RUSTAM S. SIDHWA, J.--1 This judgment will dispose of ten writ petitions W.P. No. 4396 of 1988, W.P.
No. 4411 of 1988, W.P. No. 5796 of 1988, W.P. No. 5797 of 1988, W.P. No. 5798 of 1988, W.P. No. 5999 of 1988, W.P. No. 5995 of 1988, W.P. No. 5996 of 1988, W.P. No. 5997 of 1988 and W.P. No. 5998 of 1988 filed by Ibrahim Textile Mills, Limited, petitioner, three writ petitions W.P. No. 5289 of 1988, W.P. No. 5290 of 1988 and W.P. No. 5795 of 1988 filed by A.A Textile Mills Limited, petitioner, and two writ petitions W.P. No. 6001 of 1988 and W.P. No. 6077 of 1988 filed by Chaudhry Textile Mills Limited, petitioner, calling in question notices issued by the Assistant Controller of Customs Valuation, Karachi, demanding certain payments from the petitioners as short levied customs duties and threatening detention of their future consignments till the same are paid up.
2. The brief facts of the case are that all the three petitioners imported goods from foreign countries with regard to which they filed their bills of entry for in-bonding and ex- bonding and after getting the Customs duties assessed thereon, they paid the said duties in cash and got their goods released. The dates when each of the petitioners filed their bills of entry for in-bonding and ex-bonding, the dates when the Custom's assessed the duties and the dates when the petitioners paid the said duties are as follows:-- Writ Petition Number Bill of entry for inbonding Bill of entry for ex- bonding. Date when duty was assessed by Customs. Date when customs duty paid.
WP 4411-88 1.6.87 2.6.87 10.6.87 11.6.87 evening shift.
WP 4396-88 24.5.87 3.6.87 11.6.87 11.6.87 evening shift.
WP 5289-88 28.3.87 2.6.87 3.6.87 10.6.87 WP 5296-88 25.3.87 2.6.87 10.6.87 11.6.87 WP 5795-88 253.87 2.6.87 10.6.87 11.6.87 WP 5796-88 28.2.87 3.6.87 11.6.87 11.6.87 WP 5797-88 28.237 3.6.87 11.6.87 11.637 WP 5798-88 28.2.87 3.6.87 11.6.87 11.6.87 evening shift WP 5999-88 28.2.87 3.6.87 3.6.88 11.6.88 evening shift WP 5995-88 26.5.87 3.6.87 11.6.87 11.637 evening shift WP 5996-88 26.5.87 3.6.87 11.6.87 11.6.87 evening shift WP 5997-88 26.5.87 3.6.87 11.6.87 11.6.87 evening shift WP 5998-88 26.5.87 3.6.87 11.6.87 , 11.6.87 evening shift WP 6001-88 8.4.87 2.6.87 11.6.87 11.6.87 WP 6077-88 3.5.87 2.6.87 11.6.87 11.6.87 evening shift {{TEXT MISARRANGED}} it appears that on 4th June, 1987 just a day or two after the petitioners filed their bills of entry for ex- bonding, the Finance Bill 1987 was introduced in the National Assembly for debate. Pursuant to the same, the Central Board of Revenue, vide its memorandum C-No.1 (6)-CB/87, dated 4th June, 1987, issued instructions captioned "BUDGET INSTRUCTIONS 1987-88" whereby it reduced the rate of duty on man-made (synthetic) fibres from Rs. 20/- per kilogram to Rs. 14/- per kilogram. Likewise, on 12th June, 1987, just a day or two after the petitioners had paid the customs duties on their consignments, the National Assembly refused to accept the reduction in the rate of duty and the Central Board, of Revenue, vide its memorandum C. No. (6)-CB/87, dated 12th June, 1987, issued instructions captioned "Changes in the Budget for 1987-88" whereby which it withdrew the reduction which it had made in the rate of customs duty on man-made (synthetic) fibre by the earlier memorandum of 4th June, 1987. The Finance Ordinance, 1987, was finally passed and notified on 30th June, 1987. Though the petitioners had paid the duties much before the instructions of 12th June, 1987 the Assistant Controller of Customs Valuation, Karachi, by show cause notices issued to the petitioners on different dates under section 32(2) of the Customs Act, 1969, claimed large amounts as short levied duties, on the basis that the rate of duty on man-made fibre imported by the petitioners should have been calculated at Rs. 20/; per kilogram instead of Rs. 14/- per kilogram, and that, therefore, the Customs was entitled to claim the short levied duties. Replies to these notices were sent by the petitioners, where the charge under section 32(2) of the Customs Act, was denied. During the period 1st August, 1988 and 21st October, 1988, the Assistant Controller of Customs Valuation, Karachi, after hearing the petitioners, held that as the reduced rate was withdrawn on 12th June, 1987, there was no reduced rate between 4th June, 1987 to 12th June, 1987 and the petitioners were aware of the fact that differential amount was due to the Customs, which they did not discharge deliberately and intentionally, and thus section 32(2) of the Customs Act stood rightly invoked for demanding the said amount. He, therefore, ordered the petitioners to deposit the short levied customs duties within fifteen days from the dates of issue of the orders and threatened that action would be taken under section 202 of the Customs Act in case payments were not made. The Assistant Controller of Customs Valuation, Karachi, by various letters issued thereafter to the Assistant Collector of Customs, Lahore, with copies endorsed to the petitioners, called upon the Customs Authorities at Lahore to detain all the future consignments of the petitioners in order to recover the short levied amounts under section 202(1) of the Customs Act, 1969. Being aggrieved by the action of the Customs Authorities, the petitioners preferred fifteen writ petitions, the particulars of which are given above, which are now before me for disposal.
