2023 PTD 1679 PESHAWAR-HIGH-COURT

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Citation Name: 2023 PTD 1679 PESHAWAR-HIGH-COURTBookmark this Case COLLECTOR OF CUTOMS, MODEL CUSTOMS COLLECTORATE, CUSTOMS HOUSE, JAMRUD ROAD, PESHAWAR VS WAHEED HAMID BROS. LTD Ss. 2(s), 16, 32, 129, 169, 201 & 196---Imports and Exports (Control) Act (XXXIX of 1950), S. 3(1)---Pak-Afghan Transit Trade Agreement, 1965---Transit of goods across Pakistan to a foreign country (Afghanistan)---Confiscation of transit goods, restoration of---Seized transit goods, how to be dealt with---Procedure for sale of goods and application of sale proceeds---Auction proceedings---Scope---Afghan importer (company) imported a consignment of certain miscellaneous goods for transit to Afghanistan, but the containers were seized and confiscated after contraband goods (foreign origin liquor) was recovered from them (containers)---Customs Appellate Tribunal ('Tribunal') set-aside confiscating orders and passed judgment that said transit goods be restored to importer/company ('owner') unconditionally for dispatch in transit to Afghanistan---However, when the owner of goods applied for the recovery/restoration of goods, it transpired to him that said goods were sold by the Department; and it was refunded only 17% of sale proceeds (auction amount) on the ground that the owner was only entitled to said amount after deduction of leviable taxes---During second round of litigation, the Tribunal finally passed order in favour of owner of goods by holding that the seized goods were neither liable to confiscation nor any taxes / duties were payable on the same and that the goods should be restored to the owner or entire sale proceeds be recovered without payment/deduction of any taxes/duties for its onward transportation to Afghanistan---Petitioner / Department filed reference against the order of the Tribunal contending that from the auction proceeds, first the duties/taxes should be deducted and thereafter the remaining amount would be payable to the owner of the goods (i.e. respondent)---Validity---Under the mandate of S.129 of the Customs Act, 1969 ('the Act, 1969') the transit of goods across Pakistan to foreign territory, when reaches Pakistan is not subject to incidence of taxation---Fiscal statute normally contain two provisions; charging provisions imposing the charge to tax and machinery provisions providing the machinery for quantification of tax and levy/collection of tax so imposed---Charging provisions are construed strictly while machinery provisions of the statute are not generally subject to a rigorous construction---Good-in-question were liable to confiscation as S. 201(2)(c) of the Customs Act, 1969, envisaged that the goods if sold under any provision of the Act, 1969, the sale-proceeds would be subject to certain statutory deduction (custom-duty and taxes) payable to the Federal Government---Words "payable to Federal Government" occurring in S.201(2)(c) of the Act, 1969 meant that the said deduction had been subject to the incidence of taxation under the charging section of relevant fiscal Statutes i.e. Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Customs Act, 1969---Thus, provision of S. 201(2)(c) of the Act, 1969 would be applicable to the amount of sale proceeds only when, under charging provision of a Statute, any taxes/duties were payable to the Federal Government---Similarly, S. 169(5) of the Act, 1969 only referred to the deduction of taxes as provided under S.201(2)(c) of the Act, 1969, whereas S. 201(2)(c) of the Act 1969 applied only when tax was charged and payable to Federal Government under any fiscal statute against any goods which were sold during the adjudication proceedings---Impugned order was rightly passed by the competent forum (Tribunal) which had attained finality---Reference filed by the Customs Department was dismissed, in circumstances.

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