1. ABDUL KADIR SHAIKH, J.--The petitioner-companies are ship-owners, their vessels ply on the high seas, both between East and West Pakistan, and between Pakistan Ports and Foreign Ports, with their head offices in Karachi. The East and West Steamship Company, the first petitioner, was permitted by the Government of Pakistan to have a new Ocean-going vessel of about 13,020 D. W.
2. Tons constructed by Burntisland Ship-building Co. Ltd., Scotland, with permission to make the payment in foreign exchange through the Pakistan Industrial Credit and Investment Corporation.
3. The contract price of the vessel was 1,590,000 at the relevant time, equivalent to Rs, 1,81,89,600 the final price, according to the petitioner not having yet been determined on account of certain disputes between the parties. The said vessel was named M. V. OHRMAZD, was delivered at Burntisland on 2nd November 1968 and arrived at Karachi Port, via Chittagong, for the first time on 19-5-1969. It was permitted to ply between the ports of Karachi and Chittagong on its scheduled route and has been registered with the Mercantile Marine Department at Karachi. The petitioner was called upon by the Authorities to file a Bill of Entry and comply with the Customs formalities, so that the permission could be continued to be given to the vessel to ply on the coastal run. On their request for time to comply with the Customs formalities and to pay duty legally payable, permission was, however, granted on petitioners executing a bond for payment of the Customs duty within two months, whether or not final decision was taken in the arbitration proceed-ings pending in connection with the construction of the vessel.
4. The United Oriental Steamship Company, the second petitioner, was permitted by the Government of Pakistan to purchase an Ocean-going vessel "M. V. GYLFE" on "pay-asyou-earn" scheme for a total price of 545,000 upon terms and conditions incorporated in the letter of sanction dated the 14th January 1965, issued by the Government in the Ministry of Communication. The material term, among others, was that the ship was to ply on U. S. route so that freight would be earned in foreign exchange to enable payment of its price. It is the case of the petitioner that the vessel, after its delivery was taken in March 1965, commenced to run between Continental ports and Far East Ports, and it arrived at the Chittagong port on the 13th of September 1968 whilst on a voyage from Singapore, and then arrived in Karachi on the 27th of November 1968 for the first time since its purchase. It is also asserted that no demand was made by the Customs Authority for the payment of Customs duty, and the vessel continued to remain in Continental waters and plied between foreign ports. On 23rd June 1969 however, public notice was issued that all shipping-companies should file Bills of Entry in the Import section of the Custom House and the Customs duty on ship be paid.
5. The petitioners have challenged the levy of Customs duties on ships, the demand thereof, the direction with regard to the filing of the Bills of Entry in respect of the ships, and also have asked for a direction to be issued that port clearance for their vessels be made without requiring the petitioners to file any Bill of Entry or to pay the Customs duty.
6. At the very outset, it may be stated that ships, boats, vessels, etc. are subject to levy of duty at different rate under the provisions contained in the Tariff Act, 1934. It was, however, contended that the law is such that there is no legal sanction for the recovery of customs duty as was being done by the respondents. In this connection Mr. A. K. Brohi for the petitioners, referred to the various provisions of the Sea Customs Act in particulars to section 20 for the contention that this enactment in its various provisions makes the goods carried by Ocean-going vessels liable to duty, but not the vessels themselves.
7. In order to appreciate the contention, section 20 of the Sea Customs Act, 1878 may be reproduced hereunder :- "20.--Except as hereinafter provided customs duties shall be levied at such rates as may be prescribed by or under any law for the time being in force, on-- (a)Goods imported or exported by sea into or from any Customs-port from or to any Foreign port ; (b)Opium, salt or salted fish imported by sea from any Customs-port into any other customs- port.
8. (c)Goods brought from any foreign port to any Customs-port, and without payment of duty, there transhipped for, or thence carried to, and imported at, any other Customs-port, and (d)Goods brought in bond from one Customs-port to another."
9. The learned counsel pointed out that these provisions read with sections 73, 81, 86 and 87 of the Sea Customs Act make it imperative that only such 'goods' as are brought into any Customs port in a vessel and are unloaded from such vessel on to a 'Wharf' duly notified under section 11 of the Sea Customs Act as a place for landing of the goods, and after permission has been given for the discharge, of cargo, are liable to payment of Customs duty. It was, therefore, his contention that the fact of an ocean-going vessel arriving at any port in Pakistan for the purpose of loading and discharging cargo and passengers, no Bill of Entry is to be filed and no customs duty is to be charged. He explained this in details as follows : -- (a)Under the scheme of the Act, duty is to be levied on `goods' and not on any ocean-going vessel as defined in section 3 (f) of the Sea Customs Act arriving at a Port for the purpose of loading and discharging passengers and cargo.
