M/s. PAK FOREST INDUSTRIES (PVT.) LTD. vs FEDERATION OF PAKISTAN and
This appeal arose from the dismissal of a constitution petition by the High Court of Sindh regarding a customs duty refund claim. The appellant, having purchased machinery from an importer, sought a refund of customs duties paid, citing an exemption notification (SRO). The core legal question was whether a purchaser of imported goods, who paid duties on behalf of the importer, possesses the legal standing to claim a refund of customs duties in their own right under the relevant regulatory framework. The Supreme Court held that the right to claim a refund of customs duties is strictly confined to the importer of the goods as recognized by the relevant law and notifications. The Court determined that the appellant, not being the importer of record, could not maintain the refund claim in their own capacity. The principle laid down is that refund claims for customs duties must be initiated by the importer; any grievances regarding the recovery of such payments by a purchaser from an importer must be pursued through a separate suit in a court of plenary jurisdiction.
- Can a purchaser of imported machinery claim a refund of customs duties in their own right?
- Is the right to claim a refund of customs duties restricted exclusively to the importer of the goods?
- What is the appropriate legal remedy for a purchaser who has paid customs duties on behalf of an importer but is denied a refund by customs authorities?
- SRO No. 50(1)/1992
- SRO No. 484(1)/1992
Munir A. Sheikh, J.--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 7.9.1991, been which on.
2.6.1991, 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(1)/1992 dated 28.1.1992 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(1)/1992 dated 14.5.1992.
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 SOR as such no refund could be claimed. Appeal filed by the appellant was dismissed -on 18.1.1993 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 learned 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 learned 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 improter. 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 learned counsel for the appellant that intially 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 uptil 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.