TRANSFER OF CASES
[Section 526, Cr.P.C.]
Principle governing transfer application. The transfer of a criminal case from a competent jurisdiction is justified only if there is a reasonable apprehension in the mind of the party concerned that the Court would not be able to act fairly and impartially in the matter, it is of paramount importance that the parties arraigned before the Courts, should have confidence in their impartiality. It is one of the important duties of a High Court to create and maintain such confidence, and this can be done only ensuring that, so far as practicable, a party will not be forced to undergo a trial by a Judge or Magistrate whom he reasonably regards as being prejudiced against him. What is reasonable apprehension must be decided in each case with reference to the incident and the surrounding circumstance; and the Court must endeavour, as far as possible, to place himself in the position of the applicant seeking transfer and look at the matter from his point of view, having due regard to his state of mind and degree of intelligence possessed by him. Nonetheless it is not every incident regarded as unfavourable by the applicant which would justify the transfer of the cause. The test of reasonableness of the apprehension must be satisfied namely, that the apprehension must be such as a reasonable man might justifiably be expected to have. (Case transferred to High Court.) (SC) PLD 1973 SC 327 Muhammad Nawaz v. Ghulam Qadar.
Justice should not only be done but should be seen to have been done. Case transferred. PLD 1978 Lah. 235. Barkat Ali v. Bashir Ahmed.
While hearing transfer application judge to put himself in the shoes of the petitioner and then to see whether apprehension shown by the petitioner is genuine or not. PLJ 1990 Cr.C. (Kar.) 243. Mirza Mubarik Ahmed.
High Court to consider whether the apprehension may be expected to exist in person of standard of intelligence and honesty of class to which the party belongs and not whether apprehension is reasonable. Complainant's witnesses not heard after recording statement of the Complainant and Court fixed date for arguments. Apprehension the complainant that he will not get justice held sufficient for the transfer of the case. PLD 1962 Kar. 77 Sarwar Khan. AIR 1925 Lah. 101 Ahmed Din v. King Emperor (Reasonable apprehension what is?)
Bias. Real bias in the Judge is unnecessary. Circumstances justifying applicant in entertaining the apprehension are enough. AIR 1925 Lah. 361 Amar Singh v. Sadhu Singh. ILR 3 Lah. 443 Sardari Lal v. Emperor.
Words and actions of judicial officer though susceptible of explanation and traceable to superior sense of duty, when causing in the mind of the accused apprehension not foolish or unfounded that he may not have impartial trial, it is in the interest of justice to transfer the case. PLD 1979 Kar. 188 Ghulam Nabi.
Powers of High Courts to transfer case not controlled by Crown. Crown may not desire transfer but the case may be transferred in the interest of justice. First informant in a murder case had reason not to trust the police of the district. Case transferred. PLD 1955 Lah. 402 Crown v. Mian Hussain etc.
Party interested in section 526, Cr.P.C. Complainant witness and persons lodging FIR could be interested party. The question is to be decided on the facts of each case. PLD 1975 Kar. 222 Pandhi.
First informant is an interested person and can move for transfer of the case. PLD 1962 Kar. 864 Muhammad Khan.
Uncle of deceased in case under section 302, PPC, an interested party and entitled to move for transfer of the case. (D PLD 1962 Dacca 192 Kanchan Ali v. Shahjahan.
District Magistrate to be moved first before application is made to the High Court. High Court will interfere only in the last resort. 72 lnd. Cas. 882 Ghulam Nabi v. Jawala 34 Cr.LJ 466 = 40 Cr.LJ 127 Mohiud Din v. Emperor. Overruled by: (SC) 1971 SCMR 721 Fazal Karim. (Law amended since).
District Magistrate cannot transfer cases. Power lies with the Sessions Judge. Order set aside. 1978 P.Cr.LJ 624. Hayat v. Nusrat Ali (Law amended).
Right to move High Court under section 526, Cr.P.C. is independent and not controlled by any condition other than those mentioned in section itself. Person seeking transfer not obliged to move Sessions Judge or District Magistrate first. (SC) 1971 SCMR 721 Fazal Karim.
Procedure on transfer of a case to High Court under section 526, Cr.P.C. from the Court of Magistrate would be the same as that of the Court of a Magistrate. PLD 1956 Lah. 848 Ghulam Sarwar v. Niaz Ali; PLD 1958 Lah. 747 Mushtaq Ahmad Gurmani v. `Z.A. Suleri.
Case exclusively triable by Sessions Court cannot be transferred to High Court unless committed to Sessions Court. (D 1969 P.Cr.LJ 583 dissented from 1973 P.Cr.LJ 507.
Transfer of case from one High Court to another under Article 186-A of the Constitution; inconvenience only to a party or the Court where the case has been instituted has no jurisdiction is not sufficient ground. The plea of lack of jurisdiction is to be taken before the High Court where the case is pending and if the case is decided against him by the High Court the petitioner may approach the Supreme Court. 1994 SCMR 1031, Muslim Commercial Bank Rawalpindi v. Muslim Commercial Bank Karachi.
Transfer from one High Court to other under High Courts (Establishment) Order (P.O. 8 of 197, Article 9 Transfer sought from High Court S to High Court at L. Question whether High Court S had jurisdiction or not to be agitated first before High Court. Petitioner advised to approach the Supreme Court only after an adverse decision given by High Court S. (SC) 1974 SCMR 41. Capital Development Authority, Islamabad v. Hayadri Construction Co. Ltd. Karachi.
Transfer of case from Peshawar High Court to Lahore High Court to avoid conflict of decision on two writ petitions, allowed by Supreme Court under Article 98 of 1962 Constitution. (SC) 1972 SCMR 58 Pindi Hazara Transport v. Government of NWFP.
Transfer to High Court under its extraordinary criminal original jurisdiction. An ex-Governor of West Pakistan murdered. Case received undue publicity creating reasonable apprehension in the mind of the accused against a fair trial. Case transferred to High Court. 1969 P.Cr.LJ 1058 Malik Asad Khan.
Case against S.S.P. and other senior police officers; transferred from the Court of A.C. to that of Sessions Judge, Lahore for apprehension that the Magistrate may not be able to do justice where senior police officers were involved. NLR 1986 Cr. 733 Liaqat Ali Butt.
Atmosphere at place of trial hostile. Accused police officials. Defence witnesses finding it unsafe to give evidence. District Magistrate and executive functionaries showing over zeal though actions taken by them within law. Apprehension of enquiry not being fair and impartial. Case transferred. PLD 1962 Lah. 56 Abdul Aziz. Case transferred from Karachi to Lahore. 1968 P.Cr.LJ 1675 Shamsud Din.
Transfer of Criminal case from one district to another on reference by the Sessions Judge to the High Court allowed by the High Court when both the parties also agreed to it with a direction for the expeditious disposal of the case. NLR 1989 Cr. 572. Akhtar Hussain Shah etc. v. Muhammad Ramzan.
Transfer of trial from one district to another in a murder case. It is to be considered whether in given circumstances alleged apprehension of not getting a fair trial is an apprehension that a reasonable man justifiably be expected to entertain. PLJ 1990 SC 303. Daud Iqbal Pervaiz.
