Collector of Customs, Custom House, Chittagong and ors. Vs. A. Hannan, 42 DLR (AD) (1990) 167

Case No: Civil Appeal No. 23 of 1989

Judge: Badrul Haider Chowdhury,

Court: Appellate Division ,,

Advocate: Mr. Rafique-ul-Huq,Mr. Abdul Wadud Bhuiyan,,

Citation: 42 DLR (AD) (1990) 167

Case Year: 1990

Appellant: Collector of Customs

Respondent: A. Hannan

Subject: Doctrin of Estoppel, Fiscal Law,

Delivery Date: 1989-12-6

 
Supreme Court
Appellate Division
(Civil)
 
Present:
Badrul Haider Chowdhury CJ
Shahabuddin Ahmed J
M.H. Rah­man J
A.T.M. Afzal J
 
Collector of Customs, Custom House, Chittagong and ors
................................Appellants
Vs.
A. Hannan
………….............. Respondent
 
Judgment
December 6, 1989
 
The Customs Act (IV of 1969)
Sections 19, 30 & 194
The Sales Tax Ordinance (XVIII of 1982)
Section 4(1)
The Evidence Act (I of 1872)
Section 115
The Constitution of Bangladesh, 1972
Article 102
Promissory Estoppel
Notification dated 3.10.84 under section 19 of the Customs Act was issued without any condition, limitation or restriction excepting those which have been mentioned as “terms and conditions”. The subsequent notification dated 6.11.84 can have no operation when a right had vested in the importer inasmuch as the respondent had acted upon assurance that the favourable terms mentioned in the earlier Notification will be applicable to him. He acted upon this assurance and now Government cannot retrace its steps and say that he will have to pay Customs duty at the rate mentioned in subsequent Notification which reduced the exemption. This is clearly a case of estoppel inasmuch as the respondent had acted on the assurance given by the Government and a right vested in him and that could not be taken away. The respondent acting upon the solemn promise made by the appellant incurred huge expenditure and if the appellant is not held to its promise, the respondent would be put in a very disadvantageous position and, therefore, the principle of promissory estoppel can also be invoked in this case. …………(14 & 20)
 
Cases Referred to-
Collector of Central Excise and Customs Vs. Azizuddin Industries Ltd., PLD 1970 (SC) 439; M. Afzal and Sons Vs. Federal Government of Pakistan, PLD 1977 (Lahore) 1327; BLD 1981 (AD) 91; AIR 1968 (SC) 718; AIR 1979 (SC) 621; PLD 1970 (SC) 379; PLD 1960 (SC) 310; PLD 1987 Karachi 63; 31 DLR 184; BLD 1988 (AD) 84; 22 DLR (SC) 443; 19 DLR 592; Secretary, Ministry of Indus­tries, Nationalised Industries Division Vs. Saleh Ah­med & another 1981 BLD (AD) 91; Union of India Vs. Anglo Afghan Agen­cies AIR 1968 (SC) 718; Gujarat State Financial Corporation Vs. Mis. Lotus Hotels Pvt. Ltd. (AIR 1983 (SC) page 848.
 
Lawyers Involved:
Abdul Wadud Bhuiyan, Additional Attorney General, instructed by Zinnur Ahmed, Advocate-on- Record—For the Appellants
Rafique-ul-Huq, Senior Advocate, Fazlul Hoque, Advocate with him, instructed by Sajjadul Huq, Advocate-on-Record —For the Respondent.
 
Civil Appeal No. 23 of 1989
(From the judgment and order dated 9.6.1988 passed by the High Court Division, Dhaka in Writ Petition No. 50 of 1985).
 
JUDGMENT
Badrul Haider Chowdhury CJ.
 
1. This appeal by special leave is directed against the order of the High Court Division in Writ Petition No. 50 of 1985.
 
2. Leave was granted to consider the contention that the notification under section 19 of the Customs Act is always subject to the provision of section 30 which will prevail over the Notification issued un­der section 19 of the Customs Act.
 
3. Facts are as follows: —There was scarcity of sugar in the country in 1984. Hence, the Govern­ment decided to import sugar under Wage Earners' Scheme and in that view of the matter certain for­malities were waived by the Government namely, prior permission from the Chief Controller, Imports and Exports, etc. Government decided that all regis­tered importers having valid Import Registration Certificates renewed upto date shall be eligible to open Letter of Credit for import of sugar under Wage Earners' Scheme but excluded the Industrial consu­mers. Letter of Credit could be opened for a quantity not exceeding 500 metric tons of sugar and the ship­ment of sugar must be made within 15 days from the date of opening the letter of credit. Time is, howev­er, extended till 31st October, 1984 and accordingly shipment date was also extended upto 10th Novem­ber, 1984. This was, however, revised extending the last date of shipment upto 30th November, 1984. Concessional rate of customs duty was announced for giving incentive to the businessmen, namely, the custom and sales tax could only be leviable on im­ported sugar in excess of 50% customs duty and 10% sales tax. This concessional rate is announced in ex­ercise of powers conferred by section 19 of the Cus­toms Act and section 4(1) of the Sales Tax Ordinance.
 
