N. B. TRADING COMPANY, SAMBERIAL (SIALKOT) VS COLLECTOR OF CUSTOMS (APPRAISEMENT), CUSTOM HOUSE, LAHORE, 2003 PTD-KARACHI-HIGH-COURT-SINDH 14 (2002)

(a) Customs Act (IV of 1969)‑‑‑

‑‑‑‑S.185A‑‑‑Jurisdiction of Special Judge, Customs relating to cognizance of criminal offences is entirely distinct and different from jurisdiction of Customs Officials relating to contravention of fiscal provisions of Customs Law giving rise to civil liability.

(b) Customs Act (IV of 1969)‑‑‑

‑‑‑‑Ss. 17 & 123‑‑‑Customs General Order No. 15/1989, dated 21‑10‑1989‑‑‑Constitution of Pakistan (1973), Art.l99‑‑‑Constitutional petition‑‑‑Imported goods meant for transshipment to Inland Dry Ports‑‑‑Customs Officials detained such goods at Karachi Port and after finding various contraventions of law initiated proceedings tinder Customs Act, 1969‑‑‑Contention of petitioners was that Customs Officials at Karachi Port had no jurisdiction to examine such goods, but they could merely pass on information to Customs Officials of concerned Dry Port‑‑ Validity‑‑‑Such action of Customs Officials at Karachi was legally unsustainable‑‑‑High Court allowed Constitutional petitions declaring such action to be without lawful authority and set aside same with directions to respondents to reseal all containers detained and opened by them and allow transshipment thereof to respective upcountry Dry Ports of their destination, and pass on entire information, result of investigation/inquiry and all other material available with them to Customs Officials at respective Dry Ports, who would take actions as warranted by law.

Famous Corporation v. Collector of Customs 1989 MLD 2322; M. Hameedullah Khan v. Director of Custom Intelligence and 3 others 1992 CLC 57 and Shafi Shahid and another v. Director, Intelligence & Investigation (Customs and Excise), Karachi and others C.P. No. 1016 of 1999 fol.

Messrs Nisar Art Press (Pvt.) Ltd. v. Chief Collector of Customs 1997 MLD 1859 ref.

Sohail Muzaffar and Mian Abdul Ghaffar for Appellants.

S. Tariq Ali, Federal Counsel, Raja Muhammad Iqbal, Nadeem Azhar Siddiqui, Dy. A.‑G. for the Custom Officials.

Jawaid Farooqui for the K.P.T.

Dates of hearing: 18th September and Ist October, 2002.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.‑‑‑The first three petitions have been allowed by short order, dated 18‑9‑2002 and the last petition has been allowed by short order, dated 1‑10‑2002.

A common question of law is involved in all the four petitions and therefore, the consolidated detailed reasons are recorded covering all the four petitions.

Succinctly stated the relevant admitted facts in all the four petitions arc that, all the respective petitioners imported goods which were meant for transshipment to Faisalabad, in C.Ps. Nos.577, 597 and 1034 of 2002 and to Samberial (Sialkot) in C. P. No. 2559 of 2001.

The case of respondents in all the petitions is that they received information that, the consignment in all the petitions contravened the law and therefore, the custom officials at Karachi opened the respective containers and finding various contraventions of the law detained the consignment and initiated various proceedings under the Customs Act 1969, including the criminal prosecution.

All the petitioners have assailed the jurisdiction of the Custom officials at Karachi and have contended, that, since all the consignments were destined for Dry Port, therefore, the Custom officials at Karachi could merely pass on the information to the respective custom officials at the concerned Dry Ports and the containers which were opened were required to be resealed and transmitted to the respective Dry Ports of the destinations. The Custom officials at the respective Dry Ports or destinations had the jurisdiction to initiate the proceedings fiscal as well as criminal in accordance with the law.

We have heard Messrs Sohail Muzaffar and Mian Abdul Ghaffar, learned Advocates for the petitioners and Mr. S. Tariq Ali, learned Federal Counsel, Mr. Raja Muhammad Iqbal, Advocate and Mr. Nadeem Azhar Siddiqui, learned, D.A.‑G. for the Customs Officials and the Federation of Pakistan as well as Mr. Jawaid Farooqui, learned counsel for the K.P.T. in C. P. 2559 of 2001.

