RANA BHAGWAN DAS, J.---Short question for consideration in this petition for leave to appeal is "whether the respondents-Custom Authorities were lawfully authorised to impose penalty on the petitioner-importer in exercise of their powers under item 8(b) of section 167 of the Sea Customs Act, 1878 (hereinafter referred to as Act 1878) in the given circumstances.
2: An import licence was issued for import of three air-conditioners of the value of Rs,29,000 in favour of Sir Ganga Ram Hospital, Lahore way back in 1965. Before such import could be had, on account of pressing circumstances, Hospital management obtained three air-conditioners from the petitioner-company and handed over the import licence to it with the permission of the Import Control Authorities. Petitioner accordingly imported 26 window type air-conditioners and two compressors in the name of the Hospital being within the outer limit of the value of the import licence. Customs Authorities released the goods without collection of custom duty, sales tax and other charges under the misconception that these were imported for Hospital purpose and were exempt from levy of taxes and charges in view of SRO 997(K) dated 4th of August, 1960. However, on realizing the departmental oversight for non-levy of custom duty and other charges, on or about 3rd September, 1970, Collector Customs issued a notice to the petitioner informing it that by importing 26 air-conditioners of different capacities and two compressors instead of importing three air-conditioners of 7-1/2, 5 and 3 tons capacity respectively, contravention of the provisions of section 19 of Act, 1878 read with section 3(1) of Imports and Exports (Control) 'Act, 1950 (hereinafter referred to as Act 1950) had been committed and thus the petitioner was punishable in terms of item 8(b) of section 167 of the Act 1878 read with above said provision of Act, 1950. After such notice to the petitioner, Collector of Customs held that the petitioner had evaded sales tax amounting to Rs,44,270.88 on the aforesaid assignment by hood-winking the authorities.
Accordingly, he imposed penalty of Rs,60,000 on the petitioner which was unsuccessfully assailed by the company in appeal and revision before the customs hierarchy and ultimately impugned the aforesaid orders before the Lahore High Court in a writ petition which came to be dismissed leading to the instant petition for leave to appeal.
3. Main thrust of the learned counsel for the petitioner was that in terms of section 39 of Act, 1878 since the recovery of custom duties and other charges was hit by limitation of three years prescribed in the above said provision, no penalty could have been imposed for non-payment of the principal amount. This contention was also raised before the High Court and was adequately repelled for valid reasons. We approve and uphold the view taken by the learned Judge.
4. We have examined the provisions contained in section 39 of Act, 1878 which essentially regulate the payment of duty short paid or erroneously refunded. True, that subsection (2) of this provision of law lays an embargo on the Authority of the Customs Authorities to make any demand for payment of customs duty or charges within a period of three years from the date of first assessm ent. Suffice it to say, the goods imported by the petitioner were not all assessed to any kind of duty by the Customs Authorities. Since the Authorities did not levy any customs duty nor passed an order for recovery of other charges including the sales tax, the question of issuance of show-cause notice and subsequently demand is rendered irrelevant and out of place. In fact owing to the act of the petitioner in importing as many as 26 air-conditioners and 2 compressors on the import licence for import of 3, air-conditioners of larger capacity Customs Authorities imposed a penalty of Rs,60,000 in term of item 8(b) of section 167 of Act, 1878. This provision of law empowers the Customs Authorities under Chapter XI of Act 1878 to impose penalty not exceeding five times the value of the goods in addition to confiscation of any goods, the importation and exportation of which is for the time being prohibited or restricted under Act, 1878. It is not the case of the petitioner whether the penalty imposed on it is higher than five times the value of the goods.
Learned counsel strenuously urged that since the Authorities/respondents could not collect customs duty and other charges after the expiry of three years of the clearance of goods, action of imposition of penalty was equally bad in law and without jurisdiction. The argument is untenable and fallacious on the face of it as section 39 of Act, 1878 falls within Chapter V relating to levy of and exemption from customs duties whereas item 8(b) of section 167 falls in Chapter XVI which exclusively deals with the offences committed under Act, 1878 and the penalties which can be levied under the provisions of the said Act. Both the provisions are different, distinct and independent of each other and have no nexus so far the action under the provisions of Act, 1878 is concerned. Both provisions cannot be intermingled as seriously contended by the learned counsel.
Reliance was placed on the cases reported as Qaid Cap House v. Collector of Customs 1983 CLC 1736 a Division Bench case from the High Court of Sindh, and Federation of Pakistan etc. v. Ibrahim Textile Mills Ltd. 1992 SCM R 1898. In both the cases provisions of section 32(3) of Customs Act, 1969 were considered and it was held that recovery of duty short-levied would become unenforceable if notice is not served within six months as required by section 32(3). There can be no cavil with the proposition laid down in the reported cases but these are hardly attracted in the circumstances of the present case.
5. Contention of the learned counsel is that equities lean in favour of the petitioner, in that, the company had imported the goods within outer limit of the import licence; that the company had helped Sir Ganga Ram Hospital by providing three air-conditioners of the required capacity at the time of earnest need and that the imposition of penalty after the lapse of more than five years of the import of the goods was completely illegal.
6. We are afraid, we cannot subscribe to this view of the learned counsel inasmuch as the company was duly compensated by the surrender of import licence issued in favour of Sir Ganga Ram Hospital which position Was apparently exploited by importing as many as 26 air- conditioners and two compressors, instead of three air-conditioners, without the payment of any duty and other charges and thereby obtained windfall financial gain. Indeed the petitioner cannot be permitted to put a premium on its irregular act in contravention of the provisions of Act, 1878.
Law on the subject is well-settled as reported in Raunaq Ali v. Chief Settlement Commissioner PLD 1973 SC 236, Muhammad Baran v. Member (Settlement and Rehabilitation), Board of Revenue PLD 1991 SC 691, Engineer-in-Chief Branch v. Jalaluddin PLD 1992 SC 207, Manager, Jammu and Kashmir State Property in Pakistan v. Khuda Yar PLD 1975 SC 678 and Allah Ditta v. Barkat Ali 1992 SCM R 1974.
Argument of the learned counsel if allowed to prevail would lead to hyper-technicalities and render the superior Courts as an instrument of oppression. There is no gain reiterating that superior Courts are not expected to act in aid of injustice and to perpetuate the illegalities or put a premium on ill-gotten gains.
7. For the aforesaid facts and reasons we are in no manner of doubt that the view taken by learned Judge in Chambers of the Lahore High Court is unexceptionable. Leave to appeal is, therefore, refused and the petition is dismissed.