TEC STYLE EMPORIUM vs FEDERATION OF PAKISTAN R — 2025 PTD 1570 KARACHI-HIGH-COURT-SINDH

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TEC STYLE EMPORIUM VS FEDERATION OF PAKISTAN R.75---Imported consignment of goods, auctioning of---Delay in filing of Goods Declaration by importer due to dispute regarding exemption of sales tax---Goods Declaration filed after payment of duties and taxes---Custom authorities auctioning the imported goods while the importer was agitating the matter of exemption of sales tax before the authorities---Legality---Cancellation of auction---Scope---Auction proceedings could be cancelled before delivery of goods to the auction purchaser---Two constitutional petitions were filed concerning the same consignment of goods; one by the importer seeking restraining of the auction and one by auction purchaser seeking delivery of goods---The importer faced a delay in filing the Goods Declaration due to a pending dispute over exemption of sales tax and auction of goods was conducted during the pendency of this dispute, and the importer after resolution of dispute had paid the disputed amount---The auction purchaser contended that he had acquired vested rights post-auction and was unjustly denied delivery---Primary issue for determination before the High Court was as to "Whether the auction conducted by customs authorities was lawful despite the importer's pending sales tax exemption dispute causing delay in filing of Goods Declaration, and whether the importer's subsequent payment of duties entitled him to reclaim the goods over the auction purchaser who deposited the bid amount?"---Held: Despite the auction purchaser being a successful bidder it was not disputed that the importer of the goods had filed its 'Goods Declaration' which could only be filed after payment of duty and taxes in advance as per its own calculation---The exemption claimed by the importer in respect of sales tax was denied and the matter was being persuaded by the importer before the respondent authorities for grant of such exemption---In the meantime, the customs collectorate on its own auctioned the goods, which was not in accordance with law as the importer was already agitating its case in respect of the goods and the exemption so claimed---Rule 75 of Customs Rules, 2001 clearly provided and empowered the collector to reject any auction proceedings before delivery of the goods---In the present case, admittedly the goods were not delivered as physical delivery of the goods was not given to the auction purchaser and the language of Sub-Rule (2) of R. 75 required "delivery of goods" which meant the physical delivery and not constructive delivery provided on a delivery order---Auction ought to be cancelled and the goods be delivered to the importer who had already filed a Goods Declaration and had also paid the duties and taxes as assessed---Auction proceedings stood cancelled---Moreover, since the auction of goods was conducted by fetching almost half of the total value of the goods, serious doubts were casted upon the entire auction process---Constitutional petition filed by the auction purchaser was dismissed and the one filed by the importer was allowed, in circumstances.

TEC STYLE EMPORIUM vs FEDERATION OF PAKISTAN R — 2025 PTD 1570 KARACHI-HIGH-COURT-SINDH

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