2003 P T D 409

[Karachi High Court]

Before Muhammad Mujeebullah Siddiqui, J

Messrs SAMAN DIPLOMATIC BONDED WAREHOUSE PROPRIETORSHIP CONCERN through its Manager and duly constituted attorney, Karachi

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Commerce, Islamabad and 3 others

Suit No. 706 of 2002, decided on 25/11/2002.

Customs Act (IV of 1969)‑‑‑

‑‑‑‑Ss. 32 & 13(3)‑‑‑Specific Relief Act (I of 1877, Ss. 42 & 54‑‑‑Suit for declaration and mandatory injunction‑‑‑Maintainability‑‑‑Show‑cause notice was issued and licence of plaintiff (importer of liquor) for Diplomatic Duty Free Bonded warehouse was cancelled on the ground that he had dishonestly and fraudulently submitted untrue statement to the Customs Department‑‑‑Plaintiff (Importer) prayed for grant of mandatory injunction and declaration requiring the Collector of Customs to renew the licence without delay; to issue the Import Permit immediately; declaration to the effect that the Department had erred in concluding that the plaintiff had tampered with the invoices and that the action of issuing of show‑cause notice was illegal, mala fide and without jurisdiction; direction to the Customs Authorities to allow the plaintiff to continue in bond of the goods, as the designated period of one year was about to expire and the Department not to charge any penal surcharge from the plaintiff for the custody of goods in the bond ‑‑‑Validity‑‑ Issuance of show‑cause notice and all subsequent acts in pursuance thereof being without jurisdiction and nullity in law, the plaintiff importer could not be asked to have recourse to the forum of appeal provided in the Customs Act, 1969‑‑‑Entire exercise on the part. of Department, in the present case, being without jurisdiction, the plaintiff had right to invoke the jurisdiction vested in the Civil Court which was fully competent to declare such an act as null and void‑‑‑Conditions precedent for exercise of jurisdiction under S.32, Customs Act, 1969‑‑ Principles.

For exercise of jurisdiction under section 32 of the Customs Act, 1969 several situations have been visualized by the Legislature and the conditions precedent have been prescribed in the law.

The conditions precedent for exercise of jurisdiction under section 32 of the Customs Act, 1969 are as follows:‑‑‑

(1) The Department should establish that any person in connection with any matter of Customs has made, signed or delivered or caused to have delivered to an officer of Customs any declaration, notice, certificate or other document whatsoever or has made any statement in answer to any declaration, notice; certificate or other document whatsoever or has made and Statement in answer to any question put to him by an officer of Customs which he is required by or under this Act to answer, knowing or having reason to believe that such document or statement is false in any material particular.

(2) By reason of any such document or statement as aforesaid or by reason of some collusion, any duty or charge has not been levied or has been short‑levied or has been erroneously refunded.

(3) By reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short‑levied or has been erroneously refunded.,

(4) Where any duty or charge has not been levied or has been short -levied or has been erroneously refunded and this is discovered as a result of an audit or examination of an importer's accounts or by any means other than an examination of the documents provided by the importer at the time, the goods were imported.

If a law prescribes certain conditions precedent for exercise of jurisdiction then the existence of those conditions are sine qua non for acquiring the jurisdiction. If the conditions precedent are missing or lacking, it would be a case of lack of jurisdiction.

The Department should first make an attempt to furnish evidence that the prevailing price in the country of origin at the time of import was less than declared without which it would be impossible to impute the under invoicing to anyone.

Unless the goods are chargeable to duty and the taxable event occurs under section 18, the question of valuation of goods does not arise.

Thus, upon a point of mere valuation, if a declaration is made by such a person which on inquiry the Customs Authorities find to be too low, that will not be by itself sufficient to prove that the declaration was false to the knowledge of the maker.

In case the burden of establishing the misstatement by mustering evidence is not discharged by the Department, the importer cannot be held guilty of making misstatement within the meaning of section 32 read with section 156 of the Customs Act.

In order, to attract the provisions contained in section 32(1) it was necessary to show that the person who made or filed the declaration or furnished documents was cognizant of or had knowledge or apprehension of the facts that whatever was declared or stated or the document filed was incorrect or untrue in some 'material particular' and the non‑fulfillment of these requirements renders notice to be without jurisdiction.

