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Official Citation: 2026 IHC 263512
Court / Jurisdiction: Islamabad High Court
Parties: M/s Diplomats Duty Free Pvt. Ltd. vs FOP etc.
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2026 IHC 263512. In this matter between M/s Diplomats Duty Free Pvt. Ltd. and FOP 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: Islamabad High Court (Honourable Chief Justice Mr. Justice Sardar Muhammad Sarfraz Dogar) AUTHOR JUDGE: Honourable Chief Justice Mr. Justice Sardar Muhammad Sarfraz Dogar DECISION DATE: 16-JUN-2026 CASE NO: Writ Petition-525-2026 CITATION: 2026 IHC 263512 PARTIES: M/s Diplomats Duty Free Pvt. Ltd. VS FOP etc. LAW / SECTION: - SUBJECT: Miscelleneous, Other REMARKS: Petitioner is aggrieved that its representation for licenes to import liquor has been refused. Seek indulgence and privileges for diplomatic protocols. ============================================================ JUDGMENT SHEET IN THE ISLAMABAD HIGH COURT, ISLAMABAD. JUDICIAL DEPARTMENT
W.P No.525 of 2026
M/s DIPLOMATS DUTY FREE (PVT.) LTD Versus Federation of Pakistan and others.
Date of hearing
Petitioner by:
Respondent No.1 by:
16.06.2026
Mr. Sikandar Naeem Qazi, Advocate.
Mr. Rashid Hafeez, Additional Attorney General and Mr. Asif Khan Jadoon , Assistant Attorney General for Pakistan. SARDAR MUHAMMAD SARF RAZ DOGAR , CJ : Through the instant Constitutiona l Petition filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, the Petitioner (M/s Diplomats Duty Free (Pvt.) Ltd.) assails the Speaking Order passed by the Federal Minister for Commerce, whereby the Petitioner’s review a pplication seeking import authorization for 812 cases of assorted liquor (Invoice No. DIPL -010, dated 17.07.2024 valued at USD 23,756) was "Regretted". The petitioner prayed as follows:- a. Declare that the impugned speaking order passed by Respondent No.2 is without lawful authority, having been issued in non -compliance with the directions of this Hon’ble Court and in disregard of the governing statutory and regulatory framework, and is therefore liable to be set aside; b. Set aside the impugned speaking order o n the ground that it ignores statutory provisions, subordinate legislation, and established regulatory instructions governing diplomatic bonded warehouses, and proceeds on an erroneous application of the Import Policy Order, 2022; 2 W.P No.525 of 2026
c. Declare that the petition er, being a duly licensed diplomatic bonded warehouse under section 13 of the Customs Act, 1969, is governed by a special statutory regime including Rule 333 of the Customs Rules, 2001, Customs General Order No.12 of 2002, and the Ministry of Commerce Offi ce Memorandum dated 23.09.1992, and that the Import Policy Order, 2022 cannot be applied so as to nullify the said regime; d. Direct the Respondents to permit warehousing/in - bounding of the subject consignment in the Petitioner’s licensed bonded warehouse, in accordance with law and subject to the statutory safeguards provided under the Customs Act, 1969, and the Rules framed thereunder; e. Grant any other relief deemed just, proper and equitable in the circumstances of the case. 2. Briefly stated, the facts nec essary for the disposal of the instant petition are that the petitioner has been operating lawfully since long as a licensed private bonded warehouse under Section 13 of the Customs Act, 1969, holding License No. PWL -01/2001 valid till July 31, 2027. In Ju ly 2024, the petitioner arranged the import of 812 cases of alcoholic beverages, valued at USD 23,756. Upon arrival of the vessel at Karachi Port, the petitioner applied to the Ministry of Commerce on August 9, 2024, for the issuance of an import authorization as required under Rule 333(a) of the Customs Rules, 2001. However, the Cabinet Committee for Relaxation of Import/Export Related Prohibitions/Restrictions, in its meeting held on November 28, 2024, declined to allow the release of the consignment. Thi s decision was formally communicated via a rejection letter dated January 1, 2025, which alleged a violation of Serial No. 14, Appendix-A of the Import Policy Order, 2022. Being a ggrieved by this unilateral rejection, the petitioner initially invoked the c onstitutional jurisdiction of this Court in Writ Petition No. 3146 of 2025 , which was disposed of by this Court vide order dated September 29, 2025, remanding the matter to the Ministry of Commerce with directions to afford a personal hearing to the petiti oner and all concerned 3 W.P No.525 of 2026