3. Pre-admission notices were issued to the respondents in each of these cases with a direction to file their written statements and to appear through their legal counsel, duly conversant with the facts of the cases, alongwith the records, and to be prepared to argue the main writ petitions in case the same were admitted on the next date of* hearing. Notwithstanding a number of hearings, no written statements were filed. In the course of hearings, the cases were argued by Syed Niaz Ali Shah and Sh. Maqbool Ahmad, Standing Counsel for the Federal Government.
4. Since these cases have been argued at length, these writ petitions are admitted and will be disposed of as notice cases.
5. On behalf of the petitioners a number of submissions have been made. First, that by virtue of Central Board of Revenue's circular, dated 4th June, 1987, the customs duty on man-made fibre stood reduced from Rs. 20/- per kilogram to Rs. 14/- per kilogram and all the duties having been paid by the petitioners in cash on 11th June, 1987, the second circular of the Central Board of Revenue, dated 12th June, 1987 did not have the effect of raising the customs duty. It is contended that the payments made by the petitioners on 11th June, 1987 were correctly made and no further duties were leviable. Second, that some of the payments which were made by the petitioners in cash on 11th June, 1987 in the evening shift, for which the Bank did not give the credit entry to the Customs till 13th June, 1987 (12th June, 1987 being Friday), should be deemed to have been made on 11th June, 1987. Third, that the petitioners in making the declaration that the goods were liable to duty at the rate of Rs. 14/- per kilogram, by virtue of the declaration made under section 3 of the Provisional Collection of Taxes Act, XVI of 1931, in the Finance Bill, 1987, had not made any statements which they knew or had reason to believe were false and since it was nobody's case that the petitioners had secured any benefit through collusion with the Customs Staff, no case under sub-sections (1) and (2) of Section 32 of the Customs Act stood made out and the notices issued to the petitioners under section 32(2) being based on no grounds and otherwise mala fide, deserve to be quashed. In this connection Shiromik Industries Ltd v. Collector Central Excise and two others (1984 M LD 562) has been referred. Fourth, that limitation for recovery of short levied duty not originally recovered by reason of inadvertence, error or misconception, having expired, the respondents cannot resort to section 32(3) of the Act. Fifth and last, that the remedies by way of appeal and revision would take up in indefinite time, within which period large sums of money of the petitioners would remain blocked, and that the same not being speedy and effective, this Court should interfere in constitutional jurisdiction.
6. On behalf of the respondents, it is submitted that prior to the date that the Finance Bill 1987 was presented in the National Assembly on 4th June, 1987, the rate of duty on manmade fibre was Rs.
20/- per kilogram and the presentation of the Bill did not have the effect of reducing the duty, till it was actually passed by the National Assembly and assented to by the President of Pakistan, under Articles 73 and 75 of the Pakistan Constitution. It is, therefore, submitted that on the date the petitioners paid the actual customs duty, the rate of duty on man-made fibre was Rs. 20/- per kilogram and the petitioners' declarations in the bills of entry for ex-bonding that the rate of duty was Rs. 14/- per kilogram was a deliberate mis-statement and that it was false to the knowledge of the petitioners. It is further submitted that when the petitioners made a declaration in their bills of entry for ex-bonding that the rate of duty was Rs. 14/- per kilogram, they knew that the rate of duty had not been reduced. They, therefore, had knowledge that it was untrue and false and the action of the Customs Authorities in demanding the short levied customs duty by virtue of action taken under section 32(2) of the Act was, therefore, legal and valid and within the period of limitation prescribed. It is lastly contended that the petitioners have a remedy by way of appeal and revision, which they should avail, and that this Court should not interfere in the constitutional jurisdiction.
