(1988)1988November29 fA.LOEZOU.P.] ΙΝΤΉΕMATTEROFARTICLEM6OFTHECONSTITUTION SUNTSLANDCANNTNGLTD,, Applicants, τ, THEREPUBUIDOFCYERTJ$,TORO0GH TIE DIRECTOROFTHEDEPARTMENTOFCUSTUMSANDuXtasE. Respondent. (CaseWo:867[85). Customs andExciseDuties—The Customs and Excise DutiestLaws, 1967 (Law'82/67)—Whetheradministrationpossesspower!torevoke anillegal decisionlevyingduty—Questionfeternunedinthtaffirmative—Intheab~ sence<qfaspecific legalprovision,'thematterisgovernedby the general principles.of<administrative'lawapplicableto<theceaseofrevocationofan unlawful administrative act—Refusal to'revoke anact levying duty— Refusalbasedongroundof absenceofpower'to revoke—Annulledfor misconceptionqflaw. Misconceptionoflaw—Hefusaltorevokeanactongroundthatrelevantlegis lationdid notgivepowerto revoketi—Injactjtheactcouldhavelbeenre· | g votedby applyingthegeneralprinciplesofadministrative.lawrelatingto revocationofunlawfulacts—Xefusalannulled. Theapplicantsimported;goodswhich,having beenxlassified'nvaccordancewiththedeclaration filed byapplicants'agents,'werecleared from customs.Theapplicantspaidthecorrectamountofduty,whichsuchclassi- 55 frtflttop mtaflwiSometimelatertheapplicantsappliedforreclassificationOfthegoods onthegroundthatthegoodsdid notinfactcontainsugar,as theapplicants originallythought Respondentturned down theapplication,on the/ground thatasthere 2328 20 5 3 CX.R. Sun Island Canning v. Republic wasnodisputepriortotheclearanceofthegoodsinquestion,hehadno powertoaccedetoapplicants'requestforreclassification. Thesaidrefusal wasannulledbytheCourt Theprinciplesexpounded bytheCourtinthiscaseappearsufficientlyfromthehereinaboveheadnote. ^ Subjudicedecisionannulled. Noorderastocosts. Casesreferredto: DirectoroftheDepartmentofCustomsandExcisev.GrecianHotelEnterprisesLtd.
(1985)1 C.L.R.476; 10 YiangouandAnotherv. TheRepublic
(1976)3CUR.101; Kolokosv.TheRepublic
(1965)3CX.R.558. 1 Recourse. 15 Recourse against the refusal of the respondents to refund to applicantsthe sumof£1803.33paidin excessasimportduty for "frozen concentratedpineapplejuice". G.Agapiou withA. Ioannou (Mrs.), for the applicants. Gl Hadjipetrou, for therespondents. Cur. adv. vult. 9„ 25 A.LOIZOU P.read thefollowingjudgment. Onthe2ndFebruary 1985,theapplicantsthrough theirclearing agent,deposited withtheCustomsAuthoritiesLimassolaClearanceFormtogether with all theotherrelevant documents for thepurpose of clearing from Customs a quantity of.concentrated juice which they described as "Frozen Concentrated Pineapple Juice".TheClearing Agent of the applicants declared the above goods under Tariff Heading 20.07.19inrelation towhich thereisprovidedadutyat arateof 40% advalorem.Theabovedeclaration wasacceptedby 2329 A.Loizou P. Sun Island Canningv.Republic
(1988)theCustomsOfficer andonthe5thFebruary 1985,theycollected theappropriateimportdutyamountingto£4,828.88andthesaid goodsweredeliveredtotheapplicants. Bymeansof theirletterdated the31stMay 1985,theapplicantsallegedthatthesaidconcentratedjuicedidnotcontainsugar 5 and it ought not to have been classified under Tariff item 20.07.19butunderTariff item20.07.11inrelationtowhichthe duty payable is at a rate of 25% ad valorem. By meansof the samelettertheapplicantswereclaimingtherefund of£1,803.33 whichrepresentedthedifference of 15%betweentheabovetwo JQ Tariff items.Alsotheapplicantspresented adeclarationoftheir supplierstotheeffect thattheconcentratedjuicedidnotcontain sugar. In reply therespondents addressed to theapplicants the followingletterdatedthe27thJuly 1985. 