Mahfuzul Hoque and ors
Vs.
Collector of Customs, Customs House, Chittagong & ors,
Supreme Court
Appellate Division
(Civil)
Present:
Syed J.R. Mudassir Husain CJ
Md. Ruhul Amin J
Mohammad Fazlul Karim J
M.M. Ruhul Amin J
Md. Tafazzul Islam J
Amirul Kabir Chowdhury J
Mahfuzul Hoque, Golam Mostafa, Abul Kalam, Abdul Matin, Md. Shahid, Ujjal Chowdhury, A. Rahman, M/s. Hasan and Company, M/s. Asgar Oil Mills Ltd. M/s. F. Rahman Oil Mills Ltd., M/s. Universal Trading, Rahim, S.H. Chowdhury, A.K. Chowdhury, A.H. Chowdhury, K.H.Chowdhury, Md. Alamgir, Mohammad Nibras, M/s. Golbal Traders, H. Hussain, M/s. Kamal Imports & Exports Ltd, Meghan Dairy & Food Products Ltd, Md. Imran Ahmed, M/s. Mimu Enterprise, M/s. Orient Trading, Md. Mostafa Kamal, Mrs. Beauty Akter, Md. Mostafa Kamal, Meghan Dairy & Food Products Ltd, Md. Alamgir………………………………………………………….Appellant
Vs
The Collector of Customs, Customs House, Chittagong & others…………….. Respondents (In all the cases).
Judgment
August 8, 2005.
Cases Referred To-
Mustafa Kamal Vs. The Commissioner of Customs, 52 DLR (AD) 1; Phassco Hardware Company Vs. The Government of Pakistan, PLD 1989 Karachi 621; Collector of Customs, Kasmir Vs. M/s. the New Electronic Private Ltd, 1994 PLD (SC) 363; Govt. of Province of Bombay Vs. Pestonji Ardeshir Wadia and others, AIR 1949 PC 143; Gupto Imp. Vs. Board of Revenue, AIR 1953 SC 25; Texco Stores Vs. Secretary of State for Environment and others, (1995)2 All England Reports 636; Ghulam Zarina, 16 DLR 486 Vs. A.B. Khondkar; Her Majesty the Queen Vs. Burah, 5 Indian Appeals (Vol-V) 178; In re Art.143, Constitution of India and Delhi Laws Act (1912), A.I.R. 1951 (SC) 332.
Lawyers Involved:
Dr. Kamal Hossain, Senior Advocate, (Salahuddin, Advocate with him), instructed by Md. Nawab Ali, Advocate-on-Record-For the Appellants (In Civil Appeal Nos. 76-77 of 1994).
Dr. Kamal Hossain, Senior Advocate, (Ramzan Ali Sekder, Advocate with him), instructed by Md. Nawab Ali, Advocate-on-Record-For the Petitioner (In Civil Petition No. 1189 of 1998).
Dr.Kamal Hossain, Senior Advocate, (Ramzan Ali Sekder, Advocate with him), instructed by Md. Mawab Ali, Advocate-on-Record-For the Petitioner (In Civil Petition No. 1344 of 2002).
A.S.M. Khalequzzaman, Advocate-on-Record- For the Petitioner (In Civil Petition No. 763 of 2002).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition No. 820 of /2002).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition No. 823 of 2002).
Ahsanullah Patwary, Advocate-on-Record-For the Petitioner (In Civil Petition Nos. 877-880 of 2002).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition Nos. 1416-1420 of 2002).
Dr. Kamal Hossain, Senior Advocate, instructed by A. S. M. Khalequzzaman, Advocate-on-Record-For the Petitioner (In Civil Petition No. 1390 of 2002).
Dr.Kamal Hossain, Senior Advocate, instructed by A.S.M. Khalequzzaman, Advocate-on-Record-For the Petitioner (In Civil Petition No. 1091 of 2002).
Dr.Kamal Hossain, Senior Advocate, instructed by A.S.M. Khalequzzaman, Advocate-on-Record-For the Petitioner (In Civil Petition No. 1099 of 2002).
Dr.Kamal Hossain, Senior Advocate, instructed by Md. Nawab Ali, Advocate-on-Record-For the Petitioner (In Civil Petition Nos. 1352-1357 of 2002).
Abdul Basel Majumder, Senior Advocate, instructed by Chowdhury Md. Zahangir, Advocate-on-Record-For the Petitioner (In Civil Petition Nos. 135-138 of 2002).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition No. 289 of 2003).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition No. 765 of 2003).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition Nos. 867-868 of 2003).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition No. 288 of 2003).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition No. 620 of 2003).
Mvi. Md. Wahidullah, Advocate-on-Record-For the Petitioner (In Civil Petition Nos. 214-218 of 2003).
A. F. Hassan Arif, Attorney General, instructed by B. Hossain, Advocate-on-Record-For the Respondent (In Civil Appeal Nos. 76-77 of 1994).
A.F. Hassan Arif, Attorney General, instructed by B. Hossain, Advocate-on-Record-For the Respondent (In Civil Petition Nos. 1189 of 1994).
Not represented-For the Respondents (In Civil Petition Nos. 1344, 763, 820, 823, 877-880, 1416-1420, 1390, 109, 1099, 1352-1357 of 2002, and 135-138, 289, 765, 868, 288, 620 of 2003 and 214-218 of 2004).
