1. ' MAMOON KAZI, J.---We propose to dispose of these two petitions by a common judgment as common questions of law are involved therein.
2. ' The facts pertinent for resolving the controversy in C.P. No,D-93 of 1988 are that the petitioners had imported certain consignments of palm fatty acid. The goods were got released by the petitioners after payment of customs duty upon the value declared by the petitioners. However, the respondents found that the duty had been short-levied on account of false declaration made by the petitioners. Consequently, the petitioners were given show-cause notice in respect of the different consignments under section 32(2) of the Customs Act. Be that as it may, it, however, appears that the respondents did not proceed on the basis of the said notices because they sent fresh notices to the petitioners under section 195 of the Customs Act. It is pertinent to point out that the respondents clearly modified their stand in the subsequent notices as the case of the respondents in the subsequent notices was that: "as the value was not determined on the basis of price prevalent on the day the B/E was filed as available from PORIM Price List in accordance with section 25 read with section 30 of Customs Act, 1969 and as per rules laid down in Board's C.G.O. 1/81. The value of goods was declared at unit/price of US $ 117.50 per M/Ton whereas the normal value as PORIM Price List was determined at US $ 205 per M/Ton C&F. The difference between the value ascertained and the value declared comes to US $ 87.50 per M/Ton resulting in loss of Government revenue to the extent of Rs,1,29,124 in terms of Customs duty and other taxes. There is also short payment of Rs,6,408 in respect of Income-tax."
3. ' Such notices have now been called in question by the petitioners.
4. ' The case of the petitioners in C.P. No,D-94 of 1988 is also more or less the same except for the fact that no notice under section 32(2) of the Customs Act had earlier been given by the respondents to the petitioners.
5. ' The contention of the learned counsel for the petitioners is that the provisions of section 195 of the Customs Act could only be invoked subject to the provisions of section 32 of the said Act since that is the only specific provision under which any customs duty or charge not levied or short-levied or erroneously refunded can be recovered from an importer of goods.
6. ' In order to appreciate the argument sections 32 and 195 of the Customs Act are reproduced as follows:-- "32. Untrue statement, error, etc.---(1) If any person, in connection with any matter of customs.---
(a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or
(b) makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer, knowing or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section.
(2) Where, by reason of any such document or statement as aforesaid or by reason of some collusion, any duty or charge has not been levied or has been short leveled or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date, requiring him to show cause why he should not pay the amount specified in the notice.
(3) Where, by reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short-levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within six months of the relevant date requiring him to show cause why he should not pay the amount specified in the notice.
(4) The appropriate officer, after considering the representation, if any, of such person as is referred to in subsection (2) or subsection (3) shall determine the amount of duty payable by him which shall in no case exceed the amount specified in the notice, and such person shall pay the amount so determined.
(5) For the purposes of this section, the expression relevant ate' means
(a) in any case where duty is not levied, the date on which an order for the clearance of goods is made;
(b) in ease where duty is provisionally assessed under section 81, the date of adjustment of duty after its final assessm ent;
(c) in case, where duty has been erroneously refunded, the date of its refund;
(d) in any other case, the date of paymen of duty or charge."
7. "195.
8. ' Provided that no order confiscating goods of greater value, or enhancing any fine in lieu of confiscation, or imposing or enhancing any penalty, or requiring payment of any duty not levied or short-levied shall be passed unless the person affected thereby has been given any opportunity, of showing cause against it and of being heard in person or through a counsel or other person duly authorised by him.
(2) No record of any proceedings relating to any decision or order passed by an officer of customs shall be called for and examined under subsection(1) after the expiry of two years from the date of such decision or order."
9. As is evident from section 32, subsections (1) and (2) thereof refer to recovery of customs duty not levied or short-levied or erroneously refunded on account of false statement made by any person in connection with any matter of customs. Subsection (3) of the said section refers to recovery of duty or charge not levied or short-levied on account of inadvertence or error or misconstruction.
10. The show-cause notices earlier received by the petitioners from the respondents although indicate that customs duty had been short-levied on account of false statement made on behalf of the petitioners but the notices subsequently sent to the petitioners clearly bring the case against the petitioners within the purview of subsection (3) of section 32 of the Customs Act because allegations in regard to making of false statement were subsequently dropped. For sending of a show-cause notice under subsection (3) a period of six months has been provided for. Any show- cause notice sent to a party beyond a period of six months would therefore, be invalid. No doubt section 195 which confers powers of suo motu revision on the Collector of Customs to satisfy himself as to the legality or propriety of any order passed by a subordinate officer, provides for a period of two years for making such application and such period is to be computed from the date of the order or decision sought to be reviewed but we would like to point out that the specific provisions in the Customs Act which deal with the recovery of short-levied duty or charges are embodied in section 32 and not in sectin 195 of the said Act. Since section 32(3) provides for a period of six months for reopening any case where duty has not been levied or short-levied or erroneously refunded the respondents could not circumvent the provisions of section 32(3) of the Customs Act by sending a notice under section 195 of the said Act thus rendering the former nugatory. ##TE#Although no decision of any superior Court in Pakistan has been cited before us on the point but the learned counsel for the petitioners has placed reliance upon the case of S. Venkatesan v. Nihalchand AIR 1962 Cal.
258. In this case the High Court of Calcutta while dealing with the provisions of sections 39 and 190- A of the Indian Sea Customs Act which correspond to the provisions of sections 32 and 195 respectively of our own Customs Act, in a more or less identical case has observed as follows:-- "The main point involved in this appeal is the question of construction of sections 39 and 190-A of the Sea Customs Act. It is clear that section 39 is a substantive provision which creates certain rights in favour of the Customs authorities to recover customs duties and charges and it clearly imposes liability to pay such duties and charges on persons liable to pay the same. But it also prescribes a period of limitation within which the payment is to be demanded. The condition precedent to the accrual of liability to pay is that the Customs authorities must issue a notice of demand to the person liable to pay within three months from the relevant date as defined or explained in subsection (2) of section 39 of the Sea Customs Act. If no such notice of demand is issued within the prescribed period, the amount of claim becomes irrecoverable. The section provides for certain contigencies under which certain customs duties and charges which have escaped levy and certain refunds granted under certain specified circumstances can be recovered. The Customs authorities' case is that the refund had been made erroneously to the respondents (see the letter dated the 15th September, 1958). So the contingency or case is one which falls under section 39. This being the position, can it be said that although no notice of demand was issued within three months of the date of refund and the claim for repayment has become irrecoverable, yet, by the indirect process of revision or review as envisaged in section 190- A of the Sea Customs Act, the order of refund can be revoked and the respondents made liable, to repay the amount refunded? To give countenance to such interpretation will be to make the provisions of section 39 nugatory. The result of such construction will be that in every case of short levy or escapement of levy or of erroneous refund, the provisions of section 190-A may be availed of, provided it is so availed of within a period of two years as provided in section 190-A and the bar of limitation as specified in section 39 can be got rid of or circumvented in this manner. Such an absurd intention cannot be imputed to the legislature. In my view, section 190-A has not the effect of overriding section 39 but it is subject to the said section. So this main point is devoid of any substance."
11. We are consequently of the view that the show-cause notices sent by the respondents to the petitioners are invalid having been sent beyond the period of limitation provided therefor.
12. ' In the result we accept these petitions and hold that the said show-cause notices sent by the respondents to the petitioners are without lawful authority and of no legal effect. The parties are left to bear their own costs.##TE#