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Petitioner: MUHAMMAD MAHFOOZ VS Respondent: COLLECTOR OF CUSTOMS (PREVENTIVE), CUSTOMS JUDGMENT
Court Name: Sindh High Court Judge(s): Naimuddin Ahmed, Ibadat Yar Khan Title:MUHAMMAD MAHFOOZ vs COLLECTOR OF CUSTOMS (PREVENTIVE), CUSTOMS
JUDGMENT
Reported As: PLD 1986 Karachi 28 Result: Order accordingly Judgment JUDGMENT ' NAIMUDDIN, J.-This Constitutional Petition under Article 9 of the Provisional Constitution Order, 1981 was filed on 4-3-1985, in the following circumstances. 2. On 2-1-1981, at about 8-30 p. m. Some officers of the Customs (Preventive) working in the Customs House, Karachi, under the Collector of Customs (Preventive), respondent No, 1, searched the premises of Ittehad Re-rolling Mills situated at L-10/C, Block No, 21, Federal 'B' Area, Karachi, and took in their possession 96 ingots of refined tin of Malaysian origin and 102 ingots of refined tin "Wattan Metal" with marks of Bunder Khomeini. The search was admittedly made without obtaining search warrant. It is the case of the petitioner that the search was made without complying the provisions of section 163 of the Customs Act, 19o9, (hereinafter called the Act) and it was effected by the officers who had no jurisdiction and who were not competent to do so. 3. The search was followed by a show-cause notice, dated 26-2-1981. It may be convenient to reproduce the notice in extenso which reads as follows: "On 2-1-1981, the Customs Officers raided and searched the premises of Ittehad Re-rolling Mills situated at L-10/C, Block 21, Federal B, Area, Karachi, and recovered 96 ingots of refined tin of Malaysian origin each weighing 42 Kgs. And 102 ingots of refined tin "Wattan Metal" each weighing 29/30 Kgs. With marks of Bunder Khomeini, which were seized under section 168 of the Customs Act, 1969.
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(2) Investigations in the matter revealed that the ingots were supplied by one Lala Khan and were stored in the Mills by Yaseen Baig, Manager of the Mill with the permission and authority of Partner of Mill Muhammad Mahfuz, Muhammad Mahfuz admitted that he was aware of the fact that the ingots were not imported against any import authorisation and that duty etc. Had not been paid thereon. (3) The import of refined tin into the country is restricted under Federal Government Notification No, S. R. 0920 (1)/73, dated 25-6-1973 issued under section 3 (i) of the Imports and Exports (Control) Act, 1950, except on an import authorisation and payment of duty etc leviable thereon. No such evidence is forthcoming. Read with section 3 (iii) of the said Act, the contravention is deemed to be an offence under section 16 of the Customs Act, 1969, punishable under section 156(90) (ibid). (4) Yaseen Baig, Muhammad Mahfuz and Lala Khan are, therefore, called upon to show cause why penal action should not be taken against them for violation of the aforesaid provisions of law. Their written reply should reach the undersigned within ten days of the issue of this notice, failing which the case will be decided ex parte. (5) Hearing in the case is fixed for 22nd March, 1981 at 2 p. m. When they, their accredited representative or duly briefed lawyer may appear before the undersigned in his chamber in this Customs House to represent their case. If no one appears on the date and time so fixed, it will be taken that personal hearing is not required and the case will be decided on merits." 4. The petitioner on 12-3-1981, submitted his reply to the show-cause notice and thereafter, after hearing Mr. Jamilullah Khan, Consultant of this petitioner, respondent 1 by the order dated 9-5-1981, ordered the con-fist action of the seized goods under section 156(90) of the Act, but under section 181 of the Act gave option to the petitioner to pay a fine of Rs, 2,50,000 in lieu of confiscation of the goods. He also imposed a penalty of Rs, 2,50,000 under section 150 (90) of the Act. Before respondent 1, it was urged that the search and seizure of the goods was illegal as the same was made without any search warrant and without complying with the provision of section 163 of the Act. It was also urged that the goods were importable under Free List and as such the onus of proof lay on the respondents. 5. Respondent 1 in his order held that the seizure was affected after complying with the provisions of the Act. It was, however, accepted in the order that the goods were importable under 'Free List' vide serial No, 262 (a) of the Free List of Import Policy Order, 1980, but it is stated that the petitioner failed to produce any evidence of lawful import of the goods and it was established that the goods were not imported against any import authorisation and the duty had not been paid. 6. Aggrieved by the aforesaid order, the petitioner went up in appeal before the Central Board of Revenue, respondent 2, which was decided on 22-9-1981 by Mr. Mumtazul Haq, Second Secretary. Before, respondent 2 also the same grounds as urged before respondent were urged. Dealing with the ground of search being illegal, the Second Secretary found as follows "I have carefully gone through the records of the case and I find a statement of the Assistant Collector concerned on p. 4 of the Customs House File No, SIB-104/81 in which he has recorded the ground of his belief for making the search and seizure and clearly mentioned therein the exact description of the foreign smuggled goods kept in the premises searched. In the same statement he has also stated that there was danger of the goods being removed before a search could be effected under section 162 of the Customs Act. A signed copy of the aforesaid statement was also left there. Thus all the requirements of section 163 were duly fulfilled by the Assistant Collector. Now the contention of the learned consultant that search warrant could be obtained under section 162 from a Magistrate is of no avail because of the reason given by the Assistant Collector in the said statement. The grounds given by the Assistant Collector are further supported by the fact that the search was made late in the evening at 8-30 p.m. And so his judgment about the strong possibility of the removal of the goods appears to be sound and correct."
