TOYOTA LANKA (PVT) LTD., AND ANOTHER V.
JAYATHILAKA AND OTHERS

SUPREME COURT
SARATH N. SILVA, C. J.,
AMARATUNGA, J. AND
SRIPAVAN, J.
S.C. APPEAL NO. 49/2008
C.A. NO. 2118/2005
JUNE 30TH, 2008

Certiorari - Discretionary remedy- Quash a decision which is ultra vires - Customs Ordinance - Section 125 - Seizure of goods in respect of which a Bill of Entry (CUSDEC) had been submitted - Sections. 18 and 18A - Recovery of additional dues that maybe claimed instead of seizure - Section 153 - Disbursement of forfeitures and penalties in favour of Customs Officers and informers - Section 47 - Applicability in a situation of a disputed classification of goods or underpayment or short levy of duties or dues.

    This is an appeal from the judgment of the Court of Appeal, refusing a writ of certiorari sought by the plaintiff-appellant to quash an order made by an officer of the customs seizing nine Toyota Land Cruiser Prado motor vehicles imported by the 1st appellant company. The Order states that it is made under Section 125 of the Customs Ordinance. One of the issues before the Supreme Court was whether it is competent for an officer of the Customs to have recourse to Section 125 of the Customs Ordinance and effect seizure of goods in respect of which a Bill of Entry (CUSDEC) had been submitted, as provided by Section 47 and goods released consequent to a physical examination and payment of duties that were levied, or whether, in such a situation instead of seizure the lawful course of action is for the Customs to seek recovery of the additional dues that maybe claimed by recourse to provisions of Sections 18 or 18A of the Customs Ordinance.

Held:

    (1) The mandatory consequences of forfeiture that are penal in nature in Section 47 which states "but if such goods shall not agree with

particulars in the bill of entry the same shall be forfeited" apply to a situation of concealment and evasion to pay duties as distinct from a situation of misdescription and under payment of duties.

In a situation of wrongful entry and evasion, since the consequence of forfeiture is by operation of law, even if the officer had delivered the goods upon the submission of Bill of Entry (CUSDEC), such goods maybe seized at any subsequent stage in terms of Section 125.

In a situation of misdescription and underpayment of duties the proper course would be to require the person concemed to pay "the duties and dues which may be payable" being the statutory obligation of the importer in terms of Section 47 or in the event of a short levy to recover the amount due in terms of Section 18(2) and 18(3) or 18A of the Customs Ordinance. Where a person has been charged in excess, he has a statutory right to seek a refund in terms of Section 18( 1) of the Ordinance.

(2) The forfeiture provided for in Section 47 would not apply to a situation of a disputed classification of goods or an underpayment or short levy of duties or dues. In such an event the proper course would be a requirement for payment of the amount due prior to delivery of goods or the recovery of the amounts due in terms of Section 18.

 Per Sarath N. Silva, C. J.,

"It is preposterous that officers of Customs recovered as much as 129.75% of the value as duties and thereafter seized the goods as well. The preceding analysis establishes that such action does not come within the scope of Sections 47 and 125 and is inconsistent with the scheme and structure of the Ordinance."

(3) "Audit or examination" in terms of Sections 128A (1) relates to the records an importer is required to maintain for a period of 3 years from the date of importation in terms of Section 51B. There is no provision for the examination of goods at the stage and any such examination is ispo facto ultra vires.

(4) There is no provision for a forfeiture of goods by operation of law in the event of an alleged undervaluation. Such a provision would render importation o