M/S Pak Forest Industries (Pvt.) Ltd vs The Federation Of Pakistan And Other
This appeal challenges the dismissal of a constitutional petition by the High Court of Sindh, concerning a claim for the refund of customs duties and taxes paid on imported machinery. The appellant, having purchased the machinery from the importer, Muhammad Nasir, sought a refund of duties under SRO No. 50(I)/1992 and SRO No. 484(I)/1992, claiming entitlement based on an agreement of sale and power of attorney. The core legal question was whether a purchaser of imported goods, who was not the importer of record, could maintain a claim for a refund of customs duties in their own right. The Supreme Court held that the right to claim a refund of customs duties is strictly vested in the importer of record under the relevant statutory notifications. The Court ruled that the appellant, not being the importer, lacked the locus standi to claim the refund independently. The Court further clarified that any grievance regarding the payment of duties on behalf of the importer must be pursued through a civil suit for recovery against the importer, rather than through customs refund proceedings.
- Can a purchaser of imported goods, who is not the importer of record, maintain a claim for a refund of customs duties in their own right?
- Does an agreement of sale between an importer and a third party confer the right upon the third party to claim a customs duty refund directly from the customs authorities?
- Is a person who pays customs duties on behalf of an importer entitled to seek a refund of those duties from the state, or must they seek recovery from the importer?
- SRO No. 50(I)/1992, dated 28.01.1992
- SRO No. 484(I)/1992, dated 14.05.1992
MR. JUSTICE MUNIR A. SHEIKH.-(l).This appeal by leave of the Court is directed against the judgment dated 13.11.1996 of the High Court of Sindh Karachi whereby constitution petition filed by the appellant has been dismissed.
2.The machinery in dispute was imported by one Muhammad Nasir on 07.09.1991, before which on 02.06.1991, according to the appellant said Muhammad Nasir entered into an agreement with him for the sale of said machinery. According to the terms and conditions of this agreement, appellant took upon himself to pay Government taxes, customs duty on the import of said machinery with a provision of execution of power of attorney in his favour by Muhammad Nasir to act for him and on his behalf for the purpose of receiving any amount due on the import of said machinery. SRO No. 50(I)/1992, dated 28.01.1992 was issued according to which such machinery which had been imported for setting up new units or modernization of the existing units were exempted from payment of customs duty and other Government dues which was substituted by SRO No. 484(I)/1992, dated 14.05.1992.
3.The case of the appellant was that machinery was cleared after payment of customs duty and other Government dues but it was exempted from payment of customs duty, etc., under the said SRO. It was required to produce certificate of its installation within the stipulated period in the area provided in SRO. The case of the appellant was that the machinery was installed in such area and on the basis of said agreement of sale executed in his favour by Muhammad Nasir, he filed claim in his own right for refund of the taxes and duties already paid which was rejected by the Assistant Collector Customs on the ground that appellant was not the importer as such could not claim refund. It was also held that the machinery was old one, therefore, it was not covered by the said SRO as such no refund could be claimed. Appeal filed by the appellant was dismissed on 18.01.1993 by the Collector and revision petition also met the same fate. Constitution petition filed by the appellant has been dismissed through the impugned judgment dated 13.11.1996 by leamed Division Bench of the High Court of Sindh against which this appeal by leave of the Court is directed.
4. Leave was granted to consider whether the appellant being purchaser of the machinery could maintain the claim for refund of the customs duty paid on the import of machinery under the rules and that he could claim the same in his own right.
5.The argument raised by the leamed counsel for the appellant that under agreement of sale, he was entitled to maintain the claim in his own right for refund of the amount is not sustainable. The refund of custom duty, etc., could be claimed under the law by the importer of the goods. If custom duty was paid by the appellant on behalf of the importer as attorney under the agreement with the importer, he may have a right to recover the same from the importer through suit in a Court of plenary jurisdiction on its refund to the importer. Under the relevant law and the notification under which the claim was lodged, it was clearly provided that it was importer who could claim refund of the customs duty, etc. It was admitted by the leamed counsel for the appellant that initially custom duty was paid in the name of Muhammad Nasir and the appellant never got himself acknowledged as importer before the Customs Authority for the purpose of claiming refund in his own right. The power of attorney which was executed in his favour by Muhammad Nasir also provided that he could perform a number of acts on his behalf, but it was not got registered though the same required registration. The claim was filed by the appellant in his own right and not on behalf of Muhammad Nasir as his attorney and up til today, he (Muhammad Nasir) has not claimed the refund nor he was made party in the proceedings before the departmental authority.
6.The question whether it was machinery which was exempted from payment of sales tax or person who had imported the same is of no significance as notification expressly provided that it was importer who could claim the refund and no one else. If the appellant has suffered any loss as purchaser on account of inaction of Muhammad Nasir in the matter of claiming refund, he may, if law provides any remedy sue him.
7. For the foregoing reasons, this appeal has no merits which is hereby dismissed. No order as to costs.