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Official Citation: 2026 LHC 4944
Court / Jurisdiction: Lahore High Court
Parties: COLLECTOR COLLECTORATE OF CUSTOMS (ENFORCEMENT) MULTAN vs CUSTOMS APPELLATE TRIBUNAL ETC
Ruling Summary: This decision was rendered by the Lahore High Court, officially reported as 2026 LHC 4944. In this matter between COLLECTOR COLLECTORATE OF CUSTOMS (ENFORCEMENT) MULTAN and CUSTOMS APPELLATE TRIBUNAL ETC, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Lahore High Court (Honorable Mr. Justice Muzamil Akhtar Shabir) DECISION DATE: 26-02-2026 TAGLINE: Although this Court while deciding a Reference Application on being apprised of some illegality or jurisdictional defect may decide whether the findings of fact have been correctly recorded or not, yet this Court is not equipped with sufficient machinery to enter into deeper appreciation of documents and compare the same with each and every recovered good or item, which are huge in number, to find out whether the receipts and documents correspond and co-relate to the allegedly smuggled goods. CASE DETAILS: C.Ref. (Customs Reference) 7-25 ============================================================ Form No: HCJD/C-121 ORDER SHEET IN THE LAHORE HIGH COURT, MULTAN BENCH, MULTAN JUDICIAL DEPARTMENT
Customs Reference No. 07 of 2025
The Collector, Collectorate of Customs (Enforcement), Multan. vs The Customs Appellate Tribunal, Lahore, etc S.No. of Order/ Proceeding Date of order/ Proceeding Order with signature of Judge and that of parties or counsel where necessary 26.02.2026. Mian Muhammad Ashfaq Hussain , Advocate for the applicant. M/s. Arham Tariq Butt , Uzair Ashraf and Miss Sobia Qadir Malik, Advocates for respondents No. 2 & 3. Through this Reference Application under Section 196 of the Customs Act, 1969, inter alia, the following question of la w has been urged to have arisen out of the impugned judgme nt dated 10.03.2025 (‘Impugned judgment’) passed by the Customs Appellate Tribuna l, Lahore:- “Whether the onus of proof upon the respondents (as provided under subsection (2) of Section 156 read with Section 187 of the Customs Act, 1969) stands discharged under the law, when the provided documents do not co -relate with the impugned seized goods?” 2. The learned counsel for the applicant has argued that the impugned judgment passed by the Appellate Tribunal is not sustainable as the documents provided by the respondent Nos. 2 and 3 (‘ Respondents’) do not co - relate with the impugned seized documents and on the basis of the same it is claimed that the impugned order be set aside. On the other hand the learned counsel for the respondents have defended the impugned orders by 2 Customs Reference No.07 of 2025 Dated 26.02.2026 stating that the learned Appellate Court rightly appreciated the facts of the case and law on the subject to pass the said order, which does not suffer from any illegality or jurisdictional defect. 3. The brief background of the case is that specific information was received by the Collectorate of Customs (Enforcement), Multan (‘ seizing agency ’) that a consignment of misc. goods b eing smuggled under the garb of irre levant documents loaded on a vehicle i.e. Hino HTV Truck Trailer (Chiller) displaying Registration No. TLV -236/Lasbela is under transportation to upcountry and would pass the territorial Jurisdiction of Collectorate of Customs (Enforcement), Multan. The so urce further specified that the driver is carrying irrelevant and managed documents with the consignment and that there was a huge quantity of smuggled goods lying therein. In pursuance of the said information, the staff of the seizing agency Dera Ghazi Khan, on the same date at about 07:30 pm held a secret search at checkpoint/‘naka bandi ’ at Airport Chowk, Sakhi Sarwar Road, Dera Ghazi Khan and found informed tru ck trailer coming towards DG Kha n. The staff deployed for the purpose signaled to stop the vehicle. The driver of the vehicle stopped the vehicle and fled away from the scene taking the advantage of darkness and huge flux of traffic. The staff tried its best to search him in nearby fields but in vain. On cursory checking, the vehicl e was found loaded with informed smuggled goods. During search of driver's cabin GD dated 21.09.2024, registration book of intercepted vehicle, bilty No. 6702 dated 27.09.2024 and weight slip of Field Enforcement Unit Weighment Bridge Panjpal 3 Customs Reference No.07 of 2025 Dated 26.02.2026 dated 29.09.2024 were recovered. Nobody came forward to claim the