KARACHI: Hearing four different petitions involving identical question of law, a custom appellate bench of High Court of Sindh held that no interim relief could be given to the petitioner if the assessment has been made by the department under section 25-A of Customs Act 1969.

The petitions were filed by Shamim Ahmed, M/s. Ali Containers (Pvt) Ltd, M/s. A.N Industries (Pvt.) Limited Abdul Wahid versus Federation of Pakistan & others.

The petitioners sought release of the imported goods by way of an interim order from the Court pending decisions on their challenge to Valuation Rulings issued under Section 25-A of the Customs Act, 1969 (“Act”), either before the Director General Valuation under Section 25-D of the Act, or the Customs Appellate Tribunal under Section 194-A.

The bench noted that this issue has triggered now as previously, on the directions of this Court, the Respondents were granting provisional release in terms of Section of the Act. However, after pronouncement of the Supreme Court in the case of Collector of Customs Lahore vs. Wasim Radio Traders, Lahore (2023 SCMR 1716), the said orders could no more be passed by this Court.

Earlier Counsel for the Petitioners contended that the Petitioners have impugned various Valuation Rulings issued under Section 25-A of the Customs Act, 1969; and either Revisions under Section 25-D of the Act or further Appeals under Section 194-A of the Act are pending before the DG Valuation or Customs Appellate Tribunal respectively, whereas, during such pendency of these proceedings, fresh consignments of the Petitioners have arrived, but the Customs Department has refused to allow any interim relief by way of deposit of the disputed amount of duties and taxes; hence these petitions.

The counsel for petitioner said that  he is not seeking any provisional release under Section 81 of the Act as after passing of the judgment in the case of Wasim Radio Traders, (Supra), no such relief can be granted; however, it is the case of the Petitioners that this Court while exercising jurisdiction under Article 199 of the Constitution of the Islamic Republic of Pakistan, can always grant such a relief of interim nature, notwithstanding the judgment as above. It was further contended that the Petitioners are remediless and are being compelled to pay duties and taxes on the basis of Valuation Rulings, which are already under challenge; hence the relief being sought through these petitions may be granted. Former Attorney General Khalid Jawed Khan, Advocate, appointed as Amicus Curiae  assisting the court, submitted that in the light of Section 81 (3rd Proviso) of the Act and Judgment of Supreme Court in case of Wasim Radio Traders (Supra), no application for provisional release of goods can be entertained in presence of Valuation Ruling by any Forum, Authority, Tribunal or Court. He was of the view that in the light of the provisions of the Act, which provide forum for challenging a Valuation Ruling before DG Valuation or Tribunal, the High Court will not entertain any challenge to a Valuation Ruling as recently reaffirmed by Supreme Court in the case of Mian Azam Waheed.

The forums below i.e. DG Valuation and the Tribunal while hearing a Revision under Section 25-D of the Act and an Appeal under Section 194A of the Act, can grant interim relief of releasing the goods by securing the differential amount with the concerned Collectorate, unless there is compelling reason to refuse such release, as per settled law 4 , where a forum can grant final relief, interim relief can also be granted, contended Amicus Curiae ie. He further submitted that where the forums below before whom the Revision or Appeal is pending, are either dysfunctional or are not exercising jurisdiction expeditiously, including application for interim relief, the High Court in exercise of its jurisdiction under Article 199 may allow the same interim relief as may be granted by those forums 5 . According to him a similar limited relief is granted by the High Court’s 6 under Article 199 of the Constitution in cases where Appeal may be pending before Commissioner or Collector (Appeals) and recovery proceedings are initiated by the department. Per learned Amicus, the relief so asked for is not a provisional release under Section 81 of the Act and will be subject to outcome of proceedings pending before the forums below. Therefore, according to him High Court though in a limited manner and with restrictions it deems fit, can grant the relief prayed for to the Petitioners, and the judgment of the Supreme Court in the case of Waseem Radio Traders (Supra) will not be an impediment in granting such relief. Sardar Zafar Hussain, counsel for the Director General Valuation opposed these Petitions on the ground that no relief of any provisional assessment can be granted in view of the judgment of the Supreme Court in the case of M/s Wasim Radio Traders (supra); whereas, even otherwise the third Proviso to Section 81 (ibid) also prohibits any such relief.  He contended that the jurisdiction under Article 199 of the Constitution cannot be exercised merely to grant an interim relief, as neither any final relief has been sought; nor can it be granted by this Court. Even if any extra duty has been paid on the basis of an assessment made pursuant to a Valuation Ruling, the same can be refunded as and when the Petitioners are finally successful in their challenge to such Valuation Rulings, contended Sardar Zafar Hussain Advocate.

The bench after detailed hearing passed the following order The purpose of section 81 of the Act is to make a provisional determination in a situation where an assessment cannot be made. In order to invoke section 81 of the Act, the Custom Officers must first satisfy themselves that it is not possible to assess the correctness of the value because it is necessary to first test the goods for further enquiry. Then and only then can the importer have the goods provisionally released under section 81 of the Act.

Passing judgment the bench held that “section 81 of the Act cannot be claimed as of right because the conditions stipulated in section 81 of the Act have to be attracted, which means that the Customs Officer has to find that the goods cannot be assessed and has to conclude that some form of testing or further inquiry is necessary. Accordingly, this Section cannot apply where a Valuation Ruling has been issued as the Valuation Ruling represents the declared value for the assessment of the goods or category of goods, which the importer is required to pay. As the Valuation Ruling is a formal decision providing the assessment value of the goods the requirements of section 81 of the Act perse are not invoked. Consequently, where the goods are preassessed or capable of assessment, section 81 of the Act does not apply”.