Danger to complainant's life apprehended and hostile atmosphere, held, to be valid grounds for transfer of a case to another District. NLR 1989 Cr. 32. Mubarak Ali.
Legal aid denied by local Bar, case transferred. NIR 1986 Cr. 743 Haji Mehr Khan.
Atmosphere most unsafe and uncongenial at place of occurrence and trial. Parties wielding great influence with large number of supporters. Case transferred to another district. PLD 1979 Lah. 346 Munawar Ali Khan v. Najam Abbas etc. PLJ 1979 Cr.C. (Lah.) 69.
Apprehension of personal safety and person interested. Person lodging first information report is person interested and entitled to apply for transfer of the case. Apprehension of personal safety and convenience of party are sufficient grounds for transfer. PLD 1962 Kar. 864 Muhammad Khan.
Complainant an influential person and danger to life of the petitioner. Previous enmity between parties. Case transferred. PLD 1973 Lah. 238. Hussain Bakhsh v. Ghulam Mustafa. 1974 P.Cr.LJ 116.
Desperate and influential opposite party threatening the petitioner with dire consequences. Transfer of the case refused but the Court directed the police to provide escort to the petitioner to and from the Court. (SC) 1970 SCMR 536 Mst. Sharam Khatoon.
Case transferred from Magistrate, Haroonabad to Lahore, when application filed at Lahore in High Court that it was unsafe for the female petitioner to go for trial to Haroonabad for offences u/Ss. 420, 468, 471, PPC. NLR 1987 Cr. 594 Mst. Shameem Akhtar.
Physical harm. Transfer petition by a woman on the ground of physical harm by the accused if she travelled to the Court of trial Magistrate. Transfer application rejected. Police directed to provide escort from her village to Court and back. (SC) 1971 SCMR 374 Muhammad Nawaz v. Mst. Sakina.
Danger of involvement in further criminal cases. Circumstances of petitioner's prosecution in district L are far from ordinary. Petitioner's apprehension in the circumstances regarding his safety during his presence in district L and possibility of his involvement in further criminal cases, held cannot be said to be unjustified. Case transferred to district Hyderabad. (SC) 1973 SCMR 203 Abdul Hamid Jatoi.
Second transfer application by same party-Review of Order. A transfer application dismissed by the High Court in the absence of petitioner's counsel, after considering report of the Magistrate concerned. Fresh application on the same grounds can be heard. Though section 369, Cr.P.C. prevents alteration of a judgment by the trial Court after it has been signed was not applicable to the case. The principle of finality of order has to be kept in view. This principle is not subject to the qualification that it is only to be applied where justice demands it or that it does not apply to interlocutory orders. High Court has the power to transfer a case suo motu on any grounds. When the circumstances were pointed out by the counsel the High Court transferred the case suo motu on 2nd application. PLD 1956 Lah. 505 Munir Hussain v. Crown.
Other party not given a notice. The District Magistrate transferred a case under section 145, Cr.P.C. without giving notice to the other party. Cases remanded by High Court to District Magistrate to decide it afresh after notice to the other party. 1974 P.Cr.LJ 578 Muhammad Khan v. Ghulam Jilani.
Notice to the first informant for the transfer of the case is not a must. He may be an interested party according to the facts of a particular case. But transfer order cannot be set aside because maker of FIR had no notice. PLJ 1975 Cr.C. (Kar.) 38 Pandhi.
Cases transferred on joint request of parties when transfer was being sought for suspicion only. PLJ 1995 Cr.C. (Lah.) 16, Mushtaq Hussain Shah v. Sana Ullah etc.
Notice to the other party. Section 526, Cr.P.C. does not provide for giving a notice to the other party. The issue of a notice is not mandatory and the want of notice does not amount to an illegality but certainly it does amount to impropriety. PLD 1958 Pesh. 42 Muhammad Amir.
" (In this case complainant had got the case transferred without notice to the accused).
Transfer without notice to the accused. Transfer by High Court, on complainant's application, of case for trial before itself, before summons being issued by Magistrate. Accused a person of official status. Order of transfer made without notice to the accused held in order. (SC) PLD 1963 SC 51 Ali Nawaz v. Muhammad Yousaf.
" the transfer of a case to another Magistrate without notice to the accused is not illegal. 43 Cr.LJ 278 Kumara Swamy etc. 197 IC 799.
Transfer without notice, to opposite party is not illegal. AIR 1926 Lah. 156. Bagh Ali v. Muhammad Din.
State-opposite party and complainant. Opposite-party in a murder case is the State and not the relative of the deceased or the first informant. Such person is not entitled to notice when transfer application is being moved. (SC) 1970 SCMR 484 Zulfiqar v. Zulfiqar etc.
Grant of bail is no ground for transfer of the case. Held, High Court rightly rejected transfer application. PLJ 1980 SC 82. Muhammad Ishaq v. Muhammad Nawaz Malik.
Grant of bail after the stay of proceedings under section 526, Cr.P.C. raises a reasonable apprehension in the mind of the opposite-party that he may not have a fair trial. Case transferred. 1971 P.Cr.LJ 555 Nazir-ud-Din.
Grant of bail after stay of proceedings. Complainant moved the High Court for the transfer of the case and proceedings were stayed. Subsequently the Sessions Judge admitted the accused to bail. Cancellation of bail, sought on the ground that after the proceedings were stayed the Sessions Judge was not competent to grant bail. Held, bail application filed subsequently was not a part of the main case being tried. The order granting bail held to be valid. The Court can deal with extraneous or emergent matters. PLJ 1973 Lah. 251 = 1973 P.Cr.LJ 1050 Abdul Ghafoor. (Law has been changed since).
Failure to stay the proceedings under section 526 (8), Cr.P.C. After a petitioner makes an application under section 526, Cr.P.C. to the trial Court the proceedings must be stayed. Where proceedings are not stayed the proceedings are null and void for want of competence and cannot be cured under section 537, Cr.P.C. (D PLD 1956 Kar. 440 Hayder Jaffery v. Crown. PLD 1950 BJ 64 Sehat Khatoon v. Crown. (Law changed since).
Magistrate not to proceed with the case till receipt of order from the High Court when the case is adjourned and a transfer application is made to the High Court. PLD 1965 Lah. 382 Abdul Sattar v. Muhammad Yousaf.
Stay of proceedings. First application for the transfer of the case in High Court order staying proceeding is not necessary. In the subsequent application under section 526, Cr.P.C. the Magistrate is not bound to adjourn proceedings unless he receives an order from a competent Court to do so. (F 44 Cr.LJ 751 Mahmood Hussain v. Emp. 208 I C 242. (Note: Now sec. 526 ( has been amended and the Magistrate is not bound to stay the proceeding even at the first transfer application but he cannot pronounce the final order or judgment, until he receives information from the High Court about the disposal of the application).
Inquiry for section 302/34, P.P.C. not transferred from P to S on the ground that S was convenient for eye-witness who were likely to be won over by accused in S jail. PLJ 1974 Cr.C. (Lah.) 522 Manzoor Ahmed.
