KHAN GUL GOVERNMENT CONTRACTOR VS FEDERATION OF PAKISTAN through Secretary/Chairman, Federal Board of Revenue, Islamabad, 2018 PTD-QUETTA-HIGH-COURT-BALOCHISTAN 415 (2017)

Customs Act (IV of 1969)---

----Ss. 2(rr), 168 & 171---Seizure of vehicles---Show-cause notice, non-issuance of---Effect---Petitioner was importer of vehicles which were seized by customs authorities---Validity---Vehicles were seized by customs authorities on 30-06-2017 but neither a seizure memo was prepared nor a show-cause notice issued to petitioner within two months of seizure---Collector Customs did not extend period further as provided by Customs Act, 1969---Mere issuance of notice under S. 171 of Customs Act, 1969 was not a substitute of show-cause notice nor it had absolved customs authorities of their responsibility to complete adjudication process in accordance with law within prescribed time---When a statute provided an act to be done in a particular manner, it must be done---Needful was not done which showed that customs authorities were either convinced that no proceedings were required as provided by S. 168 of Customs Act, 1969 or due to negligence proceedings were not initiated in time---Mandatory provision of law was violated by customs authorities, therefore, they had no jurisdiction to detain the vehicles benefit of such inaction must go to the petitioner---High Court directed customs authorities to release the vehicles---Constitutional petition was allowed in circumstances.

Asad Khan and Waleed Hakeem Baloch for Petitioner.

Syed Ikhlaq Shah, Assistant Attorney-General.

ORDER

JAMAL KHAN MANDOKHAIL, J.---The Government of Pakistan has announced an Import Policy Order, 2016 (the Policy) and notified vide S.R.O. No.345(I)/2016 dated 18-4-2016. Pursuant to Rule 9 Clause (II) sub-clause (5) of the Policy, the construction, mining, oil, gas and petroleum sector companies are permitted to import specialized vehicles, not older than five years. The petitioner is a Government contractor firm, which imported vehicles, which reached Pakistan on 13-6-2017. The petitioner filed Goods Declaration (GD) on the said date and paid all the applicable taxes and duties. Since then, six of the vehicles mentioned in the GD have been retained by the Customs authorities. Feeling aggrieved, the present petition has been filed.

2.The learned counsel for the petitioner states that the Customs authorities have retained the vehicles, claiming them to be older than 5 years, but no proceeding under section 168 of the Customs Act has been initiated, as such, the Customs authorities are not authorized to further retain the vehicles. He stated that even otherwise, pre-shipment inspection of the vehicles has been conducted by the petitioner through "Bureau Veritas", figures in list of the companies as provided in Appendix 'H' of the policy, which issued inspection certificate on 3-5-2017. The learned counsel added that the said company has confirmed the fact that the vehicles are not older than five years, but still the Customs authorities are reluctant to release the vehicles.

3.The learned Assistant Attorney General (AAG) opposed the contention and stated that the vehicles in question are older than five years and in this behalf, a Hinopak Motors Limited Pakistan, has issued a certificate on 30-6-2017, confirming the contention of the Customs authorities. The learned AAG pointed out that since the vehicles in question are older than five years, in contravention of the Policy, therefore, a notice under Section 171 of the Customs Act was issued to the petitioner. The learned AAG added that since proceedings under the Customs Act have been initiated against the petitioner, therefore, the present petition is not maintainable.

4.We have heard the learned counsel for the parties and have gone through the available record. The admitted facts of the case are that the Import Policy allows the constructions, mining, oil, gas and petroleum sector companies to import specialized vehicles/machinery, but that should not be older than five years. According to the Policy, the vehicles should be subjected to inspection by one of the companies, listed in Appendix "H" of the Policy. The petitioner's vehicles are supported by an inspection report issued by a firm namely "Bureau Veritas" listed in the Appendix to the Import Policy. The said inspection certificate was delivered to the Customs authorities well in time, where after, the vehicles reached into the Country on 30-6-2017 and the petitioner submitted the GD by clearing all the applicable taxes and duties. Admittedly, the Customs authorities did not contact the firm, which issued the verification certificate. The said firm has been authorized by the Policy for inspection, therefore, there is no justification to disbelieve its inspection report, especially when there is no objection upon its authenticity.

5.Even, if the vehicles in question are older than five years, section 168 of the Customs Act provides a procedure to be followed for adjudication by the Customs authorities, in the following manners:--

"Seizure of things liable to confiscation.---(1)The appropriate officer may seize any goods liable to confiscation under this Act, and where it is not practicable to seize any such goods, he may serve on the owner of the goods or any person holding them in his possession or charge an order that he shall not remove, part with, or otherwise deal with the goods except with previous permission of such officer.

(ii) Where any goods are seized under subsection (1) and no show-cause notice in respect thereof is given under section 180 within two months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized:

Provided that the aforesaid period of two months may, for reasons to be recorded in writing, be extended by the Collector of Customs by a period not exceeding two months.

[Provided further that the limitation prescribed under sub-section (2) shall not apply to goods specified under the first proviso to section 181.]

(3) The appropriate officer may seize any documents or things which in his opinion will be useful as evidence in any proceeding under this Act.

(4) The person from whose custody any documents are seized under subsection (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of an officer of customs"

6.The above provision of law casts duty upon the customs authorities to prepare a seizure memo, when the goods are seized and to issue a show-cause notice to the owner of the goods within two months of the seizure. Though the period of two months is extendable for a further period of not more than two months by the Collector Customs, through an order in writing, but with reasoning. Failing to issue a show-cause notice as provided by Section 168 of the Act, disentitles the Customs authorities to retain the goods. In this Section, the word "seize" has been used, which has been defined in Section 2 (rr) of the Act, as under:--

""seize" means to take into custody, physically or otherwise, goods in respect of which some offence has been committed or is believed to have been committed under this Act or the rules; and all cognate words and expressions shall be construed accordingly"

7.Admittedly, the vehicles were seized by the Customs on 30-6-2017, but neither a seizure memo was prepared, nor a show-cause notice was issued to the petitioner within two months of the seizure. Similarly, the Collector Customs did not extend the period further as provided by the Act. Merely, issuance of a notice under Section 171 is not the substitute of a show-cause notice, nor does it absolve the Customs authorities of its responsibility to complete the adjudication process in accordance with law, within the prescribed period. When a Statue provides an act to be done in a particular manner, it must be done, but in the present case, the needful has not been done, which shows that the Customs authorities were either convinced that no proceedings are required as provided by Section 168 of the Act, or due to negligence, the proceedings were not initiated in time. Since the mandatory provision of law has been violated by the Customs authorities, therefore, they have no jurisdiction to retain the vehicles, consequently, its benefit must go to the petitioner. Had the adjudication proceedings been started in time and in accordance with law, of course, a proper remedy for the petitioner was to approach the proper forum provided by the Act, but since no proper procedure has been adopted by the Customs authorities, as such, the retention of the vehicles is without jurisdiction, therefore, the petitioner having no alternate remedy, but to approach this court. Under such circumstances, the petition in quite competent.

8.In view of what has been stated and discussed hereinabove, it is clear that the petitioner has imported the vehicles as per the Policy. The Customs authorities have failed to substantiate their objections, therefore, retaining the vehicles for an unlimited period is not only against the provision of the Act, but is also unjustified.

Thus, in view of the above, the petition is allowed as prayed for. The respondents are directed to release the vehicles subject matter of the GD No.QCSI-HC-645-30-06-2017, forthwith.

MH/184/Bal Petition allowe