jashbhai ppeter company ltd vs national phamaceutical company ltd 1987 tzca 27 30 october 1987

AT PAR :D3 SAI.aAII ( O T M ; OHAR, J .A ., MFALI LA, A g. J .A ., And. KAPIGAI'TQ, Ag. J .A . ) CIVIL APPEAL 110. 31 OF 1J87 JASIBTIAI p. PATICL c°< COHPliTY LIMIT.JD. . .APPELLANT \ ,-^B VERSUS * J.-'iu'utiAC3UTICAL COMPANY QUOTED., .HfeOBSEHT .; (Appeal from the Judgment and “‘Decree of the High Court of Tanzania at Dar es Salaam (Kazimoto, J .) dated, the 18th day of September, 1986 in C iv il Case No. 275 of 1983 j u .Kj H.i h t ojt o r i'iR , J . A . a The appellant ia a liraited l i a b i l i t y Conpany by the name of Jsshbhai P. Patel which had 3U«d the respondent the National Pharmaceutical Company Limited fo r the recovery of the sum of Sh3. 320,117/20 being cu;:toms duty, s a lts tax, other charges and in terest, which t&e appell'ant had incurred when they cleared from the customs tl%3 con.:jf.C'nnent of •ne.Iicine owned by the respondent* I The appellant Company is a Clearing and. Forwarding Agent. The goods, according to P.W,1 Marendra G a jja r were f i r s t cleared, duty free oh per import free entry, No. 380 of 17.5.78. Afterwards the Audit election of the Customs Department in th eir querry No. 77/78 (customs No. 364 ) raised, th is matter of short le v ie s and. the Commissioner of Customs in confirming the raid it report about import duty, short levy and. sales tax on certain medicines wrote on 8th December, 1980 to the C ontroller and Auditor General about those ~ medicines that are chargeable with duty at ~$0% ad valorem, and sales tax at 18%, This le t t e r lichibit P .4 was clso addressed to seven companies including that of the appellant and warned, that should, the clearing agents not se ttle the short "leviuc which amounted to over she, 8 m illion not la t e r than 1st January, 1981 they would run the risk of th eir agency licences Tlj&pg withdrawn. The:j | | g ;.lant company p a i d - h e sales tax, customs duty on 30/12/80 as per th eir enclosed'receipts No. P .55119 and N o.P.356121 plus other charges amounting to shs. 255*073/50, On 1st January, 1981 a d.emand le t t e r by the appellant was sent to the respondent requesting fo r th is amount to be se ttle d . There has been no favourable response from the respondent Company who avoided,the ......../ 2 . ' payment end gave the fo llo w in g reasons in th e ir d efen ce; "respondent denied th a t the customs duty sa fes tc x and any other charges were paid, by the p l a i n t i f f on i t s b e h a lf and/or in stru c tio n s as a l l i e d in the p la in t . I f it is proved th at the ap p ella n t has paid then he had no in s tru c tio n s from the p r in c ip a l to p3y such duty and l e v y ” . This is no doubt a wrong v ie w , the owner o f the goods which are ly in g a t the customs does not determine what tsx es he should pay, they are imposed upon him by the Government. The evidence adduced, in clu din g the e x h ib its tendered shows th at taxes f o r variou s typos o f modicins v a ry . For example the ra te o f duty f o r con jex ta b le ts is giv en as 30% customs duty and 18% s a le s ta x ; c a s to r o i l BP is given as 10% customs duty and 12% s a le s ta x. These ra te s may be known to the owners and th e ir agents or th ey may not be known, in which cose the duty o f the au ditors is to b rin g to the a tte n tio n o f those concerned the exista n ce o f such taxes and i t wars no where suggested th at the owners and th e ir agents who did not pay did so d e lib e r a t e ly . They were merely reminded, to pay to the Customs which had s u ffe re d a lo s s o f shs. 8 m illio n due to non payment o f c o rre c t le v y . ( About the p a rtie s r e s p o n s ib ilit ie s and o b lig a tio n s S ection 126 and 127 o f iuast A fric a n Customs and T ran sfer Tax Management Act s ta te s th at any duly authorized, agent who performs any act on b e h a lf o f the owner is deemed as the owner o f goods and is h eld l i a b l e f o r a l l payments and a c ts . S im ila r ly any owner o f such goods s h a ll be l i a b l e f o r a cts o f such au th orized agent. From the fo r e g o in g i t is c le a r th at both owner and agent are lia b le f o r non observance o f cuistomo ru le s and re g u la tio n s . As Mr. K ia jith ia , Counsel f o r the a p p ella n t had 3aid., the issue here is whether the money was paid,. I f i t was p aid , as indeed i t was, then the qu estion o f reimbursement cones in which is what th is case is a l l about. Theij^jyjg no issue o f n eg ligen ce c r coreloasr.can in f i l l i n g the C u st^ y^ p rm s w rongly. Because i f the forms were f i l l e d n e g lig e n t ly by the agent under i- p o r t fr e e entry they passed through the customs and were approved by the customs and payment was made in th a t re s p e c t. Then the au ditors checked the e n trie s as they did w ith t h i s p a r tic u la r en try No. 380 o f 17.5.78 and d iscovered the goods should have the taxes p aid f o r . - 3 - I am o f the firm view th at the reimbursement o f the money paid by the agent should be e ffe c t e d by the p rin c ip a l who is the respondent rs there has been no n eg ligen ce on the part o f the n:;ent which could have caused any unexpected lo s s . In f a c t th is was no lo s s , merely' ■an J o b ligation • the 'p a rt ■*- o f owney. There are m erits in ’ th is 'a p p e a l, . ■ ''S \ . '- V : \ As the oth er Members o f the Court agree th is appeal is allow ed and the judgment o f the High Court set aside w ith costs to the a p p ella n t in th is Court and the court below. DATED at DAR S3 a'sI-.UM th is 30th day o f October, -19&7. . A. T-1.;A'. Of'AIl JgOTI^jOP JC P8J& . I c e r t i f y th at th is ia a true copy o f the o r ig in a l. ( J . H . IEOPFE) KiWIOR DEPUTY HiXIISTIUffl