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Petitioner: MUHAMMAD YAMIN VS Respondent: PAKISTAN, THROUGH SECRETARY, MINISTRY OF FINANCE, GOVERNMENT OF PAKISTAN
P L D 1960 (W
P L D 1960 (W. P.) Karachi 258
Before G. B. Constantine and A. S. Faruqui, JJ
MUHAMMAD YAMIN‑Petitioner
versus
(1) PAKISTAN, THROUGH SECRETARY, MINISTRY OF FINANCE, GOVERNMENT OF PAKISTAN
(2) COLLECTOR OF CUSTOMS, KARACHI ---Respondents
Writ Petition No. 561 of 1958, decided on 22nd December 1959.
Sea Customs Act (VIII of 1878), S. 167 (8) (81) read with S. 177‑A‑Collector's finding about " knowledge ", " intent " or "personal concern" of possessor of goods, necessary to warrant punishment.
Held, that section 177‑A, Sea Customs Act, 1878 casts on the possessor of goods the burden of proof that no act to defraud the Government of any duty payable on goods seized or to evade any prohibition or restriction has been committed or that there was no such intent, but this does not absolve the Collector from applying his mind to the question of the possessor's personal concern, knowledge or intent : for the mere fact that some other person has imported goods unlawfully does not necessarily involve the consequence that a later possessor of the goods had any concern in or knowledge or intent regarding import. A Collector is bound to set out findings sufficient to warrant the punish ment. The absence of such findings constitutes an error of law patent on the face of the record and a conviction without such findings may be quashed in certiorari.
The mere findings of smuggled goods in the hands of an innocent transferee did not support confiscation under sec tion 167 (8).
Where there were no such findings, the order of confiscation and penalty was quashed.
Federation of Pakistan v. Sardar Ali P L D 1959 S C (Pak.) 25 and 44 L T R 102 ref.
Waheed Farooqi for Petitioner.
Muzaffar Hassan for Respondents.
Dates of hearing : 10th and 17th December 1959.
JUDGMENT
CONSTANTINE , J.‑On 23‑12‑1956, the Anti‑Smuggling Police seized 72 pieces of art silk piece‑goods from the premises of the petitioner. A notice was issued by the Customs to the petitioner calling upon him to show cause why the goods should not be confiscated under section 167 (8) and (81) of the Sea Customs Act. On 14‑1‑1957, the petitioner made a representation to the
Customs in reply to the effect that he had purchased the cloth according to market usage and custom. On 2‑9‑1957, the Collector of Customs passed the following order :‑
" On 23‑12‑56, the Anti‑Smuggling Police seized seventy two pieces of art silk piece‑goods from the house of one Muhammad Yamin. The goods are dutiable and their import into the country is restricted except under a licence issued by the Chief Controller of Imports & Exports under section 3 of the Import & Export Trade Control Act, 1950, read with section 19 of the Sea Customs Act.
(2) Muhammad Yamin from whose possession the goods were seized has failed to prove under section 177‑A of the Sea Customs Act that the goods in question were lawfully imported into the country. It is, therefore, held that the goods were imported in contravention of the Import Trade Control Regulation and without the payment of customs duty and sales tax leviable thereon.
(3) The offending goods attract the provisions of section 167
(8) and (81) of the Sea Customs Act under which they are liable to confiscation and are accordingly confiscated. I also impose a personal penalty of Rs. 1,000 on Muhammad Yamin, the owner of the goods ".
2. An appeal to the Central Board of Revenue and an application in revision to Government were dismissed on the ground that the petitioner had not deposited the amount involved.
3. The relevant provisions of the law are section 167, entries No. 8 and 81 and section 177‑A. These read as follows:‑
" 167. The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively :‑
Offences
Section of this Act to which offence has reference.
Penalties.