15 "Irefer toyour letter underreference JCS/AS247ofthe 31st May, 1985, in connection with your claim for reclassification andrefund oftheimportdutyallegedlyoverpaid ontheabovejuice,onthegroundthatitshouldhavebeenclassified underTariff Heading20.07.11 @25% advaloremgen- 20 eral rate of duty and not underTariff Heading 20.07.19@ 40% ad valorem, as declared by your Clearing agents and paid. Iregrettoinform youthatasyourCustomsagentsdeclared thejuice under Tariff Heading 20.07.19 and as no dispute 25 arosepriortoitsremoval from Customscontrol,Iamunable toaccedetoyourrequest." Theapplicantsbymeansof aletterof theircounseldatedthe 13thAugust 1985,soughtareconsideration oftheirmatter.The respondents rejected the claim forconsideration, bytheir letter 30 datedthe31stAugust 1985,whichreads: "Irefer to your letter under reference JA/KC/2440 of 13 2330 3CX.R. 5 SunIsland Canning v.Republic A.LoizouP. August 1985concerning the above subject, I would inform youthatinaccordancewiththeCustomsandExciseLawNo. 82/67unlesstheoverchargeistheresultofamistakeof fact, claimsforrefund ofimportdutypaidongoodsalreadydeliveredfrom Customschargecanbeconsidredonlyinthecases fallinginSection 161
(1)thereunder. There is no other provision in the above mentionedLaw empoweringmetoreconsiderthetariff classification ofaproductandrefund ofanydutyoverpaidthereon. 10 In the present case the declaration under tariff heading 20.07.19wasmadeonbehalfofyourclientsbytheirclearing agentswhoweredulyauthorizedbythemtomakesuchadeclaration,andnodisputearosepriortothedeliveryofthegoods from Customscharge. 15 Therefore,Iamnot,asyouwillappreciate,inapositionto re-examine the tariff classification of the goods under reference. Asaresultoftherejection oftheirclaimtheapplicantsonthe 9thOctober 1985,filed thepresentrecoursewherebytheypray: 20 "1.That thedecisionof theDirectorof theDepartmentof CustomsandExcisecommunicatedtotheApplicantsbytheir letterNo.20.07dated 27/7/85 andre-confirmed by letteron the31/8/85iscontrarytothelawand/orismadeinexcessor inabuseofpowersvestedinthesaidDirector. 25 2.Adeclaration thattheApplicantsareentitledtoarefund tothemofthesumof£1803.33paidbytheApplicantsinexcessofwhatwasrightlypayablebythem." 30 Thecontentionsoflearnedcounselfor theapplicantsthatthe classification ofthegoodsundertariff item20.07.09andnotundertariff item20.07.11wasduetoacommonmistakeoffactthat istheclearingagent,ontheonehand,withoutbeingawareofthe 2331 A.Loizou SunIsland Canningv.Republic
(1988)truepositionandbelievingthatthejuicecontainedsugar,hedid infactdeclarethatitcontainedsugar,andthecustomsofficer, on theotherhandacceptedsuchdeclarationandacteduponitanddeterminedthedutypayablewithregardtogoodscontainingsugar, by actingin the same wayand makingthesamemistakeasthe 5 clearing agent. They further contended that on thebasisof the factsoftheircaserespondentsunjustifiably refused toreconsider theclassification ofthesaidgoodsandrefund theexcessimport dutywhichtheycollected bymistakeand/orillegally,contraryto the provisions of existing legislation, the Constitution and the JQ judgment oftheSupremeCourtinDirectoroftheDepartmentof CustomsandExcisev.GrecianHotelEnterprisesLtd.,