Court summoning accused to Court who had been found innocent by the police and placed in column No. 2 of report. Magistrate summons accused under clause (b) of section 190 (1) Cr.P.C. and not under clause (c) of that section. Transfer of the case refused. 1970 P.Cr.LJ 1316 Ali Muhammad.
Expression of opinion by a Magistrate in one case is no ground for getting the cross-case transferred from the Magistrate. (D PLD 1956 Kar. 421 Seigeried Forstner v. Miss Sumro.
Magistrate a defendant in official capacity in civil proceeding filed by the petitioner is no ground for the transfer of a case. PLD 1975 Lah. 695 Muhammad Afzal.
Irregularity in proceedings. Examining the accused under section 342, Cr.P.C. before the prosecution evidence is closed or allowing inadmissible pieces of evidence to be brought on the record are not ground for the transfer of a case. (D 43 Cr.LJ 48 Munar Pandey v. Emp.
Passing of wrong order or violation of procedure by itself is not sufficient for the transfer of a criminal case. 1977 P.Cr.LJ 677. Muhammad Mustafa etc.
Mere apprehension of being convicted is no ground for transfer. Apprehension of an unfair trial is a ground for transfer. 43 Cr.LJ 71 Chuni Lal 196 IC 816.
Defence counsel not given time to prepare the case, on application of the accused case transferred. NLR 1991 Cr. 290 Muhammad Aslam.
S.D.M. taking bail under section 117 (3), Cr.P.C. but ordering verification by Mukhtiarkar and the petitioner remaining in jail. Apprehension in the mind of the petitioner that he will not have justice from the S.D.M. Case transferred from the Court. 1974 P.Cr.LJ 187 Aziz Ullah.
Cross-cases. Court should dispose of cross-cases together. Expression of opinion in one case gives reasonable apprehension in the other. Transfer ordered. AIR 1934 Lah. 458 Babu v. Emperor.
Magistrate recording dying declaration, deemed to be a witness and interested in prosecution. Case transferred. (D PLD 1965 Dacca 150 Kefatullah v. Irshad Ali Mondal.
Bailable warrants issued. Magistrate issued bailable warrants of arrest without waiting for the return of summons issued in the first instance. Held, that it is a good ground for the transfer of the case. PLD 1961 Kar. 675 Muhammad Siddiq.
Issue of warrants in undue haste. Record showing that the Magistrate issued warrants in undue haste. High Court can suo motu transfer case to another Magistrate. PLD 1958 BD 1 Iqbal Hussain v. Irshad Hussain.
Harsh tone and losing temper by Magistrate. Case transferred. 1973 P.Cr.LJ 829 Meraj Din.
Magistrate using harsh tone but done only to maintain decorum of Court. Held, losing temper by Magistrate not justified. Such circumstances could create apprehension in the mind of the petitioner that he may not get justice. Case transferred. 1973 P.Cr.LJ 829 Meraj Din.
Magistrate receiving hospitality, of son of complainant, case transferred. AIR 1926 Lah. 347. Narain Singh.
Transfer when P.W. friend of Magistrate and complainant. Case should be transferred. AIR 1926 Lah. 410. Tirlok Singh.
Prolonging the case by one witness a day during the trial. Case transferred. AIR 1926 Lah. 78. Narain Dass etc.
Transfer of murder case for reason of frequent adjournments ordered, when adjournments were found to be without merit. PLJ 1991 Cr.C. (Lah.) 144 Jan Muhammad v. Khursheed etc.
Magistrate adjourning case without reasons on several hearings. Case transferred 1978 P.Cr.LJ 169. Sh. Muhammad Maskin.
Magistrate acting in manner giving semblance of an idea of his not proceeding in accordance with law. Inquiry on complaint under section 302, P.P.C. cannot be entrusted to him. 1973 P.Cr.LJ 882 Muhammad Anwar v. Qurban Ali.
District Magistrate displaying "great zeal" and taking `undue interest' in the prosecution of the case against the accused. Case transferred. PLD 1962 Kar. 678 Bhura Khan.
Magistrate's adverse remarks. Prevaricating statement of witness provoking Magistrate to remark, "I should arrest him now" intending thereby to proceed against the witness who had favoured the accused. Held, it created reasonable apprehension in the mind of the accused. The Magistrate should have taken action after the conclusion of the trial. Case transferred. (SC) 1970 SCMR 694. Mian Muhammad Rashid.
Discrimination ground for transfer. The Court waited for the prosecution counsel and adjourned the case but when counsel for the accused was not present the Magistrate did not wait when requested and proceeded with the case. Case transferred. 1973 P.Cr.LJ 515 Faqir Muhammad.
Court exercising pressure on accused to produce absconding accused. Good ground for the transfer of the case. (D PLD 1960 Dacca 981 Jagabandu.
Magistrate trying a particular type of cases (corruption) over a long time may unconsciously develop a mentality which may hinder even-handed justice. The Magistrate, acting as Special Judge went out of his way to condemn a prosecution witness who in cross-examination stated that he had grudge towards the accused. Case transferred. PLD 1957 Lah. 841 Bashir Ahmed.
Magistrate offering seat to the complainant on the dais and accommodating him in his retiring room are circumstances enough to raise reasonable apprehension in the mind of the petitioner that he may not have a fair trial. Case transferred. PLD 1976 Lah. 598 Shahid Azizi. PLJ 1976 Lah. 253.
Magistrate getting information before the commencement of the proceedings before him; there is reasonable apprehension that the information received by the Magistrate may subconsciously influence his mind, and the decision Transfer justified. 48 Cr.LJ 661 Devi Dayal v. Emp.
Government notification to transfer a part-heard case from L to K against the wishes of the parties and their convenience held invalid and set aside. Case transferred to L. 1973 P.Cr.LJ 240 Mubarik Ali.
Cases under Martial Law in the Court of a Magistrate, Section 526, Cr.P.C. applies. (D PLD 1959 Lah. 171 Fateh Muhammad.
Forfeiture of bond. District Magistrate stayed further proceedings before a subordinate Magistrate. Magistrate could not forfeit bond executed under section 526, Cr.P.C. in respect of transfer application. PLD 1951 Dacca 71 Khondar Akbar Ali v. Crown.
From one High Court to another. Supreme Court has no jurisdiction to transfer a case from one High Court to another under the Constitution or any other law. PLD 1977 SC 1. Mir Hassan v. Tariq Saeed etc. (Also see section 527, Cr.P.C. re-transfer of case by Provincial Govt.) Supreme Court is not empowered to order transfer of a case from file of a Judge of High Court. 1977 SCMR 514 Z.A. Bhutto.
Transfer to Sessions Court. High Court can transfer a case from the Court of a Magistrate Ist class to the court of Sessions Judges as it is a Court of superior jurisdiction to that of the Magistrate. PLJ 1977 Lah. 51 Nisar Ahmed.
Case cannot be transferred by the Sessions Judge u/s. 528 (1A) Cr.P.C. when the trial has already begun by the A.S.J. PLJ 1996 Cr.C. (Lah) 673, Muhammad Jahangir Iqbal.
Convenience of accused is to be considered rather than that of the complainant for the transfer of the case. AIR 1926 Lah. 493 Sohan Lal v. Gopal Singh.
Transfer of case for convenience of accused in a challan case is preferable to the convenience of the complainant. Hudood case transferred. NLR 1984 Cr. 698 Muhammad Jamshed.
Transfer of case under Suppression of Terrorist Activities Act by Sessions Judge from the Court of another Special Court presided over by Addl. Sessions Judge is without jurisdiction. Only High Court can transfer the case u/S. 4A of the Act, and transfer cannot be ordered without notice to the accused. (D NLR 1999 Cr. 243, Nazim Hussain Shah.

