Md. Shahjahan Vs. Government of Bangladesh and others, 4 LNJ AD (2015) 302

Case No: Civil Appeal Nos. 106-107 of 1999

Judge: Syed Mahmud Hossain,

Court: Appellate Division ,,

Citation: 4 LNJ AD (2015) 302

Case Year: 2015

Appellant: Md. Shahjahan

Respondent: Government of Bangladesh and others

Delivery Date: 2011-08-02


APPELLATE DIVISION
(CIVIL)
 
Md. Muzammel Hossain, CJ.
Surendra Kumar Sinha, J
Md. Abdul Wahhab Miah, J
Nazmun Ara Sultana, J
Syed Mahmud Hossain, J
Muhammad Imman Ali, J
Md. Shamsul Huda, J

 
Judgment on
02.08.2011
  Md. Shahjahan
... Appellant
(In both the appeals)
Versus
Government of Bangladesh and others
. . . Respondents
 

Customs Act (IV of 1969)
Section 25(7)
Government may by notification in the official gazette fix the tariff value of any goods imported or exported as chargeable with customs duty ad valorem. The duty shall be chargeable on the tariff value which was in existence on the date of submission of the bill of entry. . . . (16)

Customs Act (IV of 1969)
Sections 19, 25(7) and 30
Notification issued under section 19 is independent of the rate of duty mentioned in section 30 and there is no connection between sections 19 and 30 of the Act. The exemption under section 19 of the Act and the declaration of tariff value under section 25(7) of the Act are quite distinguishable. . . . (21 & 22)

Collector of Customs Vs. A. Hannan, 42 DLR (AD) 167; Customs Vs. Ahmed Hossain, (1996) 48 DLR (AD) 199; Mustafizur Rahman Vs. Government of Bangladesh and others, (1998) 18 BLD (AD) 219; Bangladesh and others Vs. Mizanur Rahman, (2000) 52 DLR (AD)149; Bangladesh Vs. Mizanur Rahman, (2000) 52 DLR (AD)149; Mustafizur Rahman Vs. Government of Bangladesh and others, (1998) 18 BLD (AD) 219 ref.

For the Appellant: Mr. Monir Sharif, Advocate, instructed by Syed Mahbubar Rahman, Advocate-on-Record.
For the Respondents: Mr. Akramul Haque, Assistant Attorney General, instructed by Mr. Mr. B. Hossain, Advocate-on-Record.

Civil Appeal Nos. 106—107 of 1999
 
JUDGMENT
Syed Mahmud Hossain, J:

These two appeals, by leave, by the writ-petitioner arise out of the judgment and order dated 23.06.1994 passed by a Division Bench of the High Court Division in Writ Petition Nos. 2411 and 2412 of 1990 discharging both the Rules. 

Civil Appeal Nos. 106 and 107 of 1999 have been heard together and are being disposed of by this common judgment as they do involve common questions of laws and facts.

The facts, leading to the filing of these two appeals, in short, are that the writ-petitioner imported a consignment of cigarette paper comprising 4,200 reams (105 bales) of sheet under a letter of credit dated 9th July, 1989 from the People’s Republic of China. This consignment is the subject matter of Writ Petition No.2412 of 1990. At that time, the rate of tariff value was at Tk. 200.00 per ream of 500 sheets as per S.R.O. dated 15th June, 1989. The shipment of the consignment was made on 10.08.1989 and the import manifest was duly submitted on 27.09.1989 and the bill of entry was submitted on 15.05.1990 for noting. At that time S.R.O. No.47/AIN/90/1267/Sulka dated 28.01.1990 was in force. The tariff value in respect of the said goods was raised from Tk. 200.00 to Tk. 300.00 per ream. Again the tariff value was increased from Tk. 300.00 to Tk. 515.00 by S.R.O. No.105/AIN/90/1279/Shulka dated 10.03.1990. The petitioner imported another consignment of cigarette paper under L.C. dated 9th July, 1989 from the People’s Republic of China. The second consignment comprising 2000 reams (50 bales) of sheet at a cost of U.S.$ 8,730.00. This consignment is the subject matter of Writ Petition No. 2411 of 1990. Both the consignments arrived at Chittagong on the same date.  