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7. The appellate authority, however, accepting the plea that the goods were importable under 'Free List', in paragraph 6 of the impugned order observed as follows : "6. Finally, the pleas of the learned consultant that the goods in question are importable on Free List and that the appellant himself is not responsible for their smuggling into Pakistan are, however, correct." 8. With regard to another plea raised on behalf of the petitioner before the appellate authority that the petitioner was not aware about the payment of duty on the goods, the Second Secretary observed as follows : "When the law raises a presumption against the accused and calls upon him to prove the contrary, it is well-settled that the contrary can be said to be proved if the accused succeeds in establishing that the act attributed to him is capable of an interpretation other than suggested by the prosecution." 9. In view of these pleas of the petitioner which according to the appellate authority had some mitigating effect on the case, it reduced the amount of penalty imposed on the petitioner from Rs, 2,50,000 to Rs, 1,50,000 maintaining the order of confiscation of the goods or payment of fine in lieu of confiscation of the goods. 10. Still dissatisfied with the order passed in the appeal the petitioner filed a revision application with the Federal Government, respondent 3. But before the same could be decided, he filed this constitution petition under Article 9 of the Provisional Constitution Order, 1981, in this Court seeking a declaration that the search and seizure, confiscation of goods and imposition of penalty on the petitioner by respondents is without lawful authority and for a direction to the respondents to return the goods without payment of fine or penalty. 11. However, during the pendency of this petition the revision application was decided and dismissed by respondent 3 by the order, dated 22-11-1985. 12. Before the Revisional Authority the jurisdiction of the officer who seized the goods was also challenged which has been dealt with by it in paragraph 7 of the order which reads as follows : "The factual position in this regard is that, vide Notification No, 57 of October 2,1953, officers of Customs stationed at Karachi had been authorised to exercise the powers of anti-smuggling under the Sea Customs Act, 1878. Therefore, notwithstanding the provisions of Notification No, 167 (R)/67, the officers of Customs were duly authorised and competent to seize contraband goods throughout Karachi while exercising the powers of anti-smuggling. It may be mentioned that after coming into force of the Customs Act, 1969 on 1-1-1970, the existing notifications, orders and regulations became subject to the provisions of the Customs Act, 1969. Section 4 of the Customs Act, 1969 provides that an officer of Customs appointed under section 3 shall exercise such powers and discharge such duties as are conferred or imposed on him by or under the Act ibid and such officer will also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him. As powers for the prevention of smuggling in the Federal Capital, Karachi were conferred on the officers of Customs vide Notification No, 57, dated 2-10-1953, they were legally competent to act and exercise the powers conferred on them under sections 161, 163 and 168 of the Customs Act, 1969 and to search and seize any goods liable to confiscation, notwithstanding the position emerging after the issuance of SRO 167 (R)/67, dated 1-9-1967. In view of the aforementioned situation, the seizure made by the Customs authorities were in order and there was no illegality involved in the orders passed by the Collector of Customs (Preventive), Customs House, Karachi." 13. Hereafter, an amended petition was filed on 27-2-1985 also challenging the order, dated 22-1- 1984, passed in the revision, as being "without lawful authority, wrong on facts and bad in law." 14. We have heard Mr. Zaheer Ahmed Khan learned counsel for the petitioner on 20-8-1985 and Mr. S. Inayat All learned counsel for the respondents on 21-8-1985, and Mr. S. Nasiruddin learned