1
2
3
8. If any goods, the impor tation or exportation of which is for the time being Pro hibited or restricted by or under Chapter IV of this Act be imported into or exported from the Provinces and the Capital of the Federation contrary to such prohibition or restriction ; or if ay attempt be made so to import or export any such goods ; or if any such goods be found in any package produced to any officer of Customs as containing no such goods ; or if any such goods, or any dutiable goods be found either before or after landing or shipment to have been concealed in any manner on board of any vessel within the limits of any port in Pakistan ; or if any goods, the exportation of which is prohibited or restricted as aforesaid, be brought to any wharf in order to be put on board of any vessel for ex portation contrary to such pro hibition or restriction.
18 & 19
Such goods shall be liable to confisca tion ; and any person concerned in any such offence shall be liable to a penalty not exceeding five times the value of the goods, except that in the case of the export of special goods, such goods shall be liable to confiscation ; and any person concern ed in any such offence shall, on conviction before a Court, be liable to imprisonment for a term not exceeding six years and not less than one month, and shall also be liable to fine.
under or by virtue of this Act with respect thereto acquires possession of, or is in any way concerned in carry ing, removing, depositing, harbouring, keeping or con cealing or in any manner dealing with any goods which have been unlawfully removed from a warehouse or which are chargeable with a duty which has not been paid or with respect to the importa tion or exportation of which any prohibition or restric tion is for the time being in force as aforesaid ; or if any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or I attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any pro vision of this Act applicable to those goods.
General
Such goods shall be liable to confisca tion and the person concerned, in any such offence, shall be liable to a penalty not exceeding five times the value of the goods, except that in the case of the export of special goods, such goods shall be liable to confiscation; and any person concerned in any such offence shall on conviction before a Court, be liable to imprison ment for a term not exceeding six years and not less than one month and shall also be liable to fine.
" 177‑A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that an act to defraud the Government of any duty payable thereon or to evade any prohibition or restriction for the time being in force by or under this Act has been committed in respect of such goods, or that there is intent to commit such act, the burden of proving that no such act has been committed or there was no such intent shall be on the person from .whose possession the goods were seized.
(2) This section shall apply to such goods as the Central Government may, by notification in the official Gazette, specify in that behalf.
(3) Every notification issued under subsection (2) shall be laid before the National Assembly as soon as may be after it is issued ".
4. Various points were raised in arguments, but the petition may be disposed of op the following short point, The order of the Collector, as is conceded by Mr. Muzaffar Hasan, proceeds on the ground that section 177‑A of the Sea Customs Act cast upon the petitioner the burden of proving that the goods in question were lawfully imported into the country. So far (assuming of course the reasonable belief required by section 177‑A) the Collector is perfectly correct. But his next step is to confiscate and impose penalty. The penalty depends upon a finding as regards entry 8 that the petitioner was concerned in the offence, and there is no such finding. As regards entry 81 there is a similar lacuna ; and this extends both to confiscation and penalty : we have no finding that the petitioner had any requisite knowledge or intent. It is true that the burden of proof is caste by section 177‑A upon the petitioner, but this does not absolve the Collector from applying his mind to the question of the petitioner's personal concern, knowledge or intent : for the mere fact that some other person has imported goods unlawfully does not necessarily involve the consequence that a later possessor of the goods had any concern in or knowledge or intent regarding import.
We think that a Collector is bound to set out findings sufficient to warrant the punishment and that the absence of such findings constitutes an error of law patent on the face of the record. In 44 L. T. Reports 102 the Justices had failed to state the ingredient of "knowingly" and their order of conviction was quashed in certiorari.
Turning now to the question of confiscation under entry 8 the matter is concluded so far as concerns this High Court by Their Lordships of the Supreme Court. It was held in Federation of Pakistan v. Sardar Ali (P L D 1959 S C (Pak.) 25) that the mere finding of smuggled goods in the hands of an innocent transferee did not support confiscation under entry 8. There is no finding B of the Collector that the petitioner was not the innocent transferee that he claimed to be.
The result is that the Collector's order is quashed and that C the respondents do pay the costs of the petitioner.
A. H.
Order quashed.