Opur v Darbar Enterprises Ltd [2004] PGNC 232; N2528 (3 February 2004)

N2528

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

BETWEEN:

MARK OPUR

- Plaintiff -

AND:

DARBAR ENTERPRISES LTD
- Defendant -

WAIGANI: GAVARA – NANU, J
2003: 31st March & 07th July
2004: 03rd February

CUSTOMS ACT, CHAPTER NO. 101 – Customs Regulations s.26 – Customs Act, ss. 1, 99, 129 (2), 146, 153(g) and 176 – Definition of ‘owner’ of goods – Requirement for the owner of goods to lodge entries – Altering bills of lading – Such alterations being made without the knowledge of Customs – Bills of lading inconsistent with cargo manifests – Duty disputed by the owner – Power of Comptroller of Customs to condemn goods dependent on the Comptroller advising the owner in writing to institute recovery proceedings – Power of the Comptroller to sell goods, where owner disputes and refuses to pay the duty under protest.

Cases cited:
Commissioner General of Internal Revenue Commission -v- Douglas Properties Ltd – N2192.
The Chief Collector of Taxes -v- T.A Field Pty Ltd [1975] PNGLR 144.

Other cases cited:
Stretton -v- Malika Holdings Pty Ltd [1998] VSCA 127.

Counsel:
C. Korus for the plaintiff.
G. Koi for the defendant.

GAVARA-NANU, J: The plaintiff is seeking orders to condemn twelve vehicles which were imported by the defendant and seized by the Customs Division of the Internal Revenue Commission (hereinafter referred to as ‘the Customs’) in 2000, after entries for the twelve vehicles were not lodged within seven clear days from the date of the inwards report of the cargo ship which carried the vehicles, as required by s. 26 the Customs Regulations (Chapter No. 101).

The plaintiff’s application is made pursuant to s. 129 (2) of the Customs Act, (Chapter No. 101), (hereinafter referred to as ‘the Customs Act’).

The undisputed facts are stated here in brief compass. The defendant imported twelve vehicles in the middle of 2000 from Japan from the supplier called Japan Flame Co. Ltd. The vehicles were seized by the plaintiff through Customs. The seizure was because of the defendant’s failure to lodge the entries and furthermore, there were alterations done to the bills of lading which were found to be false.

Two seizure notices were issued to the defendant. The first notice was issued on 26th October, 2000, and the second notice was issued on 19th January, 2001.

No customs entries have hitherto been lodged by the defendant for the twelve vehicles. The import duty also has not been paid by the defendant. These facts are not disputed.

The plaintiff claims that the duty for all twelve vehicles is K65,142.60, but the defendant argued that the correct duty is K 49,508.38.

The defendant’s contention is that pursuant to the agreement it reached with the plaintiff on 7th December, 2000, the defendant was to pay K49,508.38 customs duty for the twelve vehicles, and the plaintiff would release the vehicles to it. It was submitted for the defendant that, on that same day, viz. 7th December, 2000, the plaintiff accepted K 35,000.00 in a bank cheque as down payment towards the agreed amount of K49,508.38, and the balance of K 14,508.38 was to be paid within seven days from that date. The defendant through its Managing Director told the Court that it later went to the plaintiff’s office to pay the remaining K14,508.38, within the agreed period but the plaintiff refused to accept the payment without any reasons being given. The defendant therefore submitted that the plaintiff must honour the agreement of 7th December, 2000, and accept K 49,508.38 as the duty for the twelve vehicles. The plaintiff has denied that there was such an agreement between them.

The plaintiff called two witnesses. They are Mr Steven Iramu, who is the Director of Southern Region in the Internal Revenue Commission (hereinafter referred to as ‘the IRC’) and Mr Steven Korea, who is the Acting Director of Evaluation also in the IRC.

