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Official Citation: 2026 SHC 1355
Court / Jurisdiction: Sindh High Court
Petitioner: Const. P. 3253/2026 (D.B.) Sindh High Court, Karachi - M/s Al-Rahim Trading Co. (Pvt) Ltd (Petitioner)
Ruling Summary: This decision was rendered by the Sindh High Court, officially reported as 2026 SHC 1355. In this matter between Const. P. 3253/2026 (D.B.) Sindh High Court, Karachi - M/s Al-Rahim Trading Co. (Pvt) Ltd (Petitioner) and the Respondent, 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: Sindh High Court CASE NO: Const. P. 3253/2026 (D.B.) Sindh High Court, Karachi CITATION: 2026 SHC KHI 1355 PARTIES: M/s Al-Rahim Trading Co. (Pvt) Ltd (Petitioner) ORDER DATE: 27-JUN-26 BENCH: Hon'ble Mr. Justice Muhammad Saleem Jessar(Author) A.F.R: Yes ------------------------------------------------------------ IN THE HIGH COURT OF SINDH, KARACHI
Present: Mr. Justice Muhammad Saleem Jessar Mr. Justice Nisar Ahmed Bhanbhro
Const. Petition No. D-3253 of 2026 (M/S Al- Rahim Trading Company (Pvt) Limited & 69 others v. Federation of Pakistan and others)
Petitioners : Through Mr. Murtaza Wahab Respondent No 1 : Through Ms. Shazia Ahmed Hanjrah Deputy Attorney General for Pakistan : Respondents No 2 to 4 Mr. Shahab Imam Advocate : Date of hearing & short Order : 18.06.2026 Date of Reasons : 27 .06.2026
JUDGMENT
MUHAMMAD SALEEM JESS AR, J: - Through this petition, the petitioner has claimed the following relief(s): a. Declare that the actions of the Respondents are mala fide, unconstitutional and without lawful authority. b. Declare that the Impugned FIR is illegal, unconstitutional and liable to be quahsed. c. Quash the impugned FIR. d. Restrain the Respondents from harassing, arresting, detaining, entering the premises of the Petitioner No 1 & 2, or taking any coercive action against (i) the owner s/Directors of Petitioners No 1 and 2; and (ii) Petitioner No 3 to 70 and all other employees of the Petitioners, pending final decision of this petition. e. Costs of this petition; and f. Grant any other relief this Honorable Court deems fit.
2. Learned counsel for the petitioners contended that Petitioner No 1 is a petroleum terminal at 49, Oil Installation Area, Keamari Karachi; that
it receives, stores and releases petroleum products on behalf of clients against valid government issued documents; that Petiti oner No 2 is a Petroleum procurement and distribution company; that Petitioners No 3 to 70 are employees of Company and they have filed this petition as they apprehend their prosecution by the Customs in a false FIR recorded on 18.05.2026. He contended tha t a false FIR was lodged by Customs officers alleging that Petitioners procured, stored and transported smuggled High Speed Diesel (HSD) under the cover of Delivery Order “the Coast Guard DO” issued by the Pakistan Coast Guard and gate passes of a second government entity and these documents were fraudulently re -used to transport approximately 891,931 liters of HSD in excess of authorized quantities. He contended that after registration of FIR customs officials on multiple occasions entered the premises of Petitioner No 1 without any warrant and physically removed employees without any search warrant and such CCTV recordings are available. He contended that impugned FIR discloses no offence as Petitioners received and stored the petroleum products in a lawfu l routine daily operation of a petroleum storage. He contended that the allegations of smuggling are without any proof and no offence under section 2(s), 16, 17, 178 or 187 of the Customs Act 1969 is made out. He contended that FIR was recorded with delay of 04 days and no explanation was furnished in that regard, thus deliberations and consultations to cook a false story cannot be ruled out. He contended that entire transaction underlying the impugned FIR was initiated, authorized, and executed by Governme nt’s own entities; that the auctions were conducted by Pakistan Coast Guard and the Anti Smuggling Organization (ASO); the delivery orders were issued by those entities and the payments were received by the Government against NGDP Challans with income tax duly deposited under section 236A of Income Tax Ordinance, 2000 (ITO). He contended that ASO which issued the delivery orders has recorded the impugned FIR. He contended that unlawful possession of stocks at M/s Al-Noor Terminal (Pvt) Limited are false as no such storage facility existed there. He contended that the FIR is colorful exercise of powers, recorded with mala fide intentions, in order to harass and humiliate petitioners. He placed on record the delivery orders and payment orders in support of his contentions. He contended that FIR is nothing but an attempt to restrict Petitioners’ business activities and Respondents have offended the fundamental rights of petitioners guaranteed under 4, 9, 10-A and 18 of the Constitution of Islamic Republic
of Pak istan, 1973 (the Constitution). He lastly prayed for quashment of FIR and restore the confiscated HSD.