Please log in to like, wonder, share and comment!

The Court Fees Act (VII) of 1870 (as amended up to date)
Section 4, 6 – 13, 17, 19, 19A–K (Excluding Schedules).
The Court Fees Act and the Suits Valuation Act
-------------------------------------------------------------------
This is federal law. Federal or provincial government may alter the rate of fee. Since the fee is financial matter and effects finance, therefore, its rate is changed during the presentation of annual finance bill. It may be either central or provincial. Provinces may alter provisions of it upto the extent of their authority. Provinces cannot touch central matters. Punjab government has made amendment and Court fee is exempted upto the suit value of Rs. 25,000/-. When we go to get justice in courts of law or for redressal of grievance, then Court Fees Act is applicable. It tells us as to how much fee is applicable on certain type of suits.
As far as Stamp Act is concerned, it is applicable where rights are transferred or conveyed. Documents, which are required to do so, require stamps. These stamps are dealt by Stamp Act and not under Court Fees Act.
Judicial stamps are those, which are affixed on pleadings (plaint and written statement) while stamps used to convey rights, are termed as non-judicial stamps. For the selling of property, Agreement to Sell or Agreement of Sale, non-judicial stamps are affixed
Fee on documents filed, etc., in High Court in their extraordinary jurisdiction u/s 4: High Court works in so many jurisdictions such as:
1. Extraordinary original criminal jurisdiction: It is under Constitution like writs. Court fee prescribed in the Court Fees Act is not applicable under this case.
2. Extraordinary original civil jurisdiction: It is under Constitution like writs. Court is not applicable as prescribed in Court Fees Act.
3. Appellate jurisdiction against judgement of two or more judges of High Court or Division Bench: High Court cannot receive any document as prescribed in First or Second Schedule of the Court Fees Act.
4. Appellate jurisdiction over subordinate courts: Documents produced before High Court under this head are not covered by the Court Fees Act.
5. Revisional jurisdiction and as a Court of reference, when the proper Court fee prescribed by those schedules for such documents have been paid: It deals with only law matters and not facts in issue. Court fee is not applicable as prescribed in Court Fees Act.
This section deals with the matters of affixation of requisite Court fee whether it has been paid. If so, document is accepted otherwise returned for making it good (for the removal of deficiency).
Fee on documents filed, etc., in Muffasil Courts or in public offices u/s 6: All the documents submitted in courts should be properly stamped as described in the Schedule of the Court Fees Act. Where any document lacks proper fee is liable to return. Where no fee is paid, there is no case entertain-able in Court of law. Document without affixation of Court fee has no status until a fee is paid. Evidentiary value of document remains in vain until duly Court fee is paid.
Computation of fee payable in certain suits u/s 7: This sections lays down the rule for the computation of the Court fee to be affixed on certain documents.
1. For money suits: Money may be involved in certain cases such as:
a) Damages.
b) Compensation.
c) Arrears of maintenance.
d) Annuities.
e) Other sums payable periodically.
How calculated: In simple money suits, the Court fee is calculated on the amount claimed under such suits.
2. For maintenance and annuities: It may involve following cases:
a) Maintenance.
b) Annuities.
c) Other sums payable periodically.
How calculated: Court fee shall be calculated on subject matter.
3. For moveable property having a market value: Although money is moveable property but this clause is applicable of all types of moveable properties other than cash or money.
How calculated: Market value of the subject matter shall determine the amount of Court fee where such moveable property has market value. Market value at the time institution of suit shall be considered. Prior market value is immaterial. For example, a property had market value Rs. 100,000/- when it was purchased but now it has market value Rs. 75,000/-, the last market value at the time of institution of suit shall be taken into consideration. Where moveable property had market value Rs. 200,000/- at its procurement but now its market value has been enhanced to Rs. 250,000/- at the time of presentation of plaint, therefore Court fee shall be calculated on Rs. 250,000/- which is the latest market value.
4. Suits having no market value: Law recognizes the nature of suits having no market value. They have some different kinds such as:
a) Movable property: There are certain types of moveable properties, which have some value, but their market value cannot be assessed. For instance, degree of law has importance for the student of law or lawyer but it has no market value. Documents containing title is another instance.
b) Share in joint family system: It is applicable where the plaintiff has been ousted (expelled) from its enjoyment and seeks to be restored to joint enjoyment.
c) Declaratory decree and subsequent relief: Plaintiff must seek consequential relief in declaratory decree where it is available.
d) Suits of injunctions: Injunctions include to do or not to do something.
e) Easement cases: It is a right to use of enjoyment on certain piece of land.
f) Account: It has fixed value.
How calculated: In all above cases Court fee is determined on the value against relief is sought. It is obligatory on plaintiff that he must state the value against which he seeks relief.
New amendment: According to amendment by Finance Act, 1993, Court fee for the above cases shall be determined not less than for which Court fee shall be Rs. 15/- according the rate of Court fee. Current Court fee rate is 7.5% of the subject matter. It means minimum value of the suit should be Rs. 200/- on which Court of Rs. 15/- may be affixed.
Formula: 2 x 15* x 100 = 200 * variable amount as Court fee
15 1 1
How much Court fee is payable on principle amount of Rs. 133,400/-? Formula is as under:
Formula: 133,400* x 15 = 10,005 * variable principle amount
100 2
5. For possession of lands, houses, and gardens: Value of subject matter as per market value for the possession of houses, lands, and gardens is determinant factor for the computation of Court fee. It has some other provisions such as
a) Land in question for which annual revenue has been assessed in the register of Collector, Court fee shall be computed on the revenue payable ten times.
b) Where revenue is not assessed on land permanently, revenue payable five times is determinant factor for Court fee.
c) Where land pays no land revenue or exempted from the payment of revenue or fixed payment is made in lieu of revenue, Court fee shall be paid on the profit arisen last year by multiplying with 15.
For instance, where Rs. 100,000/- has been earned as profits, Court fee shall be paid on Rs. 1,500,000/-.
d) Where land does not earn profits, Court shall determine the value of the land on the basis of the profit arising from the neighboring land.
e) Where land forms part of an estate paying revenue to government, but is not a definite share of such estate and is not separately assessed as above mentioned the market value of the land.
6. Enforcement of right of preemption: For the purpose of preemption, Court fee is paid on the value of the subject matter as in market. Amount provided in sale deed is immaterial. Only agricultural land is subject of preemption.
7. For interest of assignee of Land Revenue: Computation of Court fee for this purpose is fifteen times net profit. Net profit arises after deduction of cost from gross profit.
8. To set aside an attachment: Upto the extent of interest lies in attachment is detrimental point for the purpose of fixation of Court fee. Order 21 of Code of Civil Procedure governs the execution of decree. Where decree is passed for an amount of Rs. 1,000,000/- and part of property attached belongs to third person being not party in case, shall pay Court fee for an amount for which he has interest, i.e., Rs. 500,000/-. He will not pay the Court fee on decree amount. Where decree is passed for Rs. 500,000/- and his property values Rs. 1,000,000/-, Court fee shall be payable on Rs. 500,000/-.
9. Redemption cases: In the cases of mortgage, principle amount on which property was mortgaged shall decide Court fee. This amount is provided in mortgage deed.
10. Specific performance: Suits for specific performance may involve certain types such as:
a) Contract of sale: Amount of consideration in contract of sale determines Court fee.
b) Contract of mortgage: In mortgage cases, amount secured is used to compute Court fee.
c) Contract of lease: In lease cases rent of twelve months including the amount of fine or premium, if any.
d) Award: Where award is made on property, the value of disputed property decides the payment of Court fee.
11. Between landlord and tenant: It may involve certain types of cases such as:
a) Delivery of counterpart by tenants having a right of occupancy.
b) Enhancement of rent cases by tenant.
c) Delivery of lease by landlord.
d) Recovery of property from a tenant.
e) Contest a notice of ejectment.
f) Recovery of property against illegal ejectment.
g) For the abatement of rent.
How calculated: Court fee is paid on amount equivalent to the rent of last one-year.
12. All the other cases: Cases which are not expressly provided in S. 7 of this Act, Court fee shall be paid minimum Rs. 15/-.
Fee on memorandum of appeal against order relating to compensation u/s 8: Government may acquire land for public purpose. Collector assesses the amount payable on the land so acquired. Where landowner has an objection on the amount of award shall pay Court fee on difference of amount of award and amount so claimed.
For example, amount awarded is Rs. 500,000/- but the amount claimed is Rs. 700,000/-. Court fee shall be payable on the amount of difference, i.e., Rs. 200,000/-.
Power to ascertain net profits for market value u/s 8: Court is empowered to investigate the annual net profits or market value of any land, house, or garden. Court may issue a commission for the investigation of estimation. As an ordinary rule, when the Court considers it necessary to ascertain the market value, etc. of any property, the law requires the Court to hold the investigation in person.
Procedure where net profits or market value wrongly estimated u/s 9: Where excess amount is affixed as Court fee, difference is refunded but where Court fee is deficient, Court orders to make good deficiency.