The defendant called four witnesses. They are Mr Robin Roman, who is the Managing Director of the defendant, Mr Muktar Hussain, who is the Managing Director of Zia Enterprises Ltd, MR Subash Ghosh, who is the General Manager of the defendant and Mr Kalam Roman, who is the Managing Director of Happy Enterprises Ltd.

Mr Iramu told the Court that, the other reason why the vehicles were seized is that, the bills of lading were altered, which he said was in breach of s. 153 of the Customs Act. Such alterations involved the defendant’s name being changed as the consignee to the names of the other companies and individuals.

Mr Iramu said, the first payment of K 35,000.00 made by the defendant was returned to the defendant at its own request.

Mr Iramu also told the Court that there was also a request by the Department of Transport to the IRC, to withhold the vehicles pending the outcome of an investigation which was being done on the defendant by that Department, for importing vehicles without a license. The defendant was eventually charged, but the charge was dismissed on technical grounds.

The plaintiff argued that, the alterations to the bills of lading were illegal because the manifests for the vehicles were not altered. In other words, the alterations in the bills of lading did not correspond with the cargo manifests.

The plaintiff said that, the total value of the vehicles was reassessed with the assistance of the PNG Motors Traders Association, which resulted in the duty being put at K65,142.60.

The plaintiff argued that, the vehicles are owned by the defendant, because it is the importer. And Mr Iramu told the Court that, if there were changes in the ownership of the vehicles, the shipping agent had to be informed first so that the appropriate alterations could be made to the cargo manifests. Also, the Customs had to be made aware of such alterations. Here, those were not done. Mr Iramu said the bills of lading could not be amended without the Customs’ knowledge. And any alterations to the bills of lading had to be made before the goods arrived at the port of entry.

In this case, the alterations to the bills of lading were done after the goods had arrived.

Mr Iramu told the Court that, even if the entries had been lodged within the required time, the contents of such entries would have been false because of the changes in the bills of lading, which would have resulted in the acquittal process being affected, as the bills of lading would not have corresponded with the cargo manifests.

Mr Roman told the Court that, from the twelve vehicles, three were for Happy Enterprises Ltd, two were for Zia Enterprises Ltd, three were for Tauna Holdings Ltd, two were for Liner No. 43 Ltd and two were for two individuals, Huamir Rahad and Subash Ghosh. He said he ordered the vehicles because his company was asked by these companies and individuals to order the vehicles for them.

He said, under the agreement entered into between the defendant and Japan Flame Co. Ltd on 11th July, 2000, the defendant was to find PNG buyers for the vehicles on behalf of Japan Flame Co. Ltd. It was agreed that if the defendant found buyers in PNG, the defendant would receive 10 % commission on every vehicle sold.

Mr Roman said, after the execution of the agreement, the four companies and the two individuals paid total of K140,000.00 to him in down payments for the vehicles. He then paid K77,000.00 to Japan Flame Co. Ltd. And the order for the twelve vehicles was made on 19th July, 2000.

Mr Roman confirmed ordering the vehicles, but denied that they are for his company, which is the defendant in these proceedings. He told the Court that on 15th August, 2000, Mr Korea phoned him and told him that the defendant’s vehicles were coming by ship. Mr Roman said, he told Mr Korea that the vehicles were not for the defendant, but Mr Korea said to him, "you better get a license before the vehicles can be cleared".

Mr Roman said, it was because of the mistakes made by Japan Flame Co. Ltd that the defendant’s name was put on the bills of lading and the cargo manifests. He said that was the reason why the bills of lading were altered.

Mr Roman agreed under cross-examination that, when he ordered the vehicles, he was acting outside of his company’s authorised businesses which are merchandise, retail, wholesale, catering and fast food. But, he said the vehicles were ordered for the business associates and friends.

Mr Roman also told the Court that one reason for not paying the duty of K65,142.60, was because the storage fee had increased to K160,000.00. He was advised of this by the PNG Harbours Board. He said, it was considered that, that amount was too much, so they decided to institute proceedings against the plaintiff when the plaintiff instituted these proceedings. When Mr Roman was asked by Ms Korus as to why he referred to the defendant as the owner of the vehicles in a letter he sent to the IRC dated 01st November, 2000; he said, that was a typing error. That letter is Annexure ‘C’ to Mr Roman’s second affidavit sworn 9th August, 2002.