The learned Advocates for the petitioners have submitted that, the question pertaining to. territorial jurisdiction of the Customs ‑Officials at Karachi pertaining to the goods meant for transshipment to Dry Ports already stands decided by various Division Benches of this Court in three cases. The first case on which they have placed reliance is, Famous Corporation v. Collector of Customs, 1989 MLD 2322 (Sindh High Court). In this case, his lordship Mr. Justice Ajmal Mian, C.J. (as his lordship then was) has held that, where the goods were meant for transshipment to Lahore Dry Port, , it cannot be examined by Custom. Officials at Karachi, The petition assailing the jurisdiction of Custom Officer at Karachi was disposed of in the following terms:‑‑

"We would dispose of the above petition by ordering that the Karachi Custom House may convey the information to the Dry Port, Authorities and, there, the Custom Officers can examine the question whether there has been factually any contravention of the Customs Law or any other law and may take action against the petitioner if so warranted. If the consignment has already been examined by the Custom Officers at Karachi, the same may be resealed and may be forwarded to the Dry Port alongwith the report, if any."

The second judgment is in the case of M. Hameedullah Khan v. Director of Custom Intelligence and 3 others 1992 CLC 57. Similar question of territorial jurisdiction came for consideration in this case also and a D.B. of this Court presided over by his Lordship Mr. Justice Saeeduzzaman Siddiqui, C.J. (as his lordship then was) held that, the Custom Officials at Karachi had no jurisdiction to take any action for the alleged contravention of law. The relevant facts were that the consignment for Dry Port, Lahore was intercepted at Karachi Port by the Custom Intelligence Department, who had the information that the consignment did not contain the declared goods. A notice was issued to the importer to show cause as to why the consignment should not be forfeited on account of the contravention of the Customs laws. The petitioner while assailing jurisdiction of the Custom Officials at Karachi placed reliance on Customs General Order No. 15 of 1989 issued by the Central Board of Revenue which reads as follows:‑‑‑

"GOVERNMENT OF PAKIS'T'AN

CENTRAL BOARD OF REVENUE

C. No. 11(2)L&P/73, Pt. III. Islamabad, the 21st October, 1989.

CUSTOMS GENERAL ORDER NO.15/1989

SUBJECT:TRANSSHIPMENT OF IMPORTED CARGO TO THE

UPCOUNTRY DRY PORTS.

It has been brought to the notice of the Central Board of Revenue that some times the personnel of the Customs Agencies such as the Directorate of Vigilance and Inspection (Customs, Central Excise and Sales Tax), Directorate of Intelligence and Investigation (Customs, Central Excise and Sales Tax), Controller of Customs Valuation, Internal and External Audit Agencies detain at Karachi imported cargo meant for transshipment of inland dry ports. Since detention of such cargo at the port of transshipment causes unnecessary delay in its transshipment to the dry ports and inconvenience to the importers, the Central Board of Revenue has decided to issue the following instructions with a view to ensuring smooth flow of transshipment cargo from the port of transshipment to inland dry ports:‑‑‑

(i) Transshipment (TP) of imported cargo (including unaccompanied baggage) to the upcountry ports shall invariably be allowed on the applications filed by the authorized representatives of the approved carriers viz. the Pakistan Railways, the National Logistic Cell (NLC) or any other public or private carrier authorized in this behalf, if the address of the party to be notified is of an upcountry destination or the marks and numbers on the Bill of Lading indicate an upcountry destination via Karachi Transshipment in these cases shall be allowed irrespective of the place of issue of import licence or of opening of L.C. such goods shall not be detained or examined at Karachi by any of the Customs Agencies including the Customs House, Karachi notwithstanding any information which such agencies might possess regarding mis-declarations or other contraventions suspected to be involved in such consignments, if there is any authentic information with any of those agencies which could lead to detection of contraventions, it should be passed on to the respective Collectors or Deputy Collectors of Customs‑Incharge of the Dry Ports and in case of Directorates to their own offices at port of destinations for necessary action at that end.

