ADNAN AHMED (MEMBER JUDICIAL-II).---Through this common order, I intend to dispose off these 02 appeals directed against Orders-in-Appeal No, 9195-9196/2014-2015, dated 09.09.2014 passed by the Collector of Customs (Appeals) (here-in-after referred as respondent No, 3) maintaining the Assessm ent Orders passed by Deputy Collector, Group-II, MCC of PaCCS, Customs House, Karachi (here-in-after referred as respondent No, 2) on the basis of Valuation Ruling 520/2012 dated 28.12.2012 issued by Director, Directorate General of Valuation (here-in-after referred as respondent No, 1)
2. Since, these appeals are based on similar facts and questions of law, therefore it is needless to reproduce facts of each case separately, hence for reference the facts of Appeal No, K-1603/2014 are taken into consideration for decisions and which are that the appellant imported a consignment of 6000 kgs "Menthol Crystal" from China against which respondent No,2 passed Assessm ent Order under section 80 of the Customs Act, 1969 and Rule 438 of Sub-Chapter III of Chapter XXI of the Customs Rules, 2001 on the basis of Valuation Ruling No, 520/2012 dated 28.12.2012 by the respondent No,1 . Which was not warranted as a Review by the appellant No,2 had been filed in terms of Section 25D of the Customs Act, 1969 against the Ruling before the Director General, Directorate General of Valuation and the application of Valuation Ruling to the extent of appellants stood abate and menthol crystal of China Origin should had been assessed on the basis of Valuation Ruling 322/2011 dated 23.05.2011. Being aggrieved from the Assessment Order appellant filed appeal under Section 193 of the Customs Act, 1969 before the respondent No, 3.
While the appeal was pending for decision before respondent No, 3 that the Director General of Valuation passed Order-in-Review dated 29.05.2013, against which appellant filed appeal under Section 194A of the Customs Act, 1969 before the/customs Appellate Tribunal vide No, K-695/2013, Which vide Order dated 02.12.2013 set aside the Order-in-Review 29.05.2013 and Valuation Ruling No, 520/2013 dated 28.12.2012 to the extent of value determine for "menthol crystal" of China origin and determination of value for the levy of Sales Tax and Income Tax and which has been reported at 2014 PTD (Trib.) 674. The said order was supplied by the appellant consultant during the course of hearing to the respondent No, 3, who ignored that and passed Order-in-Appeals Nos, 9195 to 9196 dated 09.09.2014 through which he rejected the Appeals Paras 4 and 5 of the order are relevant and are reproduced here-in-below for reference.
"4. I have examined the case record. The assessment by the respondent Collectorate was made on the basis of Valuation Ruling 520/2012, which was still in field at that time.
Therefore, the assessm ent is in order, there are no grounds for interference as it is a past and closed transaction, the appeal is rejected."
"5- This order shall apply mutatis mutandi to another appeal bearing No, Cus/4563/2013/PaCCS filed by the Messrs Shahid Impex, Karachi against assessment order No, KCSI-HC-90751- 08012013 involving the same facts, circumstances and the points of law."