7. I have given my anxious consideration to these cases. It is obvious that in all the fifteen cases the bills of entry for ex- bonding were filed on 2nd June, 1987 or 3rd June, 1987. It is admitted by the Customs Department that the petitioners did not pay the Customs duty due on these bills of entry for ex- bonding within seven days of their presentation. Under section 30 of the Customs Act, 1969, the rate of duty applicable on imported goods, in the case of goods cleared under a bill of entry for home consumption, or under a bill of entry for ex- bonding, is the rate of duty in force on the date on which such a bill of entry is presented. However, under the second proviso to the said section, where customs duty is not paid within seven days from the date on which such a bill of entry is presented, the rate of customs duty becomes that which is applicable on the date on which the duty is actually paid. The petitioners, therefore, were entitled to pay the duty at the rate applicable on the dates they made the payments.
8. The next question that arises is on what dates the petitioners actually made payments. From the table given in para 2 above, payments were made by the petitioners in cash either on 10th June, 1987 or 11th June, 1987. In some cases, the cash payments which were received by the National Bank of Pakistan, Dry Port Branch, Lahore, were received not in the morning shift, but in the evening shift.
As per Banking practice, all deposits received in the evening shift are credited to the accounts of the customers on the next working day. Thus, cash payments made by the petitioners in the evening shift on 11th June, 1987 were credited to the account of the Collector of Customs, Lahore, on 13th June, 1987, because 12th June, 1987 happened to be a Friday. All the Scheduled Banks now run evening shifts, specifically for the purposes of collection of Government dues. Where on a particular date, payment is received in cash or by transfer order or draft drawn on the receiving Bank by one of its own Branches, the legal effect would be that it is made on that day, irrespective of the fact that by Banking practice the Bank would give credit for it in the account of the customers on the next working day. However, where payment is made by cheque or other instrument, the date of actual collection would be the effective date on which payment can be said to have been legally made. In some of the instant cases, payments were made by the petitioners in cash in the evening shift on 10th June, 1987 or 11th June, 1987. For purposes of section 30 of the Customs Act, such payments shall be treated as payments made the same day. I would, therefore, hold that all payments in the' cases in instance were made by the petitioners on or before 11th June, 1987.
9. The next question that arises is whether the rate of duty on man-made fibre stood reduced from Rs. 20/- per kilogram to Rs. 14/- per kilogram between the period 4th June, 1987 and 11th June, 1987.
A Money Bill does not become law till it is passed by the National Assembly and assented to by the President of Pakistan. Under the Provisional Collection of Taxes Act, XVI of 1931, immediate effect can be given to any provision in a Money Bill for a limited period. However, the said Act only covers provisions in Money Bills which relate to the imposition or increase of duties of customs or excise or sales tax. This is apparent not only from the title heading given to the Act, but also from its preamble and section 3, which is the declaring section. Thus, where, under the said Act, the Legislature wants to provide that any provision in a Money Bill relating to the imposition or increase of a duty of customs or excise or sales tax should have immediate effect, the Federal Government can insert in the said Bill a declaration to that effect under section 3 of the said Act, and where such a declaration is inserted, the declared provision will have the force of law with immediate effect, as if enacted on the day on which the Bill is introduced. Since the Act covers Money Bills relating to the imposition or increase of duties of customs or excise or sales tax, it obviously does not cover provisions relating to the reduction or withdrawal of such duties or taxes. The cases in instance are those of reduction of customs duty. In these circumstances, the provisions of the Provisional Collection of Taxes Act, 1931, are not applicable to the instant cases. The introduction of the Finance Bill 1987 in the National Assembly, therefore, did not have the effect of immediately reducing the customs duty on man-made fibre from Rs. 20/- per kilogram to Rs. 14/- per kilogram. The two circulars of the Central Board of Revenue dated 4th June, 1987 and 12th June, 1987 being merely instructional any by way of aid to Officers working in the Customs, could by themselves not reduce the rate of duty. The rate of duty on man-made fibre between the period 4th June, 1987 and 11th June, 1987 was Rs. 20/- per kilogram and not Rs. 14/- per kilogram, as alleged by the petitioners. The declaration under section 3 of the Provisional Collection of Taxes Act, 1931, contained in the Finance Bill 1987 to the effect that the provisions of clauses 3, 5, 8 (5) and 13 of the said Bill would have immediate effect under the said Act, can only be treated as applicable io any new imposition of duty of customs or excise or sales tax or increase thereof, as provided by the said Bill and no further. To the extent that the declaration is sought to be stretched to apply to any reduction or total withdrawal of duties of customs or excise or sales tax, the declaration would be ultra vires the Act. If I may say so with respect, the declaration contained in the Finance Bill, 1987, is somewhat loosely worded. It should have been hedged by appropriate wording showing that it would be limited to such of the duties of customs or excise or I sales tax as were newly imposed or stood increased, but not to those which were reduced or withdrawn. In the absence of such qualifying words, I have no doubt that many persons would have been led to believe that such of the duties of customs or excise or sales-tax which were reduced or withdrawn by the said Finance Bill, 1987, also had immediate effect from the date the Bill was presented in the National Assembly.
