Collector of Customs (Valuation) and another vs Karachi Bulk Storage and Terminal Ltd
This matter concerns a petition for leave to appeal against a judgment of the Sindh High Court, which had set aside the customs authorities' re-evaluation of exported molasses. The core legal question was whether the respondent was required to exhaust departmental remedies under the Customs Act, 1969, before invoking the constitutional jurisdiction of the High Court to challenge an arbitrary valuation. The Supreme Court dismissed the petition, holding that the High Court correctly exercised its jurisdiction. The Court reasoned that because the customs authorities failed to provide any material or evidence to justify rejecting the exporter's declared value and enhancing it, the action was arbitrary, whimsical, and contrary to law. Consequently, the Court affirmed the principle that where an impugned administrative order is found to be illegal, void ab initio, or lacking in legal basis, an aggrieved party is not obliged to exhaust departmental remedies, as doing so would be an exercise in futility and a waste of time. The customs authorities are legally required to disclose adequate material when rejecting a declared value.
- Can an aggrieved party invoke the constitutional jurisdiction of the High Court without exhausting departmental remedies when the impugned order is illegal or void ab initio?
- Is the customs authority required to disclose evidence and material when rejecting a declared value for exported goods?
- Does an arbitrary and whimsical administrative action justify bypassing the statutory hierarchy of appeals?
- Section 25, Customs Act 1969
- Article 199, Constitution of Pakistan 1973
JUDGMENT: MR. JUSTICE RANA BHAGWANDAS.--(1). Petitioners are aggrieved by Sindh High Court Division Bench judgment dated 14-6-2004 allowing respondent's writ petition challenging the act of re- evaluation of molasses exported by the respondent through different consignments declaring its value ranging from US $ 41 to US $ 50 per metric ton. Petitioner authorities, in the exercise of their power under section 25 of the Customs Act, 1969 did not accept the valuation placed by the exporter and, without ascertaining its actual and real market value, assessed it at US $ 54 per metric ton. This action was assailed through a constitutional petition before a Division Bench of the Sindh High Court was hotly contested but allowed vide judgment impugned in this petition for leave to appeal.
2. On the last date of hearing, after recording contention of the petitioners that the respondent could not have directly invoked constitutional jurisdiction of the High Court without first availing of the remedies provided in law as were availed of by other affectees of like nature, a Bench of this Court issued notice to respondent as well as Deputy Attorney General for Pakistan to appear and assist the Court.
3. We have heard Mr. Akhlaq Ahmad Siddiqui, learned Advocate-on-Record for the petitioners and Mr. Akhtar Ali Mahmud, learned Deputy Attorney General for Pakistan. None has, however, appeared for the respondent.
4. Learned Advocate-on-Record for the petitioners reiterated that the impugned judgment of the High Court is without jurisdiction as the respondent did not have recourse to remedies provided under the customs hierarchy and straightaway invoked extraordinary jurisdiction of the High Court.
We are afraid, we cannot subscribe to this bald argument of the learned Advocate-on- A Record as it is well settled position in law that where the impugned order is found to be illegal, contrary to law or void ab initio, aggrieved person would be entitled to invoke the jurisdiction of the High Court under Article 199 of the Constitution without availing of remedies under the departmental hierarchy. In the case in hand. Division Bench of the High Court, after examining the contentions of the parties and the material placed on record has come to a definite finding that there was no material on record as to what were the grounds or reasons which prompted the customs authorities not to accept the declared value of the molasses and for determining the same of US $ 54 per metric ton as against the declared value. High Court found that in view of lack of material, action of rejection of the declared value and fixing enhanced value of molasses would appear to be arbitrary, whimsical, capricious and in complete disregard of the provisions of section 25 of the Customs Act, which requires the relevant authority to disclose evidence and adequate material for rejecting the declared value and enhancing the same.
5. Confronted with this situation, learned Advocate-on-Record has not been able to persuade us that the view taken by High Court suffers from factual or legal infirmity, except reiterating that the respondent did not wait for the ultimate decision of notice and challenged the show-cause notice.
As observed hereinabove, in view of inherent defect and lacuna in the act of the petitioners, respondent would not be legally obliged to avail of the remedies under the Customs Act as it would have been sheer wastage of time and energy and an exercise in futility.
6. For the aforesaid facts, circumstances and reasons, we find no merit in this petition and dismiss the same as no ground for leave is made out.