' This Petition calls in question demand notice dated 3rd July, 1972 whereby the petitioner has been called upon to pay duty as well as sales tax to the extent of Rs, 2,757.
2. Briefly stated the relevant facts are that the petitioner imported Karakuli cloth for manufacture of caps in January, 1965 and paid duty as assessed. The consignment was released after the payment of duty and subsequently a demand notice was sent to the petitioner on 30th March, 1965 which was received by the petitioner on 2nd April, 1965 against which a reply in writing was sent to respondent No, 2 on 2nd April, 1965 which has been received on 5th April, 1965. 1t is stated in this letter which is on the record that duty payable on the item mentioned above was properly and correctly assessed and so paid and alongwith this reply a copy of gazette was enclosed according to which Karakuli cloth was exempt from so much of the duty as is in excess of 25% ad valorem.
According to the petitioner after this reply was received the respondents were satisfied and took no further action in the matter and after a lapse of about seven years had sent a fresh demand notice dated 3rd July, 1972 in respect of the same consignment in which duty has already been paid as stated above. It is further submitted on behalf of the petitioner that this demand notice is time- barred as for such purpose a period of three months is allowed under section 39 (3) of the Sea Customs Act from the date of the assessment. Mr. Akram Zuberi, Advocate for the respondents has pointed out that Sea Customs Act has been repealed and Pakistan Customs Act,. 1969 is applicable and the relevant provision would be section 32 (3) of the said Act according to which a period of four months has been allowed from the relevant date. The provision mentioned above relates to the issuing of notice within four months from the relevant date requiring a party to show cause why he should not pay the amount specified in the notice in case the duty was not properly levied or had been short levied by reasons of inadvertence, error or misconstruction. Be that as it may the first assessm ent in respect of the consignment in question was done on 29th December, 1964, duty was paid on 6th January, 1965 and consignment was released. Thereafter notice was issued for payment of further duty on 30th March, 1965 which was received by the petitioner on 2nd April, 1965 and reply was sent to the respondents which was received by them on 5th April, 1965. The question that now arises for consideration is that after this reply was received by the respondents, it appears that they found it satisfactory. Subsequently after a lapse of about seven years, according to the petitioner, a fresh demand notice dated 3rd July, 1972 was received in respect of the same consignment asking for payment of further duty. The contention of the petitioner is that this demand notice was time-barred and was not issued within a period of four months from the relevant date, which is the date of the first assessment as contemplated by section 32 (3) of the Pakistan Customs Act, 1969. The contention raised by Mr. Akram. Zuberi is that the explanation for this delay is that in the meantime this question was being resolved as to what particular Head will apply and it was ultimately decided by C. B. R. That stand taken by respondent No, 2 initially was correct. So far this explanation is concerned it is contended on behalf of the petitioner that he had no knowledge and genuinely and bona fidely he was under the impression that the chapter was closed after the reply sent by him to Customs Authorities alongwith the copy of gazette on 2nd April, 1965. Mr. Akram Zuberi has stated that this controversial question was ultimately resolved by the C. B. R. Vide letter dated 14th November, 1972 which is in the record of the customs. Even if it be so the question again arises so far the petitioner is concerned according to him the matter was closed and the fresh notice of demand was received by him after seven years and this is time- barred and beyond the period of four months as allowed under the law. Mr. Akram Zuberi has submitted that this was not a fresh notice but a reminder and he has pointed out that in the letter dated 3rd July, 1972 a reference was made to the office demand of even number dated 26th June, 1965. We do not feel inclined to accept the proposition that this can be treated as a reminder and not a fresh notice of demand for the reason that in between 3rd July, 1972 when this notice was issued and 26th June, 1965 when the first demand notice was sent there is a lapse of about seven years during which time there was no communication from the respondents to the petitioner as such the petitioner was justified in thinking that the matter was closed and this was a fresh notice of demand which gave a fresh cause of action for the reason that it was belated and time-barred.
3. Accordingly we set aside the notice of demand dated 3rd July, 1972 as having been issued belatedly and the subsequent notices as time-barred. In the result we allow the petition with no order as to costs and bank guarantee furnished by the petitioner is discharged.