At all such time an exemption S.R.O. or any of its like provisions hold the field, the Customs Authorities have no jurisdiction to scrutinize question of under‑valuation, calculation of duties and mis-description of goods imported. The Customs Authorities were not justified to levy any penalty under section 32(1) when admittedly there was no motive on the part of the importer. to evade tax due to the exemption in the field. No penalty under section 32(1) is leviable for any alleged under valuation and misdescription where there can be no motive to evade tax and where such declaration would carry no fiscal consequence, any other interpretation shall lead to absurd situation where although no tax would be leviable on the main basic assessment but there could possibly be imposition of penalty. Such exercise was completely without jurisdiction, illegal, void ab initio and of no legal effect.

Although in section 32(1) the word `forgery' had not been used but in the context of the present case a great emphasis has been laid on the plea that the importer committed forgery. The expression `forgery' and `false statements' are not defined in the Customs Act. These expressions are defined in sections 463 and 464, P.P.C.

A perusal of the definition of forgery as in sections 463 and 464, P.P.C. shows that an intention to cause damage or injury to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud is necessary to constitute act of forgery. What amounts to making of false documents is clearly defined in section 464, P.P.C. Now applying the above provisions to the facts of the present case it is obvious that the commercial invoices are issued by the supplier and the importer produces certificate from the supplier stating that a mistake was committed by them in describing the units of currency in the invoices and the said mistake was rectified by them. In these circumstances, it was incumbent upon the Department to inquire from the supplier if any such certificate was issued by them or not. In the absence of any verification the act of change in the unit of currency cannot be attributed to the plaintiff. Secondly, the necessary ingredient for making of false document is dishonest and fraudulent intention. In the present case, it is admitted position that no incidence of tax was involved, and as such the question of any tax evasion was not involved and further the Appraising Officer, has clearly stated that neither any excess quantity of liquor was stored in the Bonded Warehouse by the importer nor it was possible to do so. In these circumstances, the question of making any false document or of any dishonest or fraudulent intention does not arise. The expressions `dishonestly' and `fraudulently' are not defined in the Customs Act and are defined in sections 24 and 25, P.P.C.

In the present case it is admitted position that because of the exemption provision in the field there wad no question of any wrongful gain to the importer or wrongful loss to the Revenue or any other person. In the facts and circumstances of the case the plea that by resorting to under‑invoicing the importer could store more quantity of liquor in the Bonded Warehouse than permissible under the licence appears to be totally presumptive and far‑fetched.

In view of the undeniable fact that no excess quantity of liquor was stored or attempted to be stored by the importer in the Bonded Warehouse, than permissible under the licence, no infringement of any condition laid down in the licence or violation of any provisions of the Customs Act and Rules made thereunder was committed, with the result that the licence granted to the plaintiff could not be cancelled, and the renewal thereof could not be refused by resorting to section 13(3) of the Customs Act.

The Department was, not able to show that the conditions precedent for issuance of notice under section 32 of the Customs Act and cancellation of licence under section 13(3) were existing. The show -cause notice issued by the Department the order in original in pursuance thereof and the imposition of penalty and the cancellation of the licence in favour of the importer are without jurisdiction, void, ab initio and nullity in law.

For the purpose of acquiring jurisdiction the custom officials are not required to establish beyond reasonable doubt the conditions precedent specified in section 32. For the purpose of acquiring jurisdiction‑a prima facie evidence is required to be shown satisfying the existence of the conditions precedent specified in section 32 and for the purpose of penalties, after acquiring of. jurisdiction, the conditions precedent are required to be established beyond reasonable doubt. In the present case, there are no prima facie circumstances, pertaining to the existence of the conditions precedent for acquiring jurisdiction under section 32 and consequently, all the acts in pursuance of the issuance of the show‑cause notice are without jurisdiction.

The issuance of show‑cause notice and ‑all subsequent acts in pursuance thereof being without jurisdiction and nullity in law, the importer cannot be asked to have recourse to the forum of appeal provided in the Customs Act. The entire exercise on the part of the Department in the present case being without jurisdiction, the importer has right to invoke the jurisdiction vested in the Civil Court and High Court is fully competent to declare such act as null and void.

Tae suit was decreed as prayed. The show‑cause notice and the order in original in pursuance thereof made by the Department were declared to be without jurisdiction and void. Department was directed to renew licence of the importer forthwith and to issue the import permit to the importer .immediately. The Department was directed to allow the importer to continue in bond of the goods and not to charge any penal surcharge from the importer for the custody of the goods in the bond.

