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C.A.565/2011 – In The Supreme Court of Pakistan

Judgement: 24.07.2023

Style:
Federation of Pakistan (Federal Board of Revenue), Collector of Customs (Karachi), Additional
Collector (Karachi), Deputy Collector (Karachi) (Appellants) versus Sus Motors (Pvt. Ltd.),
Dawlance Electronics (Pvt.) Ltd. And others (Respondents);
Civil Appeals No. 565/2011, 772 to 780/20212, 768 to 772/2014, 1070/2015, and 132-156/2017
(On appeal against the judgments/orders dated 12.11.2010, 04.06.2011,
29.11.2013, 24.07.2015 and 21.09.2016 passed by the High Court of Sindh,
Karachi in CP. No. D-1285/2008, SCRAs No. 150-158/2010, 117 to 121/2010,
218/2012 and 70 to 94/2010)
In the Supreme Court of Pakistan (Appellate Jurisdiction)

Procedural History:
1. The case began with several civil appeals being filed before the Supreme Court of
Pakistan, Appellate Jurisdiction. The appeals were filed against different judgments and
orders passed by the High Court of Sindh, Karachi, in various proceedings related to the
Customs Act, 1969.
2. Preliminary Proceedings: Before the Supreme Court, the parties filed their respective
appeals, and the court accepted them for hearing.
3. The main issue before the court was the interpretation of Section 81 of the Customs Act,
1969. The court needed to determine whether the Collector of Customs was justified in
extending the period for final assessment/determination of imported goods under this
section and whether there were exceptional circumstances justifying such extensions.
4. Previous Proceedings: The case involved a series of judgments and orders passed by the
High Court of Sindh in different civil appeals. The appellants challenged these judgments
and orders before the Supreme Court, seeking clarification on the applicability of Section
81 and whether the extensions granted by the Collector of Customs were valid.
5. Verdict: In its judgment, the Supreme Court affirmed the decisions of the High Court in
the forty appeals. The court held that the learned judges of the High Court had correctly
applied the law and established precedent. They concluded that there were no exceptional
circumstances justifying the extension of the assessment period in any of the cases. As a
result, the forty appeals were dismissed, and no orders as to costs were given.

Issue:
The main issue in the case is whether the Collector of Customs was justified in extending
the period for final assessment/determination under Section 81 of the Customs Act, 1969, and
whether there were exceptional circumstances justifying such extensions.

Rule:
Section 81 of the Customs Act, 1969 provides for provisional assessment of imported
goods. The law enables the Collector to extend the period for final assessment/determination in
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"circumstances of exceptional nature." The provision safeguards the benefit of the

assessee/importer/exporter to save them from unnecessary harassment by Customs authorities by
unnecessarily delaying their cases for an indefinite period on the pretext of making a final
assessment.

Application:
The case involved forty-one appeals challenging the interpretation of Section 81 of the
Customs Act, 1969. Different Divisional Benches of the High Court of Sindh at Karachi
rendered four sets of judgments in these appeals. In all the forty appeals, it was common that the
assessment/determination was not done within the prescribed period, or the Collector had
extended the period without considering whether there were exceptional circumstances justifying
it. The law required the Collector to extend the period "in circumstances of exceptional nature,"
and the court had consistently held that the purpose of Section 81 was to prevent unnecessary
harassment of importers/exporters by Customs authorities. The court cited previous cases where
it was held that if the final assessment was not completed within the specified period, the
provisional assessment would become final on the declared value of goods by the assessed, and
any additional amount or guarantee furnished by the importer/exporter would be regulated based
on this final assessment.

Conclusion:
The Supreme Court upheld the decisions of the High Court in the forty appeals, stating
that the learned judges correctly applied the law and the established precedent. They found that
there were no circumstances of exceptional nature justifying the extension of the assessment
period in these cases. Therefore, the forty appeals were dismissed, with no orders as to costs.
Regarding Civil Appeal No. 1070/2015, the court noted that it was not disposed of along with
other related appeals, but they independently considered it on merit. The court found that the
appellant (representing Customs authorities) failed to show any illegality or material error in the
impugned judgment. Thus, Civil Appeal No. 1070/2015 was also dismissed, with no order as to
costs.

COMPRESSED LINKEDIN POST/SUMMARY:

The Supreme Court of Pakistan recently examined a significant customs case involving
the interpretation of Section 81 of the Customs Act, 1969. The case, consisting of forty-one
appeals, raised critical questions about the justification of the Collector of Customs in extending
the period for the final assessment of imported goods under the aforementioned provision. The
court's deliberations centred on determining whether the extensions granted were made in
"circumstances of exceptional nature," as required by law. After thorough examination and
analysis, the Supreme Court upheld the decisions of the High Court in the forty appeals,
concluding that the learned judges correctly applied the law and established precedent. The court
emphasized that there were no exceptional circumstances justifying the extensions granted by the
Collector of Customs. The ruling serves to prevent unnecessary harassment of importers and
exporters, reinforcing the need for timely and fair assessments in the customs process. This
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landmark ruling has significant implications for the practice of customs law in Pakistan,
providing a crucial legal precedent for future cases involving the interpretation of Section 81 of
the Customs Act, 1969. The court's thorough and meticulous analysis sets a valuable standard for
ensuring adherence to statutory timelines and safeguarding the rights of importers and exporters
in their dealings with Customs authorities. This judgment stands as a testament to the judiciary's
commitment to upholding fairness and justice in trade-related matters.