ABDUL SHAKURUL SALAM, J.-This order will dispose of Civil Appeals No. 114 of 1990 to 129 of 1990 and 216 of 1990 as these arise in similar circumstances.
1. Relevant facts are that the Government introduced Finance Bill, 1987 on 4th June, 1987. In pursuance thereof, the Central Board of Revenue issued a memorandum on the same day reducing rate of duty on man-made (synthetic) fibre from Rs. 20 per kilogram to Rs. 14 per kilogram. The respondents paid duties at the reduced rate which were accepted by the Customs Authorities. However, the proposal for reduced duty was withdrawn by the Government on 12th June, 1987 and the Bill was accordingly passed as the Finance Ordinance, 1987 and notified on 30th June, 1987. On 2nd August, 1988, the Assistant Collector Customs Valuation, Karachi issued show- cause notices under section 32(2) of the Customs Act, 1969 to the respondents as to why they should not pay the short-levied duties. Replies were filed by the respondents denying the applicability of section 32(2) of the Customs Act. The Assistant Collector Customs Valuation, Karachi, held that as the reduced rate was withdrawn on 12th June, 1987, there was no reduced rate between 4th June, 1987 to 12th June, 1987 and the respondents were aware of the fact that differential amount was due to the Customs, which they did not discharge deliberately and intentionally, thus section 32(2) of the Customs Act stood rightly invoked for demanding the said amount. He directed the respondents 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. He endorsed copies of his orders to the Customs Authorities at Lahore to detain all the future consignments of the respondents in order to recover the short levied amounts under section 202(1) of the Customs Act, 1969. The respondents filed Constitutional Petitions in the Lahore High Court in which it was held that the duties paid were in accordance with the reduced rates announced by the Government at the time of the budgetary proposals and in consequence of which Central Board of Revenue had also issued instructions. Both the Custom Authorities and the respondents acted accordingly and were without default. Since the reduced rates were not accepted by the National Assembly and were not enacted in law, the applicable provision was section 32(3) of the Customs Act which provided for recovery of any short-levied duty if that had come about because of any inadvertence, error or misconstruction on issuance of a notice within sue months. Since notices issued to the respondents were outside the prescribed period, resultant action was without lawful authority. The petitions were accepted vide order dated 20th December, 1988.
2. In support of the appeals the learned Deputy Attorney- General submitted that since the proposal for reduced rates was withdrawn the respondents were liable to pay the duty on the earlier rates as enacted, therefore notices under section 32(2) of the Customs Act, 1969 for short- levied duties were in order. When his attention was drawn to the language of the provision which entails that the statements were untrue, when made, or there was collusion and that there was no such allegations at all; on the other had, both Customs Authorities and the respondents were acting in pursuance of the Instructions of the Board of Revenue, the learned Deputy Attorney- General did not press the point and proceeded on the basis of the finding by the learned Judge of the High Court that the case did not fall under section 32(2) but under section 32(3) to contend firstly that section 32(3) does not provide any penalty for non-issuance of notice within six months.
The provision is therefore only directory and notices issued subsequently would still be valid. He relied on "Niaz Muhammad Khan v. Mian Fazal Raqih" (PLD 1974 SC 134). He secondly submitted that since it is indisputable that under the law the respondents were liable to pay duty at the rate of Rs.
20 per kilogram, and they had paid at Rs. 14 per kilogram discretion should not have been exercised in their favour. He relied on "Nawab Syed Raunaq Ali etc. v. Chief Settlement commissioner and others" (PLD 1973 SC 236), 'The Chief '.Battlement Commissioner; Lahore v. Raja Mohammad Fazli han and others" (PLD 1975 SC 331) and "Federation of pakistan and others v. Haji Muhammad Saifullah Khan and there" (PLD 1989 SC 166).
1. Learned counsel for the respondents has referred to a recent decision of this Court by three learned Judges in Civil Appeal No. 699 of 1984 decided on 16th April, 1990 wherein notices issued for recovery of short-levied customs duties after the prescribed period were held to be without lawful authority. He also referred to three decisions of the Karachi High Court reported in "Messrs Qaid Cap House v. Collector of Customs and two others" (1983 CLC 1736), 'Yaqoob Timber Mart v.
Collector; Customs, Karachi and two others" (1984 CLC 490) and "Pakistan International Airlines Corporation v. Central Board of Revenue, Islamabad and 2 others" (1990 CLC 868) for the same proposition that notices issued by Custom Authorities after the prescribed period of time were held to be illegal.
4. Due consideration was given as to whether the respondents should not pay the short-levied duty and whether the State should suffer in public finance. But the cardinal principle of law is that all are equal before law, whether citizen or State. Secondly if a law prescribes period of time for recovery of money, after its lapse recovery is not enforceable through Courts. Thirdly, while construing a financial statute, its terms are strictly to be followed. Keeping in view these principles, for short- levied duties on account "of inadvertence, error or misconstruction", section 32(3) of the Customs Act, 1969 provides that for recovery notice shall be served 'within six months'. If that is not done, like a suit for recovery of money after lapse of time prescribed by law of limitation, the recovery becomes unenforceable. Therefore, the provision is not merely directory as contended by the learned Deputy Attorney-General. As regards his contention that discretionary relief should not have been granted to the respondents by the High Court, it needs to be said that discretion is not desire of the Judge but regulated by law. Discretion comes into play to choose one of the two or more alternatives, all of which are lawful, It is not proper exercise of discretion to refuse relief to a party to which it is entitled under law. The precedent cases quoted by the learned Deputy Attorney- General have this element in common that there is some blemish attached to the applicant seeking discretionary relief, In the appeals in had, there was no default of the respondents. In circumstances where notices under section 32 of the Customs Act, 1969 were issued after the prescribed period of time, resultant action was annulled in the cases quoted by the learned counsel for the respondents. There is no good ground to differently treat the respondents. The judgment under appeal is well based on facts and reasons. It is supported by the precedents and to the same effect is the latest judgment of this Court. It calls for no interference. The appeals are, therefore, dismissed but as these involved interpretation of statutory provisions parties are left to bear their own costs.