departments, and to pass a reasoned speaking order strictly in accordance with law within 30 days . In purported compliance with these judicial directions, the Minister -in-Charge of the Commerce Division conducted a hearing on October 30, 2025, which was attended by legal counsel for the petitioner and representatives from the Federal Board of Revenue and the Ministry of Foreign Affairs. The Minister -in-Charge subsequently issued the impugned Speaking Order, regretting/rejecting the pe titioner’s review application on the grounds that the Ministry of Commerce Office Memorandum dated September 23, 1992, stood implicitly repealed by the Import Policy Order, 2022, and that the import of alcoholic beverages remains absolutely banned under Se rial No. 14, Appendix-A of the said Policy. By filing the instant petition, the petitioner has once again approached this Court to challenge the legality of this Speaking Order. 3. While reiterating the grounds, l earned counsel for the petitioner contende d that the petitioner is a duly licensed Diplomatic Bonded Warehouse operating under Licence No. PWL-01/2001 issued under section 13 of the Customs Act, 1969, and has lawfully been carrying on its business under a special statutory regime governing diploma tic bonded warehouses. He submitted that the licence remains valid and subsisting and authorizes the petitioner to import, warehouse and supply dutiable goods, including alcoholic beverages, exclusively to diplomatic missions and other entitled privileged persons under strict customs supervision. 4. Learned counsel further argued that the impugned speaking order proceeds on a fundamentally erroneous premise that the Import Policy Order, 2022 has superseded or displaced the special legal framework governing diplomatic bonded warehouses. According to him, the petitioner’s operations are 4 W.P No.525 of 2026
regulated not only by Section 13 of the Customs Act, 1969 but also by Rule 333 of the Customs Rules, 2001, Customs General Order No.12 of 2002 and the Ministry of Commerce Office Memorandum dated 23.09.1992, all of which collectively constitute a special and self -contained regime that has remained operative for decades. It was further contended that the Ministry of Commerce lacked lawful authority to indirectly suspend or neutr alize the petitioner’s statutory licence by refusing import authorization. Learned counsel submitted that the impugned order effectively deprives the petitioner of the rights flowing from its valid licence without initiating any proceedings for suspension, cancellation or modification thereof in accordance with law. 5. Learned counsel further maintained that the respondents failed to appreciate the controlled and restricted nature of the diplomatic bonded warehouse regime. While referring to Clauses 21, 2 2 and 37 of Customs General Order No.12 of 2002, he submitted that sales from diplomatic bonded warehouses are confined exclusively to entitled diplomatic and privileged persons , subject to comprehensive customs supervision, audit, record maintenance and i nspection. He argued that the concerns regarding misuse, diversion or circulation of alcoholic beverages in the local market stand adequately addressed through the existing regulatory framework and, therefore, the refusal of authorization is based upon mere conjecture and speculative apprehensions. 6. The learned counsel next argued that the impugned order suffers from wrong interpretation and misapplication of the Import Policy Order, 2022. According to him, the respondents failed to appreciate the legal distinction between warehousing of goods under customs custody and clearance of goods for home consumption. The petitioner's counsel 5 W.P No.525 of 2026
highlights that the transshipment and warehousing of spirits are expressly governed by Rule 333(a) of the Customs Rules, 2001, which carves out a specific statutory exception in favor of diplomatic bonded warehouses and diplomatic missions. It is argued that under the established customs machinery, "in - bonding" is merely a deferred -duty storage mechanism and does not constitu te "importation for home consumption". The issue of trade prohibition under the Import Policy Order , 2022 only arises at the stage of "ex -bonding" (clearance for home consumption) under Section 104 of the Customs Act, 1969. Because all ex-bonded clearances are strictly limited to entitled diplomatic personnel on the basis of exemption certificates issued by the Ministry of Foreign Affairs, the general trade ban on alcoholic beverages is never triggered. 7. It has been further argued that Section 84 of the Customs Act, 1969 expressly permits warehousing of dutiable goods in a licensed bonded warehouse and does not authorize refusal of warehousing merely because import authorization is pending or disputed. Learned counsel submitted that the continued detention of the consignment at the port, despite the petitioner being a licensed bonded warehouse operator, amounts to an unlawful exercise of power and frustrates the statutory scheme governing bonded warehousing. 8. Learned counsel also assailed the finding re corded in the impugned order regarding the Office Memorandum dated 23.09.1992. He submitted that the respondent incorrectly treated the said Memorandum as having become redundant or impliedly repealed. According to him, no notification, executive order or statutory instrument has ever withdrawn or superseded, the said Memorandum , and in the absence of an express repeal, it continues to hold the field. He further submitted that the Ministry itself had consistently acted upon 6 W.P No.525 of 2026
