KARACHI: The High Court of Sindh was hearing a case that involved a dispute over the valuation of imported goods. The case was filed by a group of importers who challenged the valuation ruling issued by the Director General of Customs Valuation under Section 25D of the Customs Act, 1969. The importers claimed that the valuation ruling was arbitrary, unreasonable and in violation of the law and the international standards.
The Director General of Customs Valuation defended his valuation ruling and argued that it was based on the prevailing market prices, the quality and specifications of the goods, and the relevant factors prescribed by the law and the World Trade Organization. He also contended that the importers had failed to provide any credible evidence to support their claims.
The case was initially heard by the Customs Appellate Tribunal, which is a quasi-judicial body that deals with appeals against the decisions of the customs authorities. The Tribunal, however, did not decide the case on its merits, but dismissed it on a technical ground.
The Tribunal held that the importers had no right to challenge the valuation ruling under Section 25D of the Customs Act, 1969, as it was not an order in revision, but an order in original. The Tribunal also held that the only remedy available to the importers was to file a review petition before the Director General of Customs Valuation himself.
The importers were not satisfied with the Tribunal’s decision and filed a reference application before the High Court of Sindh under Section 196 of the Customs Act, 1969. The reference application is a special procedure that allows the High Court to examine the legality and validity of the orders passed by the Tribunal.
The High Court of Sindh, after hearing the arguments of both sides, set aside the order of the Tribunal and remanded the case back to the Tribunal for a fresh decision. The High Court of Sindh found that the Tribunal had erred in law and in fact by dismissing the case on a technical ground.
Sardar Zafar Hussain Advocate along with Deputy Director Valuation Azka Zafar appeared for the Customs Valuation Department.
The High Court of Sindh observed that the valuation ruling issued by the Director General of Customs Valuation under Section 25D of the Customs Act, 1969, was indeed an order in revision, as it revised the previous valuation ruling issued by the same authority under Section 25A of the Customs Act, 1969.
The High Court of Sindh also noted that the importers had the right to challenge the valuation ruling under Section 194C of the Customs Act, 1969, which provides for an appeal to the Tribunal against any order in revision passed by the customs authorities.
The High Court of Sindh further directed the Chairman of the Tribunal to exercise his powers under Section 194C of the Customs Act, 1969, and to ensure that all matters pertaining to a challenge to the valuation ruling under Section 25D of the Customs Act, 1969, are heard by a larger bench of at least three members, preferably presided by the Chairman himself, with one judicial member and one technical member. The High Court of Sindh explained that this was necessary to avoid any inconsistency or contradiction in the decisions of the Tribunal on the same or similar issues. The High Court of Sindh also left the choice of the members to the discretion of the Chairman himself, but added that if for some special and extraordinary reasons, the Chairman himself could not preside, then he could reconstitute the bench, but it should still remain a larger bench of at least three members.
The High Court of Sindh also directed the Tribunal’s office to make all possible efforts to ensure that matters pertaining to one valuation ruling are preferably decided together by the same bench, so that the errors and mistakes as noted by the High Court of Sindh are avoided. The High Court of Sindh pointed out that it was a matter of record that the order impugned in the reference applications was in respect of the valuation ruling bearing No. 1681/2022, whereas, in another set of appeals that came before the High Court of Sindh in SCRA No. 1193/2023 (The Director General of Customs Valuation v. Prime Trading) and other connected matters, the same valuation ruling was impugned and though two different benches had dealt with the same valuation ruling, but an identical verbatim order had been passed, as if the order had been passed by the same member.
The High Court of Sindh expressed its concern over the lack of uniformity and coherence in the decisions of the Tribunal and stressed the need for some monitoring and case management on the administrative side by the Chairman’s office, so that the Tribunal could perform its functions effectively and efficiently.
The High Court of Sindh, thus, remitted the case to the Tribunal with these directions and observations, and hoped that the Tribunal would decide the case expeditiously and in accordance with the law and justice.