ORDER IFTIKHAR MUHAMMAD CHAUDHRY, CJ. - Leave to appeal has been sought against the judgment of the High Court dated 30th June, 2009.
2. Precisely stating the facts, which have given rise to the instant petition, are that petitioner Company was issued a Show-Cause notice (No. ST/MISC/205/99-AID, dated 14th September, 1999, by the Collector (Appraisement) Collectorate, Karachi; alleging therein that petitioner Company has not installed textile machinery and mill at the specified place i.e. Nankana Warborton Road, Sheikhupura. Therefore, being disentitled to claim exemption from the custom and sales tax under S.R.O. No. 484(1)/1992, dated 14th May, 1992, as to why they should not be proceeded against under the various clauses of the Custom Act including clause 10-A of Section 156(1) of the Customss Act, 1969 for realization of the Customs duty of Rs. 49,08,665 and income tax at Rs. 10,63,544.
3. In the reply filed through a learned counsel, substance of the show-cause notice was partially admitted but with the explanation that as the specified place of Nankana Warborton Road, District Sheikhupura, where textile mill was to be installed after availing the exemption from the custom duties under SRO No. 484(1)/1992, the petitioner could not get financial facility for the project, thus had no option but to install the above machinery at their original factory premises at Kotri (Sindh) for which they have acquired an installation certificate issued by the Assistant Commissioner of Customs, Hyderabad in the year 1993 etc. Significantly, it is important to note that petitioner raised the plea that they have not only mentioned in the Bill of Entry that they were claiming exemption under SRO 484(1)/1992 but also under SRO 791(1)71991, dated 15th August, 1991, therefore, petitioner Company would be entitled for exemption under SRO 791(1)71991.
4. The plea of limitation in respect of issuing the show-cause notice for effecting the recovery was also specifically raised in terms of Section 32(2) or 32(3) of the Customs Act, as according to them the maximum period for issuing a show-cause notice under Section 32(2) is five years and since goods/machinery were cleared in June 1992 and show-cause notice has been issued in 1999, therefore, same is barred by time.
5. The plea so raised by the petitioner Company was turned down by the Adjudicating Officer vide Original Order No. 66 of 2000, dated 24th June, 2000, concluding thereby that the petitioner had violated the provisions of SRO 484(1)/1992 and directed them to make payment of customs duty of Rs. 32,72,442 alongwith mark-up of 14% and also levied a penalty of Rs. 10,00,000 in terms of clause 10-A of Section 156(1) of the Customs Act.
6. The Customs, Excise and Sales Tax Appellate Tribunal heard the appeal filed by the petitioner and maintained the order of the adjudicating officer to the extent of levy of the Sales Tax and imposition of the penalty but waived imposition of the mark-up.
7. Subsequent thereto, appeal was filed before the High Court under Section 196 of the Customs Act (IV- 1969), which has been dismissed vide impugned judgment, concluding para therefrom reads as under:- "In the light of the above discussion we are of the opinion that the questions which have been framed by this Court at the time of admission do not resolve the controversy in hand except question No. 3 which we will answer in affirmative in favour of tile respondent and against the appellant. We would also answer the question No. 4 for academic purposes only in negative, whereas questions Nos. 1 and 2 have no nexus with the decision of this case and therefore, we need not answer them. To resolve the controversy we will frame a fresh question numbered question No. 4(a) as under:-- "Whether on the facts and circumstances of the case the action of the respondent in refusing the exemption under SROs 484 and 791 to the appellant is in accordance with law?" and we will answer the above question in affirmative in favour of the respondent and against the appellant as consequence thereof this appeal is dismissed."
8. Before dilating upon the case of the petitioner, we consider it appropriate to note that the amount of Rs. 49,08,665 with income tax of Rs. 10,63,544 was found due against the petitioner Company w.e.f. June, 1992 when permission was sought to install the textile mill claiming the benefit of the payment concession of duty under SRO 484(1)/1992, whereas allegedly the amount of Rs. 42,72,422 has been paid on 24th May, 2011. It has been reported by the learned counsel for the petitioner that no stay was obtained for depositing the amount in the government treasury to his knowledge. Therefore, it is held that in absence of any restraint order from the competent forum the petitioner Company had a legal obligation to make the payment of custom duty and income tax as earlier as could be possible. But said amount remained in the use of petitioner Company without any legal justification under the law. It is not only the one case but invariably it has been noticed that department, who is responsible to collect the revenue which is to be spent on the welfare of the State and also to provide security to the life and property of the citizens in terms of Article 9 of the Constitution, remains outstanding for a longer period essentially either for the reasons of the negligence on behalf of the concern officers or for extraneous consideration known to them. However, in view of the observations of this Court in MESSRS ELAHI COTTON MILLS LTD. And others v. FEDERATION OF PAKISTAN through Secretary M/o Finance, Islamabad and 6 others (PLD 1997 SC 582), we direct that in absence of stay order by competent forum/Court, the functionaries of Revenue Department and the officers/officials working within its hierarchy should not compromise in any manner in effecting the recovery of the revenues from the delinquents in future and all efforts should be made to effect the recovery of the outstanding amounts with a view to facilitate State as well as the Government to generate funds for the purpose of running the affairs of the State and Government.