Case is stayed until the additional Court fee is paid within stipulated time period otherwise case shall be dismissed.
Decision of question as to valuation u/s 12: The decision as to Court fee is not final unless rendered after hearing the two sides. This section requires that the Court shall decide every question relating to valuation, etc. No one can challenge the decision of Court. Court can reassess it after report of commission issued for this purpose.
Refund of fee paid on memorandum appeal u/s 13: Court fee is also refunded where case is remanded.
Where case is partially remanded, partial fee is refunded upto the extent of case is upheld.
Where case is rejected, it can be filed again but where case is dismissed, it cannot be reopened.
Where fee is refunded, Court also issues a certificate indicating the refund of Court fee.
Multifarious suits u/s 17: Under Code of Civil Procedure two or more causes of actions can be joined.
1. Multifarious suits: It contains two distinct matters.
2. Court fee aggregate:
3. How determined: If separate suit could be maintained.
4. Where section is applicable: On suits and appeals.
5. Benefit of government:
6. Speedy justice:
7. Joining of cause of actions:
8. To prevent fraud:
9. To avoid multiplicity:
Amount of Court fee: Court fee is paid on accumulated amount of relief, which is sought. Aggregate amount of subject matter is subject of the payment of Court fee.
Object of law: Object of law is to prevent government to suffer from pecuniary loss. Joining of causes of actions with single Court fee may cause loss to government. This section helps government to avoid such loss.
Scope of law: This law is applicable only in plaints and appeals arising out of plaints. It is not applicable on applications and its appeals.
Exemption of certain documents from payment of Court fee u/s 19: Following documents are exempted from the compulsory payment of Court fee:
1. Power of attorney.
2. Written statement.
3. Probates of Wills.
4. Letters of administration.
5. Securities and Certificates.
6. Supply of water for irrigation belonging to government.
Probate, letters of administration, and certification of administration: Sections 19 – A to 19 – K, are entirely related with the probate and administration. Probate is the certified copy of Will while letter of administration is related to execute the property of deceased.
Relief where too high a Court fee has been paid u/s 19 – A: Where probate is granted to administrator who has paid too high Court fee to obtain letter of administration, he may apply to Chief Controller Revenue Authority for the reimbursement of the excess Court fee.
Administrator has to prove the excess fee paid alongwith the entire details of inventory. When Court shall think fit, shall refund the excess Court fee paid as per procedure laid down for the purpose. Previous Stamp Paper is cancelled and fresh Stamp Paper is filled in to do so.
Six months’ limitation period are granted to bring into the knowledge of Court for refund of excess Court fee.
Relief where debts due from a deceased person have been paid out of his estate u/s 19 – B: Where Court fee has been calculated on the entire estate including the debts of deceased, are considered in excess of original.
Debts payable from the estate of deceased are not considered the estate of deceased person. They are not liable to payment of Court fee. If fee is paid on such debts, is liable to refund.
Limitation period for three years is provided to bring into the knowledge of Court for refund of excess Court fee. Limitation period can be extended upon the proof of lengthy proceeding to decide the payment of debt.
Relief in case of several grants u/s 19 – C: Letter of administration is issued for whole of the estate. Administrator has to administer the whole estate. Whenever administrator dies before the complete administration of the estate of deceased person, fresh probate is to be issued to new administrator. Such fresh letter of administration is not liable to payment of fresh Court fee.
When estate would has been alienated and then holder of the estate dies, then issuance of the fresh probate shall be subject to the compulsorily payment of Court fee. It is not covered under the former principle of exemption from the payment of Court fee.
Probate declared valid as to trust property though not covered by Court fee u/s 19 – D: Where deceased person holds trust property which is also to be administrated, it shall not be liable to compulsorily payment of Court fee. It is exempt under Court fee law.
Provision for case where too low a Court fee has been paid on probates, etc. u/s 19 – E: This section deals the with too low fee paid on the grant of probate or letter of administration.
Assessment of property value: Chief Controlling Revenue-authority of the area has power to ascertain the true value of the property on which probate or letter of administration is granted where the Court fee paid is too low.
Payment of full Court fee: Authority makes an orders the payment of full Court fee on the grant of probate or letter of administration according to the value of the property of deceased.
Imposition of penalty within one year: Authority imposes penalty five times on deficient value paid if the deficiency is made good within one year.
Imposition of penalty after one year: Authority imposes penalty twenty times on deficient value paid if the deficiency is made good after one year.
Remittance of penalty upon satisfaction: Only Chief Revenue Controlling authority has power to remit the penalty imposed.
Conditions of such remittance: Chief Revenue Controlling-authority may remit the penalty imposed on the following clarification:
1. Limitation for application: Penalty imposed can be remitted if the application is made within six months after the ascertainment of the correct value of the property.
2. Bona-fide mistake: Where administrator proves that the payment of too low Court fee is result of bona-fide mistake and without intention, authority may remit the penalty imposed either five or twenty times.
3. Later discovery: Where payment of too low Court fee is result of the later discovery from the estate of deceased and administrator satisfies the authority, authority may remit the penalty imposed.
4. Lack of fraud intention: Where a too low fee is paid without having any fraudulent intention and authority is satisfied, penalty can be remitted.
5. Lack of delay intention: Some time too low fee is paid with the intention of delay the payment and also to evade the correct payment. Where administrator satisfies authority that there is no intention to cause delay or defeat to pay proper Court fee, authority may remit the penalty.
Administrator to give proper security before letters stamped under section 19 – E u/s 19 – F: This section provides that the revenue authority shall not cause the letters of administration to be duly stamped, if too low a Court fee has been paid in respect of then, and the security required by the law has not been given to the Court issuing such letters of administration.
Executors, etc., not paying full Court fee on probates, etc. within six months after discovery of under payment u/s 19 – G: Where administrator discovers under payment and does not make it good within six months, authority may impose penalty.
Rupees one thousand are forfeited at once and subsequently @ 10% on deficient value fine is charged.
Notice of applications for probate or letters of administration to be given to Revenue authorities and procedure thereon u/s 19 – H: Following procedure is adopted:
1. Where application for the grant of probate or letter of administration is made to lower Court, Court shall cause notice to Collector.
2. Where application for the grant of probate or letter of administration is made to High Court, Court shall cause notice to Chief Controlling Revenue-authority.
3. Collector is bound to inspect the property to determine its value and if administrator has estimation of undervalued, Collector shall call him to take evidence to ascertain its actual value. Collector shall require to petitioner for the amendment in valuation.
4. Where petitioner fails to amend the value of the property to the satisfaction of Collector, Collector shall move application to Court of original jurisdiction for holding of the inquiry for determination of true value of the property.
5. Court shall make Collector as party and shall order to hold an inquiry for the ascertainment of true value of property. Also Court shall record its finding about the true value of property.
6. Person designated by the Court is bound to make an inquiry. He shall take oath from petitioner and shall take evidences to reach on the conclusion. He shall furnish report to Court and Court shall record evidences and findings.
7. Findings of the Court are binding on petitioner and Collector.
Payment of Court fee in respect of probate and letters of administration u/s 19 – I: Grant of the probate or letter of administration follows two conditions such as:
1. Petitioner must file an inventory before the grant of probate or letter of administration.
2. Correct Court fee has been paid.
Recovery of penalties etc. u/s 19 – J: This section deals with the recovery of arrears of Court fee from either administrator or executor. Means to do so are as the recovery of arrears of Land Revenue provided under Land Revenue Act.
Sections 6 and 28 not to apply to probates or letters of administration u/s 19 – K: Section 6 is not applied for the grant of probate or letter of administration. U/s plaint is returned until or unless it is not properly affixed the Court fee. But in case of probate or letter of administration, application is not returned but required to make good the deficiency of Court fee. If the proper Court fee is not paid, deficiency is made good by the Court as the arrears of Land Revenue are recovered.
Object of Court Fees Act: Following are the objects:
1. Income of the government:
2. Protection of rights:
3. Awareness:
4. Legalization:
5. Evidentiary value:
6. Proper remedy:
7. Self help:
Concept of Court Fee at punitive level u/ss 10, 19 – A, and 19 – E:
1. Where market value wrongly assessed: s
2. Responsibility of Court: s
3. Where estimate is excess: It shall be refunded.
4. Where estimate is deficient: It is required to make good.
5. Consequences of deficiency: Suit is stayed until is made good.
6. Proceedings on suit: Started when is made good.
7. When fail to make good: Suit is dismissed.
Comprehensiveness of S. 7:
1. Broad:
2. Not fully exhaustive:
3. Changing circumstances:
4. Time to time exceptions:
5. Mostly described:
6. Rs. 15/- where no description specified:
7. Prevent effects of fraud against government:

