KARACHI: The Sindh High Court (SHC) has temporarily suspended an order issued by the Federal Tax Ombudsman (FTO), which directed the Collector of Customs Appraisement (West) to release goods on a provisional basis. The suspension follows a petition from the Collectorate of Customs Appraisement, with representation by Advocate Sardar Zafar Hussain, counsel for the petitioner.
The case originates from a complaint lodged by Universal Auto Engineering, challenging the customs valuation process. According to the complaint, the customs department had disregarded the importer’s declared valuation of imported high-tensile nuts, bolts, and washers, opting instead for a higher assessment. Universal Auto Engineering argued that this practice is inconsistent with established valuation protocols, prompting them to seek redress with the FTO.
After reviewing the matter, the FTO issued two key recommendations. The first recommendation instructed the Director General of Customs Valuation to have the Director of Valuation issue a revised Valuation Ruling (VR) after allowing input from all relevant stakeholders. The second recommendation called for the provisional release of the goods in question. However, the Collector of Customs Appraisement (West), upon legal counsel’s advice, filed a constitutional petition against the provisional release directive in the High Court of Sindh.
During proceedings, Advocate Sardar Zafar Hussain argued that the Director General of Valuation had addressed the valuation issue by ordering the Director of Valuation to issue a new VR following due process. He further noted that the current VR would remain in effect until a new ruling is issued, thus rendering the FTO’s order for provisional release unnecessary and beyond its jurisdiction.
After considering the arguments, the court bench, acknowledging the stance of the Collectorate of Customs, suspended the FTO’s provisional release order. Notices have been issued to the respondents and the Deputy Attorney General for Pakistan, with a follow-up hearing scheduled for December 2, 2024. This decision marks a significant development for the customs administration, as it underscores the judiciary’s role in mediating valuation disputes.