3. The appellant's being aggrieved by the order filed the subject appeals before this Tribunal on the strength of the ground incorporated in memo. of appeal and on the strength of which the consultant/advocate argued and which are:-- a) The order passed by the respondent No,3 shows that it has not been passed with the application of mind and provision of the Act. Instead is a non speaking order and did not conforms to the mandated requirement of S.24-A of the General Clauses Act, 1897 and this stood validated from the fact that no rebuttal on the grounds of appeal, rebuttal/additional arguments and order of the Tribunal in Appeal No, K-695/13 has been given instead on personal absurd opinion contrary to law and that too also is not containing substantial reasons and did not shows it was passed on objective consideration. Such type of orders are deems to be always treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary. No room was available for such illegal, void and arbitrarily order in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrarily without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The Adjudication/Appellate orders are being violation of basic principle of the goods governance and mandatory requirement of Section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD 777, 2003 PTD (Trib.) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, 2003 PTD 2369, PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173, 1984 SCMR 1014 and 2012 PTD (Trib.) 619. b) That the order under subsection (3) of Section 193A has to be passed by the respondent No, 2 within 120 days from the date of filing of appeal or within further extended period of 60 days in terms of its proviso upon availability of exceptional circumstances and recording of those after issuance of notice to the tax payer as held by Hon'ble Supreme Court of Pakistan in reported judgment 2009 SCMR 1881, Khalid Mahmood v. Collector of Customs. In the instant case the appeal was filed on 16.05.2013 and the order should have been passed by the respondent No, 2 on or before 13.09.2013. To the contrary he passed order on 09:09.2014 after lapse of 361 days. Rendering it without power/jurisdiction, hence void, ab-initio and not enforceable under law as held in the reported judgments 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax Gujranwala and 2008 PTD 578 Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762, Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263, Messrs Syed Bhai Lighting Lim or of Sales Tax and Federal Excise, Lahore and 2 others 2009 PTD 1978, Leo Enterprises v. President of Pakistan and others, 2010 PTD (Trib.) 1010, Innovative Impex v. Collector of Customs, Sales Tax and Federal Excise (Appeals), 2011 PTD (Trib.) 79 Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 987, Unique Wire Industries v. Additional Collector of Customs, MCC of PaCCS 2011 PTD (Trib.) 1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 and Pak Election Ltd. v. Collector of Customs, Lahore and others. c) That the appellant is amazed on the formed opinion of the respondent No, 3 carved for rejection of the appeal that the Valuation Ruling was in field when the assessment order was passed while ignoring the fact that the vires of the Ruling has been assailed by the appellant No, 2 through Review Application under section 25D of the Customs Act, 1969 and the said fact has been incorporated in the grounds of Memo. of appeal and very Valuation Ruling has been set aside by the Appellate Tribunal vide order dated 02.12.2013 while declaring the same as void and ab-initio. It is settled proposition of law that when some order is set aside, it is from the date of its issuance any action taken on behalf of that order or the Ruling is as well deems to be set aside and as such of no legal effect rendering the assessm ent made by the respondent No, 2, on the basis of Valuation Ruling 520/2013 to the extent of goods imported from China and to the extent of determination of value for the levy of Sales Tax and Income Tax on the imported goods as of no legal effect, hence ab-initio void. d) The appellant carves his right to add any fresh grounds at the time of hearing beside placing any valid incriminating evidence/documents.
4. No cross objection under subsection (4) of Section 194A has been filed within the period specified therein not till the date of hearing either by the respondent No, 1 or 2. Instead Mr. Shamim Iqbal Principal Appraiser, in the capacity of representative of respondent No, 1 stated that the order passed by respondent No, 3 is correct in fact and law and should be maintain and the appeal of the appellant be rejected as non maintainable. Mr. Aamir Hussain in the capacity of representative of respondent No, 2 adopted the arguments of Mr. Shamim Iqbal.
5. Rival parties heard case record passed.
6. On perusal of the order dated 09.09.2014, it has been observed that the respondent No, 3 has not passed it with the application of mind and as per essence and spirit of the provision of the Act, and even in negation to the direction of the Board issued vide No, Dy-730-M(L)/ 2002 dated 15.06.2002.