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counsel for the petitioner in reply to the arguments of Mr. S. Inayat Ali on 21-8-1985. 15, Mr. Zaheer Ahmed Khan urged following points before us: (1) That the officers of Customs (Preventive), who carried out the search under the direction of respondent 1 had no territorial jurisdiction. (2) That the search and seizure of the goods without warrants and/or without complying the provisions of section 163 of the Act was illegal. (3) That no notice as required under section 171 of the Act was served on the petitioner. (4) That the burden of proof that the goods were unlawfully imported was on the respondents and not on the petitioner. (5) That no action was taken against Lal Khan who had supplied the goods to the petitioner although a show-cause notice was also issued to him. 16. Taking up the first point it was urged that the goods were seized from the premises situated in Federal 'B Area, Karachi, which was beyond the territorial jurisdiction of the Customs Officer and/or the Collector of Customs under whose orders they were acting. This point has been dealt with in the order passed in the revision by respondent 3 and we have already reproduced the same in extenso herein before. In order to appreciate this point we may state that under section 3 of the Act the Board is authorised by notification in the official Gazette, to appoint in relation to any area specified in the notification (emphasis supplied) any person to be : (a) The Collector of Customs, (b) The Deputy Collector of Customs, (c) The Assistant Collector of Customs, or (d) An officer of the Customs, with any other designation., 17. Under section 4 of the Act an officer of Customs appointed under section 3 is authorised to exercise such powers and discharge duties as are conferred or imposed on him by or under the Act, and he is further authorised to exercise powers and discharge duties conferred or imposed upon B any officer subordinate to him. It is further provided that notwithstanding anything contained in the Act or the rules, the Board may, by general or special order, impose such limitations or conditions on the exercise of such powers and discharge of such duties as it thinks fit. 18. Now, for the purpose of exercise of powers for search and seizure reliance is placed by respondent 3 on Notification No, 53, dated October 2, 1953. Wherein the officers of Customs mentioned therein and stationed at Karachi were authorised to exercise all powers conferred by Chapter XVII of the Sea Customs Act, 1878, on the officers of Customs duly employed for prevention of smuggling, we may reproduce the said notification, which reads as follows : "No, 53.-In exercise of the powers conferred by section 6 of the. Sea Customs Act, 1878 (VIII of 1878) and in supersession of the late Government of Bombay Notification No, 9231, dated the 20th December, 1897, the Central Government is pleased to appoint the Collector of Customs, Karachi, to be Chief Customs Officer for all ports in the Federal Area and to be Chief Customs Collector in the said area." (emphasis supplied). 19. This notification was further amended by Notification No, S.R.O. 167(R), dated 1-9-1967, whereby the words 'Federal Area' and to be Chief Customs Collector in the said area "were substituted by the words "Karachi Division and to be the Customs Collector for such ports" and thus the amended Notification No, 53-Cus. Dated 1-10-1953, as amended, reads as follows : "In exercise of the powers conferred by section 6 of the Sea Customs Act, 1878 (VIII of 1878), and in supersession of the late. Government of Bombay Notification No, 9231, dated the 20th December, 1897 the Central Government is pleased to appoint the Collector of Customs, Karachi, to be Chief Customs Officer for all ports in the Karachi Division and to be the Customs Collector for such ports."