Civil Appeal Nos.76 & 77 of 1994
(From the judgment and order dated 15th August 1994 passed by the High Court Division in Writ Petition No. 1104 and 1152 of 1994)
WITH
Civil Petition for Leave to Appeal No.1189 of 1998
(From the judgment and order dated 25th May 1998 passed by the High Court Division in Writ Petition No. 329 of 1994)
AND
Civil Petition for Leave to Appeal No.1344 of 2002
(From the judgment and order dated 5th November 2001 passed by the High Court Division in Writ Petition No. 3232 of 1997)
AND
Civil Petition for Leave to Appeal No.763 of 2002
(From the judgment and order dated 22nd August 2001 passed by the High Court Division in Writ Petition No. 1395 of 1996)
AND
Civil Petition for Leave to Appeal No.820 of 2002
(From the judgment and order dated 23rd November 2001 passed by the High Court Division in Writ Petition No. 781 of 1997)
AND
Civil Petition for Leave to Appeal No.823 of 2002
(From the judgment and order dated 25th August 2001 passed by the High Court Division in Writ Petition No. 1885 of 1997)
AND
Civil Petition for Leave to Appeal No.877of 2002
(From the judgment and order dated 5th November 2001 passed by the High Court Division in Writ Petition No. 4745 of 1996)
AND
Civil Petition for Leave to Appeal No.878 of 2002
(From the judgment and order dated 5th November 2001 passed by the High Court Division in Writ Petition Nol616 of 1997)
AND
Civil Petition for Leave to Appeal No.879 of 2002
(From the judgment and order dated 5th November 2001 passed by the High Court Division in Writ Petition Nol617 of 1997)
AND
Civil Petition for Leave to Appeal No.880 of 2002
(From the judgment and order dated 5th November 2001 passed by the High Court Division in Writ Petition No 1903 of 1997)
AND
Civil Petition for Leave to Appeal Nos.1416-1417 of 2002
(From the judgment and order dated 10th April 2002 passed by the High Court Division in Writ Petition No 2275 & 3363 of 1998 respectively).
AND
Civil Petition for Leave to Appeal Nos.1418-1420 of 2002
(From the judgment and order dated 12th May 2002 passed by the High Court Division in Writ Petition No. 2469, 2472 and 2474 of 1998 respectively).
AND
Civil Petition for Leave to Appeal No.1390 of 2002
(From the judgment and order dated 11th April 2002 passed by the High Court Division in Writ Petition No. 134 of 1998)
AND
Civil Petition for Leave to Appeal No.1091 of 2002
(From the judgment and order dated 12th March 2002 passed by the High Court Division in Writ Petition No.5523 of 1997).
AND
Civil Petition for Leave to Appeal No.1099 of 2002
(From the judgment and order dated 24th March 2002 passed by the High Court Division in Writ Petition No. 7688 of 1997).
AND
Civil Petition for Leave to Appeal Nos.1352-57 of 2002
(From the judgment and order dated 5th November 2001 passed by .the High Court Division in Writ Petition Nos. 7726, 7095 of 1997 With Petition No.4001 of 1998 and Writ Petition No. 2787 of 1999 and Writ Petition No. 7094 of 1997 and Writ Petition in Writ Petition No. 7094 of 1997 and Writ Petition No. 3149 of 1999 respectively).
AND
Civil Petition for Leave to Appeal Nos.135-138 of 2003
(From the judgment and order dated 12th June 2002 passed by the High Court Division in Writ Petition Nos. 2116, 1512, 1606 and 3907 of 1997 respectively).
AND
Civil Petition for Leave to Appeal No.289 of 2003
(From the judgment and order dated 12th June 2002 passed by the High Court Division in Writ Petition No. 1522 of 1997 respectively).
AND
Civil Petition for Leave to Appeal No.765 of 2003
(From the judgment and order dated 5th November 2001 passed by the High Court Division in Writ Petition No. 1410 of 1997).
AND
Civil Petition for Leave to Appeal No.867 of 2003
(From the judgment and order dated 22nd August 2001 passed by the High Court Division in Writ Petition No. 4480 of 1996).
AND
Civil Petition for Leave to Appeal No.868 of 2003
(From the judgment and order dated 3rd April 2001 passed by the High Court Division in Writ Petition No. 2353 of 1998).
AND
Civil Petition for Leave to Appeal No.288 of 2003
(From the judgment and order dated 12th January 2003 passed by the High Court Division in Writ Petition No. 5086 of 1997).
AND
Civil Petition for Leave to Appeal No.620 of 2003
(From the judgment and order dated 30th April 2003 passed by the High Court Division in Writ Petition No. 3649 of 1998).
AND
Civil Petition for Leave to Appeal Nos.214-218 of 2004
(From the judgment and order dated 25th October 2003 passed by the High Court Division in Writ Petition Nos. 3306, 2692, 2519, 2858, 1258 of 1996 respectively).
Judgment:
Mohammad Fazlul Karim J.- These appeals by leave arose out of judgment and order dated 15.08.1994 passed in Writ Petition Nos. 1104 and 1152 of 1994 respectively heard along with Writ Petition Nos. 1053, 1054 and 1055 of 1994 discharging the rules issued by the High Court Division challenging the fixation of tariff value by SRO No.214-Ain/93/1527/Shulka dated. 28.10.1993 in respect of imported cigarette papers of the size of 20″/30″ and 15″/30″ at US$ 1800 per metric ton treating the same as arbitrary, without any factual and objective basis and having on nexus with the prevailing international market rate on the face of the invoice value of the goods being at US$ 835.49 per metric ton (taking the invoice value of US$ 291 per Rim of 500 sheets) alleging that such arbitrary fixation of tariff value has been done without lawful authority and no legal effect.