3. Learned Counsel for Respondents No 1 to 3 contended that on intervening night between 13 -14 May 2026 two oil tankers were intercepted near Gate No 1 Ke mari Karachi. That the drivers admitted that HSD covered by Coast Guard Delivery Order dated 11.05.2026 had already been transported on 12 -13 May 2026 and unloaded at Petitioner No 1 premises. He contended that despite the Petitioners smuggled the HSD in v iolation of Customs Act, 1969 which was a cognizable offence, therefore, FIR was recorded. He contended that the Petitions were not maintainable as investigation was under process and petitioners had an efficacious remedy by way of filing an application un der section 249 - A or 265 - K CrPC. He therefore prayed that investigation is being conducted in fair and transparent manner, during investigation no arrest shall be made and Petitioners will be granted ample opportunity of defending accusations. He conte nded that Petitioners have caused loss of millions of rupees by smuggling HSD by avoiding taxes. He contended that Petitioners’ Counsel was an elected Mayor of Karachi Metropolitan Corporation, therefore cannot practice being debarred under Rule 175 of Pak istan Bar Councils & Practitioner Rules. He relied upon the case of Col. Shah Muhammad Ashiq (2006 SCMR 276), A. Habib Ahmed V. M.K.G Scott Christian (PLD 1992 SC 353), Muhammad Farooq v. Ahmed Nawaz Jagirani (PLD 2016 SC 55) and FIA V. Syed Hamid Ali Sha h (PLD 2023 SC 265)
4. Learned Deputy Attorney General for Pakistan contended that Petitioner Company was involved into evasion of sales tax and illicit trade activities and Customs Authorities while conforming to the provisions of Customs Act seized the smuggled articles. She contended that compliance of section 162 for obtaining permission from concerned Magistrate was not possible as incident took place in the wee hours of night. She contended that there is no illegality in the proceedings conducted by Customs Authority and FIR was rightly recorded, therefore, no case for indulgence of this Court at this stage is made out. She prayed for dismissal the petition.
5. Heard arguments of the parties and perused the material made available before us on record.
6. Scanning of the material available on record revealed that in the intervening night between 13 - 14 May 2026 Mr. Mubashir Naveed Preventive Officer Collectorate of Customs (Enforcement) Karachi received credible information from Head Quarters that certain el ements were engaged in the procurement, storage and illicit transportation of smuggled petroleum products from Keamari Karachi under the cover of legal auction documents. Complainant party proceeded to place of information and mounted surveillance and inte rcepted two oil tankers bearing Registration No TLR -040 and TLZ - 704. The drivers disclosed that they were transporting High Speed Diesel from M/S Caspian Oil by reusing Delivery Order issued by Government entity. The goods loaded in tankers were detaine d and inquiries thereafter were initiated at M/S Al Rahim Trading Company and the relevant movement, receipt and decanting records were procured under masheernama. Scanning of the record revealed that same two tankers had transported a total 398,913 liters of HSD (excluding 96000 liters found on board at the time of interception) from M/s Caspian Keamari filling point/barge Keamari Karachi to the Al -Noor/ Fuel XL storage facility within the Al Rahim premises located in the oil terminal Keamari Karachi duri ng 11.05.2026 to 13.05.2026. The complainant part then verified the record of Al Caspian Oil facility which confirmed delivery of HSD through same oil tankers to the Al Rahim facility during the said period under the instructions of M/s Al-Noor Petroleum p rivate limited. The record confirmed that M/s Al Noor Petroleum Private Limited and M/s Fuel XL limited in connivance with M/s Caspian Keamari transported 398,913 liters of HSD. Further scrutiny of record revealed that M/s Al-Noor Petroleum limited and M/s Fuel XL limited in connivance with M/s Caspian Keamari transported another quantity of 397,018 liters of HSD by misusing the gate passes issued by another government entity. The team also visited M/s Caspian Oil Barge and took dip of the tanker at the premises, but since the internal dimensions of tanker were not available the exact quantity of the stored POL could not be ascertained. The staff of the said company was not available and no assistance was provided.