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20. It will be seen that by the amendment in the notification the changes made are that the Collector of Customs, Karachi, is appointed to be the Chief Customs Officer for all ports in the Karachi Division instead of the Federal Area and instead of being Chief Customs Collector in said areahe becomes the Customs Collector for all ports in the Karachi Division. Thus, the further question that arises for consideration is that what is the-limits of the ports in Karachi Division as it is the Collector of Customs for ports in Karachi Division that would have territorial jurisdiction in the matter. Now, by Notification No, 6315, dated August 26, 1897, in the exercise of the powers conferred by section 11 (b) of the Sea Customs Act, (VIII of 1878), the Central Government declared the following to be the limits of the port of Karachi :- "To the North.-A line drawn from a point on the ridge dividing the harbour backwater from the Arabian Sea, (9) nine miles N. W. Fi Manora Point along the high-water mark ordinary spring tides to boundary pillar No, 44 at the head of Soti Creek, and thence along a line demarcated at the angles by masonry pillars numbered 43 around Khudda village to 32 on the Harris Road, and from thence along the western edge of Harris Road to the north-east corner of the Native Jetty where it crosses the Bunder Road to the Queen's Road at the N. E. End of the Railway bridge and on to boundary pillar No, 2. From boundary pillar No, 2 round Scandal Point and Bath. Island upto boundary pillar No, 24 on the Western edge of the Clifton Road. To the East.-A line drawn from boundary pillar No, 24 on Clifton Road last abovementioned to boundary pillar No, 26 north of Clifton and from thence to the shore end of Clifton Pier and thence along the high-water line on the beach to a point 3/ miles S. E. Of Clifton. To the South:-A line drawn from that point last abovementioned on Clifton breach running in a S.W. By W. W. Direction to a point four ,miles S. By E. E. From Manorabreak-water, and from thence along a line running in a N. W. t W. Direction to a point two miles out at sea S. W. S. From the point first mentioned on- the _ridge dividing the harbour back-water from the Arabian Sea. To the West.-A line drawn from the point last abovementioned running in a N. E. N. Direction, to the starting point on the ridge abovementioned nine miles from Manora Point." 21. By another recent Notification No, 108 (1)/83, dated 12-2-1983, the Central Board of Revenue specified the following to be the limits of the Customs-port of Karachi, namely : "To the North. -A line drawn from a point on the ridge dividing the harbour break-water from the Arabian Sea, nine miles N. W. From Manora Point, along the high-water mark ordinary spring tides to boundary pillar No, 44 at the head of Soti Creek, and thence along a line demarcated at the angles by masonry pillars numbered 43 around Khudda Village to 32 on the Harris Road, and from thence along the western edge of Harris Road to the North-East corner of the Native Jetty where it crosses the M. A. Jinnah Road at the Moulvi Tamizuddin Khan Road at the North-East, end of the Railway bridge and on to boundary pillar No, 2. From boundary pillar No, 2 round Scandal Point and Bath Island upto boundary pillar No, 24 on the Western edge of the Clifton Road. To the East. - A line drawn from boundary pillar No, 24 on Clifton Road last abovementioned to boundary pillar No, 26 north of Clifton and thence to the shore, end of Clifton Pier and thence along the high-water line on the beach to a point 3} miles S. E. Of Clifton. To the South. -A line drawn from the point last abovementioned on Clifton beach running in a S. W. By W. # W. Direction to a point four miles S. By E. I E, from Manora break-water, and from thence along a line running in N. W. I W. Direction to a point two miles out at sea S. W. S. From the point first mentioned on the ridge dividing the harbour break-water from the Arabian Sea. To the West. -A line drawn from the point last mentioned above running in a N. E. z N. Direction to the starting point on the ridge abovementioned, nine miles from Manora Point." 22. Thus, it will be seen that the premises which were searched and from where the goods were seized and which are situated in Federal 'B' Area do not fall within the limits of the Port of Karachi. The appointment under section 3 of the Act, of the Collector of Customs, Deputy Collector of
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Customs, Assistant Collector of Customs and an officer of Customs was for the Ports in Karachi Division and the Karachi Port did not cover the entire area of Karachi but only the Ports Area. 22-A. The Revisional Authority has however, relied on Notification No, 57, dated 2-10-1953, published in the Gazette of Pakistan Extraordinary E dated 2-10-1953, issued under section 9 of the Sea Customs Act, 1878, (VIII of 1878), by the Central Board of Revenue which reads as follows :- "57. In exercise of the powers conferred by section 9 of the Sea Customs Act 1878 (VIII of 1878), the Central. Board of Revenue is pleased to direct that the following further amendment shall be made in the late Government of India, Central Board of Revenue, Notification R. Dis. No, 499-1-Cus/25, dated the 14th May, 1925, namely :- ' In the said Notification, for Rule (I), the following shall be substituted, namely :- "(1) The Collector and Assistant Collectors of Customs, the Chief Inspector, Preventive service, all Preventive Inspectors and Officers and Wharfinger stationed at Karachi or at the Outnort of Barf Hydri are required to prevent smuggling and are authorised to exercise all the powers conferred by Chapter XVII of the Sea Customs Act, 1878, on Officers of Customs duly employed for the prevention of smuggling." So far as this notification is concerned the Officers named therein, in our opinion, could prevent smuggling in their territorial jurisdiction which in F the present case was port of Karachi. 