(ii) The authorities at the Inland Dry Ports shall deal with the transshipment cargo with reference to the information received by them under para. (i) of this order. The Collector or Deputy Collector Incharge of the Dry Port concerned shall intimate to the information giving agency their findings and where any contraventions have been established, copy of the show‑cause notice issued and the order‑in‑original passed shall be endorsed to the concerned agency.

(iii) Custom House shall not allow transshipment in cases where the party to be notified (on the Bill of Lading) is based at Karachi or the marks and numbers on the Bill of Lading not indicate upcountry destination.

2. No transshipment shall be allowed for the items specified in S.R.O. 125(I)/83, dated 12th February, 1983 (copy enclosed).

(Sd.)

(Dr. Afaque Ahmed),

Second Secretary (T&W)."

His Lordship Mr. Justice Saeeduzzaman Siddiqui, C.J., held as follows:‑‑‑

"We have already reproduced above the letter containing the instructions issued by the C.B.R. regarding transshipment of imported cargo to upcountry dry ports. After going through the same we are of the view, that under sub‑paragraph (i) of the above instructions, if the address of the party to be notified is disclosed in the Bill of Lading as of an upcountry destination or the mark and numbers on the Bill of Lading indicate an upcountry destination via Karachi, then in that case the consignment cannot be detained at Karachi. However, if any misdeclaration or suspected contravention is discovered in respect of such consignments, the information is to be conveyed to the respective Collector of Customs or Deputy Collector of Customs, Incharge of Dry Port or the Directorate of Intelligence at the Dry Port. These instructions are applicable both in cases were either the notifying party as indicated in the Bill of Lading is situated in upcountry destination, or the shipping marks on the consignment indicate the upcountry destination via Karachi. In the case before us it is admitted position that the Bill of Lading was allowed to be amended under section 45 of the Customs Act and the name of notifying party has been shows as Allied International Lahore and therefore, in terms of the instructions referred to above transshipment of consignment to the Dry Port, Lahore should have been allowed. In our view the absence of shipping marks on the consignment, could not give jurisdiction to the Directorate of Customs Intelligence, Karachi to detain the consignment at Karachi Port when the address of notifying party was shown at Lahore. In such a case if the respondents had discovered any contravention of Customs Law by the importer, they should have allowed the consignment to its destination namely the dry port at Lahore and notified its offices there for action or convey the above information to the Collector or Deputy Collector of Customs at Dry Port as was required under the law."

It was ultimately declared that, the detention of the consignment at Karachi was without authority and of no legal effect and further direction was given to the respondent to allow transshipment of consignment to the Lahore Dry Port, which was shown destination of the consignment in the Bill of Lading.

A similar question again came for consideration before a Division Bench of this Court in C.P. No. 10.16 of 1999, Shafi Shahid and another v. Director, Intelligence and Investigation (Customs and Excise) Karachi and others. In the said case, the consignment destined for Lahore Dry Port was intercepted and detained at Karachi for alleged contraventions of the Customs Laws. The prosecution was launched and criminal case was challaned in the Court of Special Judge Customs, Karachi. The petitioners in the said case, assailed the jurisdiction of Custom Officials at Karachi. Petition was disposed of vide order dated 25‑8‑1999. Reliance was placed on the two earlier judgments of this Court referred to above, and it was held as follows:‑‑‑

"We find that the action of the respondent is legally unsustainable, therefore, it is ordered that the respondent should send the consignment to Lahore where the custom and other authorities shall be legally competent to take other actions according to law."

It was clarified that, the petition was allowed to the above extent only and no order was made regarding the criminal case which was pending on the file of learned Special Judge Custom at Karachi. It was observed that, the petitioners were at liberty to seek‑further legal appropriate remedy in respect of the criminal case.

The learned Advocates for the petitioners have vehemently argued that, point in issue stands decided, by three Division Bench judgments of this Court and consequently, the actions taken by the respondents whereby the consignment destined for upcountry Dry Port have been seized/detained, may be held to be without lawful authority and the actions taken by the respondents and all subsequent proceedings be held void and of no legal effect.