2. The appellants as the importers opened the letters of credit No. 05940186-C dated 19.5.1994 and 05940125-C dated 18.4.1994 respectively for US$ 19QOO/- in order to import of 2000 Rims of Dragon Brand C.P. in sheet form of size 20″/30″ at the rate of US$ 4.50 per Rim of 50 sheets each and letter of credit No. 05940186-c dated 18.4.1994 of US$ 212034.00 for import of 72, 864.20 Rim Dragon Brand C.P. in sheet form of size 15″/30″ for US$ 2.91 per Rim of 50 sheets each. The goods having arrived at Chittagong Port the respective bills of entry were submitted to the Customs authority for assessment of duties and taxes in order to release the goods on 5.7.1994 and 12.7.1994 respectively. The Government, however, fixed tariff value of the CP sheet at US$ 1800/- per metric ton vide SRO No.214-Ain/93/1527/Shulka dated 28.10.1993 and accordingly assessed the duties and taxes ignoring invoice value of the appellants’ goods-at US$ 2.17 and 2.91 per Rim. Thus the writ-petitioners have challenged the same as arbitrary and without lawful authority as the said papers were liable to be assessed at US$ 835.49 per metric ton instead of its tariff value at US$ 1800/- per metric ton which is contrary prevailing the international market having no nexus thereto and inflated one.
3. The High Court Division upon hearing the parties discharged the rules. The appellants thereafter moved this Court against the said impugned order challenging the impugned assessment of the said imports of the appellants pursuant to notification being SRO No.214 dated 28.10.1993 on the ground that the tariff value introduced for assessment of customs duties and other taxes in respect of the concerned imported goods is arbitrary, fictitious grossly inflated having no objective basis and not in keeping with fair value of the goods in the international market inasmuch as section 25(7) of the Customs Act does not confer any authority on the Government to determine the tariff value arbitrarily.
4. Leave to appeal was according by granted by this Division to consider the submission of Dr. Kamal Hossain on behalf of the appellant that:
“The High Court Division has not given its full consideration to the arguments made by the learned Advocate for the petitioner before it. The respondents appeared in the writ petitions but did not file any affidavits-in-opposition denying the allegations as to arbitrary imposition of tariff value at an unreasonably higher rate. He submits that the very difference in the invoice value and tariff value is indicative of arbitrariness and fictitious-ness. There is no guideline for fixing tariff value in section 25 and the Government has utilised the wide scope for fixing tariff value without regard to the local and international market rate of the imported goods, purely for the purpose of augmenting its revenue without legislative sanction”.
5. Dr. Kamal Hossain, the learned Counsel appearing for the appellants has detailed the background of the necessity of the protective value in order to protect local industries and determining a fair price of the goods in the prevailing International market introducing the tariff value in the Country since 1976 and with that end in view has introduced the SRO No./214 dated 28.10.1993 in respect of the import in question but the tariff value determined by the Government under the provision of section 25(7) is excessively higher and has no nexus to the international market price and the Government did not have unfettered, unlimited and absolutely arbitrary discretion in the matter of determining the value and that the same is contrary to the objective information regarding the price prevalent in the international market.
6. The learned Counsel has further submitted that though section 25(1) of the Customs Act authorises levy of the customs duties in respect of the imported goods, meaning thereby the worth of a thing expressed in money and is determinable by reference to the objective yardstick normally the ‘market price’ or the price determined by an agreement between the concerned parties in an open market which are considered for determining the ‘normal value’ of the market but sub-section (7) of section 25 does not give unfettered power to fix any arbitrary tariff value at $ 1800 whereas the ‘normal value’ of which is about $ 800 without any objective basis and in support thereof, the learned Counsel has referred to the case of Mustafa Kamal Vs. The Commissioner of Customs reported in 52 DLR (AD) 1.
7. The learned Counsel has further submitted that the Customs Act being a fiscal legislature should have the basis for the taxation, that is, the value, slab or quantum as it is applicable to all citizens alike. Nobody has any vested right to any particular rate, slab or quantum of tax as the authority is to collect the revenue by determining the slab and that the tariff value must be determined keeping consistency and nexus to the international market price of the particular item with reference to contemporaneous document to show that the international market price was around the determined tariff value inasmuch as though section 25(7) of the Customs Act empowers the Government to fix the tariff value but the said power is not absolute or unfettered and the value is to be determined for the purpose of achieving uniformity of the customs assessment of the value of an assessment of the import within a reasonable range price having objective basis. The learned Counsel has further submitted with reference to the rate of his import at US$ 898.61 per Metric ton as per invoice and letter of credit dated 19.5.1994 but the tariff value fixed by the NBR at US$ 1800 per metric ton by impugned notification under section 25(7) of the Customs Act on the recommendation of a high powered Advisory Committee although the said Committee does not possess any unfettered, unlimited and absolute discretion in determining tariff value and thus the power under section 25(7) has been exercised arbitrarily in relation to the import value having no nexus between the invoice value and the actual market value which is abnormally higher than the prevailing international market price.
8. Mr. A.F. Hassan Arif, the leaned Attorney General has submitted that there is no legal right to the appellant to any particular ceiling of tariff value which is determined by the authority concerned as the tariff value that has been fixed by the authority constituted for the purpose taking into consideration the over all international market price i.e. the rates prevalent in respect of the import in question in different foreign countries of the world from which the imports are usually made inasmuch as there is no legal requirement for having a nexus between the tariff value and international market value and local market value inasmuch in this jurisdiction which gave rise to a controversy between the parties requiring factual prove into the matter on the basis of material brought on record by the parties, which determination is beyond the scope of judicial review of the High Court Division in its jurisdiction.
9. Section 25 of the Customs Act in its subsection (1),(2)and(3) provides for determination of the “normal value” of the imported goods and sub-section (4), (5) and (6) thereof provided for determination of the value of the export goods but sub-section (7) thereof provides for fixation of tariff value by the-Government issuing notification in the official gazette. Section 25(7) of the Customs Act reads as under:-
(7) Notwithstanding anything contained in this section, the Government may by notification in the official Gazette, fix for the purpose of levying customs-duties, tariff values for any goods imported or exported as chargeable with customs duty ad-voloram; Provided that any imported or exported goods the declared value of which is higher than its tariff value fixed under this sub-section shall be chargeable with customs duties on the basis of its declared value.