4. Respondent normally does not deal with sug­ar. He, however, availed this opportunity for import­ing sugar at the concessional rate of duty and sales tax. He opened irrevocable letter of credit for import of 500 metric tons of sugar from South Korea and eventually the sugar in question arrived at Chittagong Port on 24th November, 1984.
 
5. In the meantime on 6th November, 1984 this concessional rate was withdrawn by the Govern­ment and it was leviable on imported sugar in ex­cess of 75% customs duty and 10% sales tax. Now the petitioner contended that the Government is es­topped from denying the right that has been vested to the petitioner upon the announcement of the conces­sional rate of duty and taxes which suddenly was withdrawn with retrospective effect. The Collector of Customs took the view that the Respondent was not entitled to concessional rate of customs duty and tax­es because the bill of entry was delivered to the Cus­toms on 20.2.1985.
 
6. Respondent filed Writ Petition No. 50 of 1985. At the hearing preliminary objection that the petitioner had alternative remedy of appeal was repelled. The contention of the Respondent herein had found favour with the High Court Division on the ground that the respondent had already fulfilled the terms and conditions of the earlier notification dated 16.10.84 and he could not be deprived of the right of a concessional customs duty by the subsequent noti­fication dated 6.11.84. The High Court Division took the view that the interpretation sought to be given by the Collector of Customs of section 30 of the Customs Act was not tenable. Rule was accord­ingly made absolute and leave was granted as aforesaid for considering the points of law involved under the Customs Act.
 
7. To follow the matter chronologically few dates are important. Mr. Rafique-ul-Huq cited the dates in the following manner:
 
"3.10.1984—By a Public Notice being No. 28(84-85) dated 3.10.84 Govt. decided to al­low import of sugar under Wage Earners' Scheme.
18.10.1984—Letter of Credit was to be opened by this date.
11.10.84—By another Public Notice the time for opening Letter of Credit: was extended upto 31.10.84 and goods must arrive before 30.11.84.
31.10.1984—Extended date for opening Letter of Credit.
16.10.1984—By Notification No. S.R.O. 449-L/48/877/Cus. dated 16.10.84 the Govt. in exercise of the powers conferred by section 19 of the Customs Act, 1969 and section 4(1) of the Sales Tax Ordinance, 1982 exempted sugar from so much of the Customs duty and sales tax levi­able thereon as is in excess of 50% and 10% re­spectively.
31.10.1984—Respondent opened Letter of Credit for US $ 1,14,500.00 for import of 500 metric tons of sugar of South Korean origin from Hong Kong.
6.11.1984—The Government, by Notifica­tion No. S.R.O. 482-L/84/878/Cus. dated 6.11.1984 reduced the exemption granted on 16.10.84 and exempted sugar from so much of customs duty and sales tax leviable thereon as is in excess of 75% and 10% respectively.
24.11.1984—The vessel carrying sugar ar­rived at Chittagong Port.
26.2.1985—Bill of Entry was delivered to the appropriate Officer of Customs.
28.2.1985—The respondent by his letter ad­dressed to the Collector of Customs requested him to clear the goods at the rate of 50% cus­toms duty and 10% sales tax.
16.3.1985—Assistant Collector of Cus­toms rejected respondent's prayer contending, in­ter alia, that the respondent will have to pay customs duty at the rate of 75% and sales tax at the rate of 10%, because his Bill of Entry No. 5313 was handed over to Customs and received by the appropriate officer in the Customs House on 26.2.1985 and the section 30 of the Customs Act, 1969 provides that the rate of duty applica­ble to any imported goods shall be the rate of duty prevailing on the date of the delivery of the Bill of Entry to the appropriate officer."
 
8. The High Court Division relied upon the de­cision of Collector of Central Excise and Customs Vs. Azizuddin Industries Ltd. reported in PLD 1970 (SC) 439 for coming to the conclusion that a Noti­fication allowing exemption does create a right and found that the petitioner opened the Letter of Credit and brought the goods to Bangladesh within the period specified in the two Public Notices and, therefore, he had acquired a vested right to be treated in accor­dance with the Notification dated 16.10.84 allowing exemption of customs duty to the extent of 50%. The subsequent Notification, it was held, cannot destroy or take away or curtail or extinguish the vest­ed right created in the petitioner by the earlier Notifi­cation dated 16.10.84. Reliance was placed in the case of M. Afzal and Sons Vs. Federal Government of Pakistan, PLD 1977 (Lahore) 1327 for the proposition that the subsequent Notification cannot take away the vested right of exemption. The High Court Division repelled the contention that the Writ petition was not maintainable inasmuch as the alter­native remedy by way of filing appeal was not fol­lowed. In this view of the matter, the Rule was made absolute.
 