the said framework in processing requests relating to diplomatic bonded warehouses, thereby acknowledging its continued applicability. 9. It has been further contended by learned counsel for the petitioner that the respondents failed to apply the well - recognized principle that a special statutory framework prevails over a general policy instrument. He argued that the Import Policy Order, 2022, being a general regulatory instrument, could not override the special regime established under the Customs Act, 1969 and the subordinate legislativ e and executive instruments specifically governing diplomatic bonded warehouses. Furthermore, the impugned order unlawfully elevates a general policy framework above a special statutory arrangement, rendering the latter redundant. 10. Learned counsel last ly submitted that the impugned order is arbitrary, unreasonable, based upon misdirection in law, non -consideration of relevant material and consideration of irrelevant factors. He argued that the respondents failed to correctly appreciate the statutory fra mework governing diplomatic bonded warehouses and thereby exercised their discretion in a manner inconsistent with law. He , therefore, prayed that the impugned speak ing order be declared unlawful and set aside with a direction to the respondents to grant t he requisite import authorization and facilitate release of the consignment in accordance with the diplomatic bonded warehouse regime and the applicable law. 11. Conversely, the learned law officers appearing on behalf of the respondent -Federation of Paki stan opposed the petition and supported the impugned speaking order. It has been s ubmitted that the petitioner has no vested or absolute right to import alcoholic beverages merely on the basis of 7 W.P No.525 of 2026
possession of a bonded warehouse licence. It is contended th at a warehouse licence and an import authorization operate in distinct legal spheres and fulfillment of one requirement does not dispense with compliance of the other. Learned counsel argued that import into Pakistan is governed by the provisions of the Imports and Exports (Control) Act, 1950 and the Import Policy Order, 2022 framed thereunder. He submitted that every import transaction must conform to the prevailing import policy and that no person can claim exemption from the operation of the Import Polic y Order unless such exemption is expressly provided by law. According to him, the petitioner cannot rely upon a bonded warehouse licence to circumvent the restrictions and conditions prescribed under the import control regime. It was contended that the Min istry of Commerce is the competent authority entrusted with regulation of imports and possesses the lawful authority to determine whether a proposed import falls within the parameters of the applicable import policy. The impugned decision, therefore, represents a lawful exercise of statutory discretion and does not warrant interference in constitutional jurisdiction. Learned law officer further submitted that the Office Memorandum dated 23.09.1992 relied upon by the petitioner does not confer any perpetual or indefeasible right to import alcoholic beverages. He argued that the said Memorandum was merely an administrative arrangement issued in a particular policy context and cannot override, amend or supersede subsequent statutory instruments, including the I mport Policy Orders issued from time to time under the Imports and Exports (Control) Act, 1950. According to the respondent , the Import Policy Order, 2022 is the latest and governing policy instrument regulating imports into the country. To the extent that any previous executive instructions, circulars, memoranda or administrative practices are inconsistent with the current 8 W.P No.525 of 2026
import policy framework, the latter must prevail and previous shall stand superseded . Learned law officer submitted that the petitioner's entire case is premised on obsolete administrative instructions which cannot be enforced in derogation of the prevailing statutory policy. It was further argued that Customs General Order No.12 of 2002 and the Customs Rules, 2001 merely regulate the man ner in which goods may be warehoused, accounted for and supplied after lawful importation. These instruments do not independently create a right to import goods whose importation is restricted, prohibited or subject to prior authorization under the import control regime. The learned law officer maintained that the distinction sought to be drawn by the petitioner between importation and warehousing is misconceived. He submitted that before any goods can be deposited in