Mr Hussain told the Court that he paid K27,950.00 to Mr Roman for his two vehicles. He said, he received invoices for his vehicles from Japan Flame Co. Ltd through the defendant. He admitted asking for a Nissan Blue Bird but the bill of lading does not show it.

Mr Ghosh also told the Court that he paid K10,000.00 to Mr Roman for a vehicle. But he said the description of the vehicle in the invoice was different to the vehicle he ordered.

Mr Kalam Roman, who is the brother of Mr Robin Roman told the Court that, his company asked for three vehicles. He could not say where the bill of lading for one of the vehicles is. He said, the other bill of lading is incorrect. When asked by Ms Korus as to where the bill of lading for his other vehicle is, he said, he gave all the documents to Mr Roman. He also admitted paying money to Mr Roman for his vehicles.

In paragraph 3 of the first affidavit sworn by Mr Roman on 26th July, 2002, he says, the vehicles were imported by the defendant for its PNG clients. In paragraph 4, he says, Wari Vele Agencies were assigned to make Customs clearances for the vehicles but the clearances were not made for obvious reasons.

Mr Roman said, the defendant only facilitated the delivery of the vehicles for its clients. In paragraph 7 of the affidavit, Mr Roman confirms that his company was to receive 10 % commission on each vehicle sold. Then in paragraph 11, he refers to Japan Flame Co. Ltd as its trade partner. The Annexure ‘A’ to this affidavit is the letter sent by the defendant to Mr Iramu. The letter is dated 16th October, 2000. It is brief and only in four paragraphs. It is significant, I will therefore reproduce it in full.

16th October, 2000

The Director Customs

Southern Region

P O Box 777

PORT MORESBY, NCD

Attention : Mr Paul Iramu

Dear Sir,

RE : CLARIFICATION TO CONSIGNMENT OF 12 UNITS (MOTOR VEHICLES)

Initially, I write to clarify that my company is only appointed agents here for our trade partners in Japan. In fact we only facilitate customers who require motor vehicles for personal or company use. Further more we only receive benefit as commission of 10% from total invoice per car. Therefore the current shipment are for clients who will pay upon receipt of units. All clearance and duties will be paid by customers through customs agent we appoint.

There in fact is an error in the manifest as the units were supposed to be consigned to individual customers and companies respectively.

Thus we trust this may clarify the whole situation. Disclosed herewith are documents raised in our meeting dated 12th October, 2000.

Sir we now look forward to your deliberation and utmost assistance for the release of the 12 units to our clients, as there is accumulation in bills.

Yours Faithfully,
DARBAR ENTERPRISE LIMITED

The Annexure ‘D’ to that affidavit is the Certificate of Dismissal by the Waigani District Court, of the Information charging Mr Roman under s. 2 (1) (g) (ii) of the Motor Car Dealers Act, for selling second hand vehicles without a license. The ground for the dismissal of that Information was that, it was "defective". The Information was laid in August, 2000 and the Certificate of Dismissal was issued on 5th April, 2001. In paragraph 5 of Mr Roman’s second affidavit, sworn 9th August, 2002, Mr Roman refers to the Memorandum of Agreement between the defendant and Japan Flame Co. Ltd. That agreement is Annexure ‘A’ to the affidavit. The agreement is significant, because it refers to Japan Flame Co. Ltd as the ‘consignor’ and the defendant as the ‘consignee’ of any motor vehicles delivered by Japan Flame Co. Ltd to the defendant. The agreement provides that Japan Flame Co. Ltd was to be the supplier and the consignor of the motor vehicles and the defendant was to source potential PNG buyers for the motor vehicles as the consignee and to provide the list of buyers to Japan Flame Co. Ltd.