“As per this Rule, where there is a dispute with respect to the value of the goods, the importer can claim provisional release of the goods under section 81 of the Act. However, Rule 125 of the Rules does not apply to cases where a Valuation Ruling has been issued because remedy against a Valuation Ruling lies under section 25-A(2) or under section 25-D in the form of a review petition before the Director General Valuation. This remedy of review specifically allows an aggrieved person to challenge a Valuation Ruling such that the existing Ruling can be either rescinded or a fresh valuation can be ordered. Hence, the scope of the relief against a Valuation Ruling is such that the Ruling is either rescinded or else has to be decided afresh. Accordingly, Rule 125 (2) of the Rules is not applicable to cases where there is a Valuation Ruling, as it applies to cases where section 81 of the Act is applicable, says the order converting Civil Petitions into Appeals and the same are allowed”. From perusal of the aforesaid findings, it reflects that insofar as any provisional release of consignments under Section 81 of the Act assessed by the department on the basis of a Valuation Ruling issued under Section 25-A ibid is concerned, the Supreme Court has not approved the findings of the learned Lahore High Court that such a provisional release can be allowed, notwithstanding the fact that against such Valuation Ruling a Revision under Section 25-D (ibid) is pending. The Supreme Court has held that a Valuation Ruling is a statutory ruling and in view of such position there cannot be a concept of any provisional release as the same would not fall within the ambit of Section 81 of the Act. It is also relevant to observe that subsequent to Lahore High Court’s judgment a third proviso 8 to Section 81 of the Act has now been added; whereby, the provisional relief is now further prohibited in the given facts and circumstances. 8. Now the moot question before us is that whether in the facts and circumstances as above, this Court while exercising jurisdiction under Article 199 of the Constitution can grant any interim relief by directing to secure or deposit differential amount of duties and taxes and order release of the consignment upon payment of duties and taxes on the declared transactional values. It is not in dispute that under the Act, an alternate remedy of a Revision is provided against a Valuation Ruling in terms of Section 25-D of the Act before DG 8 Provided further that no provisional determination of value shall be allowed in those cases where a Valuation Ruling (VR), issued under section 25-A, is in field, irrespective of the fact whether any review or revision against such Valuation Ruling is pending in terms of section 25-D or relevant rules, as the case may be. CP Nos. 4972, 5173, 5966 & 5626 of 2023 Page 8 of 10 (Valuation), and thereafter by way of an Appeal under Section 194-A of the Act before the Customs Appellate Tribunal and finally before this Court by way of a Reference Application under Section 196 ibid. Therefore, invoking any writ jurisdiction against a Valuation Ruling issued under Section 25-A of the Act directly, is barred by law. Even if this Court grants any interim relief until such time the forums below decide the matter, it would amount to assuming jurisdiction over the list, for which the petitioners have invoked the alternate remedy and the remedial process has been set in motion. In our considered view, assuming Constitutional jurisdiction in the given facts would amount to frustrate the statutory remedial process.

We may also add that it would not be correct to assume that Supreme Court while deciding the case of Wasim Radio Traders (supra) was not aware as to the consequences and hardship now being faced by the Petitioners. It is also needless to state that the said judgment was rendered when in fact there was no prohibition in law for such provisional release of the goods in question. As of today, the law by itself is more stringent and bars any such relief of provisional release of the goods. Though, we are mindful of the fact that the said judgment was in relation to Section 81 of the Act; but at the same time, the consequences which flow from the said principle of law is the same, that whether any interim relief of provisional nature can be granted to a Petitioner, who has challenged a Valuation Ruling before the hierarchy; and therefore, following the intention of the Supreme Court and the principle of law so enunciated, it is our considered view that this Court cannot exercise its discretion under Article 199 of the Constitution as prayed for in the given facts and circumstances as above. Lastly, we may observe that even otherwise, an Obiter Dicta9 of the Supreme Court is binding on the High Court; therefore, after judgment in the case of Waseem Radio Traders (Supra), we do not seem it appropriate to direct any provisional release of the consignment in question, be it under Section 81 of the Act; or for that matter, by asking the department to release it otherwise by way of deposit of the differential amount of duties and taxes pending any such challenge to the Valuation Rulings. 10. The other argument of the Petitioner’s Counsel as well as of the learned Amicus that as a matter of routine in several cases when the Commissioner/Collector (Appeals) and even the Appellate Tribunal (s) are not entertaining or deciding the stay applications either way, whereas, recovery proceedings are initiated, this Court has been exercising jurisdiction under Article 199 of the Constitution by entertaining such petitions and also granting restraining orders is concerned, it is to be noted that in such cases, the Court has shown indulgence only for the reason that such Appellate forums had failed to exercise appropriate discretion vested in them by and under the law, and therefore, in the interest of justice, this Court as well as other High Courts have been entertaining such petitions and are also granting interim relief. Insofar as the issue in hand is concerned, the forums below have not been conferred any such powers; rather the power and jurisdiction, available if any, has now been taken away by the judgment of the Supreme Court as above. Moreover, the subsequent addition of the 3rd proviso to Section 81 of the Act in fact further prohibits exercising of such jurisdiction; therefore, any reliance placed on the cases cited by the learned Amicus is of no help, at least in the present facts and circumstances of the case in hand. 11. Lastly, if at all the Petitioners are finally successful in their challenge to the Valuation Rulings in question, they will be within their right to seek refund of excess duties and taxes in accordance with law; hence, even otherwise, the relief being sought in these petitions cannot be granted at this stage of the proceedings. 12 the judgement says.

In view of here in above facts and circumstances, we do not see any reason to exercise our discretion so vested in this Court under Article 199 of the Constitution and as a consequence thereof, all these Petitions are hereby dismissed, says the judgment.