10. The aforesaid provision authorises that the Government may by notification published in the official gazette fix tariff value for any import or export for the purpose of levying customs duties and non-substantive clause thereof enables the said authority to exercise the said power inspite of provision for determination of value of such goods under the provisions of sub-section (1) to (6) of section 25 of the Customs Act.
11. Usually invoice value is the basis of assessment of custom duty but in order to prevent under-invoicing and over-invoicing by the importer or exporter either in a bid of avoid payment of proper duty or smuggle out foreign exchange, section 25(7) has been introduced providing power vested in the Government to fix tariff value of imported or exported goods and accordingly, when the Government finds from materials that the importer or exporter have taken resort to under-invoicing or over-invoicing and in order to protect realisation of proper customs duty, and to protect the local industrial selfsame product, the Government is obliged to fix tariff value of the imported goods.
12. In this respect it will be profitable to look through the Customs Appraising Manual to find the rationale and justification regarding tariff value on goods providing assessment thereof as per provision of sub-section (7) of section 27 of the Customs Act which provides that the Government fixes tariff value for any goods imported or exported as are chargeable with customs duty ad-volaram. The provision added by Finance Ordinance 1976 is intended to intervene in the large scale under-invoicing and thereby protect Government revenue. It is not based on the invoice value but on the investigated findings keeping in view of the current market price of the goods. The fixation of value saves a lot of inconvenience of the importers as also of the assessing officers. However, since 1976 the list of tariff value item is being expanded with every year passing considering its utility and efficacy, for the latest list of items assessable on the tariff value. Reference may be made to SRO No.1-Law/92/1437/Cus dated 20.1.1992, SRO No. 46-Law/92/1440-Cus dated 20.02.1992 and SRO No. 152-Law/92/1466-Cus dated 18.6.1992.
13. From the above, it is clear that due to change in price of goods in the different foreign markets at intervals the investigative findings are arrived out periodically keeping in view of the import market price of the goods. Since 1976 the Government is empowered to fix tariff value for imposition of assessment of custom duty in respect of any particular item or items which protects not only the under-invoicing and over-invoicing of the goods and thus saves lot of inconvenience of the importers and also the assessing officers.
14. The non-obstantive provision of sub-section (7) of section 25 of the Customs Act has made it a distinct separate and imposing provision of assessment of value of customs duty than those provided under sub-section (1), (2) and (3) of section 25 of the Customs Act. The investigated findings regarding the current market price of goods in the local market taking into consideration the change in price of goods in different foreign markets from where the goods are imported from time to time is being done on the basis of recommendation of high powered committee consisting of representative of the concerned Ministries, concerned members of the Chambers of Commerce and Industries, representatives of the concerned importers in question and in presence of a member of Tariff Commission following certain guideline namely:
bengali
15. Mr. A.F. Hassan Arif, the learned Attorney General though submitted that the fiscal law containing charges and duties specified thereto having the basis in Article 83 of the Constitution, the object of which is to introduce a fiscal clause charging for determination of value in respect of any import or export which touches each and every citizen of the country who are the ultimate consumers and pay the assessed tax as tariff value and as such the writ petitioners have no personal grievance in the fixation of tariff value in respect of any imported goods and accordingly, the writ-petitioners could not have any grievance against the said fixation by the Government.
16. Dr.Kamal Hossain, the learned Counsel appearing for the appellants, however, submitted that the high powered committee arbitrarily and fictitiously fixed the tariff value without any objective basis before it and that the appellant being import of his assertion that the impugned fixation of the tariff is grossly and abnormally higher than the international market value. The appellants in the instant case have produced certain invoices regarding the import in question belonging to him from China for the above assertion.
17. It may be noted here that the object of fixation of tariff value is to introduce a rational and uniform price for ascertainment of value for assessment of duties upon arrival in the country in respect of the imported goods considering the prices of the goods in various foreign countries lest there is no arbitrariness as to the assessment of the value of the goods either causing injustice to the importers or for the sake of convenience to the assessing officer. Obviously, the selfsame goods imported from European countries and United States would fetch more higher price than the same goods imported from eastern countries including China or Taiwan but whatever may be country of origin and price of the self same import in any of the foreign countries but for uniform and rational assessment of value of the import in question Customs Act has provided in its section 25(7),the power to fix the uniform tariff value authorising the Government for assessment of customs duties.
18. Dr. Kamal Hossain, however, submitted that section 25(7) of the Customs Act does not give unlimited power to the Government and that the committee does not possess arbitrary and unfettered authority and absolute discretion in determining tariff value but must follow certain guidelines which are germen to the Customs Act.
19.Dr.Kamal Hossain has further submitted that the respondents neither controverted the assertions as to arbitrariness etc. by filing any affidavit-in opposition nor produced the relevant file for perusal of the Court to show that the committee was in possession of any contemporaneous document to show the price in the international market of the particular import at the relevant time and has gone to submit even to the extent, that even if the respondents file some documents or the file for perusal of the Court in support of the fixation of the tariff value, possibly the appellant would have no grievance in the rule.
20. Dr. Kamal Hossain has relied on the decision and the principle of law enunciated in the case of Mustafa Kamal Vs. The Commissioner of Customs reported in 25 DLR (AD) 1 and the case of Phassco Hardware Company Vs. The Government of Pakistan reported in PLD 1989 Karachi 621 in order to substantiate the submission that the power under section 25(7) of the Customs Act having exercised arbitrarily and capriciously the impugned notification is liable to be declared to have been made without lawful authority.
21. At the fag end of the hearing, however, the learned Attorney General could be able to produce the file containing record of the case including the proceeding of the committee fixing the tariff value.