Under clause 3 of the agreement, the supplier, Japan Flame Co. Ltd, would receive payment for the motor vehicles within three months after receipt of monies from the buyers through its PNG agent, which is the defendant. And clause 4 of the agreement, provides that, Japan Flame Co. Ltd would then pay 10% commission to the defendant from the consigned value of the invoice per vehicle. The agreement was signed by the delegate of the consignor, one Shekmd Rana and Mr Roman signed as the delegate of the consignee. The agreement as noted was executed on 11th July, 2000, and it bears the seals of both companies. Mr Rana is the Managing Director of Japan Flame Co. Ltd and Mr Roman of course is the Managing Director of the defendant. These are born out clearly by the agreement.

In paragraph 8 of the affidavit, Mr Roman says, he deducted his 10% commission first from the payments he received from the companies and individuals in PNG for the vehicles then sent the balance of the payments received to Japan Flame Co. Ltd. In paragraph 13, he says, Japan Flame Co. Ltd then made out the invoices for the vehicles, but the bills of lading were made out to the defendant. Mr Roman in the same paragraph says, the bills of lading were corrected after it informed Japan Flame Co. Ltd of the errors and advised it of the actual owners of the motor vehicles.

Mr Roman swore his third affidavit on 22nd November, 2002. It basically covers the same matters deposed in his first two affidavits.

The affidavit evidence by Mr Roman clearly shows that, the defendant had agreed to pay K 49,508.38 duty for the twelve vehicles, for which it said it paid K 35,000.00 in down payment. But after the duty was reassessed at K 65,142.60 the defendant refused to pay it because by then the storage fee had increased to K160,000.00.

It is noted that the vehicles arrived in PNG on 15th August, 2000. No entries were lodged for the vehicles. The entries should have been lodged before the end of August, 2000. Thus the first seizure notice which was issued in October, 2000, was issued about two months after the vehicles arrived; and the second seizure notice which was issued in January, 2001, was issued four months after the vehicles arrived.

The defendant said, on 7th December, 2000, it made out a bank cheque for K35,000.00 payable to the plaintiff. That is the cheque which according to the plaintiff was later taken back by the defendant.

It is not in dispute that the dismissal of the charge against the defendant by the Waigani District Court for importing and selling second hand vehicles without a license was not based on the merits of the case.

From the evidence adduced, it is clear that the defendant did not have a license to carry on the business of importing and selling second hand vehicles.

It is also clear that, no entries and duty have hitherto been lodged and paid by the defendant for the vehicles.

It is also beyond question that, the vehicles were imported pursuant to the Memorandum of Agreement entered into between Japan Flame Co. Ltd, as the ‘supplier and consignor’ and the defendant, as the ‘consignee’.

The defendant has argued that it is not the owner of the vehicles, because, it only facilitated their importation for its business associates and friends. That no doubt is the reason why the defendant’s name was altered on the bills of lading as the consignee, to the names of the companies and individuals for which and for whom the vehicles were allegedly ordered.

The defendant therefore argued that the duty had to be paid by those companies and individuals.

The plaintiff on the other hand argued that the defendant is the importer and the owner of the vehicles, it therefore had to pay the duty. Clearly, the answer to the question of who owns the vehicles and who should pay the duty lies in the Customs Act itself.

Section 1 of the Act, defines ‘owner’ in relation to any goods, as including a person, being or holding himself out to be the owner, importer, exporter, consignee, agent or person possessed of, beneficially interested in or having control of, or a power of disposition over the goods.

The defendant clearly falls within the definition of ‘owner’ under s.1 of the Act. In the letter to the plaintiff by Mr Roman, dated 1st November, 2000, Mr Roman referred to the defendant as the owner of the vehicles. In other words, in that letter, the defendant held itself out as the owner of the vehicles. The defendant is also the one who imported the vehicles. These are not in dispute. The defendant also had possession and control of the vehicles. And more significantly, the defendant is the ‘consignee’ of the vehicles pursuant to the Memorandum of Agreement, it signed with Japan Flame Co. Ltd.