7. It is further alleged that evidence g athered prima facie discloses two similar patterns of documents issued by two different government entities which were storing their confiscated smuggled Iranian POL products in M/s Capsian Kemari storage facilities. First auction documents authorizing 99,000 liters, were re-utilized to transport a total of 494,913 liters. Second government entity gate passes were allegedly misused to facilitate the movement of another 397,018 liters HSD. All record procured during the inquiry were taken into possession un der proper masheernamas and made part of investigation file. The exact duty, tax impact, procurement source, financial trail and specific role of each accused person and entity shall be determined in the course of further investigation.
8. It is further alle ged that in view of suspected smuggling activity, it was deemed necessary to physically inspect the storage tanks of M/s Al - Noor Petroleum Pvt. Limited M/s Fuel XL Petroleum (Pvt) Ltd., within Al Rahim premises. The complainant along with other members of ASO proceeded to the facility for inspection. Tank No ATC - 07 was found to contain 10,50,488 Liters HSD, and an oil tanker bearing No TMR - 896 parked on the premises was found loaded with an additional 21,000 liters of HSD. As no lawful import or procure ment documents were produced the Tank No ATC 07 and oil tanker were seized pending production of documentary evidence. It is further alleged that team then proceeded to M/S Al Noor Terminal where tank No ATL -11 was found to contain 12,53,911 liters of PMO (Motor Gasoline). The tank was sealed pending the production of lawful import and procurement documents. The team also found four tankers parked their and were suspected to be loaded with smuggled HSD, hence sealed. The recovered tankers and all document s were sealed and samples were taken in presence of witnesses Naeem Ahmed and Usama Munir. Notices under section 171 of the Customs Act, 1969 were served upon Tasawar Abass, Muhammad Imtiaz, Muhammad Shoaib and Murtaza Hussain and Notices were additionally served upon m/s Caspian Oil, M/s Al -Rahim Trading, M/s Al -Noor Petroleum, M/s Fuel XL directing their presence.
9. It was alleged that on the basis of totality of facts, physical evidence, statements, decanting records, gate -out details and the pattern of repeated tanker movements it is prima facie evident that M/s Al Noor
Petroleum Limited, M/s Fuel XL, M/s Caspian Ke amari and M/s Al - Rahim trading Company through their respective personnel were engaged in a coordinated scheme for the procurement, storage and transportation of suspected smuggled HSD under the guise of government auction documents hence committed offence under section 2(s), 16, 17, 178 and 187 punishable under section 156(1), 156(2) and 157(2) of the Customs Act, 1969.
10. From perusal of FIR, which has been recorded on 18.05.2026 with a delay of four days without any explanation, it transpires that the same lacks the necessary ingredients of criminal charge viz date and time of the offence. In absence of particular details an accused cannot be indicted for the charge. Section 222 CrPC defines charge in the following manner:
222. Particulars as to time Place and person. (1) The charge shall contain such particulars as to the time and place of the alleged offence, and the person (if any) against whom, or the thing (if any) in respect of which, it was committed, as are reasonably sufficient to give the accused n otice of the matter with which he is charged. (2) When the accused is charged with criminal breach of trust or dishonest misappropriation of money, it shall be sufficient to specify the gross sum in respect of which the offence is alleged to have been committ ed, and the dates between which the offence is alleged to have been committed, without specifying particular items or exact dates, and the charge so framed shall be deemed to be a charge of one offence within the meaning of section 234: (3) Provided that the time included between the first and last of such dates shall not exceed one year.