The main contention of the writ-petitioner is that the writ-respondents should make assessment for the duty and tax on the basis of tariff value applicable on the date of import namely 09.07.1989 or on the date on which the import manifest was submitted i.e. 27.09.1989 when the tariff value was at Tk. 200.00 per ream under the S.R.O. dated 15.06.1989. It is contended that with the increase of the tariff value, the corresponding custom duty and other charges also increased and as such the writ-petitioner has been seriously prejudiced. The petitioner has acquired a vested right by virtue of operation of rate at that time when the L.C. was opened and the goods were shipped and as such the impugned demand by way of such notification is ex-facie bad, malafide and colourable exercise of the power of the customs authority and the same should be declared to have been made without any lawful authority and to be of no legal effect. 

Against imposition of increased tariff value, the writ-petitioner moved the High Court Division and obtained both the Rules in both the writ-petitions. 

The writ-respondents filed an affidavit-in-opposition controverting the material statements made in the writ-petition. Their case, in short, is that the impugned notification was issued or made in exercise of power vested in the Government and as such no illegality has been committed. It was stated that the tariff value of cigarette paper increased from Tk. 300.00 to Tk. 315.00 by issuance of notification under the authority conferred by the legislature under sub-section(7) of section 25 of the Customs Act, 1969. It is further stated that customs duties shall have to be paid on the tariff value prevailing on the date of delivery of bill of entry to the appropriate officer of Customs Authority as provided under section 30 of the Act. The provisional noting by submission of import manifest on 15.09.1990 has nothing to do with the assessment of duty. Therefore, the tariff value will be fixed as per provision of section 25 of the Customs Act, 1969.

The High Court Division heard both the writ-petitions simultaneously and discharged both the Rules by a common judgment and order dated 23.06.1994.

Feeling aggrieved by and dissatisfied with judgment and order passed by the High Court Division, the writ-petitioner filed both the civil petitions for leave to appeal before this Division.

Hearing the parties, this Division by its order dated 18th August, 1999, granted leave in both the petitions resulting in the initiation of Civil Appeal Nos. 106 and 107 of 1999. 

Mr. Monir Sharif, learned Advocate appearing on behalf of the appellant, in both the appeals, submits that the appellant acquired a vested right not to pay any duty which was not in force on the date of opening of the letter of credit as he intended to import the goods seeing the rates in the notification prevalent on the date of opening of the letter of credit and that this  right could not be taken away by a subsequent SRO and that the High Court Division without considering this aspect discharged both the Rules.

In support of his contention, the learned Advocate for the appellant relies upon the cases of Collector of Customs Vs. A. Hannan, 42 DLR (AD)167; Collector of Customs V. Ahmed Hossain (1996) 48 DLR (AD) 199; and Mustafizur Rahman V. Government of Bangladesh and others, (1998) 18 BLD (AD) 219.

Mr. Ekramul Haque, learned Assistant Attorney General, appearing on behalf of the respondents, in both appeals, submits that the question raised by the appellant has already been settled by this Division in the case of Bangladesh and others V. Mizanur Rahman, (2000) 52 DLR (AD)149.

We have considered the submissions of the learned Advocates of both the sides, the impugned judgment and the papers incorporated in the paper-books. The writ-petitioner imported two consignments of cigarette papers from the People’s Republic of China on the basis of letter of credit dated 9th July, 1989. At that time, the rate of tariff value was Tk. 200/- per ream of 500 sheets as per S.R.O. dated 15.06.1989. The tariff value in respect of the said goods increased from Tk. 200/- to Tk. 300/- per ream. Again the tariff value increased from Tk. 300/- to Tk. 515/- by S.R.O. dated 10.03.1990. Admittedly, the tariff value of the goods increased before submission of the bill of entry in exercise of power under section 25(7) of the Customs Act. Section 30 of the Act provides that the duty has to be assessed on the value of goods as on the date of submission of the bill of entry. The appellant contends that duty and tax have to be assessed on the basis of tariff value prevailing on the date of opening the L.C., that is, 09.07.1989.
 
Let us consider the grounds on which leave was granted as under :
 
Whether the respondents ought to have assessed the duties and sales tax at the rate of Tk. 200/- per ream, which was the tariff value applicable on the date of opening of letter of credit on 09.07.1989 and also on the date the import manifest when it was submitted on 27.09.1989 as per notification dated 15.06.1989 and the petitioner having imported both the consignments relying upon the tariff value rates as applicable then, and the petitioner is entitled in law to pay necessary duties etc. on such value and such lawful entitlement of the petitioner cannot be taken by giving retrospective effect to a subsequent notification.
 