9. Learned counsel for the petitioner contended that High Court in the impugned judgment had failed to take into consideration that in terms of Section 32(2) of the Customs Act, show-cause notice dated 14th September, 1999 had been issued beyond the period of limitation i.e. Five years demanding recovery of Rs 49,08,665 etc. Whereas on the other hand learned counsel appearing for the respondent had opposed the contention so raised by the learned counsel for the petitioner Company and stated that the High Court had dealt with this question elaborately.
10. Learned High Court being conscious of this important aspect of the case had dealt with this issue while taking into consideration the implication of the indemnity bond furnished by the petitioner wherein it has been assured that 'The plant and machinery released under this notification shall not, within the period of eight years from Its importation, be used in any area which is not eligible for the same concession. In case this condition is violated the amount of custom duty and sales tax exempted under this notification and penalties that may be imposed in this behalf shall be recovered under Section 202 of the Customs Act, 1969 (IV of 1969). In addition to this condition, the contents of undertaking dated 7th June, 1992 had also been taken into consideration, which had been relied upon by the adjudicating officer besides examining the provisions ot Section 202 of the Customs Act and ultimately following conclusion was drawn:- "We are of the opinion that since the exemption which was granted was a contingent exemption, it car. Be assumed that the appellant was liable to pay the duties unless he fulfilled the conditions on which the exemption was contingent and not fulfilling these conditions or violation thereof will render them liable to pay the government dues on the day of the clearance and there is no time limit for collection of such government dues. We are, therefore of the considered opinion that even the show-cause notice or the order in original was not needed to collect these dues and a simple demand notice would have sufficed. We, therefore, hold that the action leading to the recovery of the disputed dues was not barred by the period of limitation."
11. We have no reasons to disagree with the above findings so recorded by the learned Judge in High Court. In addition to it during course of hearing the learned counsel was repeatedly asked to satisfy that in view of categorical admission of the petitioner that in the year 1993, the machinery was shifted to Kotri against the undertaking and the provisions of SRO No. 484(1)/1992, the petitioner has burdened itself with two legal obligations namely accusation for violation of undertaking given by it while availing the concession of non-payment of the custom duty, sales tax vide SRO 484(1)/1992 and evasion of the customs and sales tax and petitioner-Company had an obligation to pay the duty without any hesitation, therefore, in terms of Section 202 of the Customs Act for which no limitation is prescribed, the duty of the Customs has to be recovered from him at the rate prevailing in the year 1993 as the amount has not been paid, although it was due against it and now on 14th May, 2011, it has been paid, therefore, in terms of Section 83-A read with Section 202-A of the Customs Act, the duty (customs and sales tax) with surcharge has to be refunded alongwith mark-up at the enhanced rate of currency which is required to be calculated on the basis of value of US$ prevailing on the date when the amount was paid. He had no answer to reply, however, he sought time to seek instructions and on his request the matter was adjourned, but when it was taken-up again he prayed for withdrawal of the petition by showing mercy upon the petitioner. We could not help him out because pf the conduct of the petitioner as well as being conscious of our duty in view of the principle discussed in the judgment of ELAHI COTTON MILLS noted hereinabove and also keeping in mind that if a fraud is committed, it vitiates most solemn proceedings as well. The tax has to be paid by all and sundry due against him/them in personal or corporate capacity because withholding of the tax is not only crime against the Government but also against the State. No welfare State can afford such type of luxury because its affairs have to be run on the basis of income which is to be generated inter alia from one of the source of collecting the tax, therefore, the tax evaders are not entitled for any concession irrespective of their status. Therefore, we order for the recovery of the customs and sales tax from the petitioner accordingly.