Please log in to like, wonder, share and comment!

IN THE HIGH COURT OF SINDH, KARACHI
Present
Mr. Justice Irfan Saadat Khan
Mr. Justice Zulfiqar Ahmad Khan
Special Customs Appeal No. 63 of 2002
M/s. Xavier Company …… Appellant
Versus
Customs, Excise & Sales Tax Appellate Tribunal
and others …… Respondents
Appellant
:
Through Mr. Ammar Yasser, Advocate
Respondent Nos.1,2 & 4
:
Through Mr. G.M Bhutto, AAG
Respondent No. 3
:
Through Mr. Sarfaraz Khan Marwat, Advocate
Date of hearing
:
29.09.2022
Date of judgment
:
03.11.2022
JUDGMENT
Zulfiqar Ahmad Khan, J:- Appellant through the instant SCRA has impugned the order dated 04.02.2002 passed in Customs Appeal No.K-1599 of 2001 by raising the following questions of law:-
1. Whether the amendment in Section 25 of the Customs Act, 1969 eliminates the concept of economic zone for comparison and fixation of value of the goods imported and the Transaction value shall be the value for levy of the Customs Duty and other leviable taxes?
2. Whether the provisions of Section 32 of the Customs Act, 1969 are applicable to the case of the appellant?
2. Background of the case is that the appellant being an importer of various automobile parts including Carbon Brushes, as a part of its usual business, imported a consignment of 50 cartons of such brushes from Thailand (hereinafter to be called as “the subject goods”) vide IGM No.1494/2000 dated 11-09-2000 Index No.18 at the declared value of Rs.204,789/- and cleared the said consignment for Bond vide Bill of Entry dated 16.09.2000. Upon filing of ex-bond Bill of Entry, the department (Group-VIII) assessed the duty and taxes for Rs.29,422/-,
Spl.Cus.Appeal No.63 of 2002
-2-
whereafter the goods were sent to the Special Monitoring Team for further checking of duty and taxes, which also confirmed that the duty and taxes assessed by the said Group were correct, and for the purpose of payment of the aforementioned assessed duty, the importer drew a pay order No.595657 dated 18.11.2000 for Rs.29,422/-. The said pay order was duly deposited in the National Bank of Pakistan, Customs House Branch, Karachi. However at the time of clearance, the importer was informed that some objection regarding valuation of the said goods has been raised by the Appraising Intelligence Branch (AI. The importer immediately approached AIB and the Customs Authorities for clearance of the subject goods and presented relevant documents to prove his valuation, which were not accepted and a Show Cause Notice dated 15.01.2001 was issued to the appellant and his Clearing Agent. Based on the valuation of Carbon Brushes imported from China, it was alleged that the importer’s goods were grossly under-valued. The same stance was adopted by the department during the course of hearings before the learned Collector alleging that third parties have imported similar consignments from China, but at a much higher rates. Order-in-Original No.32/2001 dated 30.01.2001 was passed against the appellant on the grounds of misdeclaration and under-invoicing, whereas the Clearing Agent was discharged. The importer preferred an Appeal. While passing Order-in-Appeal the Respondent No.1 remanded the case back to the Respondent No.2 for de novo consideration on the ground of violation of principles of natural justice. Written Arguments with physical evidence were presented by the appellant before the Respondent No.2, who passed the impugned Order-II on 18.08.2001 wherein a fresh version of the department was incorporated, which were neither mentioned in the show cause notices. Via Corrigendum Order-III dated 06.10.2001 passed by the Respondent No.2, liability of the Clearing Agent was discharged upon an application made under section 206 of the Customs Act. The appellant, again preferred an appeal before
Spl.Cus.Appeal No.63 of 2002
-3-
the Respondent No.1, which was dismissed vide the impugned order, which is assailed herein on.
3. Per learned counsel of the appellant, by wrongly comparing the value of the subject goods of Thailand origin with those of Chinese origin, the department has contravened the principles settled by the Hon’ble Supreme Court of Pakistan in the case reported as 1992 SCMR 1083 that “country of origin and not country of import is the criterion for determination of value of goods”. The orders impugned are passed in haste and without application of judicial mind, whereby the Respondent Nos.1 and 2 failed to appreciate the principle settled by the Supreme Court in the aforesaid case that “price of goods provided by other exporters could not be taken into consideration to treat declared version of another importer as misdeclaration”, per learned counsel who also emphasized that the allegation of misdeclaration is based on the premise that part numbers of certain items imported differ from the confiscated goods to which he states that part numbers of items declared in the invoice are the same which have been imported and the importer, hence no mis-declaration of any item(s) is seen. Per learned counsel, in respect of each and every item prices prevailing in one country cannot be matched with those in the other country. The assessment by the appellant per learned was based upon the price-list admittedly published by the Customs Department SMT for the non-genuine auto parts. On the basis of the same price listing, goods from Thailand were imported. Rates charged by the manufacturer, as evident from the manufacturer’s Invoice were declared and on the basis of the same, taxes and duties were assessed/paid, per learned counsel. It was also submitted that in the absence of any price data available regarding non-genuine auto parts of Thailand origin, the importer was completely justified in relying upon the pricing mentioned in the said Price Manual as the same goods have been previously imported by the appellant and
Spl.Cus.Appeal No.63 of 2002
-4-
cleared by the Customs Department prices whereof were based on the above mentioned SMT manual, hence the appellant has committed no illegality.
4. Learned counsel for the department and Mr. G.M Butto, learned Assistant Attorney General supported the impugned judgment and argued in favour of the findings given therein. They contended that the consignment was under-invoiced and even if it is compared to raw material such under-invoicing is apparent on the face of it. They added that China and Thailand both fall in the same economic zone and parts made therein are more or less of the same quality and the respondents have rightly compared prices of imported goods with China.
5. Heard the counsel and perused the record. In the case at hand, the appellant imported Carbon Brushes form Thailand and declared part numbers, which have been mentioned on the brushes as well. As to the question No.1, it is now an admitted position that post GATT, section 25 has no concept of economic zone and goods are to be compared with identical goods from the same source of export only. This departure to liberate goods from economic zones to one-market economy in result of lengthy deliberations which led to the General Agreement on Tariffs and Trade (GATT) wherein incentives related to special economic zones can be broadly grouped into three categories: (i) measures that are consistent with the World Trade Organization (WTO), notably exemptions from duties and taxes on goods exported from special economic zones; (ii) measures that are prohibited or subject to challenge under WTO law, notably export subsidies and import substitution or domestic content subsidies; and (iii) and measures where WTO consistency depends on the facts of the particular case. The very purpose of GATT was to promote international trade by reducing or eliminating trade barriers such as tariffs and quotas. According to
Spl.Cus.Appeal No.63 of 2002
-5-
Agreement’s preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis." Core obligations under GATT are to give Non-discriminatory treatment to members, which fundamental principle of non-discrimination is expressed in Article I of the Agreement known as “most favoured nation treatment” (MFN) which provides that “any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.” Thus the obligation to provide all contracting parties (i.e. countries) with any benefit conferred on a contracting party (i.e. a country) is made explicit by the Agreement. Under Article II, contracting parties are restricted from importing duties on importation from other contracting parties in excess of those provided for in their own tariffs. Application of the MFN principle to all contracting parties in this way is aimed to constitute a multilateralization of the MFN obligations which hitherto had been found only in bilateral treaties, The core strength of GATT is that no comparison or preferential treatment could be given to goods originating from one country over another, adversarial to any importer.
6. In the above context Article VII of GATT Agreement is worth discussing which deals with the issue of Valuation for customs purposes as it requires the contracting parties to recognize the validity of the general principles of valuation set forth in the said Article, which should give effect in respect of all products subject to duties or other charges or restrictions on importation and exportation, based upon or regulated in any manner by value. These covenants require that:
(a) The value for customs purposes of imported merchandise should be based on the actual value of the imported merchandise on which duty is assessed, or of like merchandise, and should not be based on the value of
Spl.Cus.Appeal No.63 of 2002
-6-
merchandise of national origin or on arbitrary or fictitious values.
(b) "Actual value" should be the price at which, at a time and place determined by the legislation of the country of importation, such or like merchandise is sold or offered for sale in the ordinary course of trade under fully competitive conditions. To the extent to which the price of such or like merchandise is governed by the quantity in a particular transaction, the price to be considered should uniformly be related to either (i) comparable quantities, or (ii) quantities not less favourable to importers than those in which the greater volume of the merchandise is sold in the trade between the countries of exportation and importation.
(c) When the actual value is not ascertainable in accordance with subparagraph (b) of this paragraph, the value for customs purposes should be based on the nearest ascertainable equivalent of such value.”
7. With the aforementioned knowledge, coming back to the issue of special economic zones it is pertinent to observe that such zones are not specifically mentioned by name in any of the multilateral agreements concluded under the auspices of WTO, where several types of incentives that were typically part of such a policy were made subject to discipline of WTO laws, most notably through provisions in the Agreement on Subsidies and Countervailing Measures (SCM Agreement) which largely prohibits such a discriminatory treatment. To conclude, the post GATT era section 25 of the Customs Act, 1969 not only eliminates the concept of economic zones for the comparison and fixation of the values of imported goods for customs purposes but at the same time requires such valuation to be based on the actual value of the imported merchandise on which duty is to be assessed and bars valuation hinged to the value of merchandise of national or any other country’s origin or on arbitrary or fictitious values. Resultantly Question No.1 is answered in Affirmative i.e., against the department and in favor of the importer.
8. Now coming to the question No.2 as to whether the provisions of Section 32 of the Customs Act, 1969 are applicable to the case of the appellant. Learned counsel for the appellant stated that no evidence whatsoever on the subject was produced during the course of hearing
Spl.Cus.Appeal No.63 of 2002
-7-
before the Additional Collector in the earlier round of hearing, nor any evidence was produced at the time of hearing by the department before the Respondent No.1, and whole case is based upon the contention of the department that prices of the items imported from Thailand differ from the prices of the Chinese origin, which is a real possibility as goods made in different countries would have different cost of production and profit margins. As far as allegation of under-invoicing is concerned, per learned counsel, the same is again based upon the department’s version that goods of Thailand origin are supposed to be more expensive than those having Chinese origin. Attention of this Court is drawn towards the settled principle that penal provisions of Section 32 of the Customs Act are only attracted when a person makes a false statement or false document knowingly or having reasons to believe that such document or statement is false. It is not the case of the department that false Invoice has been produced by the Appellant, but the allegation is that prices of these goods do not match with that of Chinese origin, thus per learned counsel, section 32 is not applicable in the instant case since admittedly, the importer has produced the same invoice which was sent by the manufacturer and has assessed and paid taxes and duties accordingly.
9. It is an admitted position that offence under section 32 of the Customs Act, 1969 could not be constituted in the absence of mens rea on the part of an importer therefore it could not be put in operation.1 Section 32 of the Customs Act, 1969 could only be invoked on an importer upon the availability of a deliberate act or connivance, error, ommission or misconstruction. In the case at hand, element of mens rea is missing and no deliberate mis-declaration is apparent from the record. The department had not adduced any evidence to substantiate that it was a willful fault and a deliberate mis-declaration. The department's
1 2021 PTD 2027 Peshawar High Court
Spl.Cus.Appeal No.63 of 2002
-8-
desire to levy fine in the absence of incriminating evidence could not be entertained in the circumstances at hand. Merely hypothecation would not ipso facto mean that the element of mens rea was present making the importer liable for imposition of penalty, in such circumstances, allegation of mis-declaration and imposition of fine and penalty do not sustain. This view finds support from the case of Messrs Latif Brothers v. Deputy Collector, Customs, Lahore2. Accordingly, question No.2 is answered in Affirmative, i.e., in favor of the appellant and against the respondent.
10. A copy of this decision may be sent under the seal of this Court and the signature of the Registrar to the learned Customs Appellate Tribunal.
Judge
Judge