Sub-para (vii) of para 2 orders the Quasi Judicial Authorities to "pass a speaking order giving reason in support of his conclusions. Each plea/arguments advanced by the person should be brought out in the order and if not admitted it should be rejected with reasoning it should not be left to the person concern or to the Appellate Forum to search for the reason and to speculate what induced the appellate forum to come to a different conclusion and in sub-para (viii) read that "the judgment always speaks about their authors. The judgment passed must reflect professionalism, fairness, neutrality, reasonableness, clarity and justice. The FBR subsequently renewed the direction vide letter C. No,1(1)SPS-M(L)/2014 dated 05.09.2014 with the caption "Administration of justice by the quasi judicial authority guideline regarding", para 2(a) of which is:-- "A qausi judicial is a formal expression of adjudication and it should be one which ought not to be left open to what is exactly adjudicated upon. The part of the order dealing with the decision of the action should contain the brief fact and contention of the parties from which the fact in issue or point of disagreement are necessarily to be evolved which need to be determined by the adjudicating authority. The Adjudicating Authority must evaluate these facts in issue by making a discussion of evidence produced by the party. The order must contain real point of determination and decisions thereon. The discretion which the rules give required to be judicially exercised. Make sure that no material consideration have been overlooked. The adjudicating officers should apply their mind to the facts of the case and point out issue and give a well reasoned order thereon satisfying legal requirement that all evidence has been evaluated and rival contention and arguments duly considered section 24A of the General Clauses Act, 1897 provide necessary and mandatory guidance on fair and just exercise of powers and passing a speaking order, which needs to be followed under all circumstances . "
The direction of the Board and mandated requirement of The General Clauses Act, 1897 as to be adhered in terms of Section 223 of the Customs Act, 1969 and the principle of natural justice, fair play and ratio decidendi. To the contrary the Respondent No,3 intentionally and purposely has not rebutted a single ground of the Appeal No,4930/ 2013/PaCCS filed before him by the appellants and nor on the rebuttal/ additional arguments dated 14.04.2014 filed by the consultant on the comments of appeal of Respondent No,2. Instead he ventured beyond that and even had not taken into consideration the order of the Appellate Tribunal dated 02.12.2013 in Appeal No, K-695/2013, which has attained finality by virtue of non filing reference with the High Court of Sindh under Section 196 of the Customs Act, 1969 and hold field firmly. And had passed a very sketchy, vague, cursory and non-speaking order confirming that it has been passed not on objective consideration rather on personal whims and wishes and inapt interpretation of the Provision of the Act and definition of the Phenomenon "passed and closed transaction". Such type of order are termed by the superior judicial Fora as illegal, void, arbitrary and as a result of misuse of authority vested with the authority. No room was available with the Respondent No, 3 to pass such illegal, void and arbitrary order as it is a settled dictum of the Superior judicial fora that if any Authority, Court or Tribunal gave a finding of fact which was not based on material available on record, the findings so given is illegal and arbitrary and became perverse and a perverse finding of fact is violative of the established principle of appreciation of evidence of record and as such not sustainable in law.
The principle laid down by the Board and the Superior Judicial Fora is that, that every Judicial/Quasi Judicial order should be based on a reasoning containing the justification for the finding given in the order because in the absence of the same the order so issued is in derogation of established principle of the dispensation of Justice. The order in appeal in the present shape is too vague and defective as it contains no valid reasoning for rejecting the appeal. Hence it is in derogation of the direction of the Board and mandatory requirement of section 24A of the General Clauses Act, Therefore it is not only illegal and void but also fails the test of Judicial scrutiny and as such not sustainable in the eyes of Law and this has been held by the Superior Judicial Fora in countless reported judgment referred in Para 3(a) Supra and which are squarely applicable on the case of the appellant.
7. The appeal before the respondent no. 3 was filed on 16.05.2013 and an order under the proviso of subsection (3) of section 193A of the Customs Act, 1969 should had been passed within 120 days from the date of filing of appeal i,e, on or before 13.09.2013 or within a further extended period of 60 days during the initial period of 120 days with reason to be recorded for extension in writing after serving a notice to the person concerned as per law laid down by the Hon'ble Supreme Court of Pakistan in reported judgment 2009 SCMR 1881 Khalid Mehmood v. Collector of Customs. No extension was granted by the respondent No, 3 within the initial period of 120 days as evident from order which is completely silent in this regard and the he passed the order on 09.09.2014, rendering if barred by 361 days, hence without powers/jurisdiction and cannot be enforced under law a held in reported judgments 2008 PTD 60 , 2008 PTD 578 , 2009 PTD 762, 2009 PTD (Trib.)1263, 2009 PTD 1628, 2010 PTD (Trib.) 1010, 2011 PTD (Trib.) 79, 2011 PTD (Trib.) 987, 2011 PTD (Trib.) 1146 and PTCL 2012 CL 347.