22. On perusal of the same we find that the authority had in its possession the contemporaneous invoices from different foreign countries showing international market price of the particular item in question and the consideration thereof together with the price in the local markets in the said meeting of the Committee recommendation to the Government to fix tariff value at certain particular rate. On perusal of the same, we are of the view that the fixation of the tariff value was done on the basis of certain objective basis on consideration of contemporaneous documents to show the international/foreign market prices of the disputed item of import during the interim period between last meeting of the committee and the concerned meeting fixing the tariff value.
23. In the case of Mustafa Kamal Vs. The Commissioner of Customs reported in 52 DLR (AD) 1 this Court found that there was no relevant and reliable materials in the hands of the Committee in its meeting held on 21.8.1996 to show any justification for increase of tariff value from US$ 160 per metric ton to US$ 220 per metric ton and accordingly uphold the contention of the appellants therein that the increase/fixation of the tariff value has been made without reference to local and international market price of the imported goods and arrived at a finding that the fixation of tariff value on Sada was not based on any objective information obtained from reliable and relevant materials.
24. In the case of Phassco Hardware Company Vs. The Government of Pakistan reported in PLD 1989 Karachi 621, Justice Ajmal Mian CJ (as his Lordships then was) held that a notification under section 25B can be impugned if it cannot be demonstrated that the power contained under the said section have been exercised arbitrarily and capriciously and that for example in a case where the import value in terms of section 25 of a particular value is US$ 20 whereas under a notification issued the Government authority and the actual market value but some discrepancy between the two will not vitiate the notification in the present case, the notification between the price declared by the importers namely US$ 40 per dozen and Government price 42 US$ come to about only 5% and therefore it cannot be urged that the power under section 25 has been exercised arbitrarily or capriciously.
25. Justice Ajmal Miah, as the Chief Justice of Pakistan subsequently in a decision in the case of Collector of Customs, Kasmir Vs. M/s. the New Electronic Private Ltd. reported in 1994 PLD (SC) 363 held while considering the selfsame provision of section 25B (similar to our section 25(7) held, inter-alia, that:-
“I had given my serious thoughts to the above submission and I am of the view that reasonableness of the various valuation fixed for various items of goods cannot be the subject-matter of an enquiry in exercise of Constitutional jurisdiction by the High Court. The above controversy requires thorough factual probe into the matter on the basis of materials to be brought on record by the parties. The remedy, if any of the respondents is to make representations through their association to appellant No.3 and /or to approach any other competent forum.”
26. It is true that the respondents have not filed any affidavit-in-opposition controverting assertions made in the petition regarding the international market price of the goods in question but althrough verbally asserting against the assertions of the writ petitioners but the Authority has belatedly submitted the relevant papers including contemporaneous documents to show the foreign market price of the concerned item of import and that the committee has taken into consideration relevant and reliable materials to justify the increase of tariff value from $ 800 to US$ 1800 per metric ton.
27. In the case of Mustafa Kamal (Supra) it has been held by this Court that-
“Having heard both sides in extenso we are of the view that when a writ petition is filed on a bald assertion that the high powered committee arbitrarily and fictitiously raised tariff value without any , objective material before it, the High Court Division ought not to rush into issuing a Rule Nisi and stay payment of duties and taxes. It should take notice under section 114(e) of Evidence Act, 1872 and should start with the presumption of regularity in official business.”
28. The said presumption under section 114(c) of the Evidence Act declares that the Court may presume that judicial and official acts have been regularly performed i.e. that what ought to have been done in connection with the official act was in fact done. Reference may be had to the case of Govt. of Province of Bomby Vs. Pestonji Ardeshir Wadia and others reported in AIR 1949 PC 143. In the case of Gupto Imp. Vs. Board of Revenue reported in AIR 1953 SC 25 it has been held that where a responsible officer exercised discretion vested in him, the Court can legitimately make a presumption that he did not act capriciously. However the presumption applies where there is evidence to show that the act itself was performed as the presumption is limits to the regularity of the act done, and does not extent to the doing of the act itself. Thus when a notification is issued under the authority conferred by law there is presumption that it was regularly published and promulgated in the manner in which it was required to be done but there is no presumption that it was issued according to the terms of the section which empowered it. But there is no presumption that an act was done, of which there is no evidence and the proof of which essential to the case raised. Thus if an official act was proved to have done, it can be presumed to have been regularly done but no presumption could be raised that an act was done of which there is no evidence.
29. It appears from the file that the Committee has recommended the amount of value to be fixed by the Government and that Government on the basis of recommendation and relevant consideration of the objective basis fixed the tariff value in exercise of its jurisdiction under section 25(7) of the Customs Act.
30. In the case of Texco Stores Vs. Secretary of State for Environment and others reported in (1995) 2 All England Reports 636 it has been held that whether a consideration was relevant was a matter for the Courts to decide but it was entirely for the decision maker to attribute to a relevant consideration such weight as he thought fit and unless he acted unreasonably in doing so the Courts would not interfere with his decision.
31. In view of the above, we are of the view that inspite of the fact that no affidavit-in-opposition denying the assertions as to alleged arbitrary imposition of tariff value at an unreasonably higher rate has been filed but from the record filed before the Court it appears that different invoices of different foreign countries were considered by the Committee indicating of evidence thereof and the invoice only from China only filed by the appellants in support of assertion is no inductive of arbitrariness and fictitiousness of the tariff value fixed under section 25(7) of the Customs Act and that the Government has not acted capriciously but exercised the discretion for fixing tariff value on consideration of the local and international market price comprising of various foreign countries form where the imported goods are usually imported.