On the other hand, Mr. S. Tariq Ali, learned Federal Counsel, has submitted that, the contentions raised by the learned Advocates for the petitioners came for consideration before a learned Single Judge of this Court, as Special Appellate Court and the contentions were repelled vide judgment dated 18‑1‑2002, in Special Criminal Bail Application Nos.30 to 33 of 2001. The matter was taken to Hon'ble Supreme Court in Criminal Petitions Nos.19‑K and 21‑K of 2002, Ch. Abid Saeed v. The State and others and the Hon'ble Supreme Court refused to grant leave to appeal and the order of Special Appellate Court comprising a Single Judge of this Court refusing bail to the two applicants was upheld.

Mr. S. Tariq Ali, has contended that, after the refusal of leave to appeal by the Hon'ble Supreme Court, the earlier judgments of this Court on the point of jurisdiction of the Custom Officials are not to be followed.

Mr. Raja Muhammad Iqbal, Advocate has placed reliance on another Division Bench judgment of this Court in the case of Messrs Nisar Art Press (Pvt.) Ltd. v. Chief Collector of Customs 1997 MLD 1859 (Karachi), in which the contention that, Custom Officials, at Karachi had no jurisdiction was repelled. In this case, the relative facts were that the petitioner a Private Limited Company carrying on business at Lahore imported goods from U.S.A. The Bill of Lading carried address of petitioner/consignee as of Lahore. The consignment which was destined for Dry Port, Lahore was detained at Karachi and a show- cause notice was issued to the petitioner. The action was challenged before the High Court. It was pleaded on behalf of the Customs Officials that the delivery of goods was made at Karachi and not at Lahore. There was information of contravention of the Customs Laws and therefore, the consignment was detained. The earlier judgments of this Court on which the learned Advocates for the petitioners have placed reliance were referred and the learned Members of the Division Bench after referring to the findings in the above‑cited judgments and the Customs General Order 15/1989 observed that, they were in complete agreement with the principle laid down in the case of M. Hameedullah Khan v. Director of Customs (supra) but the decision was not applicable to the facts of the case under consideration. It was observed that, the principle laid down in the case of M. Hameedullah, was that if the Bill of Lading shows upcountry destination or the mark and numbers and the Bill of Lading indicate upcountry destination via Karachi, then in that case the consignment cannot be detained at Karachi. It was further observed that in the case under consideration the port of discharge and destination in the Bill of Lading was shown as Karachi: It was also observed that this fact was not denied by the petitioner. Thus, in the facts and circumstances of the said case, it was observed that para. 3 of C.G.O. No. 15/89 was applicable which provided that the Custom House shall not allow transshipment in cases where the party to be notified on the Bill of Lading is based at Karachi or the marks and numbers on the Bill of Lading do not indicate upcountry destination.

We have given our anxious consideration to the admitted facts in the present petitions and the judgments on which the learned counsel for the parties have placed reliance.

We find, no hesitation in holding that the question of jurisdiction of the Custom Officials at Karachi in respect of the consignment destined for upcountry Dry Port already stands settled by three earlier D.B. judgments of this Court. We are, in respectful agreement with the views held in the earlier three judgments of this Court. So far, the judgment of learned Single Judge of this Court as Special Appellate Court under the Customs Act, is concerned, we find that the learned Single Judge had seisen over a bail application in .the criminal case pending before the Special Judge Customs, Karachi. The considerations in respect of the jurisdiction of Special Judge Customs, pertaining to the cognizance of criminal offence are entirely distinct and different than the question relating to the jurisdiction of Custom Officials, pertaining to the fiscal provisions and contraventions of the Custom Laws giving rise to the civil liability. A perusal of the judgment of Hon'ble Supreme Court refusing the leave to appeal also shows that the Hon'ble Supreme Court has merely considered the question if a case for grant of bail was made out and the order of the learned Special Appellate Court was open to any exception. It is indicated from the following findings of the. Hon'ble Supreme Court:‑‑‑

"We have gone through impugned judgment, which in our view is exhaustive one and has covered all aspects of the matter, thus does not require interference. For the present there appears reasonable grounds to believe that the petitioners for the present have not made out case for grant of bail as there exists no reasonable ground to believe that they had not committed the offence punishable under prohibitory clause of section 497, Cr.P.C. and the case referred (supra) is on different facts and circumstances and has nothing to do with the case of the petitioners."