ownership of the intercepted goods & vehicle nor any legal/import documents were provided at the spot. Due to inadequate and improper safety arrangements at roadside, the intercepted vehicle was brought to Customs State Warehouse, Hamidpur Kanora Multan, for complete de -stuffing and preparation of recovery memo. Thorough examination/search of the vehicle yielded recovery of items/goods mentioned in the recovery memo, which primarily comprise of 23 different kind and quantity of items in each category is huge in number. As the documents had not been produced, by treating recovered goods as smuggled goods along with carrier vehicle were tak en into possession by the Customs ASO staff, for further investigation in the matter and a notice under section 171 Customs Act, 1969 , was prepared and served upon the unknown possession holder by way of pasting at Notice Board of Customs ASO Office, DG Khan , as well as Customs House , Multan. Thereafter, adjudication proceedings culminated in passing of Order-in-Original No. 806/2024 dated 30.12.2024 and the goods and carrier vehicle were confiscated by treating the documents filed by the private respondents as irrelevant. However, the private respondent Nos. 2 and 3 filed two separate appeals before the Customs Appellate Tribunal both of which appeals were allowed through consolidated order (‘impugned order’) by treating the documents produced by them as relevant documents and the goods were held not to be established to be smuggled goods and were held to be in lawful possession of the r espondents and be released to lawful owners. 4 Customs Reference No.07 of 2025 Dated 26.02.2026 4. The main grievance being raised by the learned counsel for the appl icant is that the documents provided by the respondents do not co -relate with the seized goods, which aspect of the matter has been negated by the learned counsel for the respondents . The learned Appellate Tribunal has already addressed the said controversy in detail in the impugned order while observing that in t erms of Section 187 of the Customs Act, 1969, the burden of proof was on the respondents to show that they held possession of the alleged smuggled goods with lawful authority. The Appellate Tribunal after taking into consideration the documents produced by the respondents and referring to the law on the subject held that the respondents had discharged the onus that the goods were not smuggled goods and were in lawful possession of the respondents and ordered the release of goods and carrier vehicle to respective lawful owners . For ready reference the operative portion of the impugned order is reproduced below: “15. The seizure report lists down the items, which had been recovered from the Vehicle. The Schedule of Seized Goods appended thereto provides the description of each item and its found quantity. Now, in terms of Section 187 reproduced supra, it was incumbent upon the Appellant to establish that the subject goods were legally procured by it and the same were duty/taxes paid.
16. In this connection, the Appellant has produced before this Tribunal a plethora of documents including copies of GDs, Sales Tax Invoices, Sales Tax Returns, and Bilties providing details of goods legally procured by the Appellant, which have been provide d along with a statement. A detailed examination of the documents shows that the Subject Goods are, prima facie, covered by these documents provided by the Appellant. 5 Customs Reference No.07 of 2025 Dated 26.02.2026
17. These documents include the copy of the Verification Report of import status of subj ect goods dated 20.09.2024 issued by Collectorate of Customs, Enforcement, Custom House, LMQ Road, Multan, which confirms the GD TAFT - HC-11608-21.09.2024 and LAPR -HC-4874- 21.02.2024 in the PRAL database. Through the first GD 129 Cartons of LED Lights, 400 Cartons of LED Christmas Lights and 500 Cartons of LED Christmas Lights had been imported by Riz Traders, Lahore. Through the second GD 1530 Cartons of Switches and Sockets had been imported by the Asalam Traders, Lahore. To establish the link between the Appellant and the Riz Traders and Asalam Traders, the Appellant has produced the following documents:- i. Sales Tax Invoice issued by Asalam Traders to Sila Enterprises dated 02.09.2024. ii. Sales Tax Return of Asif Javed for the period 1st September to 30th September 2024, who sold the goods to Sila Enterprises along with proof of payment. iii. Sales Tax Invoice of Sila Enterprises who sold the goods to the Appellant dated 03.09.2024.