12. Learned counsel also contended that in the Bill of Entry petitioner while claiming the concession from the custom duty and the sale tax besides relying upon SRO No. 484(1)/1992 had also claimed benefit of SRO 791(1)/1991. The contention raised has no force, as the learned High Court has held that there was tampering in the Bill of Entry as SRO 791(1)71991 has been inserted with handwriting subsequently, which prima-facie indicates that yet another attempt has been made to play fraud with the custom authorities. In addition to it, it is an undisputed position that an air-conditioner (cooler) was imported under SRO 791 (1)/1991, whereas major components for installing the textile mill were based on the concession which was available under SRO 484(1)/1991, thus there is no question for the amalgamation of both the SROs. The petitioner in its own letter dated 18th May, 1993 issued to the Assistant Collector of Customs has admitted about the shifting of machinery.
The contents whereof are mentioned herein below:- "The above consignments were imported for installation in Nankana Warberton Distt. Sheikhupura as at that time we planned to install another independent expansion Unit there for which even the land was acquired. Release of the machinery was allowed in terms of the notification given in the enclosed copies of the B.Es. Unfortunately due to economic crises as a whole and particularly in the textile sector it was not found feasible to install another independent unit in Nankana for which the financial assistance from Banks is also not at the moment possible.
We have therefore decided to install the above machinery at our existing Unit in S.1.T.E. Kotri. On installation and on obtaining the Installation Certificate from the respective Customs authorities we shall submit to you for needful action in the matter."
13. In the above letter admission by the petitioner of shifting plant/machinery is established but without permission from the competent authority i.e. Ministry of Finance and discharging of the burden of payment of customs duty, sales tax and other charges. Contention of the learned counsel that the CBR has allowed to do so is without substance because under the Customs Act, it is the Ministry of Finance who issues SROs for purpose of granting concession from payment of the customs duty etc., thus the CBR in any manner is not authorized to extend such permission, but on record, we have failed to find out any such permission granted by the CBR except that the above letter was sent to the Assistant Collector and without seeking permission from the concerned quarters i.e. Ministry Of Finance in violation of the indemnity bond, which has been filed by petitioner in pursuance of SRO 484(1)/1992, installed machinery at Kotri, therefore, besides committing violation of the undertaking, petitioner also committed breach of trust and also evaded the duty which petitioner had an obligation to pay for importing a machinery for establishing a textile mill in the year 1992, thus, had made itself liable of the civil as well as criminal action save in accordance with law.
14. No other point has been raised by the learned counsel.
15. Hereinabove are the reasons of our short order which reads as under:- "For the reasons to be recorded later we direct the petitioner to make payment of the custom and the allied duties on the machinery imported for installing the textile mill for the area of Nankana Warborton Road, Sheikhupura which was imported vide bill of entry No. 1181 of 1992, dated 20-6- 1992 claiming exemption under SRO No. 484(1)/1992, and after having availed the exemption granted by the competent authority from. The payment of the custom duties etc. And filing an undertaking, the machinery was transferred to Kotri without making payment of the taxes however claiming the benefit another SRO No. 791(1)/91 but subsequent thereto when it was transpired that after availing the exemption the undertaking has been violated show-cause notice was issued.
Statedly in pursuance whereof the duty worked out to the tune of Rs. 4,272,422 has been paid on 24-5-2011 which actually was due in the year 1993 when the machinery for installing the textile mill was shifted to Kotri. The proceedings initiated against the petitioner were finally culminated in the impugned order dated 30-6-2009.
(2) We have heard this case at length and noticed that payment of duty was evaded fraudulently therefore we direct in exercise of Article 187 of the Constitution that let petitioner in terms of Section 83A read with 202-A of the Customs Act, 1969 make payment of the actual duty which was payable for installing such textile mill/factory in the Kotri at the rate prevailing at the relevant time and as the amount of duty and sales tax was withheld for a considerable period therefore on making calculation as per the value of the currency prevailing at the time when the payment was made on 24-5-2011 as per US$ rate has to be recovered as surcharge in the interest of. Justice with allied duty and mark-up as this money belongs to the public exchequer and no one can be allowed to defraud the authorities in this matter. Therefore the customs department is directed to make the calculation and put up the demand to the petitioner as it has been observed hereinbefore within a period of three days. The petitioner shall make the payment of the same amount within next seven days and the matter shall be reported to the Registrar of this Court for our perusal in Chambers.
The Customs authorities are also directed to initiate criminal proceedings against all concerned for committing the fiscal fraud with the public exchequer forthwith. The copy of the F.I.R. And the other proceedings shall also be sent to the Registrar for our perusal in Chambers.
(3) Consequently, this petition dismissed and leave declined.