That also is the reason why the defendant was initially put down in the bills of lading as the consignee.

It follows that the changes in the bills of lading were done in breach of the Memorandum of Agreement and s. 153(g) of the Act, because the defendant was the consignee and the owner of goods pursuant to the agreement and by definition under s. 1 of the Act.

The only reason I can think of for such changes in the bills of lading is for the defendant to avoid paying duty on the vehicles.

Also the way Mr Roman went about ordering the vehicles was contrary to the terms of the agreement between Japan Flame Co. Ltd and the defendant.

Moreover, under the agreement, the 10% commission was to be paid to the defendant by Japan Flame Co. Ltd, after the vehicles were sold and the proceeds from those sales were paid to Japan Flame Co. Ltd by the defendant. And the 10% was to be calculated on the consigned value of the invoices forwarded to the defendant for each vehicle.

In this case, according to Mr Roman’s evidence, he first collected the 10% commission from the payments made for the vehicles by the clients then sent the balance to Japan Flame Co. Ltd. So the 10% commissions were deducted by Mr R. Roman before the invoices for the vehicles were sent to him by Japan Flame Co. Ltd. That certainly was done in breach of the agreement. And that also resulted in Mr Roman collecting more than his 10% commission.

The plaintiff is correct in its contention that the defendant by law was the owner of the vehicles. Therefore, being the owner of vehicles, the defendant was obliged to lodge entries with Customs within the required period and pay the appropriate duty.

The plaintiff was entitled to seize the vehicles because the defendant had failed to lodge the entries and had lodged false and illegal bills of lading. The power of seizure is given by s. 146 of the Act.

Lodging of false bills of lading as I said was contrary to s. 153 (g) of the Act. Under s. 99 (1), the plaintiff has wide powers to detain goods, if the values of the goods are in doubt. The plaintiff had the power to revalue the goods with the assistance of an expert, as it was done in this case. Section 99 (3) states that if the owner refuses to pay the duty as assessed, the plaintiff may sell the goods. Thus, the reassessment of the duty at K65,142.60, was done within the powers of the plaintiff.

It is clear from Mr Roman’s own evidence, that the defendant refused to pay K65,142.60 duty, after it was informed by the PNG Harbours Board that the storage fee had increased to K 160,000.00. So the main reason for refusing to pay the duty appears to be because of the increased storage fee.

The defendant is effectively asking this Court to declare that it should only pay K49,142.60 duty, because that was the amount it claims was agreed to between it and the plaintiff.

This contention by the defendant must fail for two reasons. Firstly, the plaintiff has denied that there was such an agreement between them. The plaintiff also told the Court that the K 35,000.00 the defendant paid was never received by the plaintiff because the payment was never receipted. The plaintiff said, the cheque was returned to the defendant upon its own request. Furthermore, even if there was an agreement, the defendant had rescinded it by taking the K35,000.00 cheque back. In this regard, I accept the plaintiff’s arguments. There is indeed no evidence of the payment of K35,000.00 being made to the plaintiff. Only a copy of the cheque for K35,000.00, purportedly made payable to the plaintiff has been produced to the Court by the defendant, but that is of no assistance to the defendant. It does not progress the defendant’s case any further.

Secondly, even if there was an agreement between the plaintiff and the defendant for the defendant to pay only K 49,508.38 in duty, such agreement would fetter the power of the plaintiff to reassess the duty. Thus, the agreement would be illegal and unenforceable. The plaintiff cannot bind itself from reassessing the duty, where necessary as required under the Act. Furthermore, to enforce the agreement would effectively mean sanctioning the false bills of lading lodged by the defendant by this Court, which it cannot do.