18. The Respondent has further alleged that Bilty No. 114 shows the transportation of goods from Lahore to Quetta, whereas the Subject Goods were seized during transportation from Quetta to Lahore. In this regard the Appellant has argued that the goods were earlier sent from Lahore to Quetta through Bilty No. 114 dated 05.09.2024, however, due to the cancellation of the order, the same were being transported back to Lahore vide another Bilty No. 519 dated 01.10.2024. In fact, cancellation of orders is a normal practice in day -to-day business. The Respondent department has n ot posed any objection to the later Bilty except for making an argument about warehousing of the goods during this intervening period, which has no nexus with the legal status of the Subject Goods.
19. Based on the foregoing deliberations, we observe that the Appellant has established the nexus among the trail of documents so provided 6 Customs Reference No.07 of 2025 Dated 26.02.2026 along with the snapshots taken at the ti me of import as well as at the t ime of the seizure, which duly matches with the Subject Goods thereby verifying their lawful procureme nt by the Appellant. By producing these documents, the Appellant had shifted the burden onto the Respondent department under Section 187 of the Act ibid. It was then incumbent upon the Respondent department to have reconciled these documents with the Subje ct Goods in order to verify the same, however no such exercise was conducted by the Respondent department. The Respondent department has merely termed these documents as irrelevant without giving any plausible basis or without providing a reconciliation st atement. To our surprise, the adjudicating authority himself did not make an effort to reconcile these documents with the Subject Goods and merely held in Para 18 of the Impugned Order that the produced documents were not relevant as the description and quantity of the seized goods did not match with each other.
20. In light of the foregoing deliberations, the Respondent department's claim that the Subject Goods were smuggled remains unsubstantiated, as they have placed no proof of smuggling on record. On the contrary, the Appellant has brought on record plenty of documentary evidence proving legal procurement of the Subject Goods. Therefore, in the presence of the above-mentioned documents, which the Respondent has not claimed to be false, the question of the Subject Goods being smuggled becomes baseless, and that too of the same are not notified goods within the contemplation of SRO 566(1)/2005 dated 06.06.2005. Therefore, in the absence of any irrefutable evidence regarding the goods being smuggled, the confiscation of the goods is declared to be illegal and without lawful authority.
21. Based on the above case scenario, the Question Nos: ( i) and ( ii) framed above are answered in the affirmative in favour of the Appellant and against the Respondent Department.
7 Customs Reference No.07 of 2025 Dated 26.02.2026 22. As regards Customs Appeal No. 29/LB/2025 filed by the claimant of the Vehicle (Appellant in Customs Appeal No. 29), it is observed that the same was carrying the Subject Goods. In the foregoing paras, we have concluded that the Appellant had adeq uately shifted the burden under Section 187 of the Customs A ct 1969, as to the legal procurement of the Subject Goods, therefore, the vehicle carrying such goods has unjustly been seized and confiscated. The provisions relating to the confiscation of the conveyance carrying smuggled goods are contained in Section 157(2) of the Customs Act, 1969, which reads as under:- "(2). Every conveyance of whatever kind used in the removal of any goods liable to confiscation under this Act shall also be liable to confiscation."
23. The underlining point in this provision is „used in the removal of any goods liable to confiscation‟. It is clear from the above-detailed discussions that the subject goods were not smuggled, therefore, the confiscation of the Vehicle is unjust and unlawful. In light of the above factual and legal position, the confiscation of the Vehicle is declared to be unlawful. A ccordingly, the answer to Question (iii) is given in the affirmative in favour of the Appellant and against the Respondent Department.