B-K Soomro
2 1992 SCMR 1083

Please log in to like, wonder, share and comment!

XAVIER WINS-SCRA JUDGMENT AGAINST CUSTOMS
Xavier Company, an importer wins its Custom Reference Application (SCRA) against Pakistan Customs as an appellate bench of High Court of Sindh decides basic questions of law in favor of the applicant and against the department.

The Appellant filing an SCRA has impugned the order dated 04.02.2002 passed in Customs Appeal No.K1599 of 2001.

The applicant raised the following questions of law that “Whether the amendment in Section 25 of the Customs Act, 1969 eliminates the concept of economic zone for comparison and fixation of value of the goods imported and the Transaction value shall be the value for levy of the Customs Duty and other leviable taxes? and that “Whether the provisions of Section 32 of the Customs Act, 1969 are applicable to the case of the appellant?”.

As per details that the applicant/ appellant being an importer of various automobile parts including Carbon Brushes, as a part of its usual business, imported a consignment of 50 cartons of such brushes from Thailand (hereinafter to be called as “the subject goods”) vide IGM No.1494/2000 dated 11-09-2000 Index No.18 at the declared value of Rs.204,789/- and cleared the said consignment for Bond vide Bill of Entry dated 16.09.2000.

Upon filing of ex-bond Bill of Entry, the department (Group-VIII) assessed the duty and taxes for Rs.29,422/-, -2- Spl.Cus.Appeal No.63 of 2002 whereafter the goods were sent to the Special Monitoring Team for further checking of duty and taxes, which also confirmed that the duty and taxes assessed by the said Group were correct, and for the purpose of payment of the aforementioned assessed duty, the importer drew a pay order No.595657 dated 18.11.2000 for Rs.29,422/-. The said pay order was duly deposited in the National Bank of Pakistan, Customs House Branch, Karachi. However at the time of clearance, the importer was informed that some objection regarding valuation of the said goods has been raised by the Appraising Intelligence Branch (AI. The importer immediately approached AIB and the Customs Authorities for clearance of the subject goods and presented relevant documents to prove his valuation, which were not accepted and a Show Cause Notice dated 15.01.2001 was issued to the appellant and his Clearing Agent. Based on the valuation of Carbon Brushes imported from China, it was alleged that the importer’s goods were grossly under-valued. The same stance was adopted by the department during the course of hearings before the learned Collector alleging that third parties have imported similar consignments from China, but at a much higher rates. Order-in Original No.32/2001 dated 30.01.2001 was passed against the appellant on the grounds of misdeclaration and under-invoicing, whereas the Clearing Agent was discharged. The importer preferred an Appeal.

While passing Order-in-Appeal the Collector (Appeals) remanded the case back to the Respondent No.2 for de novo consideration on the ground of violation of principles of natural justice. Written Arguments with physical evidence were presented by the appellant before the Respondent No.2, who passed the impugned Order-II on 18.08.2001 wherein a fresh version of the department was incorporated, which were neither mentioned in the show cause notices. Via Corrigendum Order-III dated 06.10.2001 passed by the Respondent No.2, liability of the Clearing Agent was discharged upon an application made under section 206 of the Customs Act.

The appellant, again preferred an appeal before the Respondent No.1, which was dismissed vide the impugned order, which is assailed herein on. 3. Per learned counsel of the appellant, by wrongly comparing the value of the subject goods of Thailand origin with those of Chinese origin, the department has contravened the principles settled by the Hon’ble Supreme Court of Pakistan in the case reported as 1992 SCMR 1083 that “country of origin and not country of import is the criterion for determination of value of goods”. The orders impugned are passed in haste and without application of judicial mind, whereby the Respondent Nos.1 and 2 failed to appreciate the principle settled by the Supreme Court in the aforesaid case that “price of goods provided by other exporters could not be taken into consideration to treat declared version of another importer as misdeclaration”, per learned counsel who also emphasized that the allegation of misdeclaration is based on the premise that part numbers of certain items imported differ from the confiscated goods to which he states that part numbers of items declared in the invoice are the same which have been imported and the importer, hence no mis-declaration of any item(s) is seen. Per learned counsel, in respect of each and every item prices prevailing in one country cannot be matched with those in the other country. The assessment by the appellant per learned was based upon the price-list admittedly published by the Customs Department SMT for the nongenuine auto parts. On the basis of the same price listing, goods from Thailand were imported. Rates charged by the manufacturer, as evident from the manufacturer’s Invoice were declared and on the basis of the same, taxes and duties were assessed/paid, per learned counsel. It was also submitted that in the absence of any price data available regarding non-genuine auto parts of Thailand origin, the importer was completely justified in relying upon the pricing mentioned in the said Price Manual as the same goods have been previously imported by the appellant and Spl.Cus.Appeal No.63 of 2002 cleared by the Customs Department prices whereof were based on the above mentioned SMT manual, hence the appellant has committed no illegality.

The counsel for the department and Mr. G.M Butto, learned Assistant Attorney General supported the impugned judgment and argued in favour of the findings given therein. They contended that the consignment was under-invoiced and even if it is compared to raw material such under-invoicing is apparent on the face of it. They added that China and Thailand both fall in the same economic zone and parts made therein are more or less of the same quality and the respondents have rightly compared prices of imported goods with China. 5. Heard the counsel and perused the record. In the case at hand, the appellant imported Carbon Brushes form Thailand and declared part numbers, which have been mentioned on the brushes as well.