10. In the light of the above, it is now necessary to examine whether the petitioners made any declaration in their bills of entry for ex-bonding, knowing or having reason to believe that they were false in any particular. The show cause notices issued to the petitioners by the Assistant Controller of Customs. Valuation, Karachi, under section 32(2) of the Customs Act demanding payment of short levied Customs duty, only refers to the fact that the petitioners had claimed assessments of their consignments at the rate of Rs. 14/- per kilogram, instead of the statutory rate of Rs. 20/- per kilogram, that consequently certain amounts become due as short levied customs duty and since the assessm ents claimed and finalised resulted in short recoveries, therefore, they were required to show cause why they should not pay the short levied customs duties. It is nowhere stated in these notices that the petitioners made or caused to be filed any document or declaration which they knew or had reason to believe were false in any material particular. Under sub-section (1) of section 32, it is necessary to show that the person who made or filed any declaration or document was cognizant of or had knowledge or comprehension of the fact that whatever statement or declaration he had made or the document he had filed, was incorrect or untrue in some material particular. In the absence of proper allegations in the notices showing what statements or declarations made or documents filed were false in some material respect, to the knowledge or belief of the petitioners, the notices were vague and not complying with the requirements of sub- section (2) of section 32 of the Customs Act. However, since action has been taken on these notices, I shall discuss this matter later, when I deal with the orders passed by the Customs Authorities on these notices.
11.. This then brings me to the other ground on the basis of: which the case can be opened for recovery of the short levy, namely, collusion between the petitioners and the Customs Staff. The show cause notices issued by the Assistant Controller of Customs Valuation, Karachi, to the petitioners also do not contain any averment suggestion that the short levy was the result of any collusion between the petitioners and the Customs Staff. Such an allegation, with proper particulars, must be clearly levelled, if that is the ground on which the short levy is to be claimed. If any authority is required for this view, Shiromik Industries Ltd. v. Collector Central Excise and two others (Supra) may be referred. Since no such allegation was made in the show cause notices and this matter was not taken into consideration during the adjudication of the cases, this issue, therefore, does not arise in these cases.