24. In view of the foregoing deliberations, the instant appeals are allowed and the Impugned Order is set aside. The Respondents are directed to release the Subject Goods as well as the Vehicle unconditionally to the Appellants/their lawful owners forthwith after fulfilling the legal and codal formalities.‟ 5. The perusal of the above shows that the Appellate Tribunal after detailed scrutiny has found the documents produced by the respondents as relevant and related to the goods and items subject matter of the proceedings initiated against the respondent s and held that on production of documents by the respondents the onus had 8 Customs Reference No.07 of 2025 Dated 26.02.2026 shifted upon the applicant/seizing agency to show that the said goods were smuggled goods, which onus the applicant failed to discharge . It is pertinent to note here that the Appellate Tribunal in the impugned order observed that the respondents had established the nexus among the trail of documents so provided along with the snapshots taken at the time of import as well as at the time of the seizure, which duly match with the Subject Goods thereby verifying their lawful procurement by the respondents. By producing these documents, the respondents had shifted the burden onto the Applicant- Department under Section 187 of the Customs Act, 1969, and i t was then incumbent upon the Applicant- Department to have reconciled these documents with the Subject Goods i n order to verify the same, however no such exercise was conducted by the Applicant- Department. The Applicant-Department has merely termed these documents as irrelevant without giving any plausible basis or without providing a reconciliation statement. It was also noted with surprise that the adjudicating authority himself did not make an effort to reconcile these documents with the Subject Goods and merely held in Para 18 of its order that the produced documents were not relevant as the description and quantity of the seized goods did not match with each other. Resultantly, in view thereof the Appellate Tribunal held that the said goods and items were not smuggled goods and further declared the confiscation of the goods and vehicle were unlawful and directed the applicant/ seizing agency to release the subject goods and vehicle unconditionally to the real owners forthwith after fulfilling the legal and codal formalities. The afore - referred findings recorded by the Appellate Tribunal are 9 Customs Reference No.07 of 2025 Dated 26.02.2026 purely findings of fact which have been recorded after detailed comparison of documents produced by the respondents with the allegedly smuggled goods and in view thereof th e question referred for opinion of this Court by the Applicant -Department that whether the documentary evidence relied upon by the Respondent before the Customs Appellate Tribunal co-related with the allegedly smuggled goods, was purely a question of fact involving factual inquiry requiring deeper appreciation of facts of the case and com parison of document with goods , which could not ordinarily be entertained by the High Court in reference jurisdiction for the reason that i t is settled law that a question involving inquiry into facts is not a question of law and cannot be considered by th e High Court in a Reference under S ection 196 of the Customs Act, 1969 , which confers jurisdiction upon this Court to decide pure questions of law or mixed question of law and fact , whereas recording of f indings of fact rest with the Appellate Tribunal, ex cept where such findings are perverse or contrary to the material on record. Reliance is placed on Commissioner Inland Revenue v. RYK Mills Lahore (2023 SCMR 1856 ); Commissioner Inland Revenue v. Sargodha Spinning Mills (2022 SCMR 1082); Commissioner Inland Revenue v. MCB Bank Limited (2021 PTD 1367 ), Wateen Telecom Limited v. Commissioner Inland Revenue (2015 PTD 936 ), Pakistan State Oil Company Ltd. v. Collector of Custom, E&ST (Adjudication -II) (2006 SCMR 425 ), National Logistics Cell v. Collector o f Customs (2023 SCMR 1325) and Fancy Foundation v. Commissioner of Income Tax (2017 SCMR 1395). 10 Customs Reference No.07 of 2025 Dated 26.02.2026 6. Despite vehement arguments of the learned counsel for the applicant that the findings of fact recorded by the Appellate Tribunal were against the material available on the record, we are not convinced that the documents produced by the respondents do not co-relate to the goods subject matter of these proceedings and we have not been provided with any plausible reason to hold that the findings of fact recorded by the learned Appellate Tribunal suffer from any misreading or non - reading of record and any illegality or jurisdictional defect for this Court to warrant interferen ce in the same, which even otherwise cannot be done at th is stage as although this Court on being apprised of some illegality or jurisdictional defect may decide whether the finding s of fact have been correctly recorded or not, yet this Court is not equipped with sufficient machinery to enter into deeper appreciation of documents and compare the same with each and every recovered good or item, which are huge in number, to find out whether the receipts and documents correspond and co -relate to the allegedly smuggled goods, and in view thereof the question of law proposed for our opinion in decided in terms that there is nothing available on the record to observe that the onus of proof on the respondents to show that seized goods were not smuggled goods was not discharged or to hold that that the documents produced by them did not co - relate with the seized goods. In view thereof the referred question stands decided in the affirmative in favour of the respondents and against the Applicant-Department with observations that the onus of proof upon the respondents was rightly held by the Appellate Tribunal to have been discharged. 11 Customs Reference No.07 of 2025 Dated 26.02.2026 7. In view of above discussion, it is observed that the impugned judgment does not suffer from any legal infirmity and the instant Reference Application is dismissed. A copy of this judgment shall be sent under seal of this Court to the Customs Appellate Tribunal.
(SYED AHSAN RAZA KAZMI) (MUZAMIL AKHTAR SHABIR) JUDGE JUDGE
APPROVED FOR REPORTING