a bonded warehouse, their import must f irst be lawful and compliant with the applicable import policy. In the absence of valid authorization from the competent authority, the petitioner cannot insist upon warehousing of the goods as a matter of right. It was also contended that alcoholic bevera ges constitute a highly regulated category of goods involving considerations of public policy, regulatory control and international obligations. The competent authorities are therefore entitled to adopt a cautious approach while processing requests for imp ort authorization relating to such products. Learned law officers submitted that policy choices in matters of trade and import regulation fall primarily within the executive domain and are ordinarily not amenable to judicial review unless shown to be paten tly unlawful, mala fide or without jurisdiction. While referring to the impugned speaking order , learned law officers argued that the matter had been reconsidered strictly in compliance with the directions previously issued by this Court , and the petitioner was afforded an opportunity of a hearing, all relevant 9 W.P No.525 of 2026
material was examined and a detailed, reasoned and speaking order was thereafter passed. The requirements of due process and fair hearing having been fully satisfied, no procedural illegality can be attributed to the impugned decision. The law officers further contended that the petitioner cannot invoke the doctrines of legitimate expectation or past practice against a statutory policy framework. Even if import authorizations had been granted in the p ast, no estoppel can operate against the law and no expectation can arise contrary to the prevailing legal regime. According to him, each request for import authorization is required to be assessed independently in light of the policy applicable at the relevant time. Lastly, it has been submitted that the petitioner ha d failed to demonstrate any violation of a vested legal right, jurisdictional defect, mala fide, arbitrariness or patent illegality warranting interference under Article 199 of the Constitutio n. Finally, prayed for the dismissal of the instant petition. 12. I have heard the arguments advanced by learned counsel for the parties and ha ve perused the record with their able assistance. 13. The controversy involved in the instant petiti on lies within a narrow compass. Therefore, before proceeding further with the matter, it would be advantageous to examine the statutory and administrative framework governing diplomatic bonded warehouses. The petitioner is admittedly a licensee operating a private/ manufacturing bonded warehouse under Section 13 of the Customs Act, 1969, which reads as under:- “13. Power to licence private warehouses. - (1) At any warehousing station, the Collector of Customs may, from time to time, licence private warehouses wherein du tiable goods may be deposited 3[without payment of customs-duty.] (2 ) Every application for a licence for a private warehouse shall be made in such form as may be prescribed by the Collector of Customs. 10 W.P No.525 of 2026
4[(3) A licence granted under this Section may be cancelled by the Collector of Customs for infringement of any condition laid down in the licence or for any violation of any of the provisions of this Act or any rules made there under, after the licensee has been given proper opportunity of showing cause against the proposed cancellation]. (4) Pending consideration whether a licence be cancelled under sub-section (3), the Collector of Customs may suspend the licence.” Section 13(1) expressly authorizes the Collector of Customs to licence private warehouses "wherein dutiable goods may be deposited without payment of customs -duty". More importantly, sub-sections (3) and (4) of section 13 prescribe a complete statutory mechanism for cancellation or suspension of such licence in the event of infringement of lice nce conditions or violation of the Customs Act or Rules made thereunder. Admittedly, no proceedings for suspension or cancellation of the petitioner's licence have ever been initiated. On the contrary, Respondent No.4 /Collector of Customs, has expressly ac knowledged that the licence continues to be remained valid. Consequently, the legal existence of the petitioner's warehouse and its entitlement to operate thereunder cannot be disputed. 14. Furthermore, Rule 333 of the Customs Rules, 2001, is a body of sta tutory subordinate legislation enacted by the Central Board of Revenue (now Federal Board of Revenue) in exercise of the powers conferred under Section 219 of the Customs Act, 1969, which specifically deals with goods not ordinarily permitted for transshipment. It states:- “333. Goods not permitted for transhipment. - The following goods shall not be allowed transshipment to up -country customs port or stations, namely: -(a) spirits, as defined in Chapter 22 of the First Schedule to Act, except imported by diplomatic bonded warehouse and diplomatic mission after obtaining import authorization from Ministry of Commerce." The said provision is of considerable significance. Far from abolishing the regime of diplomatic bonded warehouses, the 11 W.P No.525 of 2026