Section 176 of the Act, provides that where there is a dispute as to the duty to be paid on goods, the owner of the goods must pay under protest and write on the entry of goods, the words, "Paid under protest". The grounds of protest must also be stated on the entry including the description of all the goods affected by such protest. The owner or his agent must then sign the entry. And the amount paid under protest will be deemed to be the proper amount, unless another amount is determined by the Court to be the appropriate duty.

After paying the amount in protest, the owner can then institute proceedings in a Court of competent jurisdiction to recover the amount paid either in full or in part.

Section 176 (5) provides that no recovery proceedings can be instituted by the owner for the amount paid in duty, unless the payment is made under protest and the amount paid is the duty payable under the Customs Tariff and that the proceedings are commenced within six months from the date of payment.

This provision is significant because, it means that, if the owner wants to recover the amount of duty paid either in full or in part, he must show and prove that the amount was paid under protest. That is the condition upon which the owner can institute recovery proceedings. The owner must also show that the amount paid was determined to be appropriate by the Collector of Customs in accordance with the Customs Tariff.

So, like in this case, the amount of duty the defendant had to pay is K65,142.60, because that is the amount determined by the plaintiff in accordance with the Customs Tariff.

The defendant cannot just pay K 49,508.38. That would be in breach of s. 176.

The Act, specifically provides under section 176, that, if the owner wants to recover the amount of duty paid either in full or in part, he must first pay the amount under protest. He can then claim it, through Courts. Even if he does not agree with part of the amount, the owner must still pay the amount under protest. The owner has no option.

No owner can take legal action against the plaintiff to avoid paying the amount of duty or even part of it.

The reason why the owner is required to pay the duty even under protest is obvious. The plaintiff is charged with the responsibility of raising and collecting revenue for the State, which must continue without hindrances by legal claims lodged by the owners of goods who dispute the duties determined by the IRC or the plaintiff. The legislative intent under the Customs Act is that the State must continue to collect and receive its revenue through tax. And if some of the tax or duty is wrongly received or collected, then the State will reimburse the owner of whatever amount that should be reimbursed to him after the owner has claimed it through proper Court actions or proceedings.

Thus, the mandatory procedure under s. 176 of the Customs Act, is the only process by which the defendant can challenge the duty imposed by the plaintiff. I find support on this view in Stretton -v- Malika Holdings Pty Ltd [1998] VSCA 127 (4th December, 1998). There, the Supreme Court of Victoria, Court of Appeal considered a similar provision in s. 167 of Customs Act, 1901 (Cth). This section is similar to s. 176 of the Customs Act.

In Stretton -v- Malika Holdings Pty (supra), Batt, J.A. at page 20 said:

"The option of paying without protest is not, I am inclined to think, one conferred by s. 167 (1) itself. It was at one stage in the course of argument suggested that there was a third option, not to pay at all; but I do not think that that is an option under the Act, at any rate when a demand for the duty has been made in accordance with s. 165 (1), for non-payment would be a contravention of the Act. Although senior counsel for the appellant expressly declined to embrace the interpretation which follows, to my mind the word "may"’ in s. 167 (1) does not confer a discretion, but rather an authorization or permission, as though the relevant part of the sub-section read, " ... it shall be lawful for the owner of the goods to pay under protest ... " In other words, a procedure was being set up, ... under which owners were authorized to pay under protest and then sue for recovery".

Then at pages 21 his Honour went on to say:

"In any event, it is clear now from the subsequent authorities discussed earlier that there is only one method of recovering moneys overpaid as Customs duties, namely, that laid down in s. 167: that method of recovering is not merely optional".

Section 176 of the Customs Act, is also analogous to s. 20 of the Stamp Duties Act 1952, which provides that, once the duty is assessed and the notice of assessment is issued, the duty must be paid. And if there is any objection to the assessed duty, the person objecting to the assessed duty may do so in writing to the Collector of Stamp Duties, but such objection can only be raised after the duty is paid. These points were discussed in Commissioner General of Internal Revenue Commission -v- Douglas Properties Limited N. 2192. In that case, the Court followed, The Chief Collector of Taxes -v- TA Field Pty Ltd [1975] PNGLR 144, where Raine J. (as he then was) at pages 148 to 149 in explaining the reason why the assessed duty must be paid, before it can be objected to, said:

"... It may turn out that the assessment was void, but the sub-section is in absolute terms, and, so it seems to me, one must pay up protesting, and live in hope that it will later be established that the Chief Collector was wrong, and have one’s wrongly levied tax repaid.