9. Mr. Abdul Wadud Bhuiyan, learned Addition­al Attorney-General appearing for the appellant, con­tended that Bill of Entry was delivered on 26.2.1985 though the vessel carrying sugar arrived at the Port on 24.11.84. The learned Additional Attorney-General fairly pointed out that in the Public Notice dated 11.10.1984—the Letter of Credit was extended upto 31.10.84 and goods must arrive before 30.11.84. He contended that though the Letter of Credit was opened within the time limit and goods arrived before 30.11.84 but Bill of Entry was deliv­ered on 26.2.85. Hence, the rate of duty must be governed by section 30 which reads:
 
"The rate of duty applicable to any imported goods shall be the rate of duty prevailing on the date of the delivery of the bill of entry to the ap­propriate officer."
 
10. Mr. Bhuiyan contended that since the Bill of Entry was submitted on 26.2.85, the contention of the respondent that the rate should be at the rate of 50% Customs Duty and 10% Sales Tax is not tena­ble and he is to pay the customs duty at the rate of 75% and sales tax at the rate of 10% which reduced the exemption by Notification dated 6. 11.84. Mr. Bhuiyan contended that section 19 cannot control section 30. Section 19 reads as under:
 
"The Government subject to such condi­tions, limitations or restrictions, if any, as it thinks fit to impose, may, by notification in the official Gazette, exempt any goods imported into, or exported from, Bangladesh or into or from any specified port or station area therein, from the whole or any part of the customs duties chargeable thereon."
 
11. Plain reading of section 19 shows that the contention of Mr. Bhuiyan, the learned Additional Attorney-General, is bereft of any substance. The First Public Notice No. 28 (84-85)/Import (Import Trade Control) dated 3.10.1984 was issued in the fol­lowing terms: —
 
"It is hereby notified for the information of all concerned that the Government has decided to allow import of Sugar under" Wage Earners' Scheme with immediate effect. The procedures and arrangement of import of Sugar shall be as follows: —
 
(i) All registered importers having valid Im­port Registration Certificate renewed upto date shall be eligible to open Letter of Credit for im­port of Sugar under Wage Earners' Scheme. However, industrial consumers shall not be eli­gible to import sugar under any source of finance.
(ii) An individual importer shall be entitled to open Letter of Credit for a quantity not ex­ceeding 500 (five hundred) metric tons of sugar and no repeat facility will be available.
(iii) Letter of Credit shall have to be opened within 15 (fifteen) days from the date of issue of this Public Notice.
(iv) Shipment must be completed within 15 (fifteen) days from the date of opening of each Letter of Credit.
(v) Commercial Bank shall be guided by the instructions to be issued by the Bangladesh Bank in this regard.
2. In inviting attention to the remarks under Col. 4 against the item at Sl. No. 112. List-II, page 8827 of the Import Policy Order 1984-85, it is hereby clarified that no prior permission from the Chief Controller of Imports and Ex­ports shall be necessary for the purpose of import of sugar under Wage Earners' Scheme as per procedure detailed above."
 
12. It will be noticed that there was no spe­cial stipulation. Then the Notification was issued be­ing SRO 449-L/84/877/Cus. dated 16th October, 1984 which reads as under: —
 
"No SRO 449-L/84/877 Cus—In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969) and section 4 (1) of the Sales Tax Ordinance, 1982 (XVIII of 1982), the Government is pleased to exempt sugar from so much of customs duty and sales tax leviable thereon as is in excess of 50% and 10% respectively, subject to the fulfillment of the terms and conditions specified in the Public Notice No. 28(84-85)/Import dated 3.10.84, is­sued by the office of the Chief Controller of Im­ports and Exports, Dhaka."
 
13. It will be seen that this Notification under section 19 was issued without any condition, limita­tion or restrictions excepting those which have been mentioned as "terms and conditions" in Public No­tice No. 28 dated 3.10.84.
 