Messrs K.G. Traders v. Deputy Collector of Customs PLD 1997 Kar. 541; Abdul Rauf v. Abdul Hameed Khan PLD 1965 SC 671; Messrs Kamran Industries v. Collector of Customs (Exports) PLD 1996 Kar. 68; Lt. & G.M. Ltd. v. Collector of Customs PLD 1988 Lab. 563; M. G. Abrol, Additional Collector of Customs and another v Shand Lal, Chota Lal & Co. and another 1984 ECR 503 SC; Messrs Eastern Rice Syndicate v. Central Board of Revenue PLD 1959 SC 364; Messrs Latif Bros. v. Deputy Collector, Customs, Lahore 1992 SCMR 1083; Rib Tapes (India) (Pvt.) v.. Union of India and others (1986) 8 TCE 171 SC; Ibrahim Textile Mills Ltd. v. Federation of Pakistan PLD 1984 Lah. 47; Oskui Traders v. Collector of Customs 1991 CLC 24 and Collector‑General, Excise and Land Customs, Chittagong v. Imdad Ali 1969 SCMR.708 ref.

Mrs. Navin Merchant for Petitioner.

Syed Tariq Ali, Federal Counsel for Respondents.

Date of hearing: 23rd October, 2002.

JUDGMENT

The main prayer of the plaintiff is:‑‑‑

"(a) To grant mandatory injunction requiring the defendant No.3 to renew the license of the plaintiff without any further delay;

(b) To grant mandatory injunction requiring the defendant N6.1 to issue the Import Permit immediately;

(c) Declare that the defendants have erred in concluding that the plaintiff has tampered with the invoices, dated 25‑2‑2000 and 28‑2‑2000;

(d) Declare that the action of the defendant No. 5 in issuing the show‑cause, notice is illegal, mala fide and without jurisdiction;

(e) Direct the defendants Nos. 3 and 4 to allow the plaintiff to continue in‑bond of the goods, as the designated period of one year is about to expire;

(f) Direct the defendants Nos. 3 and 4 not to charge any penal surcharge from the plaintiff for the custody of the goods in the bond."

2. The facts leading to this suit as contained in the plaint are that plaintiff is a sole proprietorship concern holding license for operation of Diplomatic Duty Free Bonded Warehouse, granted by defendant No.3 in accordance with the provisions of the Customs Act, 1969. The license was granted to the plaintiff for importation of different brands of liquor which has been renewed from time to time on compliance of the rules laid down by the Customs Functionaries. The license was renewed lastly up to. 30‑6‑2000. On expiry of license on 30‑6‑2000 an application for renewal was submitted on 20‑7‑2000. During the validity of the license issued to the plaintiff consignments of Scotch Whisky were imported as follows:‑‑‑

"(a) A consignment consisting of 1 x 20" STC 714 cases of Scotch Whisky from Glasgow, shipped on. board vide Bill of Lading No. GLA 0028909 reached Karachi Port on vide IGM No.518/2000, dated 30‑3‑2000.

(b)A consignment consisting of 1 x 20" STC 799 cases of Scotch Whisky from Glasgow, shipped on board vide Bill of Lading No.GLA 0028911, reached Karachi Port on vide IGM No.518/2000 dated 30‑3‑2000."

3. The plaintiff vide letter, dated 16‑8‑2000 to the defendant No.4 requested permission to in bond the goods and the same was granted for the period of one year. It is averred that the license once granted is renewed by the defendant No.3 in the normal course of business and unless there is any serious allegation against the licensee, the same cannot be cancelled without proof of the charge. According to plaintiff, the defendant No.3, kept the application for renewal of license pending without any reason .with the result that the plaintiff is not able to operate the bond for which valid license was issued. It is alleged that it is causing tremendous financial loss as the goods which have been imported are lying in the bond and due to their short shelf life they will be of no use. Similarly the permits are issued by the defendant No. 1 , in the normal routine either when the goods are on their way or when they have been arrived in Pakistan. After the arrival of goods, the plaintiff requested defendant No. 1, for issuance of the import permit but the defendant No. 1, delayed the same on one or the other pretext. Without the import permit, the plaintiff is not allowed to clear the goods. The plaintiff has further averred that in order to create a new pretext for victimizing and harassing the plaintiff, the defendant No.5, issued a show‑cause notice on 16‑12‑2000 alleging that the plaintiff with a view to under value the invoice, had tempered with the same and had printed the words US $ instead of the words GBP. It was stated in the show‑cause notice that the Consulate of Pakistan in Glasgow had also confirmed that the value of the invoices were in pound sterling instead of US $ when the importer submitted the same for attestation.