supra Rule expressly re cognizes their existence and contemplates importation of spirits by diplomatic bonded warehouses subject to obtaining import authorization from the Ministry of Commerce. Had the legislative intent been to prohibit such imports altogether, there was no occa sion to carve out a specific exception in favour of diplomatic bonded warehouses and diplomatic missions. Th is Rule, therefore, constitutes a clear statutory acknowledgement of the legality of imports by diplomatic bonded warehouses. 15. Likewise, the Mini stry of Commerce itself, through Office Memorandum dated 23.09.1992, laid down the policy governing " Import of Liquor by Diplomatic Bonded Warehouses". The operative portion thereof states that:- "the Bonded warehouses may be allowed to import liquor on behalf of foreign diplomatic mission in Pakistan, diplomats or commissioners and also for ultimate consumption by the foreign privileged persons working in various organizations in Pakistan under agreement with their respective government with the Government of Pakistan." The Memorandum further prescribes conditions requiring production of a valid licence for keeping liquor in bond, certified stock statements, duly attested invoices and other documentary safeguards. The significance of the Memorandum lies not merely in the permission granted thereunder but in the fact that it establishes a complete regulatory framework governing such imports. It is pertinent to mention here that the stance of Respondents that said Memorandum has been superseded is found unsubstantiated as t he respondents have been unable to point out any notification, statutory instrument or executive order expressly rescinding or withdrawing the said Memorandum. 16. The same position emerges from Customs General Order No.12 of 2002. Chapter V III thereof, dealing with "Special Exemption", specifically recognizes diplomatic bonded 12 W.P No.525 of 2026
warehouses established under section 13 of the Customs Act, 1969. Clause 21 provides:- "Licensees of diplomatic bonded warehouses established under Section 13 of the C ustoms Act, 1969 shall open foreign currency accounts in their respective names; and entitled persons/organizations etc., shall make payment for purchase from the warehouses through cash, credit card, cross cheques, pay orders or drafts issued in favour of the licensees from their foreign currency accounts maintained in Pakistan." The aforesaid provision is a clear acknowledgment that diplomatic bonded warehouses are a continuing component of the customs framework and are intended to make sales to entitled persons and organizations. More importantly, Clause 22(b) of the same General Order expressly provides that expatriate employees and other specified foreign nationals "would also be allowed to import directly or purchase from duty free shops/diplomatic bon ded warehouses their requirements of alcohol, cigarettes and food stuff...". However, the respondents have placed considerable reliance upon the concluding sentence of Clause 22(b), that "import of alcoholic beverages will, however, be subject to Import Policy Order." The said stipulation cannot be read in isolation as it merely subjects the import process to the applicable policy requirements; it does not abolish diplomatic bonded warehouses, nullify licences granted under section 13 of the Customs Act, 1969, or repeal the special mechanism recognized by Rule 333 and the Office Memorandum dated 23.09.1992. 17. The matter is put beyond any doubt by the communication dated 20.09.2022 issued by the Ministry of Foreign Affairs. The said communication records t hat foreign missions and diplomatic personnel enjoy privileges and immunities under the United Nations Convention on Privileges and Immunities, 1946, the Vienna Convention on Diplomatic Relations, 1961, the Vienna Convention on Consular Relations, 1963, th e United Nations Privileges and Immunities Act, 1948 13 W.P No.525 of 2026
and the Diplomatic and Consular Privileges Act, 1972. Most significantly, paragraph 7 thereof recognizes the continuing role of diplomatic bonded warehouses in the following terms:- "The Bonded Warehouse s provide the means through which Foreign Missions and their members obtain relief from the imposition of taxes and duties on their official and personal purchases of certain commodities. Such commodities generally include hard drinks, soft drinks, tobacco and fragrances etc." The Ministry of Foreign Affairs further acknowledges that:- "the only mechanism, apart from import, through which a Foreign Mission or its members can obtain an exemption from such…
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