(1985)1 C.L.R.476and/orinexcessand/orabuseoftheirpowers. Ontheotherhandlearnedcounselfortherespondentssubmittedthatthematterisgovernedbysection 161 oftheCustomsand ,~ ExciseLaw 1967,(LawNo. 82of 1967),whoseprovisionsare onlyapplicableinthecasesofdisputeswhicharisebeforetheremoval of thegoods from customs;andnot in instances suchas this one where the dispute arose after the goods had been removedfromcustoms. In Director of the Department of Customs and Excise v.GrecianHotelEnterprises(supra)thequestionthatfellforconsideration wasthis:"DotheCustomsAuthoritieshavepowerto revoke, amend, ormodify adecision levyingduty on imported goodsafter clearance."(SeethejudgmentofPikisJ.,atp.479). 25 PikisJ.,delivering thefirstjudgment of theCourtanswered the questionasfollows atpp.481-482: "Having given due consideration to every aspect of the case,weareunabletoupholdthejudgmentofthetrialCourt. Theimposition ofcustomsdutiesisanadministrativeactand ™ like every administrative act it may, in appropriate circumstances, berevoked. As Triantafyllides, J., as he then was, observed in A. & S. Antoniades & Co. v. TheRepublic
(1965)3C.L.R.673,thereispowerin administrativelawto revokeanerroneousdecisionanddecisionsofthecustomsau- 35 2332 3 C.L.R. 5 JQ . 20 25 30 SunIsland Canning v.Republic A.LoizouP. thoritiesarenoexception.Adecisionrevokinganearlierone, isreviewableunderArticle 146.1 oftheConstitution,inaccordancewithsettledprinciplesofadministrativelawpertainingto thevalidityofrevocatoryacts.AsexplainedbyStassinopoulos inLawof AdministrativeDisputesp.230,thereis powerin aa^ninistrativelawtorevokeanillegaladministrativeact,that is,anactcontrarytolaw.Thusthereisamenityonthepartof theAdministrationtorecalladecisionclaimedtobecontraryto law.Whetherthispowerwasproperlyexercisedinthepresent case,isamatterofnoconcerntousforthereviewofanysuch act could only be undertaken in thecontext of proceedings challenging the act, under Article 146.1of the Constitution. Everyillegaladministrativeactisliable,inappropriatecircumstances,torevocation,theeffect ofwhichistoremovethedecisionrecalled andcreateanewsituationinlaw,definitiveof therightsofthoseaffected thereby.Oncetherewasdiscretion torevokeinthiscasetheoriginaldecisionfortheclassification of the marble on the ground it was taken contrary to law, namelytheclassification ofgoodsundertheCustomsandExciseLaw,theoriginaldecisiondisappearedandanewsituation arose,imposingaburdenontherespondentstopaydutyaccordingtothenewdecision.Theyhadarighttoquestionthe decisionof 17.4.78,arighttheyforfeited byfailing tomounta challenge before theSupremeCourtinitsrevisionaljurisdictionwithin 75days,asrequired byArticle 146.3of theConstitution.OnlytheSupremeCourtcouldinquire,onarecourse intothepresumedvalidityoftherevocatoryact,asprovidedin para.1 ofArticle 146.Thereafter, thedebtorobligationofthe respondents accruing under thedecision of 17.4.78,wasrecoverableinacustomsprosecution astheappellantssoughtto recover it by thepresent proceedings.Tothisclaimrespondentshadnovaliddefence;therefore,appellantswereentitled tojudgmentforasumofC£3,346." Triantafyllides P.,statedthefollowing atpp.483-484: 35 "InthelightofthematerialbeforetheCourtitisevidentthat theinitialclassification of thegoodsinquestionwaserrone2333 A.Loizou P. SunIsland Canningv.Republic