4. In reply to the show‑cause notice the plaintiff furnished the copy of suppliers letter dated 13‑5‑2000, wherein supplier denied that the currency value should be in Pound. The suppliers clarified that the five invoices were sent to Pakistan Embassy Glasgow Scotland, Two were in favour of the plaintiff while three were in favour of Jawad & Company. "When the invoices were returned to them, they realized that there had been an error made regarding the currency. The currency should have been in US $ and not Pounds". They, therefore, called upon the Embassy and informed them of the mistake. Embassy staff informed that they had no concern with the value and that their attestation stamp clearly states that the value is never confirmed. The Embassy was, therefore, informed that the suppliers . would correct the mistake and forward the invoices to their customers to which the Embassy had no objection. The suppliers further clarified as follows:‑‑‑

"The invoices attested by the Embassy are not attestations as to the `value' but are merely for the purpose of verifying the existence of the company.

At all given times the invoice is the property of our company and we have all rights to correct or amend them."

5. The plaintiff further averred that the‑ allegations in the show‑cause notice were without substance as the plaintiff was not to benefit in any way by tampering with the documents and further there was no question of any loss to public exchequer by under invoicing the value. The inquiry was completed by defendant No.4 but no decision was given till the filing of suit on 1‑6‑2002. Request for early decision always met a deaf‑ear and the defendant No.1 did not issue the import permit causing heavy losses to the plaintiff. The matter pertaining to the renewal of license for operation of Diplomatic Duty Free Bounded Warehouse also remained stuck‑up and hence the present suit.

6. The defendant No. 1. in its written‑statement has taken plea that under the terms and conditions laid down in the office memorandum dated 29‑9‑1992 issued by the defendant No. 1, the import of liquor by Diplomatic Duty Free Bonded Warehouse was subject to inter alia, attestation of invoices by the Pakistan Commission in the country of export. According to defendant No.1, the plaintiff tampered with the value of the goods in the relevant invoices by erasing the original entries indicating the currency in Great Britain Pound and replacing it with US currency, with a view to under 'value the import. It is further contended that in order to confirm if the plaintiff has resorted to forgery/tampering with the invoices, the defendant No.1 sent relevant invoices to Vice Consulate of Pakistan in Glasgow for verification. The Consulate confirmed that all the invoices attested by them were in Pound Sterling and that the plaintiff had fraudulently erased the original currency Unit in GBP and replaced it with the US $ in order to undervalue the imports. The copies of the invoices attested by the Consulate were also furnished. It was stated that as per license issued by defendant No.4, the plaintiff was eligible to keep the goods up to the value not exceeding Rs.5 million. It was pleaded that the plaintiff had indulged in forgery and tampered with invoices to misuse the said facility. The defendant No. 1, therefore, did not grant the import authorization for liquor to the plaintiff against the forged and tampered documents and informed the defendant No.2 about the forgery committed by the plaintiff with the request to cancel their license.

7. The defendants 2 to 4 in their joint written‑statements contended that the plaintiff committed an act of misdeclaration in the invoices value thereby committing an offence under section 32 of the Customs Act; 1969 punishable under clause (4) of section 156 of the Customs Act, and therefore, show‑cause notice dated 18‑12‑2000 was issued. They have contended that the plaintiff instead of contesting the matter before the Collector of Custom filed this suit for pressurizing the defendants and lingering on the matter with mala fide intention. They admitted that the plaintiff applied for renewal of license and averred that the defendant No. 1 had reported in respect of the misdeclaration and forgery in the invoices value, therefore, the license was not renewed. They admitted that decision was not given by the defendant No. 4 for the reason that adjudication process takes its own course and several documents and evidence brought on record are to be inquired into. They have contended that the plaintiff without exhausting the legal remedies under the Customs Act, 1969 has filed the present suit which is no: maintainable under the law.

8. The suit came for hearing before this Court on 14‑10‑2002 when Mr. Arif Motain learned counsel for the defendants Nos. 2, 3 and 4 stated that the defendant No.4, shall decide the matter expeditiously and copy of the order shall be produced before this Court on 21‑10‑2002. On 21‑10‑2002 the copy of order in original, dated 19‑10‑2002 passed by the defendant No.4 was produced by the learned counsel for the defendant No.2 to 4. Mr. Arif Motain, learned counsel for the defendants 2 to 4 submitted that since the defendant No.4 has passed the order in original, the plaintiff may prefer appeal before the Customs Central Excise and Sales Tax Appellate Tribunal. On the other hand, Mrs. Navin Merchant, learned counsel for the plaintiff contended that a perusal of the order in original shows that it is mala fide. The entire proceedings commencing from the issuance of show‑cause notice and culminating with the passing of order in original, after about six months of the filing of the suit was without jurisdiction. She contended that when an act is without jurisdiction and mala fide in nature, the effected person can always approach the Civil Court and shall not be compelled to seek the relief before the forum provided in the statute as any, act without jurisdiction and mala fide is void, inoperative and of no legal effect. The learned counsel for defendants Nos. 2 to 4 conceded to the proposition of law that if an order is without jurisdiction and mala fide the aggrieved person can invoke the jurisdiction of Civil Court but vehemently argued that the plaintiff committed a forgery/tampering with the invoices and resorted to under invoicing, therefore, the non‑renewal of license, non issuance of permit, issuance of show‑cause notice and the order in original dated 19‑10‑2002 were in exercise of jurisdiction vested in the defendants.