11. In the case of Mumtaz Ali and another Versus The State reported as 2000 P Cr. L J 367 Learned Division Bench of this Court has held that:
It is mandatory that charge shall contain all material particulars as to time, place as well as specific name of the alleged offence, the manner in which the offence was committed and the particulars of the accused so as to afford accused an opportunity to explain the matter with wh ich he is charged. The purpose behind giving such particulars is that the person against whom such charge is framed should prepare his case accordingly and may not be misled in preparing his defence. Charge is the very start of trial and it is at this stag e that an accused comes across the accusation levelled by the prosecution against him, as such he will have to keep such material in his mind during the proceedings of the trial. 12. On detention of oil tankers in the intervening night between 13 - 14 May 202 6, during the period in between 14 th May to 18 th May 2026, the
complainant party conducted search of various petroleum storage facilities and seized the goods under suspicion being smuggled goods. Section 162 of the Customs Act, 1969 mandates the search of the premises on obtaining the search warrant from concerned magistrate. Section 162 reads as under:
162. Power to issue search warrant. - (1) Any Judicial Magistrate may, on application by a gazetted officer of customs stating the grounds of his belief th at goods liable to confiscation or documents or things which in his opinion will be useful as evidence in any proceeding under this Act are secreted in any place within the local limits of the jurisdiction of such Magistrate, issue a warrant to search for such goods, documents or things. (2) Such warrant shall be executed in the same way, and shall have the same effect, as a search-warrant issued under the Code of Criminal Procedure, 1898 (Act V of 1898).
13. From perusal of FIR, it is crystal clear that g oods were seized under suspicion being smuggled goods by invoking the provisions of section 163 of the Customs Act, 1969. Section 163 is closely tied in with section 162 which envisaged for issuance of a search warrant by Judicial Magistrate, on application by a gazetted officer of customs stating the grounds of his belief that goods liable to confiscation or documents or things which in his opinion will be useful as evidence in any proceeding under this Act are secreted i n any place within the local limits of its jurisdiction. Learned Magistrate may issue a warrant to search for such goods, documents or things and such warrant shall be executed in the same way, and shall have the same effect, as a search -warrant issued under the Code of Criminal Procedure, 1898 (Act V of 1898). Resort to section 163 of Customs Act, 1969 was only merited, if the requirements laid out therein were satisfied. In the present case initially no search warrant was obtained to examine the premises as to availability of any smuggled goods. If we presume that information to Customs Authorities was conveyed in the night and there was no possibility of obtaining a search warrant, thus recourse to section 163 was rightly taken when first two tankers were seized on the first night. Recourse to section 163 can be made in the situations where there are reasonable grounds for believing that any goods liable to confiscation or any documents or things which will be useful for or relevant to any proceeding under this Act are concealed or kept in any place and that there is a danger that they may be removed before a search can be effected
under section 162, the officer of Customs may, after preparing a statement in writing of the grounds of his belief and of the g oods, documents or things for which search is to be made, search or cause search to be made for such goods, documents or things in that place. But in the case of Petitioners search of the premises continued from 14 th May until 18 th May 2026 but no search warrant was obtained. Section 163 reads as under:
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 that there is a danger that they may be removed before a search can be effected under section 162, he may, after preparing a statement in writing of the grounds of his belief and of the goods, documents or things for which search is to be made, search or cause search to be made for such goods, documents or things in that place. (2) An officer or person who makes a search or causes a search to be made under sub section (1) shall leave a signed copy of the aforementioned statement in or about the place searched and shall, at the time the search is made or as soon as is practicable thereafter, deliver furthermore a sig ned copy of such statement to the occupier of the place at his last known address. (3) All searches made under this section shall be carried out mutatis mutandis in accordance with the provisions of the Code of Criminal Procedure, 1898 (Act V of 1898). (4) Notwithstanding anything contained in the foregoing sub -sections and subject to previous authorization by an officer of customs not below the rank of an Assistant Collector of Customs, any officer of customs or any person duly empowered as such may, with respect to an offence related to exportation of such goods as the Federal Government may, by notification in the official Gazette, specify in this behalf- (a) arrest without warrant any person concerned in such offence or against whom reasonable suspici on exists that he is about to be concerned in such offence; (b) enter and search without warrant any premises to make an arrest under clause (a),or to seize any goods which are reasonably suspected to be intended for exportation contrary to any prohibitio n or restriction for the time being in force, and all documents or things which in his opinion will be useful for or relevant to any proceeding under this Act; and (c) for the purpose of arresting, detaining or taking into custody or preventing the escape of any person concerned or likely to be concerned in such offence, or for the purpose of seizing or preventing the removal of any goods in respect of which any such offence has
occurred or is likely to occur, use or cause to be used such force to the extent of causing death as may be necessary. (5) The provisions of sub-section (4) shall apply only to the areas within five miles of the land frontier of Pakistan, and within a five miles belt running along the sea coast of Pakistan. (6) No suit, prosecutio n or other legal proceeding shall be instituted, except with the previous sanction in writing of the Federal Government, against any person in respect of anything done or purporting to be done in exercise of the powers conferred by sub -section (1) or sub -section(2) or, in the areas specified in sub-section (5), by sub-section (4).