(1988)ous,and,therefore,contrarytotherelevant legislativeprovisions,and that the aforesaid 'demand note* wastheresultof theproperapplicationofsuchprovisionsevenbelatedly. Asthiswasaninstanceofrevocationofanunlawfuladministrativedecisionitisuseful, asregardsthegeneralprinciples 5 ofadministrativelawapplicablethereto,torefer to,interalia, A. &S.Antoniades &Co.v.TheRepublic,
(1965)3C.L.R. 673, 683, 684,Pavlides v. The Republic
(1966)3C.L.R. 530,549-551,andonappeal
(1967)3C.L.R.217,228,Zenios v.TheRepublic,
(1967)3CX.R. 364,371, 372,Karayi- 1 0 annisv.TheRepublic,
(1974)3C.L.R.420,433,434,Yiangouv.TheRepublic,
(1975)3C.L.R.228,243,244,andon appeal
(1976)3C.L.R. 101,105-108,Michaelv.TheRepublic
(1979)3C.L.R.499,501,502,andGeorghiouv.TheRepublic
(1983)3C.L.R. 827,837-840.Itispertinent topoint 1 5 out,too,thatsuchprinciplesdifferfromthosewhichapplyto therevocationoflawful administrativedecisions,astheywere expounded in, inter alia, Paschali v.TheRepublic
(1966)3 C.L.R. 593, 608, Sarantiv.TheRepublic
(1974)3C.L.R. 338,341, 342,andon appeal
(1979)3C.L.R.139,143,144, 2° loannouv.TheRepublic
(1979)3C.L.R.423,441,·Peristianis v.TheRepublic
(1981)3C.L.R.92, 101,Loucav.The Republic,
(1981)3 C.L.R. 190, 193,and Charalambous v. TheMinisterofInterior
(1981)3C.L.R.203,213. Moreover,itisapparentfromaperusaloftheCustomsand ExciseLaw, 1967(Law82/67)thattheinitialdecisionregardingtheimportationfreeofdutyofthequantityofmarblein questionwasnotrevokedbyvirtueofanyspecific legislative provision inLaw82/67,orinanyotherLaw,whichcouldbe treatedasexcluding,inwholeorinpart,theapplicationofthe 30 generalprinciplesofadrninistrativelawgoverningtherevocationofunlawful adrninistrativedecisions(see,inthisrespect, inter alia,theAntoniades, case,supra,theSaranticases,supra,inthefirstinstanceandonappeal,theYiangoucases,supra,inthefirstinstanceandonappeal,CurzonTobacco Com- 35 panyLimitedv. TheRepublic
(1975)3C.L.R.363,368,and 2334 3 C.L.R. 5 JQ 15 20 25 3Q Sun Island Canning v.Republic A. Loizou P. on appeal,
(1979)3 C.L.R. 151, 156, 157,Michaelides v. The Attorney-General of theRepublic,
(1978)3 C.L.R.285, 300,andon appeal
(1984)3C.L.R. 1596,theLouca case,supra, The Group of'Five Bus Tour Ltd. v.- The Republic,
(1983)3C.L.R.793,808,809 andPetrides v.'The Republic,
(1983)3 C.L.R. 1355, 1358,"1359)." " - •« Ineffect theapplicants'contentionwasthattheclassification in questionwasmadeinamannercontrarytotherelevant legislative provisions andthusamounted toan unlawful administrative act. Further theapplicantsbytheirclaimwereineffect askingtherespondentstorevoketheirpreviousclassification. Asitwillappear from thefacts abovereferredtotherespondentsrejectedtheapplicantsclaimonthesolegroundthattherelevantlegislationdidnot empowerthem todoso. AswasheldbyPikisJ., intheGrecianHotelcase (supra),the Customs Authorities havepower torevoke, amend, ormodify a decisionlevyingdutyonimported goodsafter clearance. FurtherTriantafyllides, P.,statedintheGrecianHotel(supra), thatintheabsenceof aprovision intherelevantlegislation (Law 82/67) for revocation of erroneous decisions imposing import dutytheirrevocation shouldbegovernedbythegeneralprinciples of administrative law governingrevocation ofunlawful administrativedecisions.Theprinciplesgoverning therevocation of unlawful administrative actswere statedinthecaseof Yiangouand Another v.TheRepublic