32. Thus from the above it is apparent that the authority is to taken decision considering the materials and it is for the decision maker to take in to consideration of the relevant materials. It is for the Court, if the matter is brought before it to see whether the consideration was made to relevant matters for the decision arrived at by the decision maker what weight to the materials the decision makers thought fit, unless he has acted unreasonably in doing so, the Court would not interfere with such decision when it is apparent that it had given its due consideration, his decision was not open to challenge, for once the authority takes into consideration relevant matters, it is for the authority to decide what weight is to be given to such matters and the Court of law does not sit in as the appellate Court.
33. The learned Counsel for the appellants has submitted that the power conferred under section 25(7) of the Customs Act seems to be an excessive delegation which has been controverted by the learned Attorney General.
34. Article 83 of the Constitution provides that ‘no tax shall be levied or collected except by or under the authority of an Act of Parliament.’ Proviso to Article 65(1) thereof provides that “Provided that nothing in this clause shall prevent Parliament from delegating to any person or authority, by Act of Parliament, power to make orders, rules, regulations, bye-laws or other instruments having legislative effect.”
35. Article 83 is the parent authority regarding levy or collection authorized by an Act of Parliament itself. But Article 65(1) provides for delegation of such power to other subordinate authority to make orders, rules, regulations etc having legislative effect for the purposes. Thus apart from the provision of section 18 of the Customs Act providing levy of customs duty etc. at such rule or rules as are prescribed in the First and Second Schedules or under any law for the time being in force. The said provisions together with the provisions of section 3 and 4 of the Provisional Collection of taxes from the date of placement of Budget till it is passed by the Parliament as valid and such the imposition of supplementary duty has the force of law having been made under valid legislation. On such specified types of goods imported/exported mentioned in the from and out of Bangladesh, section 25(7) in one of such law authorizing the Government to fix tariff value on the export/import from time to time. Since 1976 the Parliament has legislated through Finance
Act providing the provision regarding tariff value amending the Customs Act which is absolutely within the domain of the Parliament to decide and arm the authority with the power to fix the tariff value in the fitness of things for the cherished goal.
36. In 16 DLR 486 in the case of Ghulam Zarina Vs. A.B. Khondkar, the petitioner, a dealer in pan carried pan from East Pakistan to West Pakistan and under section 5(2) of PIAC Ordinance the Central Government was entitled to issue instruction on the PIAC with regard to the policy and carriage of goods and accordingly notifications were issued by the Central Govt. inviting application for allocation of air space for the year 1960 on PIA flight from Dhaka to Karachi and Lahore and application for allotment of quotas, which has been impugned. The High Court while making the rule absolute held, inter alia, that-
“Delegation by the legislature is permitted within prescribed limits in order to execute the legislative norms and provisions that have been enacted. Thus a restricted delegation in aid of the proper functioning of legislative power has not been regard as unconstitutional. There are innumerable decisions to support the aforesaid proposition and before we discuss some of them, we should like to observe that the principles we have discussed above resolve themselves thus:
(1) Legislation being the exclusive function of the Legislature, it cannot abdicate such function.
(2) The Legislature, after having enunciated the essential legislative principles and standards, is, however, entitled to delegate to outside agencies such functions which are essential to an effective exercise of the legislative power with which it has been endowed by Constitution.
(3) The Legislature, however, cannot efface itself and delegate all its functions to an extraneous agency.”
37. In the case of her majesty the Queen Vs. Burah reported in 5 Indian Appeals (Vol-V) 178 where it was a case authorising the Lieutenant-Governor of Bengal the power to determine whether the Act, or any part of it, shall be applied in a certain district, is conditional legislation, and not a delegation of legislative power. In the said Act it was provided that section 2 shall come into operation on such day as the Lieutenant Governor of Bengal shall by notification in the Calcutta gazette direct, which was held to be the’ conditional legislation.
38. The decision in the case of In re Art.143, Constitution of India and Delhi Laws Act (1912) Special Reference No.1 of 1951 reported in A.I.R. 1951 (SC) 332 where it has been held that:
“The legislature must normally discharge its primary legislative function itself and not through other. (2) Once it is established that it has sovereign power within a certain sphere, it must follow as a corollary that it is free to legislate within that sphere in any way which appears to it to be the best way to give effect to its intention and policy in making a particular law, and that it may utilize any outside agency to any extent it finds necessary for doing things which it is unable to do itself or finds it inconvenient to do. In other words, it can do everything which is ancillary to and necessary for the full and effective exercise of its power of legislation. (3) It cannot abdicate its legislative functions, and therefore while entrusting power to an outside agency, it must see that such agency acts as a subordinate authority and does not become a parallel legislature. (4) The doctrine of separation of powers and the judicial interpretation it has received in America ever since the American Constitution was framed enables the Courts to check undue and excessive delegation but the Courts of this country are not committed to that doctrine and cannot apply it in the same way as it has been applied in America. Therefore there are only two main checks in this country on the power of the legislature to delegate these being its good sense and the principle that it should not cross the line beyond which delegation amounts to abdication and self-effacement.”
39. In view of the above, the above authority conferred upon the Government to fix up the tariff value can never be termed as excessive delegation so as to declare the same as done without any lawful authority.
40. From the above, it is difficult to find any exercise of unfettered, unlimited or absolutely arbitrary exercise of discretion in determining tariff value by the Government under the provision of section 25(7) of the Customs Act.
41. Before we part with we feel that the effect of section 30 of the Customs Act upon the notification issued under section 25(7) thereof should be reiterated here which has been aptly made clear in the case of Bangladesh Vs. Mizanur Rahman reported in 52 DLR (AD) 149 as under “Dr. Kamal Hossain further argued that by executive decision notification is published declaring tariff value and retrospective effect cannot be given by such notification published subsequent to the opening of the letter of credit. In reply to the same Mr. Mahmudul Islam argued that section 30 of the Act gives authority to the executive to give retrospective effect to the notification published by the executive authority fixing tariff value in exercise of power under section 25(7) of the Act. Since section 30 provides for effective date of determination of tariff value from the date of presentation of the bill of entry by the importer we find no merit in this contention of Dr. Kamal Hossain.