14. There was acute shortage of sugar in the country and the Government encouraged the importa­tion of sugar and it was clearly mentioned that Gov­ernment exempted sugar from so much of customs duty and sales tax leviable thereon as is in excess of 50% and 10%. The subsequent notification dated 6.11.84 can have no operation when a right had vest­ed in the importer inasmuch as the respondent had acted upon assurance that the favourable terms men­tioned in the Notification dated 16.10.84 will be ap­plicable to him. He acted upon this assurance and now Government cannot retrace its steps and say that he will have to pay Customs duty at the rate mentioned in Notification of 16.11.84 which re­duced the exemption. This is clearly a case of estop­pel inasmuch as the respondent had acted on the as­surance given by the Government and a right vested in him and that could not be taken away. It was no­where mentioned in the Notification that the deliv­ery of the bill of entry will be determining factor as Mr. Bhuiyan intends to suggest.
 
15. Mr. Rafique-ul-Huq, the learned Counsel, explained the reasons as to the delay, though the goods arrived in the port on 24.11.84 the bill of en­try was given on the later date because there was heavy rush at the Port and that is why necessary pro­cess was delayed for delivering the bill of entry. Apart from this explanation the respondent has made out a clear case of estoppel and acted upon the Gov­ernment assurance and imported sugar because of the exemption that was granted and now the Government is estopped from denying such position.
 
16. Mr. Rafique-ul-Huq cited number of deci­sions such as BLD 1981 (AD) 91, AIR 1968 (SC) 718, AIR 1979 (SC) 621 and BLD 1981 (AD) 91. He has further relied upon the decision of PLD 1970 (SC) 379, PLD 1960 (SC) 310, PLD 1987 Karachi 63 and PLD 1977 Lahore 1327. Mr. Huq further submitted that the contention of the Government that the alternative remedy was not followed is not tenable because the alternative remedy given under section 194 is not an equally efficacious remedy be­cause it stipulated deposit of 50% of the amount of penalty of the duty demanded. As such it cannot be efficacious alternative remedy. Reliance was placed on 31 DLR 184, BLD 1988 (AD) 84, 22 DLR (SC) 443 and 19 DLR 592.
 
17. In the case of Secretary, Ministry of Indus­tries, Nationalised Industries Division Vs. Saleh Ah­med & another 1981 BLD (AD) 91 it was held that
 
"When the Government took the decision on agree­ment to release the Mill in question, lack of power on the part of the Government so to do is not the plea; rather a belated plea was taken that the decision had been revised by the Government although no such case was made out. It was said that applying the principle of promissory estoppel the least that can be said is that the appellants cannot be allowed to act inconsistently and the decision to release the Mill remains binding on them."
 
18. In Union of India Vs. Anglo Afghan Agen­cies AIR 1968 (SC) 718 it was observed that even assuming that the provisions relating to the issue of Trade Notices offering inducement to the prospective exporters were in character executive, the Union Government and its officers were not entitled at their mere whim to ignore the promises made by the Government. It could not be said that the Textile Commissioner was the sole judge of the quantum of import licence to be granted to an exporter, and that the Courts were powerless to grant relief, if the promised import licence was not given to an export­er who had acted to his prejudice relying upon the representation. Hence, the persons aggrieved because of the failure to carry out the terms of the Scheme were entitled to seek resort to the Court and claim that the obligation imposed upon the Textile Com­missioner by the Scheme be ordered to be carried out. After reviewing certain English cases it was observed:
 
"That even though the case did not fall within the terms of section 115 of the Evidence Act, it was still open to a party who had acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution."
 
19. This case completely demolishes the argu­ment of the learned Additional Attorney-General that no formal contract was executed between the parties. As has been noticed that the respondent clearly acted upon the Government assurance and imported sugar because of such assurance and, therefore, the Govern­ment is now estopped from denying such position.
 
20. Same view was taken in the case of Gujarat State Financial Corporation Vs. Mis. Lotus Hotels Pvt. Ltd. (AIR 1983 (SC) page 848) and it was ob­served that the principle of promissory estoppel would certainly estop the Corporation from backing out of its obligation arising from as solemn promise made by it to the respondent. The respondent acting upon the solemn promise made by the appellant in­curred huge expenditure and if the appellant is not held to its promise, the respondent would be put in a very disadvantageous position and, therefore, the principle of promissory estoppel can also be invoked in this case.
 
21. It is not necessary to cite further decisions on the well-settled principle of promissory estoppel. As for the alternative remedy, the contention of Mr. Rafique-ul-Haq is fully correct because the remedy provided for in the Act is not equally efficacious remedy to bar the writ jurisdiction.
 
22. Applying the principles laid down in the aforesaid decisions the view taken by us is correct and we are fortified in coming to the conclusion that the High Court Division had correctly made the Rule absolute and in this view of the matter the opinion is that the appeal must be dismissed.
 
In the result, this appeal is dismissed without any order as to cost.
 
Ed.