M/s. Pako Computers, Karachi (Applicant) VS Custom Appellate Tribunal, Karachi & Others (Respondent)

THE HIGH COURT OF SINDH, KARACHI

Present: Mr. Justice Muhammad Junaid Ghaffar Mr. Justice Jawad Akbar Sarwana

1.Spl. Cus. Ref. A. M/s. Pako Computers, Karachi VS Custom 1640/2023 Appellate Tribunal, Karachi & Others 2. Spl. Cus. Ref. A. M/s. Pako Computers, Karachi VS Custom 1641/2023 Appellate Tribunal, Karachi & Others 3. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore & another VS 1669/2023 Custom Appellate Tribunal, Karachi & others 4. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore & another VS 1670/2023 Custom Appellate Tribunal, Karachi & others Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1671/2023 Appellate Tribunal, Karachi & others Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1672/2023 Appellate Tribunal, Karachi & others 7. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1673/2023 Appellate Tribunal, Karachi & others 8. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1674/2023 Appellate Tribunal, Karachi & others 9. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1675/2023 Appellate Tribunal, Karachi & others 10. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1676/2023 Appellate Tribunal, Karachi & others 11. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS The Custom 1677/2023 Appellate Tribunal, Karachi & others 12. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS The Custom 1678/2023 Appellate Tribunal, Karachi & others 13. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore & another VS 1679/2023 The Custom Appellate Tribunal, Karachi & others 14. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1680/2023 Appellate Tribunal, Karachi & others 15. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1681/2023 Appellate Tribunal, Karachi & others 16. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1682/2023 Appellate Tribunal, Karachi & others 17. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore & another VS 1683/2023 Custom Appellate Tribunal, Karachi & others 18. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore & another VS 1684/2023 Custom Appellate Tribunal, Karachi & others 19. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore & another VS 1685/2023 Custom Appellate Tribunal, Karachi & others 20. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1686/2023 Appellate Tribunal, Karachi & others 21. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1687/2023 Appellate Tribunal, Karachi & others 22. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1688/2023 Appellate Tribunal, Karachi & others 23. Spl. Cus. Ref. A. M/s. Decent Computers, Lahore VS Custom 1689/2023 Appellate Tribunal, Karachi & others Page 1 of 6

24.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1711/2023 VS Custom Appellate Tribunal, Karachi & others 25. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1712/2023 VS Custom Appellate Tribunal, Karachi & others 26. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1713/2023 VS Custom Appellate Tribunal, Karachi & others 27. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1714/2023 VS Custom Appellate Tribunal, Karachi & others 28. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1715/2023 VS Custom Appellate Tribunal, Karachi & others 29. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1716/2023 VS Custom Appellate Tribunal, Karachi & others 30. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1717/2023 VS Custom Appellate Tribunal, Karachi & others 31. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore VS Custom 1718/2023 Appellate Tribunal, Karachi & others

32.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1719/2023 VS Custom Appellate Tribunal, Karachi & others 33. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1720/2023 VS Custom Appellate Tribunal, Karachi & others 34. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1721/2023 VS Custom Appellate Tribunal, Karachi & others 35. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1722/2023 VS Custom Appellate Tribunal, Karachi & others 36. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1723/2023 VS Custom Appellate Tribunal, Karachi & others 37. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore VS Custom 1724/2023 Appellate Tribunal, Karachi & others

38.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1725/2023 VS Custom Appellate Tribunal, Karachi & others 39. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1726/2023 VS The Custom Appellate Tribunal, Karachi & 40. Spl. Cus. Ref. A. another Lahore & another M/s. POP Global Distribution, 1727/2023 VS Custom Appellate Tribunal, Karachi & others 41. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1728/2023 VS Custom Appellate Tribunal, Karachi & others 42. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1729/2023 VS Custom Appellate Tribunal, Karachi & others 43. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1730/2023 VS Custom Appellate Tribunal, Karachi & others 44. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1731/2023 VS Custom Appellate Tribunal, Karachi & others 45. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1732/2023 VS Custom Appellate Tribunal, Karachi & others 46. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1733/2023 VS Custom Appellate Tribunal, Karachi & others 47. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1734/2023 VS Custom Appellate Tribunal, Karachi & others 48. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1735/2023 VS Custom Appellate Tribunal, Karachi & others 49. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1736/2023 VS Custom Appellate Tribunal, Karachi & others Page 2 of 6

50.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1737/2023 VS Custom Appellate Tribunal, Karachi & others 51. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1738/2023 VS Custom Appellate Tribunal, Karachi & others 52. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore VS Custom 1739/2023 Appellate Tribunal, Karachi & others

Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore VS Custom 1740/2023 Appellate Tribunal, Karachi & others

54.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore VS Custom 1741/2023 Appellate Tribunal, Karachi & others

55.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore VS Custom 1742/2023 Appellate Tribunal, Karachi & others

56.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1743/2023 VS Custom Appellate Tribunal, Karachi & others 57. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1744/2023 VS Custom Appellate Tribunal, Karachi & others 58. Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore VS Custom 1745/2023 Appellate Tribunal, Karachi & others

59.Spl. Cus. Ref. A. M/s. POP Global Distribution, Lahore & another 1746/2023 VS Custom Appellate Tribunal, Karachi & others For the Applicants: Through Waseem Ahmad Malik, Advocate.