Whether bill of entry having been submitted on 15.05.1990, the tariff value @ Tk. 315.00 as in force on 10.03.1990 will be applicable in view of section 30(1) of the Customs Act, which provides for rate of duty as applicable on the date of submission of bill of entry and not rate of tariff value as applicable on the date of submission of bill of entry and the High Court Division was wrong to hold by reference to section 30 that the tariff values on the date of submission of the bill of entry would be applicable inasmuch as there is no provision in the  Customs Act providing for application of tariff value as on the date of submission of the bill of entry.
 
Whether tariff value as fixed in exercise of power under section 25(7) has prospective application and the petitioner having already opened letter of credit as per notification dated 15.06.1989, and there is a vested right created in favour of the petitioner, who has fulfilled the conditions of importing the goods under the said notification and the right created by the notification dated 15.06.1989 cannot be taken away by the subsequent notification as the same can not be given  retrospective effect.
 
Whether three decisions of this Court reported in 42, DLR (AD)167, 48 DLR (AD)199 and 18 BLD (AD)219 are applicable on the facts of the case.

For proper appreciation of the issues, it is necessary to have a glance over section 25(7) of the Customs Act as quoted below :

“(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 advalorem;
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.” 
 
Having considered sub-section (7) of section 25 of the Act, it appears that Government may by notification in the official gazette fix the tariff value of any goods imported or exported as chargeable with customs duty ad valorem. The duty shall be chargeable on the tariff value which was in existence on the date of submission of the bill of entry.

In both cases, the bill of entry was submitted on 15.05.1990 for noting. At that time S.R.O. No.47/AIN/90/1267/Sulka dated 28.01.1990 was in force. The letter of credit for both the consignments was opened on 09.07.1989 when the tariff value was at Tk. 200/- per ream of 500 sheets as per the S.R.O. dated 15.06.1989. The tariff value in respect of the goods was raised from Tk. 200/- to Tk. 300/- per ream. Again the tariff value was raised from Tk. 300/- to Tk. 515/- by SRO dated 10.03.1990. Therefore, the appellant was under the legal obligation to pay tax and duty on the imported goods on the basis of tariff value as per the S.R.O. dated 10.03.1990 and at the relevant time, the tariff value was Tk. 515/- per ream of 100 sheets.

The case of Collector of Customs Vs. A. Hannan, (1990) 42 DLR (AD)167 dealt with the impact of issuance of notification under section 19 of the Customs Act exempting customs duty. The High Court Division held that such a notification created a vested right in favour of the importer and this Division held that such a notification gave rise to a promissory estoppel from claiming enhanced customs duty.

In the case of Bangladesh Vs. Mizanur Rahman (2000) 52 DLR (AD) 149, this Division reviewed the decision made in the case of Mustafizur Rahman V. Government of Bangladesh and others, (1998) 18 BLD (AD) 219 (51 DLR (AD)40) holding that the then Attorney General could not bring to its notice the distinguishing feature between Hannan’s case and the case of Mustafizur Rahman which was a case under section 25(7) of Customs Act. This Division further held that no vested right was acquired to pay sale taxes and customs duty on the basis of tariff value declared by the 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 of presentation of the bill of entry.

The case of Collector of Customs Vs. Ahmed Hossain, (1996) 48 DLR (AD) 199 was a case under section 19 of the Customs Act. This Division primarily decided the question of acquiring vested right in the matter of getting exemption from customs duties on the basis of earlier notification and the same could not adversely affect the subsequent notification made by the Government in exercise of the power of delegated legislature.

Notification issued under section 19 is independent of the rate of duty mentioned in section 30 and there is no connection between sections 19 and 30 of the Act.

The exemption under section 19 of the Act and the declaration of tariff value under section 25(7) of the Act are quite distinguishable. The cases reported in 42 DLR (AD) 167 and 48 DLR (AD)199 did not held that the importer acquired vested right to pay tax and duty on the basis of invoice value and tariff value existing at the time of opening of the letter of credit. Therefore, the Appellant has to pay tax and duty on the basis of tariff value on the date of presentation of the bill of entry.

In the light of the findings made before, we do not find any ground to interfere with the judgment and order of the High Court Division.

Accordingly, both the appeals are dismissed without any order as to costs.

Ed.