At first blush some might be offended at the situation I believe should be arrived at. But if one takes pause, and remembers that Parliament must have money to support its many existing operations and projects, to cite a few, hospitals, schools, defence, rural improvements, and the police, then it is not surprising to find provisions in the Income Tax Act, that attempt to ensure that the money believed owing to the Chief Collector is not lost to the country while lengthy and difficult appeals are embarked upon. I can imagine tax payers being very irritable in cases where they are sure, on good grounds, if you like, that the assessment is wrong, because they still have to hand over the amount they are sure was wrongly assessed, at least temporarily. But there are cases, or could be cases, where, but for the effect of s. 257, in combination with other provisions, many assessments would never be paid, people would leave the jurisdiction, money channelled off, companies despoiled and so on".

The same principle applies in this case where s. 176 of the Customs Act makes it imperative on the importer or the owner or the consignee of the goods to pay the duty, under protest, for the same reasons that the State through its revenue collector the IRC, must have money to finance its many national projects and obligations.

Thus the duty of K 65,142.60 in this case, is deemed to be proper and appropriate as having been determined by the Comptroller of Customs, and it had to be paid by the defendant as provided under s. 176 (3) of the Customs Act, even under protest.

The upshot of this is that the defendant has no defence to the plaintiff’s claims, as it cannot go around or evade the responsibility imposed on it by s. 176 of the Act.

It follows that all of the arguments advanced by the defendant in its defence must fail.

The plaintiff has sought Orders for the condemnation of the twelve vehicles under s. 129 (2) of the Customs Act. But I do not think the plaintiff’s remedy is available under that section, for the reason that, there is a requirement under that section that, the plaintiff should have given written notice to the defendant to commence legal proceedings to recover the vehicles, and if after four months of such notice being given, the defendant had failed to take legal proceedings, then the vehicles can be deemed condemned. These requirements have not been satisfied by the plaintiff. Thus the plaintiff cannot benefit from that section.

I am however of the opinion that the plaintiff’s remedy lies in s. 99 (3) of the Act. That is, the defendant having refused to pay the duty as determined by the plaintiff with the assistance of the experts, namely the PNG Motors Traders Association, the plaintiff is now at liberty and does have the power to sell the vehicles.

I am satisfied that the defendant has refused to pay the duty determined by the plaintiff, when it refused to pay the duty under protest.

Thus, I am satisfied that the plaintiff can exercise his powers to sell the vehicles under s. 99 (3) of the Act.

I note that the defendant has cross-claimed against the plaintiff for a declaration that there was an agreement between it and the plaintiff and that, pursuant to that agreement, the defendant only has to pay the duty of K49,508.38, for the vehicles. The defendant also claimed damages and costs.

These issues have already been addressed in the judgment, where I have held that the agreement, if made, is illegal and unenforceable and that the defendant has no defence to the plaintiff’s claims by reason of s. 176 of the Act.

The defendant’s cross-claim therefore has no basis in law and I dismiss it.

Thus the Orders of the Court are as follows: -

1. The twelve vehicles which are subject of these proceedings are to remain forfeited to the plaintiff.
   
2. The plaintiff is at liberty to sell the twelve vehicles, and the proceeds from such sales are to be paid into the State’s Consolidated Revenue Account.
   
3. The defendant will pay the plaintiff’s costs.

_________________________________________________________________________
Lawyer for the plaintiff : Internal Revenue Commission Legal Division
Lawyer for the first defendant : Yapao Lawyers