Overview
- A three‑member bench of the Supreme Court issued written judgments on July 14–15, 2026 that decided two customs appeals and set new limits on when assessments can be reopened.
- The Court held the June 26, 2002 show‑cause notice served on Pakistan State Oil (PSO) was issued well beyond the six‑month period then applicable and is therefore time‑barred and of no legal effect.
- The justices ruled that Section 32 of the Customs Act, 1969 may only be used when customs proves deliberate misdeclaration, use of false documents, or fraud, and that mere disputes over legal interpretation or valuation do not meet that standard.
- The PSO case involved a claimed duty recovery of Rs257,000 and turned on whether supplies to naval ships were exempt under section 106; the Court reversed lower court and tribunal orders that had failed to treat limitation as a substantive issue.
- Practically, the rulings constrain customs from relabeling interpretation or valuation disagreements as fraud to reopen closed transactions and place the onus on revenue authorities to produce clear evidence of deliberate wrongdoing before reopening past assessments.