8. The opinion formed by the respondent No, 3 for rejecting the appeal that Valuation Ruling was in field when the assessm ent was made and the transaction stood past and closed is contrary to the fact as the appellant No, 2 assailed the valuation Ruling before the Director General Valuation under section 25D of the Customs Act, 1969 and upon rejection of the review filed appeal under section 194A of the Customs Act, 1969 before the Customs Appellate Tribunal. Simultaneously, he challenged the assessm ent order before respondent No, 3 on the strength of the review application and appeal filed with the Appellate Tribunal. The Tribunal on the appeal issued order on 02.12.2013 through which it declared the determination of value of menthol crystal of China origin as exercise in futility beside in derogation of provision of sections 18, 19 and 25A(1) and Notification No, 659(1)/2007 dated 30.6.2007 ab initio and void to the extent of determination of value for levy of Sales Tax and Income Tax and set aside the order-in-review dated 29.05.2013 and so the Valuation Ruling No, 520/2012 dated 28.12.2012. It seems that the respondent No, 3 is not familiar with the words "ab initio", void and set aside". Meaning of which as per Black's Law Dictionary are "from the beginning and of no legal effect, null absolute nullity and to annual or vacate a judgment, order and etc." When the Tribunal declared the Valuation Ruling ab initio void and set aside the same, it mean that the Valuation Ruling is of no legal effect being absolute nullity from the very beginning and set aside the same, meaning thereby from the date of its issuance i,e, 28.12.2012 and any assessm ent made on the basis of the said Ruling of menthol crystal of China Origin is nullity to law as being made on the basis of an ab-initio void Ruling, which is infact nonexistent as per the order of the Tribunal, rendering the assessment made of the appellant consignment is equally ab initio void and as such without lawful authority/jurisdiction. That as regard to the phenomenon "past and closed transaction" i,e, also misconceived as transaction stood past and closed when it attains finality. In the instant case Assessment Order is not final as the respondent No, 2 can pass a reassessm ent order under section 80(3) of the Customs Act, 1969 after compliance of the direction given in Section 80(2) ibid and these orders can be challenged through an appeal under Section 193 of the Customs Act, 1969 before the Collector of Customs (Appeals) and likewise before the Customs Appellate Tribunal. Unless the assessment order crosses all the forums set up under the law in which it can be challenged and the order of the last forum set up under the law would become final. Admittedly, in the case under consideration neither Valuation Ruling was final as it was challenged before the Director General Valuation through review and subsequently with the Customs Appellate Tribunal and likewise the assessment order passed by respondent No, 2 on the basis of Valuation Ruling before respondent No, 3 and against his order through the subject appeal before this Tribunal. Therefore, neither Valuation Ruling dated 28.12.2013 nor assessment order dated 18.04.2013 attained finality by virtue of the fact that each order stood reopened immediately upon filing of review/appeal as held by Hon'ble Supreme Court of Pakistan in reported judgment at 1993 SCMR 39 Central Board of Revenue and others v. Chanda Motors at paras 17 to 22 and which read as follows: "17- It is the language used in paragraph III(d) and Circular 9 of 1985 which required detailed examination. What is meant by "assessment already finalized"? Assessment is defined in Income Tax Ordinance, 1979 as including reassessment and additional assessment, which shows the scope of assessment is wider and larger than its ordinary meaning. Word "finalized" is derived from the word "final" which is define in Chambers 20th Century Dictionary to mean "last decisive, conclusive: respecting the end or motive of a judgment ready for execution last of series". "Finality" is defined as state of being final completeness or conclusiveness.
In Black's Law Dictionary Fifth Edition, word "final" is defined as, "last; conclusive, decisive, definitive; terminated; and completed." In its used in reference to legal actions this word is generally contrasted with "inter-locatory". Viewed in the light of meanings of the word "assessments" and "finalized", it appears that assessment order as such do not have touch of finality unless all the forum are exhausted in which such orders can be challenged so that the order take the, final decision."