9. In view of the contentions raised by the learned Advocates for the parties and on the basis of pleadings, the following preliminary issue was framed under Order 14, rule 2,.C.P.C.:

"Whether in the facts and circumstances of this case case the respondents Nos. 3 and 4 have the jurisdiction to withhold the renewal of license in favour of the plaintiff?"

It was further directed under Order 15, rule 3, C.P.C. that the arguments on the above preliminary issue shall be heard on the basis of pleadings and material available on record.

10. I have heard Mrs. Navin Merchant, learned counsel for the plaintiff and Syed Tariq Ali , learned Federal Counsel for the defendants on the above preliminary issue.

11. In support of her contention that the bar of jurisdiction under section 217 of the Customs Act is not operative where an order assailed suit was without jurisdiction, she has placed reliance on a single Bench judgment of this Court in the case of Messrs K.G. Traders v. Deputy Collector of Customs, PLD 1997 Karachi 541. In this case it has been held that a mala fide order or one without jurisdiction is a fraud on the law and can never be assumed to have been passed under a particular statute. Therefore, a plea as to bar of jurisdiction could only be sustained if it is assumed that the impugned order was passed in bona fide exercise of powers conferred by the Customs Act or Rules and not otherwise. In coming to the above conclusion the learned single Judge placed reliance on the judgment of Hor ble Supreme Court in the case of Abdul Rauf v. Abdul Hameed Khan PLD 1965 SC 671, wherein it was held that, "no order is an order passed under the Act, if it was not passed in exercise of powers granted by Act and was, therefore, without jurisdiction." It was further held by their Lordships of the Hon'ble Supreme Court that a mala fide act is by its very nature an act without jurisdiction. It was explained that a mala fide order means an order which is passed not for the purpose contemplated by an enactment granting powers to pass such order but for some other collateral or ulterior purposes."

In the cited case, the licenses of clearing Agent were suspended and the said act of the custom official was assailed in suit. The case of the Departmental Officers was that on receiving credible information the Director of Intelligence and Investigation (Customs and Excise) visited the warehouse and found that large quantity of R.B.D. Palm Oil stored in the warehouse were clandestinely removed without filing of ex‑Bond bills of entries and payment of tax leviable therein. A show‑cause notice was, therefore, issued and the license of clearing agent was suspended. After examining the facts and the relevant law it was observed that, proceedings against a person for evasion of duty or penal action under the provisions of Customs Act were altogether different from proceedings for suspension or revocation of clearing agents licenses. The licensing rules provide a complete mechanism for suspension or revocation of such licenses. Rule 19(1) enumerates 9 specific reasons for which the license of Clearing agents can be suspended or revoked and they appear to be exhaustive. One such ground stated in clause (v) reads "punishment of the licensee under the Act", it would, therefore, follow that prima facie the plaintiffs licence could be suspended only after they were punished on finding of guilt for violation of the provision of the Customs Act and not upon the mere allegation to that effect. It is also interesting to note that the notice, dated 25‑1‑1997 does not mention a single ground upon which action against the clearing agents could be taken under rule 19.

I regret to say that the relevant Officers have not bothered to apply their mind to the requirement of the rules and the law and have acted in an extremely casual and arbitrary manner.

12. Dealing with the objection that under section 56(d) of the Specific Relief Act, no injunction can be granted to interfere with the public duty of the any Department of the Central Government or with the Provincial Government or with the sovereign acts of a Foreign Government. It was observed that "Public Officials are required to perform their duties in accordance with law and when they proceed to violate law, then their action could not be treated as performance of public duties".