14. From perusal of above provisions of law it was necessary to obtain a search warrant from concerned magistrate so as to make search and seizure proceedings trust worthy. No mater ial has been placed on record for this omission, which vitiated all the proceedings conducted by the ASO officers. Requirement of giving reasons is stated in subsection (1) of section 163 of the Customs Act, which reads that 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 opin ion will be useful for or relevant to any proceedings under this Act are concealed or kept in any place and that there is a danger that they may be removed before a search can be effected under section 162, he may, after preparing a statement in writing of the grounds of his belief and of the goods, documents or things for which search is to be made, search or cause search to be made for such goods, documents or things in that place. This makes the search warrant of the concerned magistrate mandatory.
15. In the case of COLLECTOR OF CUSTOMS (PREVENTIVE) and 2 others V. MUHAMMAD MAHFOOZ reported as PLD 1991 Supreme Court 630 it is held that: Perusal of the statement of grounds reproduced above clearly shows that grounds for belief in support of danger as such w ere not mentioned specifically as is required under section 163 of the Customs Act. This is a statutory requirement and there is legislative wisdom behind it which is to the effect that ordinarily a place is to be searched only after search -warrant is obtained from the Magistrate as is contemplated under the preceding section of the Customs Act and only in extraordinary cases this section can be dispensed with as is permissible under section 163 of the Customs Act but then grounds are to be stated by the Cu stoms Officer who is allowed this facility for his belief and decision in not obtaining the search warrant. He must state the grounds
which justify apprehension of danger of removal of goods. For example, information is received from such and such person t hat the party concerned has taken steps or is about to take steps for removal of goods and if search -warrant is obtained the same will consume time or the Magistrate is not available, hence there is no other way but to go for the search without warrant. By providing such statutory requirement, the intention of legislature is to provide safe -guard against mala ride interference with rights of citizens in respect of property and against violation of right of privacy. In the instant case in the statement of grounds reproduced above, reasons are not stated as to why and what danger was apprehended for removal of goods and it is not enough simply to say that "it is not expedient to obtain search -warrant". We are, therefore, in agreement with the finding of the Hi gh Court on the ground that search and seizure were defective and improper on account of non -compliance with the provisions of sections 162 and 163 of the Customs Act.
16. For taking any action related to seizure or confiscation of the goods, it was incumbent upon Officer of Customs to inquire about the status of goods. If during inquiry Petitioner Company failed to justify the entry of goods through valid channel then proceedings under section 163 ought to have been taken. Section 26 of the Customs A ct empowers a designated officer to require any person concerned with the importation, exportation, purchase, sale, transport, storage or handling of any goods, which are being or have been imported or exported, to furnish such information relating to the goods as may be necessary for determining the legality or illegality of the importation or exportation of such goods. In the event that the department did have actionable information, it may have been appropriate to serve such a notice to determine the ver acity of the information received. Section 26 of the Customs Act, 1969 reads as under:
26. Obligation to produce documents and provide information.- (1)…
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