18-Legally speaking order of assessment passed by Income Tax Officer is an order of original authority but is not final for the reason that it can be challenged in appeal or revision as the case may be and would be final only when it goes through all the forums and the finding of the last forum shall be binding as conclusive.
19-The question whether appeals and other remedies provided under the law formed part of proceedings or not came up for consideration before the Supreme Court of India in the case of Garikapati Veeraya v. N. Subbiah Choudhry and others reported in PLD 1957 Supreme Court (India.) 448 it is held as per majority opinion that legal pursuit of a remedy , suit, appeal and 2nd appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. Reference can be made to the case of Commissioner of Wealth Tax v. Vimlaban Vadilal Mehta reported in (1984) 145 ITR 11, in which it is held that it is well settled that when an appeal is filed against assessment order before AAC the assessment is thrown open and Appellate proceeding constitute a continuation of a assessment proceeding."
20-In the case of F.A. Khan v. The Government of Pakistan (PLD 1964 Supreme Court 520), question came up for consideration that in the case of dismissal of a Government servant for filing a declaratory suit whether limitation would start from the date of order of dismissal to be reckoned under Article 120 of the Limitation Act or from the date of order of Appellate Authority confirming the first order to be reckoned under Article 58 of the Limitation Act. It is held that such right accrued on the date of dismissal but, where there is an appeal on the date of Appellate order upholding dismissal. It is further held that the legislature when its provided a hierarchy of the Tribunal for the determination of a dispute it is really providing one complete procedure for such determination, proceeding before different Tribunal being only step in this procedure.
21- On the question construction, in the light of what is stated above, is can be said without fear of contradiction that order passed in original proceedings is not final unless it crosses all the forums set up under that law in which it can be challenged and the order of the last forum would become final. Mr. Rehan Hassan Naqvi, learned counsel for the respondent has submitted before us that there is plethora of case law on the point that even within the frame work of Income Tax law, appeals and other remedies provided therein formed part of the same proceedings regarding assessment. In this context our attention is drawn to the case of Chatturam and others v. Commissioner of Income Tax, Bihar reported in (1947) 15 ITR 302. In the reported case assesses of partially excluded areas were served with the notices under section 22(2) of the Income Tax Act for furnishing returns. Subsequently Governor of Bihar by notification directed that India Income Tax (Amendment) Act, 1939, the Income Tax law Amendment Act, 1940 should be deemed to have been applied to the Chotanagpur Division containing partially excluded areas with retrospective effect. Subsequently Regulation 1 of 1941 was also issued by the Governor to remove doubts as to the retrospective applicability of the Act mentioned in the Notification. Assesses were assessed and their appeals were pending when Regulation 1 of 1941 was issued. It was contended that assessment proceedings initiated and completed against them were invalid and neither the notification nor the Regulation were competent in law to validate those proceedings, it was held .by the Federal Court of India, inter alia, that appeals to the Appellate Assistant Commissioner were an integral part of the machinery of assessment and therefore it could not be contended that assessment proceedings were over when Regulation 1 of 1941 was made and the Regulation could not apply to the proceedings covered by those appeals."
9. In the light of what have been deliberated herein above, particularly the interpretation of law and legal preposition in the light of prescribed law and to follow the ratio decidendi, settled by the Superior Courts, I hold that the Assessment Orders dated 18.04.2013 in GD No, KCSI-HC-140611- 13042013 and dated 23.01.2013 in GD No, KCSI-HC 90751-08012013 passed by the respondent No, 2 and subsequent proceedings, actions and orders dated 09.09.2014 of the respondent No, 3 are inadequate and are in breach of natural justice and being equated with breach of law during the hierarchy of the Customs, suffers from grave legal infirmities and are declared illegal, ab initio and void and as such set aside and the appeals are accordingly allowed with no orders as to costs.
10. Order passed and announced accordingly.