13. She has further placed reliance on a Division Bench judgment of this Court in the case of Messrs Kamran Industries v. The Collector of Customs (Exports) PLD 1996 Karachi 68. In the cited case a show‑cause notice was issued by the Collector of Customs threatening to impose penalty under section 32 read with clause 14 of section 156 of the Customs Act, 1969, inter alia for the reason that the invoice value was under declared as compared to the normal/correct price of the entire consignment. The plea taken by the petitioner was that the Federal Government had exempted the whole of customs duties and sales tax at import stage on all goods without any exception, accordingly any misdeclaration, under declaration and non‑declaration was of no consequences as the same was not likely to benefit the petitioner. The Collector rejected the contention and imposed penalty under section 32 read with clause (14) of section 156(1) of the Customs Act, on grounds of under valuation and misdescription. An appeal was preferred before Member Judicial (C.B.R.) who dismissed the same and the petitioner instead of filing revision under section 196 of the Customs Act (as it stood at that time) filed a writ petition under Article 199 of the Constitution:

14. During the course of arguments, several points were raised on behalf of the petitioner. The first being that the value of goods imported was completely irrelevant as the petitioner could not, derive any advantage from the under valuation or misdescription in the invoice, because the entire import enjoyed exemption. The second contention was that Customs Authorities had no jurisdiction to look into the question of valuation and description of goods as the import in issue entail no tax. It was further contended that till such time the exemption from tax was intact the Customs Authorities under these rules can only pass and refuse clearance of goods on the grounds of their, falling under the prohibited category reliance was placed in this behalf on the judgment of Lahore High Court in the case of Lt. & G.M. Ltd. v. Collector of Customs PLD 1988 Lah. 563., wherein it was held that "unless the goods are chargeable to duty and the taxable event occurs under section 18 the question of valuation of goods under section 25 and calculation of duty payable at any particular rate under section 30 does not arise".

15. A judgment from the Indian Supreme Court was also cited. In the case of M.G. Abrol. Additional Collector of Customs and another v. Shanti Lal, Chota Lal & Co. and another 1984 ECR 503 SC the Indian Supreme Court held that "the Custom Authorities had no jurisdiction to look into the description or misdescription of goods, while had only jurisdiction to examine as to whether the goods fell under the prohibited category".

16. Another contention was raised that the mere allegation of under valuation cannot warrant a penalty under section 32 of the Customs Act, as mere allegation of under valuation does not amount to deviation of any "material particular" which is a condition precedent for action under section 32. Reliance was placed on the case of Messrs Eastern Rice Syndicate v. Central Board of Revenue PLD 1959 SC 364. In this case. Cornelius, J. (as his Lordship then was) held as follows:

"There need be no doubt whatsoever that the word `untrue' caries the sense of falsity in the knowledge of the person concerned. Thus, upon a point of mere valuation, if a declaration is made by such a person which on enquiry the Customs Authorities find to be too low that will not be by itself sufficient to prove that the declaration was false to the knowledge of the maker."

17. In respect of the valuation of the imported items and fixation of normal price it was held in the same judgment as follows:‑‑‑

"If it is claimed by the Authorities that he has made a mis statement of price in his invoice that cannot in our opinion be established otherwise than by furnishing proof of the prevailing commercial price in the country of origin at the time of import. Without first making an attempt to furnish such evidence, it is impossible to say how the making of untrue statement within the meaning of section 39 and the consequences of imposing (9‑B) in section 167 can be imputed to anyone."

18. The above decision was followed by Hon'ble Supreme Court in the case of Messrs Latif Bros. v. Deputy Collector, Customs, Lahore 1992 SCMR 1083. The Hon'ble Supreme Court was of the view that in case the Custom Authorities resorted to valuation they had to produce the price list of similar goods of country of origin while onus was entirely on the department to establish that importer made a misstatement by mustering evidence of price imports from. the country of origin to belie the declared value. It was categorically held by the Hon'ble Supreme Court that, in case such burden was not discharged the importer cannot be held guilty of making misstatement within the meaning of section 32 read with section 156 of the Customs Act. Reliance was placed on another judgment by the Indian Supreme Court in the case of Rib Tapes (India) Pvt. v. Union of India and others 1986 (8) TCR 171 (SC).

In this case Indian Supreme Court held with reference to the comparative provisions in the Indian Statute that misdeclaration of value of imported goods did not constitute misdeclaration in the "material particular" in view whereof no penalty was leviable for under valuation in the invoice price.