For the Respondents: M/s. Ali Tahir and Khalilullah Jakhro, Advocates.

Date of hearing: 22.05.2024 Date of Judgment: 22.05.2024

JUDGMENT

Muhammad Junaid Ghaffar, J: Through these Reference Applications, the Applicants have impugned judgments dated 08.06.2023 & 09.06.2023 passed in Customs Appeal No. K-111 of 2021 and other connected matters proposing various questions of law. All impugned judgments are verbatim same, and therefore, all these Reference Applications have been heard together and are being decided through this common judgment. In all these Reference Applications there is only one common legal question which can decide the entire controversy as the same now stands decided by the Honourable Supreme Court. The said question reads as under:-

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“III. Whether the learned Tribunal has fallen into error of law by not taking into account that the impugned order in original is hit by limitation prescribed in sub section (3) of Section 179 of Customs Act, 1969?”

2.Heard learned Counsel for the parties and perused the record. In the instant matter the show cause notice was issued on 29.5.2020 and the last date for passing the Order in Original (“ONO”) in terms of Section 179(3) of the Customs Act, 1969 was 28.08.2020, whereas, the adjudicating authority has stated in the ONO that time was extended by FBR till 30.11.2020. Insofar as the case of the Respondents is concerned, Mr. Ali Tahir, Advocate appearing on behalf of Post Clearance Audit has today placed on record, copy of Letter dated 22.09.2020 issued by FBR; whereby, certain extension was granted exercising powers under Section 179(4) of the Customs Act, 1969. He has contended that since an extension had been granted by FBR as above, the Tribunal was fully justified in holding that the ONO was not time barred. However, perusal of the said letter of FBR dated 22.09.2020 reflects that undisputedly such extension was granted after the mandatory period provided under Section 179(3) of the Act had already expired. To that there appears to be no dispute. Not only this, the request for extension was also made by the Adjudicating Authority on 14.09.2020; when the period for passing the ONO had already expired on 28.08.2020. Therefore, even if FBR had any jurisdiction to extend the time period it was done after the cut-off date; hence, was meaningless and was without lawful authority. It further appears that extension letter does not seem to have been issued in consonance with the powers conferred upon FBR under Section 179(4) ibid, whereas, no independent reasons of its own have been assigned by FBR; rather, the reasons stated by the Collector in his extension letter have been found to be justified. This is an incorrect approach as FBR cannot abdicate its authority so conferred under the Act in such Page 4 of 6

a manner and ought to have given its own reasoning in line with Section 179(4) of the Act. In Collector of Customs Lahore v HNR Company (Pvt) Limited1, the Hon’ble Supreme Court while dealing with a somewhat similar extension of time under Section 179(4) of the Act, without assigning cogent reasons has held that the provision of reasons for granting an extension of time is necessary so as to ensure that discretion has been exercised by the FBR on valid grounds transparently and in a structured manner.

3.As to the finding of the Tribunal that such period of limitation is directory and not mandatory, with respect are unable to agree with it as the Supreme Court2 has already decided it against the department in various cases under the Sales Tax Act, 1990 as well as The Customs Act, 1969, as both the statutes have analogous provisions insofar as passing of ONO within a certain period of time is concerned. It has been held that wherever the legislature has provided certain period for passing of an Order; then the said direction is mandatory and not directory and in that case non-compliance of such a mandatory provision would invalidate such act. It has been further held that since adjudication was beyond time as prescribed in Section 179(3) of the Act; therefore, the said decision is invalid. In Super Asia (Supra) it has been held that wherever, the legislature has provided certain period for passing of an Order; then the said direction is mandatory and not directory and in that case non-compliance of such a mandatory provision would invalidate such act. In Mujahid Soap (Supra) it was held that since adjudication was beyond time as prescribed in Section 179(3) of the Act; therefore, the said 1 Order dated 28.09.2021 in Civil Petition No.2734 & 2735 of 2020 2 Mujahid Soap & Chemical Industries (Pvt.) Ltd., v Customs Appellate Tribunal (2019 SCMR 1735); The Collector of Sales Tax v Super Asia Mohammad Din (2017 SCMR 1427) and respectfully followed in the case of A.J. Traders v Collector of Customs (PLD 2022 SC 817), followed by this Court in SCRA No. 119 of 2024 (Director, Directorate General, Intelligence & Investigation (Customs), Karachi Vs. M/s. Chase Up.)

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decision is invalid. Both these views have been followed and affirmed in the case of A.J. Traders (Supra).

4.Accordingly, the proposed question as above, is answered in the affirmative in favour of the Applicant and against the Respondents and as a consequence thereof, answer to the remaining Question(s) would be an academic exercise; hence, we deem it appropriate not to answer the same. The Reference Applications are hereby allowed by setting aside the impugned order(s) to the extent of the present Applicants. Office is directed to sent copy of this order to Customs Appellate Tribunal, Karachi, in terms of sub-section (5) of Section 196 of Customs Act, 1969. Office shall also place copy of this order in the connected Reference Applications.

JUDGE

JUDGE

Ayaz P.S.

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