“The Government has the power to fix tariff value by publishing notification in the official gazette and this power has been vested in the Government under sub-section (7) of section 25 of the Act to fix tariff value of imported or exported goods by notification.”
42. Thus it is clear that under section 25(7) of the Customs Act the customs duty is payable by the importer on the basis of tariff value in force on the date of presentation of the bill of entry and not on the basis of invoice or tariff value in force at the time of opening of letter of credit.
43. Mr. Arif, the learned Attorney General has submitted that the appellants having opened letter of credit dated 19.5.1994 at a time when the tariff value was prevalent in respect of the import in question and knowing fully well about the prevalent tariff value opened the letter of credit and has acquiesced with the tariff value and cannot be allowed to deny the same inasmuch as the appellants have no legal and vested right to be assessed on the basis of invoice value when the tariff value was in prevalence before the opening of the letter of credit and under the provision of section 30 of the Customs Act the custom authority was under the legal obligation to assess the import in question on the basis of tariff value.
44. Dr. Kamal Hossain in reply has submitted that there was no acquiescence of the tariff value vide notification dated 28.10.1994 as the appellant was not affected due to issuance of the notification and could only know it only when the impugned order of assessment was made on 7.7.1994 directing him to declare tariff value fixed under the impugned notification inasmuch as there was no scope for the appellants to challenge the aforesaid notification since the appellants were not affected by such notification.
45. In order to appreciate the aforesaid submissions it will be profitable to take resort to the meaning of the word ‘acquiescence’ as defined in Halsbury Laws of England, Third Edition, Volume IA at page 638 wherein it has been stated the acquiescence in its proper legal sense implies that a person abstains from interfering while a violation of his legal rights in progress and that acquiescence operates by way of estoppel. It is acquiescence in such circumstances that assent may reasonably be inferred and is an instance of estoppel by words and conduct consequently, if the whole circumstances are proper for raising this estoppel, the party acquiescing cannot afterwards complain of the violation of his right.
46.The appellant has impugned the notification in SRO No. 214-Ain/93/1527/Sulkla dated 28.10.1993 fixing tariff value in respect of his import in question, subject-matter of letter of credit opened on 18.4.1994 and 19.5.1994 respectively. Thus the appellants prior to opening of the letters of credit were aware of the notification fixing tariff value for the imports and to their own volition, knowing fully well about the prevalent tariff value opened the letters of credit and thus have acquiesced the tariff value in respect of the imports. The notification though could be challenged being in violative of any law and legal right in the appropriate forum but in the instant case in order to challenged vires only of the same, resort could be had to writ jurisdiction for a declaration that the notification as has been passed without any lawful authority and of no legal effect.
47. Thus the appellants as a businessman was aware of the notification and prior to the initiation of any step for importation of the import has not challenged the same to be illegal or to have been passed without any lawful authority but imported the goods acquiescing the notification, for which acquiescence may also be inferred under the circumstances which may operate as well an estoppel by conduct. Though there is no estoppel against law but in the facts and circumstances of the case we have already found that the notification does not suffer from any legal infirmity i.e. no law or any legal right has been violated and the notification has been issued in accordance with law.
48. Civil Petition No.1344 of 2002 arose out of the impugned order dated 05.11.2001 passed by the High Court Division in Writ Petition No. 3232 of 1997, Civil Petition No. 823 of 2002 arose out of the impugned order dated 25.08.2001 passed by the High Court Division in Writ Petition No.1885 of 1997, Civil Petition No.820 of 2002 arose out of the impugned order dated 23.11.2001 passed by the High Court Division in Writ Petition No.781 of 1997, Civil Petition No.763 of 2002 arose out of the impugned order dated 22.08.2001 passed by the High Court Division in Writ Petition No. 1395 of 1996 and Civil Petition No.1198 arose out of the impugned order dated 25.05.1998 passed by the High Court Division in Writ Petition No. 329 of 1994. These rules were issued challenging the imposition of tariff value on the respective import of the petitioners instead of invoice value or C&F value prevalent either in the time opening of the L/C. or at the time of filing of the bills of entry as the customs authority ignoring the C&F value or invoice value has assessed the customs duty etc. on the basis of tariff value in force at the time of submission of the bills of entry in compliance with the SRO then prevalent fixing the tariff value.
49. Section 25(7) of the Customs Act reads as follows:
“Notwithstanding anything contained in this section, the Government may be notification in the official gazette, fix for the purpose of levying customs duties, tariff value for any goods imported or exported as chargeable with customs duty ad-valorem.”