Following is the TEXT of judgment on both the Questions of Law

“As to the question No.1, it is now an admitted position that post GATT, section 25 has no concept of economic zone and goods are to be compared with identical goods from the same source of export only. This departure to liberate goods from economic zones to one-market economy in result of lengthy deliberations which led to the General Agreement on Tariffs and Trade (GATT) wherein incentives related to special economic zones can be broadly grouped into three categories: (i) measures that are consistent with the World Trade Organization (WTO), notably exemptions from duties and taxes on goods exported from special economic zones; (ii) measures that are prohibited or subject to challenge under WTO law, notably export subsidies and import substitution or domestic content subsidies; and (iii) and measures where WTO consistency depends on the facts of the particular case. The very purpose of GATT was to promote international trade by reducing or eliminating trade barriers such as tariffs and quotas. According to Agreement’s preamble, its purpose was the “substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis.” Core obligations under GATT are to give Non-discriminatory treatment to members, which fundamental principle of non-discrimination is expressed in Article I of the Agreement known as “most favoured nation treatment” (MFN) which provides that “any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.” Thus the obligation to provide all contracting parties (i.e. countries) with any benefit conferred on a contracting party (i.e. a country) is made explicit by the Agreement. Under Article II, contracting parties are restricted from importing duties on importation from other contracting parties in excess of those provided for in their own tariffs. Application of the MFN principle to all contracting parties in this way is aimed to constitute a multilateralization of the MFN obligations which hitherto had been found only in bilateral treaties, The core strength of GATT is that no comparison or preferential treatment could be given to goods originating from one country over another, adversarial to any importer. 6. In the above context Article VII of GATT Agreement is worth discussing which deals with the issue of Valuation for customs purposes as it requires the contracting parties to recognize the validity of the general principles of valuation set forth in the said Article, which should give effect in respect of all products subject to duties or other charges or restrictions on importation and exportation, based upon or regulated in any manner by value. These covenants require that: (a) The value for customs purposes of imported merchandise should be based on the actual value of the imported merchandise on which duty is assessed, or of like merchandise, and should not be based on the value of merchandise of national origin or on arbitrary or fictitious values. (b) “Actual value” should be the price at which, at a time and place determined by the legislation of the country of importation, such or like merchandise is sold or offered for sale in the ordinary course of trade under fully competitive conditions. To the extent to which the price of such or like merchandise is governed by the quantity in a particular transaction, the price to be considered should uniformly be related to either (i) comparable quantities, or (ii) quantities not less favourable to importers than those in which the greater volume of the merchandise is sold in the trade between the countries of exportation and importation. (c) When the actual value is not ascertainable in accordance with subparagraph (b) of this paragraph, the value for customs purposes should be based on the nearest ascertainable equivalent of such value.” 7. With the aforementioned knowledge, coming back to the issue of special economic zones it is pertinent to observe that such zones are not specifically mentioned by name in any of the multilateral agreements concluded under the auspices of WTO, where several types of incentives that were typically part of such a policy were made subject to discipline of WTO laws, most notably through provisions in the Agreement on Subsidies and Countervailing Measures (SCM Agreement) which largely prohibits such a discriminatory treatment. To conclude, the post GATT era section 25 of the Customs Act, 1969 not only eliminates the concept of economic zones for the comparison and fixation of the values of imported goods for customs purposes but at the same time requires such valuation to be based on the actual value of the imported merchandise on which duty is to be assessed and bars valuation hinged to the value of merchandise of national or any other country’s origin or on arbitrary or fictitious values. Resultantly Question No.1 is answered in Affirmative i.e., against the department and in favor of the importer. 8. Now coming to the question No.2 as to whether the provisions of Section 32 of the Customs Act, 1969 are applicable to the case of the appellant. Learned counsel for the appellant stated that no evidence whatsoever on the subject was produced during the course of hearing before the Additional Collector in the earlier round of hearing, nor any evidence was produced at the time of hearing by the department before the Respondent No.1, and whole case is based upon the contention of the department that prices of the items imported from Thailand differ from the prices of the Chinese origin, which is a real possibility as goods made in different countries would have different cost of production and profit margins. As far as allegation of under-invoicing is concerned, per learned counsel, the same is again based upon the department’s version that goods of Thailand origin are supposed to be more expensive than those having Chinese origin. Attention of this Court is drawn towards the settled principle that penal provisions of Section 32 of the Customs Act are only attracted when a person makes a false statement or false document knowingly or having reasons to believe that such document or statement is false. It is not the case of the department that false Invoice has been produced by the Appellant, but the allegation n is that prices of these goods do not match with that of Chinese origin, thus per learned counsel, section 32 is not applicable in the instant case since admittedly, the importer has produced the same invoice which was sent by the manufacturer and has assessed and paid taxes and duties accordingly. 9. It is an admitted position that offence under section 32 of the Customs Act, 1969 could not be constituted in the absence of mens rea on the part of an importer therefore it could not be put in operation.1 Section 32 of the Customs Act, 1969 could only be invoked on an importer upon the availability of a deliberate act or connivance, error, omission or misconstruction. In the case at hand, element of mens- rea is missing and no deliberate mis-declaration is apparent from the record. The department had not adduced any evidence to substantiate that it was a willful fault and a deliberate mis-declaration. The department’s desire to levy fine in the absence of incriminating evidence could not be entertained in the circumstances at hand. Merely hypothecation would not ipso facto mean that the element of mens rea was present making the importer liable for imposition of penalty, in such circumstances, allegation of mis-declaration and imposition of fine and penalty do not sustain. This view finds support from the case of Messrs Latif Brothers v. Deputy Collector, Customs, Lahore. Accordingly, question No.2 is answered in Affirmative, i.e., in favor of the appellant and against the respondent”.

Please log in to like, wonder, share and comment!

"A proforma defendant is a defendant against whom no relief is sought. He is arrayed as party only to avoid the defect of non-joinder of parties."
-------------------------------------------------------------------
Order Sheet

IN THE HIGH COURT OF SINDH KARACHI

Suit No. 1081 of 2007

Mr. Irfan Aziz, advocate for the plaintiff.
Mr. Muhammad Umar Farooq Khan, advocate.
Mr. Umar Shoaib Pirzada, advocate.
Ms. Ascho Marzia Begum, State Counsel.


Date of hearing : 14.09.2015.


ORDER ON C.M.A. No. 8669 of 2010


NADEEM AKHTAR, J. – This application has been filed by defendant No.6 (Chief Manager, National Bank of Pakistan, Main Branch, I. I. Chundrigar Road, Karachi) praying that his name be deleted from array of defendants.

2. This Suit has been filed by the plaintiff for declaration, partition, accounts, recovery of rent and mandatory and permanent injunction in respect of property bearing No.36-C, 24th Commercial Street, Phase-II Extension, DHA Karachi, measuring 200 sq. yds., with construction thereon (‘the suit property’). It is the case of the plaintiff, as averred in the plaint, that the suit property is owned jointly by the plaintiff and defendant No.2, each having 50% share therein. He has alleged that he has been illegally deprived of his business by defendants 1 and 2, and since the said defendants had misappropriated joint properties of the parties, he apprehends that the suit property will also be misappropriated. He has stated that the suit property was earlier mortgaged with National Bank of Pakistan, who is not providing any information to him about the status thereof. He has shown apprehension that since the suit property is in the possession and control of defendants 1 and 2, they may create any liability against it by encumbering or mortgaging it.

3. In this application, defendant No.6 has stated that there is no allegation against him in the plaint nor has any relief been claimed against him. Perusal of the plaint shows that there is a specific allegation against the said defendant that he has not disclosed to the plaintiff any information about the mortgage of the suit property despite several demands by the plaintiff. This allegation becomes relevant and important in view of the allegations made by the plaintiff that defendants 1 and 2 may encumber the suit property by mortgaging it. In my opinion, defendant No.6 is a proper party to these proceedings if not a necessary party, and his presence before this Court would certainly facilitate the Court in adjudicating upon the issues involved in this Suit effectually and completely. I am also of the view that no prejudice will be caused to defendant No.6 if he remains as a proforma defendant in this Suit as no relief has been sought against him by the plaintiff.

4. Foregoing are the reasons of the short order announced by me on 14.09.2015, whereby this application was dismissed with no order as to costs.


Judge

Please log in to like, wonder, share and comment!