated period mentioned in S. 81(2) of the Customs Act, 1969, Department was duty bound to refund that amount without calling for an application for refund.

Complainant/importer, had sought refund of customs duty and allied taxes allegedly recovered illegally by the department against the security deposited by the complainant for release of his goods under Provisional Assessment order

Contention of complainant was that department having failed to finalize the Provisional Assessment within period of one year, as prescribed under S.81(2) of the Customs Act, 1969, the value declared by the complainant had attained finality; and complainant was entitled for refund of differential amount deposited by him for release of goods, which was illegally recovered by the department

Validity

After Provisional Assessment, the complainant did not pursue the matter, and no evidence was produced by him to support his declared value and that prescribed period of one year had expired

After expiry of prescribed period, Provisional Assessment, which included the declared value, as well amount secured, had attained finality under S.81(4) of Customs Act, 1969

Recovery of amount secured through PDC, could not be termed as illegal and no case for refund of the same, was made out

Compliant was rejected.

Question before the High Court was whether S.122C of the Income Tax Ordinance regarding provisional assessment, could be applied retrospectively and whether the right of appeal provided under S. 127 of the Income Tax Ordinance, 2001 was available to a taxpayer in order to impugn an order under S. 122C of the Ordinance

Held, that perusal of S. 56 of Azad Jammu and Kashmir Interim Constitution Act, 1974 read with Ss. 5,6, 6-A and other enabling provisions of the General Clauses Act, 1897; for interpretation of statutes regarding "coming into operation of the enactment" "effect of repeal" etc; it became crystal clear that S. 122C of the Income Tax Ordinance, 2001 could neither operate retrospectively nor could it take away right of appeal of taxpayer provided under S. 127 of the Income Tax Ordinance, 2001

Income Tax Ordinance, 2001 was amended whereby S. 122C was inserted, and it had not been given retrospective effect, rather it had been enforced from date of coming into force of amending statute

Right of appeal under S. 127 of the Income Tax Ordinance, 2001 was a substantive right which could not be taken away by addition of S. 122C of the Ordinance

Tax under provisional assessment order under S. 122C of the Income Tax Ordinance, 2001 had been made payable vide S. 137 of the Ordinance and such scheme of law suggested the prospective applicability of S. 122C of the Ordinance

Law followed events and laws of the time of occurrence/incident would apply, hence the law of the year for which the assessment was made, would be applied in order to make assessment of tax amount

Reference was answered, accordingly.

Grievance of importer was that authorities committed maladministration by encashing its security treating provisional assessment of goods declaration as final

Complaint filed by importer was dismissed by Federal Tax Ombudsman

Validity

Encashment of security on expiry of period under S. 81(2) of Customs Act, 1969, by treating provisional assessment final in terms of S. 81(4) of Customs Act, 1969, was not in violation of law, rules and procedure and did not tantamount to maladministration as defined under S. 2(3) of Federal Tax Ombudsman Ordinance, 2000

Goods declaration was finalized on 11-9-2008, leviable duty and taxes were recovered by encashment of securities in May, 2012 but complaint was filed on 18-6-2013, i.e. after more than one year of finalization of the matter

Complaint, on the face of it, under the provisions of S. 10(4) of Federal Tax Ombudsman Ordinance, 2000, was hit by limitation

Review was rejected in circumstances.

Revenue contended that S.122(c) of the Income Tax Ordinance, 2001 could be applied retrospectively because it was a" machinery provision, procedural in nature and was also a beneficial legislation while the taxpayer contended that S.122(c) of the Income Tax Ordinance, 2001 was a substantive provision which was prospective in nature and could not be applied with retrospective effect

Validity

Section 122(c) of the Income Tax Ordinance, 2001 was introduced through Amended Finance Ordinance dated28-10-2009-Retrospective operation was not to be given to a statute so as to impair an existing right or obligation

Main and primary rule was that every statutory provision was to be deemed prospective unless by express provision or by necessary intendment it was to have retrospective effect

Taxation Officer was not correct in applying S.122(c) of the Income Tax Ordinance, 2001 retrospectively for the tax year 2008

Finding of First Appellate Authority that S.122(c) of the Income Tax Ordinance, 2001 was not applicable retrospectively, did not suffer from any illegality to warrant any interference

As the order passed by the First Appellate Authority did not suffer from any factual or legal infirmity appeal filed by the revenue was dismissed being devoid of any merits.

Provision of S.122-C of the Income Tax Ordinance, 2001 could not be applied retrospectively to the previous year.

Taxpayer contended that S.122-C of the Income Tax Ordinance, 2001 was introduced through Amended Finance Ordinance dated 28-10-2009 and was applicable for the tax year 2010 and onward; and completion of assessment under S.122C of the Income Tax Ordinance, 2001 for the year under appeal was illegal, unjustified and without jurisdiction; and that Cl.(vi) of subsection (1) of S.114 of the Income Tax Ordinance, 2001 was introduced through Finance Act, 2009 was applicable for the tax year 2010 and onward so issuance of notice under S.114(4) of the Income Tax Ordinance, 2001 and subsequently completion of assessment under S.122C of the Income Tax Ordinance, 2001 for the tax year 2008 was illegal, unjustified and without jurisdiction

Validity

Taxpayer produced photocopy of passport showing that taxpayer was a U.K national; and produced bill of entry showing the booking of vehicle from Japan and consideration was transmitted to Japan from U.K

Assessment made was without jurisdiction because provision of S.122C of the Income Tax Ordinance, 2001 was introduced through Amended Finance Ordinance dated 28-10-2009 and was applicable for the tax year 2010 and onward

Assessment completed under S.122C of the Income Tax Ordinance, 2001 was without jurisdiction and not maintainable in the eye of law

Order passed by the First Appellate Authority was not open to any exception and was upheld and maintained

Departmental appeal was dismissed by the Appellate Tribunal.

Return so filed was an assessment order under the term of S.120(1)(b) of the Income Tax Ordinance, 2001; in the presence of the same any other assessment order was nullity in the eye of law.

Ex parte assessment could not be termed best judgment because as per the information from PIMRA as recorded in the ex parte assessment order, taxpayer had PIMRA license with the capacity of 1000 connections, beyond this number taxpayer could not install extra connections, the taxation officer had taken it at 3000 connections which was not only unjust and unfair but also penalizing

When the taxpayer was National Tax Number holder; already existed on tax role, the completion of assessment at temporary tax number in the absence of personal service of the statutory notices, the passing of order under S.122(C) of the Income Tax Ordinance, 2001 at a figure which was at variance than one communicated by the PIMRA

Order passed under S.122(c) of the Income Tax Ordinance, 2001 was directed to be annulled, in circumstances.