12. I now turn to the actual orders passed by the Assistant Controller of Customs Valuation, Karachi, under section 32(2) of the Customs Act, 1969. The operative parts of these orders, which are relevant, may be summarised thus: In each of the cases the ''Assistant Controller has held that a budgetary proposal was announced by the Government on 4th June, 1987 (Thursday evening), under which the rate of duty of the subject item was reduced from Rs. 20/- per kilogram to Rs. 147- kilogram, that the said proposal was withdrawn vide revised budget which was announced by the Government on 12th June, 1987 (Friday), that as a result of the revised budget the reduced rate which remained in force from 4th June, 1987 to 12th June, 1987 stood withdrawn altogether and the original rate of Rs. 20/- per kilogram stood restored,, that the petitioners who had paid the duties and taxes during this period at the reduced rate had to pay the differential amount, that the petitioners were aware of the fact that differential amounts were due and payable by them, but they did not discharge their responsibility deliberately and intentionally and avoided the payments due by them, that the provisions of section 32(2) stood correctly invoked for demanding the said amounts and that the demands were thus justified and should be properly enforced, in exercise of powers vesting in him under section 32(2) of the Customs Act, 1969. He, therefore, directed the petitioners to deposit short levied duties within fifteen days from the dates of issue of his orders, failing which he threatened that the same would be recovered under the provisions of section 202 of the Customs Act, 1969. The said orders do not touch the conditions precedent required for the exercise of the powers vesting in the Assistant Controller under sub-section (2) of section 32 of the Customs Act, 1969, namely, (a) whether the petitioners had made or caused to be made or delivered or caused to be delivered any declarations or statements knowing or having reason to believe that such documents or statements were false in any matter particulars or (b) whether the petitioners by reason of some collusion had connived at any duty or charge being short levied. It cannot be denied that the declaration made under section 3 of the Provisional Collection of Taxes Act, 1931, contained in the Finance Bill 1987 was not hedged by appropriate working showing that it would be limited to such Of the duties of Customs or excise or sales tax as were newly imposed or stood increased, or that the declaration would not apply to such duties or tax which were reduced or withdrawn. In the absence of such qualifying words, I have no doubt that - the petitioners were reasonably led to believe that such of the duties of customs or excise or sales tax which were shown as reduced or withdrawn in the said Finance Bill 1987, came into effect with immediate effect from the date the Bill was presented in the National Assembly. The fact that the Central Board of Revenue shared the same view can be gauged from the fact that they issued their circular dated 4th June, 1987 intimating about the reduction of the duty. Thus, when the petitioners, through their clearing agents, made the necessary corrections in the bills of entry for ex-bonding reducing the rate of duty shown therein from Rs. 20/- per kilogram to Rs. 14/- per kilogram, it cannot be said that they made any statements knowing or having reason to believe that they were false in any material particular. The fact that the Appraisement Staff of the Customs Department, who were responsible for passing the said bills of entry, also shared the same view, is obvious from the fact that they made the assessme nts on the basis of the reduced rate. In the instant cases, it was not enough for the department to show that the rate of duty shown in the bills of entry were untrue, but it was also necessary for them to show that the petitioners who made the declarations were cognizant of or had knowledge or comprehension of the fact that the rates they were declaring were incorrect or untrue in some material, particular. Where the wording of the declaration in the Finance Bill 1987 was open to doubt, it cannot be said that the petitioners, who declared the reduced rate of duty in their bills of entry, did so knowing or having reason ta believe that what they were stating was untrue.
13. The cases in instance appear to be those where the Customs Appraisement Staff, through their own inadvertence, error or misconstruction, short levied duty, for which the remedy was available under section 32(2) of the Act. However, such a remedy is only available to the Customs if a notice is served on the importer within six months of the date the short levy is made. It appears that the Customs Authority having lost their remedy under sub-section (3) of section 32 of the Act, resorted to sub-section (2) of section 32 and, by a forced construction of that provision, sought to recover the short levy.
14. The impugned orders having been passed on no material and on erroneous construction of the law, require to be set aside.
15. The objection of the Department that the writ petitions should not be accepted, as the petitioners have remedies by way of appeal and revision, appears to be attractive, but has no merits. The orders in instance have been passed on material which do not make out the conditions precedent on the basis of which they could have been passed. The orders appear to be based on a forced construction of the law. The remedies by way of appeal and revision would drag the case through another three years, involving advance deposits of heavy amounts, in case stay orders are not granted. For all these reasons, I do not think the alternative remedies can be treated as speedy, adequate or effective, so as to disentitle the petitioners to their remedies in the writ jurisdiction.
16. For the foregoing reasons, all the fifteen writ petitions WP No. 4411 of 1988, WP No. 4396 of 1988, WP No. 5289 of 1988, WP No. 5290 of 1988, WP No. 5795 of 1988, WP No. 5796 of 1988, WP No. 5797 of 1988, WP No. 5798 of 1988, WP No. 5999 of 1988, WP No. 5995 of 1988, WP No. 5996 of 1988, WP No. 5997 of 1988, WP No. 5998 of 1988, WP No. 6001 of 1988 and WP No. 6077 of 1988 are accepted and the orders passed by the respondents under section 32(2) of the Customs Act claiming short levied customs duties and those expressing their intention to take action to detain the future consignments ' of the petitioners for recovery thereof, as detailed by each of the petitioners in their respective petitions, are declared to have been issued without lawful authority and are set aside.
17. All the writ petitions are accepted with costs Rupees Two Thousand (Rs. 2,000/-) is fixed as counsel's fee in each of the fifteen cases, which shall be paid to the petitioners.