22-B. We have also come across a Notification No, S. R. 0. 48 (R)/ 67; dated April 14, 1967, issued under section 3 of the Land Customs Act, 1924 (XIX of 1924), which reads as follows : "S. R. O. 48 (R)/67.-In exercise of the powers conferred by subsection (1) of section 3 of the Land Customs Act, 1924 (XIX of 1924) and in supersession of the Ministry of Finance, former. Revenue Division, Notification Nos. 14-Cus., 37-C and 23-C, dated the 1st April, 1953, the 14th October, 1955, and the 25th May, 1959, respectively, the Central Board of Revenue is pleased to appoint :- (1_) the officers specified in column 1 of the table below to be the Collectors of Land Customs for the areas specified in column 2 thereof, and (3) the Deputy Collectors, Assistant Collectors, Superintendents, Deputy Superintendents, Inspectors, Lady Inspectors, Jamadars, Havaldars, Naiks and Peons of the Collectorate of the Central Excise and Land Customs duly employed in the said areas to be Land Customs Officers for those areas. {{TABLE}} Officers Areas 1 2 Collector of Central Commissioner's Divisions of Hyderabad, Excise, Hyderabad. Khairpur, Quetta a td Kalat, Bahawalpur and the Districts of Muzaffargarh, Dera Ghazi Khan and Multan of Multan Division. Collector of Central Excise, Areas comprising the former province Lahore. Of Punjab excluding the Commissioner's Division Bahawalpur and the Districts of Muzaffargarh, Dera Ghazi Khan and Multan of Multan Division. {{TABLE}} ' However, no such notification under the Land Customs Act, 1924 (XIX of 1924) in relation to area outside the Karachi Port Area and for the District or Division of Karachi has been brought to our notice nor have we been able to notice any such notification. 23. It has, however, been brought to our notice that by another.. Notification No, S. R. 0. 446 (1)/74, dated 4-4-1974, in exercise of powers conferred l y the proviso to section 4 of the Customs Act, 1969, the Central Board of Revenue ordered that the powers and duties to be exercised and performed by the Collector of Customs (Preventive) in relations to the Customs Stations in Karachi shall be limited to the following namely :-
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"(1) Preventive Organization at Customs-Sea Port, Karachi, and at Keti Bunder, Shah Bunder, Sokhi Bunder, Port Muhammad Bin Qasim, Bram Hyderi, Giddani, Sonmiani and Ormara. (2) Customs Airport, Karachi. (3) Postal Appraisement Department. (4) Export Appraisement. (5) Drawback, Rebates and Refunds. (6) Sale of Goods, abandoned or confiscated. (7) Adjudication of cases relating to the matters aforesaid." 25. It is, therefore, clear from the above notification that neither the Collector of Customs nor any other officer could have jurisdiction beyond their territorial jurisdiction to search and seize the goods. However, on .G February 12, 1983, another notification being S. R. O. 95 (1)/83, was issued, whereby the Central Board of Revenue remedied the situation by appointing the officers mentioned below for the areas noted against their names. TABLE}}{{ SCHEDULE Officers Area 1 2 Collectors of Customs, The division of Karachi, in the Pro- Custom House, vince of Sind and the District of Karachi. Lasbella except Ormara in the Pro- vince of Baluchistan, including the following : (i) the ports of Karachi, Keti Bun-der, Shah Bunder, Sokhi Bunder, Port Muhammad Bin Qasim, Bi am Hyderi, Giddani and Sonmiani ; and (ii) the Customs - airport (Civil) Karachi, Shahre Shah Faisal Air-base, Karachi, Masroor Airbase, Mauripur." {{TABLE}} Thus, it will be seen that the Collector of Customs is appointed to be the Collector of Customs for the entire area of Karachi Division and the District of Lasbella excepting Ormara in the Province of Baluchistan, including the Ports of Karachi, etc., and Customs-Airport (Civil) Karachi, Shahre Shah Faisal Airbase, Karachi Masroor Airbase, Mauripur. 25. No other notification has been relied upon in the impugned orders nor has any been brought to our notice except the one mentioned above whereby the entire Karachi was declared to be port area. However, with reference to the provisions of section 163(1) of the Customs Act, 1969, it was argued by Mr. Syed Inayat Ali that the Customs Officers could seize the goods sold or kept in any place and Mr. Syed Inayat Ali laid much emphasis on the word any place in section 163 (1) of the Act which we may immediately reproduce herein below : "163. Power to search and arrest without warrant.-(1) Whenever any Officer of Customs not below the rank of an Assistant Collector of Customs or any other officer of like rank duly employed for the prevention of smuggling has reasonable grounds for believing that any goods liable to confiscation or any documents or things which in his opinion will be useful for or relevant to any proceeding under this Act are concealed or kept in any place and…
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