19. It was next argued in the cited case that the show‑cause notice issued under section 32(1) does not meet the mandatory arid essential requirement of that section, by placing reliance on the case of Ibrahim Textile Mills Ltd. v. Federation of Pakistan, PLD 1984 Lahore 47. It was contended that in section 32(1) it was necessary to show that the person who made or filed the declaration or furnished document was cognizant of or had knowledge or comprehension of the fact that whatsoever, declared or stated or the document filed was incorrect or untrue in some "material particular" and the non‑fulfilment of this requirement renders the notice to be without jurisdiction.

20. It was also argued that in order to sustain an action under section 32 of the Customs Act, mens rea was required to be established.

21. Mr. S. Tariq Ali, learned Standing Counsel, appearing in the cited case took plea that the petition was not maintainable as the petitioner had failed to exhaust the revisional remedy available under section 196 of the Customs Act. The learned Standing Counsel had taken several other pleas.

22. The learned Division Bench of this Court formulated several propositions including the following:‑‑‑

"(1)That availability of a revisional remedy is no bar to the maintainability of Constitutional petition. .

(2)That where impugned orders are completely bereft of jurisdiction and patently perverse and illegal it is not essential to avail alternate remedies."

23. Contention raised by the learned counsel for the petitioner was accepted to be correct holding that where impugned action is completely without jurisdiction and prima facie illegal it is not essential to avail the alternate remedy. In order to determine whether the impugned action was without jurisdiction or not the learned members of the Division Bench proceeded on to examine if the. Customs Authorities have any jurisdiction to question into the valuation and scrutinize, description of the goods imported in the EPZ (which enjoy exemption for payment of tax duty). It was held that following Oskui Traders v. Collector of Customs, 1991 CLC 24, the application of the Customs Act and its rules are restricted to the extent that till such time the exemption S.R.O. or any of its like provision hold the field the Customs Authorities have no jurisdiction to scrutinize the question of under valuation, calculation of duties and misdescription of goods imported into the EPZ. It was further held that the Customs Authorities were not justified to levy any penalty under section 32(1) when admittedly there was no motive on part of the petitioner to evade tax due to the exemption in the field. It was also held as follows:‑‑‑

"We are of the view that where a person submits a declaration in the context of Customs Clearance and there can possibly no fiscal consequence contingent upon his declaration and that contingency of no fiscal consequence is either undeniable or regarding which the accused has demonstrated his knowledge or reason to belief that he though that no tax was leviable by no figment of imagination could it be said that the said person had any knowledge or reason to believe that his declaration/statement was false or untrue in any material particular. In this context the contention of Mr. Farogh Naseem that no penalty under section 32(1) is leviable for any alleged under valuation and misdescription where there can be no motive to evade tax and where such declaration would carry no fiscal consequence is correct. Any other interpretation would also give rise to an absurd situation where although no tax would be leviable on the main basic assessment but there could possibly be imposition of a penalty."

24. The petition was ultimately allowed and the impugned action was held to be completely without jurisdiction, illegal, void ab initio and of no legal effect.

25. She has placed reliance on the case of the Collector‑General, Excise and Land Customs, Chittagong v. Imdad Ali 1969 SCMR 708. The ratio of the judgment in the case of Eastern Rice Sydicate (Supra) was reiterated in this case.

26. Relying on the ratio of the above judgments, the learned counsel for the plaintiff has submitted that the conditions precedent for exercise of jurisdiction under section 32 of the Customs Act, 1969 are as follows:‑‑‑

"(1) The Department should establish that any person in connection A with any matter of customs has made, signed or delivered or caused to have delivered to an officer of customs any declaration, notice, certificate or other document whatsoever or has made any statement in answer to any question put to him by an officer of custom which he is required by or under this Act to answer, knowing or having reason to believe that such document or statement is false in any material particular.

(2)By reason of any such document or statement as aforesaid or by reason of some collusion, any duty or charge has not been levied or has been short‑levied or has been erroneously refunded.

(3)By reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short‑levied or has been erroneously refunded.

(4)Where any duty or charge has not been levied or has been short levied or has been erroneously refunded and this is discovered as a result of an audit or examination of an importer's accounts or by any means other than an examination of the documents provided by the importer at the time, the goods were imported."

27. She has further submitted that in the case of Messrs Kamran Industries (Supra) it has been. clearly held that, "where a person submits a declaration in the context of Custom Clearance, and there can possibly be no fiscal consequence contingent upon his declaration and that contingency of no fiscal consequence is either undeniable or regarding which the person has demonstrated his knowledge or reason to believe that he thought that no tax was leviable, by no figment of imagination could it be said that the said person had any knowledge or, reason to believe that his declaration/statement was false or untrue in any material particular. No penalty under section 32(1) is thus leviable for any alleged under valuation and misdescription where there can be no motive to evade tax and where such declaration would carry no fiscal consequence." It was further held that the Customs Authorities shall not be justified to levy penalty under section 32(1) when evidently there was no motive on the part of the person to avoid tax due to the exemption in the field".