(1976)3 CL.R. 101inwhich Triantafyllides P., giving thejudgment of the Full Bench said the followingatpp. 105-106: "The revocation of an unlawful administrative act is·a courselawfully open to the administration and it is based on thenotionofthepreservationoflegality;therelevantprinciples aretobefound in Stasinopoullos onthelawof Administrative Acts
(1951),at pp. 398-399; and it is useful torefer, too, to the decisions of the Council of State in Greece in cases7967 1964, 1750/1965, 1531/1966, 3027/1967 and 458/1968; in 2335 A. Loizou P. Sun Island Canning v. Republic
(1988)particularinthedecision incase3037/1967thefollowingare stated as regards the revocation of unlawful administrative acts: '... ηανάκλησις,καιπαρανόμουέτιδιοικητικήςπράξε ωςδενείναιεπιτρεπτήμετάτηνπάροδον ευλόγουχρόνου, 5 κρινόμενουκατάτας εκάστοτεσυνθήκας,εάνεξαυτήςπα ρήχθη πραγματικήκατάστασιςπροστατευτέαενόψειτων αρχώντηςχρηστήςΔιοικήσεως,πληνεάναύτηπροεκλήθη δι* απατηλής ενεργείαςτουενδιαφερομένουήδενετηρήθει υπ* αυτού όρος τεθείςεν αυτή μετην επιφύλαξιν της JQ ανακλήσεωςήσυντρέχηλόγοςδημοσίουσυμφέροντος.' ('...therevocationof even anunlawful administrativeactis notpermissible after thelapseof areasonableperiodof time, tobejudged in thelight of thecircumstancesof eachcase,if therehasbeencreatedfrom thebeginning asituationneeding 15 protectiononthebasisof theprinciplesof properadministra tion,unlesstheunlawful adrninistrativeacthasbeencausedby fraudulent conduct of theperson concernedor therehasnot beenobserved by himaconditionincludedintheactsubjectto thereservation thatthere mightberevocationorthereexist rea- 20 sonsof public interest'.)" Similar approachis tobefound inSpiliotopoullos Manual on Adrninistrative Law 2ndEdition,atpp. 174-
- Almost tothesameeffect is theapproachinDagtoglouGeneral Adrninistrative Law A* 2ndeditionatp.
- 25 As it appearsfromtheabove passages andfrom the case-law referred tointhejudgmentof Triantafyllides P.,inthe-Grecian Hotelcase (supra) the administration, in its discretion,may re vokeanunlawful administrative act.Inthiscase,however, the administration declined toexercise any discretion infavour or 30 against revocation,andthereasonfor adoptingsuchacourse was because itwas labouring underthemisconceptionof law thatit had no power under the law to revoke its previous decision, 2336 3 C.L.R. 5 SunIsland Canning v.Republic A.LoizouP. whereasinfactithadsuchapowerundertheprinciplesofadministrativeLawgoverningrevocationofunlawful administrativedecisions.Thisbeingtheposition,thesubjudicedecisionhastobe annulledasbeingadecisionwhichwastakenunderamisconception of the*correct legal position (seeKolokos v.The Republic
(1965)3C.L.R.558). Asthequestionofrevocationornotfallswithinthediscretion of theadministration Ineed saynomoreonthematter. Itisreferred totherespondentsforreconsideration in thelightof this JQ decisionandofthefactsofthecase. Intheresultthesubjudicedecisionisannulled.Inthecircumstances,however,therewillbenoorderastocosts. Subjudicedecisionannulled. Noorderastocosts. 2337