50. The issues involved in these cases have been set at rest by this Court in the case of Bangladesh Vs. Mizanur Rahman reported in 52 DLR (AD) 149 invoice value or C & F value or the tariff value prevalent at the time of opening the L/C. as under:
“As we have stated that section 25(1) of the Act provides for determination of value of imported goods on the basis of normal price and sub-section (7) provides for fixing of tariff value by the Government by notification published in the official gazette for the purpose of levying of customs duty and as section 25(7) was not interpreted in 48 DLR (AD) 199, it is difficult to hold in the face of sections 25(7) and 30 that earlier SRO when new tariff value was declared for levying customs duty. The argument of acquiring vested right may be tenable in case of exemption granted, in a special circumstances as in Hannan’s case but it is difficult to understand that normal importer would acquire vested right in the invoice value or the tariff value prevailing at the time of opening of letter of credit. The government has the power to fix tariff value by publishing notification in the official gazette and this power has been vested in the government under sub-section (7) of section 25 of the Act to fix tariff value of imported or exported goods by notification. As a matter of fact, the then Attorney General could not bring to our notice the distinguished feature between Hannan’s case and the case of Mustafizur Rahman, 51 DLR (AD) 40 which was a case under section 25(7) of the Act. As the present case is under section 25(7) of the Customs Act, we are of the view that the customs duty is payable by the importer respondent on the basis of tariff value in force on the date of presentation of the bill of entry and not on the basis of invoice or tariff value in force at the time of opening of letter of credit. So the decision in 51 DLR (AD) 40 appears to us to be not correctly decided due to the failure of the then Attorney General to point out the distinction between 42 DLR (AD) 167 and 48 DLR (AD) 199 on the one hand and the case of Mustafizur Rahman on the other even he failed to bring to our notice the case of Khairul Basher Vs. Collector of Customs, 50 DLR 225 in which High Court Division correctly noticed the distinction between exemption under section 19 and section 25(7) of the Act and did not follow the ratio decided of 42 DLR (AD) 167 and 48 DLR (AD) 199 and held that importer acquire no vested right in the invoice value of the tariff value existing at the time of opening of letter of credit. We, therefore, review our opinion expressed in that decision in 51 DLR (AD) 40 and hold that no vested right is acquired by the importer to pay sales tax and customs duty on the basis of tariff value declared by notification in force on the date of opening the letter of credit. The importer has to pay tax and duty on the basis of tariff value in force on the date on presentation of bills of entry.”
The Appellate Division thus held that the customs duty is to be assessed on the basis of tariff value under section 25(7) of the Customs Act read with section 30, and 30(A) of the Customs Act, 1969, in compliance of the prevalent SRO on the date when the bills of entries are presented.”
51. Civil Petition Nos.877,878, 879 and 880 of 2002 arose out of the impugned order dated 5.11.2001 passed by the High Court Division in Writ Petition Nos.4745 of 1996, 1616 of 1997, 1671 of 1997 and 1903 of 1997 respectively.
52. Civil Petition Nos.1416, 1417,1418, 1419 and 1420 of 2002 arose out of the impugned judgment order dated 10.04.2002 in Writ Petition Nos. 2275 and 3360 of 1998 and dated 12.5.2002 in writ Petition Nos.2469, 2473 and 2474 of 1998 respectively passed by the High Court Division.
53. Civil Petition No.765, 289, 135, 136, 137 and 138 of 2003 arose out of the impugned judgment and order dated 05.11.2001 in Writ Petition Nos. 1410 and 1522 of 1997 and dated 12.06.2002 in Writ Petition Nos. 2116, 1512, 1606 and 3907 of 1997 respectively passed by the High Court Division.
54. Civil Petition Nos. 867 and 868 of 2003 arose out the impugned judgment and order dated 22.08.2001 in Writ Petition Nos. 4480 of 1996 and 3.4.2000 in Writ Petition No. 2353 of 1998 respectively passed by the High Court Division.
55. Civil Petition Nos. 288, 620 of 2003 and Civil Petition Nos. 214, 215, 216, 217 and 218 of 2004 arose out of judgment and order dated 12.01.2003 in Writ Petition No. 5086 of 1997, dated 30.04.2003 in Writ Petition No. 3649 of 1998 and dated 25.08.2003 in Writ Petition Nos. 3306, 2692, 2519, 2858 and 1256 of 1996 respectively passed by the High Court Division.
56. Civil Petition Nos.1352, 1353, 1354, 1355, 1356 and 1357 of 2002 arose out of judgment and order dated 05.11.2001 passed by the High Court Division in Writ Petition Nos. 7726, 7095 of 1997 with Writ Petition No.4001 of 1998 and Writ Petition No. 2787 of 1999 and Writ Petition No. 7094 of 1997 and Writ Petition No. 3149 of 1999 respectively.
57. Civil Petition Nos. 1091 and 1099 of 2002 arose out of judgment and order dated 24.03.2002 in Writ Petition No. 5523 of 1997 and dated 11.12.2001 in Writ Petition No. 7688 of 1997 respectively passed by the High Court Division.
58. Civil Petition Nos.1416, 1417, 1418, 1419 and 1420 of 2002 arose out of judgment and order dated 10.04.2002 in Writ Petition Nos. 2469, 2472 and 2474 of 1998 respectively passed by the High Court Division. In these case the petitioners imported their respective items on the basis of letter of credit of different dates and on arrival of goods filed the bills of entry for assessment of customs duty according the same has assessed the customs duty on the basis of tariff value in all the cases which was prevalent SRO on the date of filing of the bills of entry.
59. Civil Petition No.1390 of 2002 arose out of judgment and order dated 11.05.2002 passed by the High Court Division in Writ Petition No.1734 of 1998 challenging the imposition of the supplementary duty having the force of law as Article 83 of the Constitution clearly provides that no tax ship levy or collect except by or under the authority of the Parliament but proviso to Article 65(1) provides for delegation of the Parliament to any other subordinate authority to make orders, rules, regulations, bye-laws and other legislature instrument having legislature effect. So far the customs duty, VAT and supplementary duty are concerned the same are livable under section 18 of the Customs Act read with First Schedule to the said Act and section 3 read with section 7(1) of the VAT Act read with Third Schedule respectively providing statutory basis for imposition of customs duty, supplementary duty and VAT respectively. The said provisions together with the provision of section 3 and 4 of the provisional Collection of Taxes Act 1931 has made provision for any imposition of taxes of the nature from the placement of budget till it is passed by the Parliament as valid and as such the imposition of custom duty, supplementary duty etc. have force of law having been made under valid legislation.
60. Accordingly, all the petitions are dismissed.
61. In view of the above, we do not find any substance in the submissions of the learned Counsel for the appellants.
The appeals are dismissed without any order as to costs.
Ed.
Source: 2005, (AD)