10. (b)Section 20 of the Sea Customs Act, envisages an act of import into the country in the sense that the goods must actually be landed at a wharf or other place duly appointed for that purpose.
11. Accordingly a ship or vessse l can be imported into the country for use within the country on inland waters or rivers but not ocean-going vessels calling at Pakistan Ports for loading and unloading cargo passengers.
12. (c)Such imported goods which are landed are intended to be for home consumption or for warehousing or for any other approved purpose. No ocean-going vessel or ship whether flying Pakistan or Foreign colour is intended for home consumption or for warehousing or any other approved purpose, as all vessels carrying cargo on the High Seas by necessity remain in International waters and are outside the purview of the Act.
13. The contentions raised are quite attractive, but the closer scrutiny of the various Enactments would show that they are without substance. Section 2 of the Tariff Act, 1934 provide that there shall be levied and collected in every port the duties Steamship in the First and Second Schedules, and the Central Government is authorised by issue of a notification in the official Gazette to fix for the purposes of levying the said duties Tariff values of any articles enumerated in the Schedule. Ships vessels, etc. are covered by Entry No, 89 in the First Schedule and it was not even contended that so far as the provisions of the Tariff Act 1934 are concerned, the vessels of petitioners are not covered by this Entry. This Act is the law relating to custom duty on 'goods" imported into or exported from Pakistan by Sea, and makes it plain that the articles mentioned in its various headings in the schedules are subject to the varied rate of duty. For the decision whether vessels of the petitioners are subject to the levy of Customs duty or not, reference to the Tariff Act, 1934 would be enough.
14. This Act however, would have reference to the Sea Customs Act in so far as the method is prescribed thereunder as to the various steps that are to be taken in regard to the import of goods by sea, and also to the procedure regulating the arrival and departure of the vessels, etc. Mr. A. K.
15. Brohi, the learned counsel for the petitioners was quite right in saying that the Sea Customs Act, in its various provisions, envisages an act of import into the country in respect of the goods brought by ocean-going vessels, and the formalities to be gone through in respect thereof, and does not contemplate the vessel itself being the subject-matter of import. But the difficulty in accepting his contention is that the absence in the Sea Customs Act of a provision with regard to the formalities to be undertaken and the procedure to be gone through in the case of an import a ship or a vessel, would not ipso facto absolve the ship or a vessel from payment of duty, if another enactment makes the levy compulsory. The Tariff Act, 1934 clearly imposes duty on a ship or a vessel, and for the purposes of this enactment these are goods that can be imported into Pakistan by sea. No doubt the word 'goods' has not been defined in the Sea Customs Act, 1878, but there is no reason why in the absence thereof resort should not be made to the ordinary dictionary meaning of this word. The word 'goods' includes a vessel or a ship in the ordinary English dictionary meaning. In an English case reported as Behnke v. Bede Shipping Company, Ltd. , it was held that a ship is covered by the word 'goods'. In a Calcutta case reported as AIR 1959 Cal. 273. it was held that for the purpose of section 183 of the Sea Customs Act, 1878 'goods' included a 'vessel'.
16. It cannot also be legitimately urged that the petitioners did not import the vessels in Pakistan. The word 'import' is again not defined in the Sea Customs Act, 1878, but admittedly the vessels were 'imported' on the basis of the permits granted under the provisions of the Import and Export (Control) Act, 1950. The ownership of the vessels in the petitioners was not possible in law unless the vessels were imported into Pakistan, The petitioners themselves applied for the permission for the import of the vessels under the provisions contained in the Import and Export (Control) Act, 1950, and for the purposes of this Act, the vessels were imported into Pakistan by sea. It was after the vessels were 'imported' into Pakistan by sea that they were registered in Pakistan, and the ownership thereof got vested in the petitioners.