After a very careful consideration of all the judgments cited before us, and the material placed on record, we are of the opinion that, so far, the territorial jurisdiction of the Custom Officials is concerned, it already stands decided by three earlier judgments of this Court and consequently, respectfully following the cited judgments, we find that the action of the Custom Officials at Karachi is legally unsustainable. It is hereby, declared to be without lawful authority and is accordingly set aside. We, further direct the respondents to reseal all the containers detained and opened by them and allow the transshipment of the consignment to the respective upcountry Dry Ports which are ports of destination and pass on the entire information, the result of investigation/inquiry and all other material available with them to the Custom Officials at the respective ports of destination, who shall take actions in accordance with and as warranted in law.

All the petitions are allowed to the above extent with no orders as to costs.

Respectfully following the order dated 25‑8‑1999 by a D.B. of this Court in C.P. No.D‑1016 of 1999, it is hereby clarified that this judgment shall not affect the criminal case which is pending on the file of the learned Special Judge Customs, Karachi, out of which the bail application arose which was decided by a learned Single Judge of this Court as Special Appellate Court and further gave rose to the Criminal Petitions 19‑K and 21‑K of 2002 before the Hon'ble Supreme Court of Pakistan.

In addition to the direction contained in the D.B. judgment in C.P. 1016 of 1999, Shahid Shafi and others v. Director, Intelligence and Investigation, referred to above, we are guided in this behalf by the judgment of Hon'ble Supreme Court, dated 21‑5‑1998, in Criminal Appeals Nos. 103, 104, 105, 106 and 107 of 1994. The State v. Muhammad Nawaz. In this appeal leave was granted to consider the following point inter alia the other grounds:‑‑‑

"That even if the F.I.R. was defective, the same would not vitiate the trial, once cognizance in respect of alleged offence has been taken by the Special Judge properly:"

In the cited case the proceedings pending before the learned Special Judge were quashed by a Single Judge of this Court and a contention was raised before the Hon'ble Supreme Court that by virtue of the provisions contained in section 185‑A of the Customs Act, the learned Special Judge was competent to take cognizance even on receipt of complaint or information of facts constituting the offence made or communicated by any person and therefore, even if it was assumed that, the officer of the Custom was not competent to lodge the F.I.R. or file complaint, the cognizance could have been competently taken by the learned Special Judge by treating the F.I.R. as information in terms of section 185‑A(1)(b) of the Customs Act. The Hon'ble Supreme Court observed that, by virtue of the provisions contained in the above section, the learned Special Judge could have taken cognizance by treating the complaint as an information.

It was further contended before the Hon'ble Supreme Court that, once the cognizance was taken by a competent Court any irregularity prior to the taking of cognizance would not vitiate the proceedings. In support of his contentions, reliance was placed on the cases of Noorul Islam v. The State 1986 SCMR 1836, State through Director‑General, Pakistan Coast Guards, Turbat v. Sabro and another 1992 PCr.LJ 1795 and Zubair alias Nana v. The State 1992 PCr.LJ 2127.

In the first case, the Hon'ble Supreme Court held that, illegality committed in course of investigation could not affect competence and jurisdiction of the Court. In the second case, it was held by his lordship Munawar Ahmed Mirza, C.J. (as his Lordship then was) that, lodging of an F.I.R. with the Special Judge Customs by the Commandant of Battalion instead of authorized officer would not vitiate the trial. In the third case, bail was refused by this Court which was sought on the ground that, the police had no power to investigate the offence. The Hon'ble Supreme Court approved the ratio in the above judgments and the order of learned Single Judge of this Court was set aside and the case was remanded to learned Special Judge (Customs and Taxation), Karachi, to proceed with the matter on merits.

These are the detailed reasons in support of the short orders, whereby the petitions were allowed.

S.A.K./N‑105/K Petitions accepted.