The apex court set aside a judgment of Customs Appellate Tribunal, saying the decision given by it was beyond time as prescribed in Section 179(3) of Customs Act, 1969. A three-judge bench, headed by Justice Umar Ata Bandial, on 25-04-2019 after hearing the arguments of the parties had reserved the judgment, which was uploaded on Supreme Court website late Friday. M/s Mujahid Soap and Chemical Industries (Pvt) Ltd had challenged the verdict of the Customs Appellate Tribunal, Islamabad. The judgment noted that the show-cause notice was issued on 28-08-2013 and the order-in-original was issued on 19-02-2014, while 120 days after the issuance of the show-cause notice it had expired on 26-12-2013.
The appellant had raised question whether under the provisions of Section 179(3) of the Customs Act, 1969 the order-in-original No. 55 of 2014 issued by the Deputy Collector (respondent) on 19-02-2014 was decided within the limitation period prescribed in the Act.
The Section 179 (3) says; "The cases shall be decided within one hundred and twenty days of the issuance of the show cause notice or within such period extended by the Collector for which reasons shall be recorded in writing, but such extended period shall in no case exceed 'sixty days'."
The counsel of deputy collector submitted that the case was actually decided on 24-12-2013 when the final hearing took place and this is also reflected in the heading of the order-in-original which records the date of judgment as 24-12-2013.
He also argued that the case was 'decided' within a period of 120 days from the issuance of the show cause notice. He explained that the matter was decided when it had been heard and the judgment was reserved for release of the reasons. However, he conceded that on 24-12-2013 no decision was verbally announced by the adjudicating officer nor was any decision communicated to the parties prior to the issuance of the order-in-original dated 19-02-2014.
The court observed how a decision can be said to have been taken without announcement or communication thereof to the parties. "To our understanding the law is quite accommodating for the taxing authority as an extension is available beyond the originally prescribed period of 120 days for rendition of a decision. Even though no decision is communicated within the said period, such an extension can be sought and granted subsequently but in such an event it is mandatory that the decision comes within 180 days after the date of show-cause notice."
The court noted that the deputy collector did not even apply for an extension but consumed 157 days to record the reasons for his judgment and communicate it to the parties. "We cannot accept the proposition that such decision had taken place as and when the hearing was concluded." It is necessary that an adjudicatory decision be recorded and duly communicated to the parties, which has not happened in the present case.
According to the record, the decision took place on 19-02-2014 and not on 24-12-2013 as contended by the respondent counsel. "The decision is invalid. Consequently, the impugned judgment is set aside," said the apex court judgment.
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