17. Although the Sea Customs Act does not define the word `import', yet the provisions contained thereunder do clearly indicate that `import' means bringing in whether by land or by sea into1 Pakistan. Sections 18 and 19 which constitute Chapter IV of the Sea Customs Act relate to 'Prohibitions' and `Restrictions of Importation and Exportation'. The former section prohibits the goods specified therein from being "brought whether by land or sea into Pakistan ; similarly section 19 with its heading "Power to Prohibit and Restrict Importation and Exportation of Goods" authorises the Central Government to prohibit or restrict "the bringing or taking" by sea or by land of the specified descriptions into or out of Pakistan. The word "import" therefore, clearly constitues the bringing of the goods into Pakistan. The petitioners by their own action brought the vessels in Pakistan in the sense that they were imported for the purpose of the Import and Export (Control)
18. Act into Pakistan, and thereafter the ownership of the vessels got vested in them. For the purpose of the Import and Export (Control) Act, 1950, the import of the vessels by sea was complete. It is also admitted that the vessels entered the port of Karachi. It can, therefore, be safely said that the vessels were brought in Pakistan. The learned Attorney-General brought to our notice that the territorial waters of Pakistan extend to 12 nautical miles, which would make the entry or import of the vessels into Pakistan clear. The absence of the procedure as to the formalities to be gone through in case of import of a ship or a vessel cannot affect the levy of duty on the ship or the vessel on its import or bringing in if such levy is authorised by law.
19. Moreover, it would be seen that the Sea Customs Act, although it prescribed the manner the goods carried by a ship or a vessel are to be imported, yet from the mere fact that the goods are not brought in Pakistan in the prescribed manner, it cannot be legitimately urged that the actual 'bringing in' does not take place ; in one case the bringing-in or the import would be legal, and in other illegal or unauthorised.
20. For all these reasons it is clear that entry of a ship or a vessel in any Pakistan-port amounts to 'import' of the ship or the vessel.
21. Much was sought for the contention that the entry of every vessel, including a foreign vessel, in this view of the case, would mean import of that vessel in Pakistan, which would make the vessel subject to import duty, and this would lead to astonishing results. The reply made by the respondents to this contention was that the levy of Customs duty on a foreign ships is not made on account of international agreements, and in the case of a Pakistani owner it cannot be made twice However, on the view we have taken, entrance of even a foreign ship or vessel into a Pakistani port would technically amount to import of the vessel, we are, however, not called upon in these cases to decide the question of levy of customs duty in such a situation. We would, therefore, reserve our opinion in this connection until an appropriate case comes up for decision.
22. Syed Pirzada Sharifuddin, the learned Attorney-General of Pakistan, who appeared at our request as amicus curie referred to the decision of the Privy Council in the case of West Lancashire Rural District Council v. The Lancashire and Yorkshire Railway Company , in which the contentions urged were quite similar to those raised before us. In that case, the appellant, a Railway Corporation incorporated in Canada, purchased a steamship from the United States, and after the arrival of the vessel, they were called upon to pay duty imposed by Article 409 of the Customs Tariff Act, 1897.
23. The appellants contended that the question of their liability to pay the duty depended upon the meaning of section 2 of the Customs Act, which did not make their vessel liable to duty and, therefore, the provisions of the Customs Tariff Act, 1897 were inconsistent and repugnant. The Supreme Court of Canada rejected this plea on the ground that the Customs Tariff Act, 1897 was unambiguous and put a duty on any foreign ship imported into Canada in terms that left no room for doubt. Their Lordships of the Privy Council upheld this view in a short judgment observing :- "It will not be possible usefully to add anything."
24. This case fully covers the controversy raised before us, and our answer to the petitioner would be the same as the one of the Supreme Court of Canada noted above.
25. The learned Attorney-General of Pakistan controverting the plea of the petitioner, pointed out that2 Customs duty on ships is not a special feature of Pakistan alone, other countries e.g. United Kingdom, Japan, Spain, Argentine, Yugoslavia etc. have likewise imposed customs duty on vessels and ships, in some countries the rate of duty being even higher.
26. However, for the reasons given above, the levy of Customs Duty on the vessels of the petitioners cannot be held as unlawful. As to the question of its recovery, the learned counsel for the respondents referred us to the provisions contained in section 167(81) of the Sea Customs Act, which prohibits acquisition or possession of any goods charged with customs duty which has not been paid. Since the Sea Customs Act envisages import of the goods carried by sea on a ship or a vessel, and makes no provision in regard to the import of the ship or the vessel itself, it is not possible to hold that the filing of the Bill of Entry in regard to a ship or vessel is the requirement of law. We would, therefore, while upholding the levy of Customs duty on the vessels, leave the matter of the recovery thereof to the Authorities concerned to be made in accordance with law.
27. Those petitions, with the directions given above, are dismissed, and since the questions of law were raised, we leave the parties to bear their own costs.
28. Before parting with this judgment, we would like to record a note of appreciation of the valuable assistance Syed Pirzada Sharifuddin, the learned Attorney-General of Pakistan, gave in these cases. 1927 (i) K N 649 (1902-3) 19 T L R 624