28. In the light of the above propositions, she has submitted that the mala fide on the part of respondent No.4. is evident from the fact that the goods were imported by the plaintiff in March, 2000, the license expired in June, 2000 and application for renewal was submitted in July, 2000, but no orders were passed and a show‑cause notice under section 32 was issued in December, 2000, but no order in original was made till 19‑10‑2002. She has submitted that a mala fide and colourable act is always devoid of any legal validity and is always without jurisdiction because the mala fide per se destroys the jurisdiction which is always an exercise of bona fide discretion. She has submitted that the order in Original was passed under a directive of this Court and the entire case of the department is contained in the said order. She has submitted that the order in original contains that the supplier in U.K. normally issue invoices in G.B.P. currency whereas in this case word G.B.P. was tampered with the words US $. It further contains that the Consultate of Pakistan in Glasgow has confirmed that when the invoices were produced for attestation it contained the value in Sterling instead of US $. After this observation, it has been inferred that the invoices had been tampered for the clearance of liquor from the customs against the forged documents. It further contains that the above Act on the part of plaintiff attracts the provisions of section 32 of the Customs Act, 1969, punishable under clause (14) of section 156 of the said Act. It was further urged that the aforesaid Act also tantamount to infringement of the license issued to the plaintiff and therefore, Diplomatic Duty Free Bonded Warehouse License issued to the plaintiff ‑was liable to be cancelled under section 13(3) of the Customs Act, 1969. She has pointed out that in the reply submitted on behalf of the plaintiff it was clearly contended that the Ministry of Commerce has not given the true picture to the Customs officials as they have conveniently ignored the correspondence which took place between the plaintiff and the supplier who issued the invoice. The copy of suppliers correspondence was also furnished' to show that the allegation of the plaintiff was baseless and incorrect. It was further contended that it was not a case of loss of any revenue to the exchequer. She has submitted that the suppliers in their certificate, dated 13‑5‑2000 clarified the position that they had shown the value of the liquor supplied in bound by mistake and the mistake was communicated to the Pakistan Embassy Glasgow and the Embassy had informed them that they had no concern with the value and therefore, they were further informed that the supplier would correct the mistake and forward the invoice to the customer (plaintiff). She has submitted that in the reply of departmental representative, before the respondent No. 4. the suppliers certificate was not denied but without any inquiry or evidence it was contended that the certificate is doubtful. It was emphasized by the departmental representative before the defendant No. 4, that, when the invoices were attested the value was given in G.B.P. She has submitted that the supplier has also confirmed this fact and has clarified that it was mistake on their part and they had corrected the same under intimation to the Pakistan Mission in Glasgow.

29. She has further submitted that the respondent No.4, framed 8 issues which are as follows:‑‑‑

"(1) Whether the respondents have through alteration of unit of currency from G.B.P. Sterling to US $ in the import invoices have indulged into an act of tampering/forgery of the aforesaid) documents?

(2) Whether the alteration of unit of currency from G.B.P. Sterling to US $ in the import invoices constituting an untrue/false statement/document was in the knowledge of the respondent?

(3) Whether the respondents duly notified either the Pakistan Mission in Glasgow. Ministry of Commerce, Islamabad or Collectorate of Customs (Preventive) Custom House, Karachi or about the 'alteration of unit of currency from G.B.P. Sterling to US $ in order to establish their so claimed bona fide act?

(4) Whether the alteration of unit of currency from G.B.P. Sterling in US$ in the import invoices through tampering/forgery without disclosing it to the concerned Authorities constitute an act of suppression/concealment of the factual position?

(5) Whether the attestation of both the said invoices initially declared in G.B.P. Sterling and subsequently altered to US $ mitigate the gravity of the offence of tampering/forgery of the documents which amounts to misdeclaration within the ambit of mischief of section 32(1) of the Customs Act;1969? .

(6) Whether the act of forgery/tampering of invoices committed by the respondents through alteration of the unit of currency from G.B.P. Sterling to US $ constitute an act of mispresentation/ misdeclaration within the ambit of mischief of section 32(1) of the Customs Act, 1969 punishable under section 158(1) of clause (14) (ibid)?

(7) Whether the respondents can take shelter under the plea of absence of mens rea when the elements of tampering, forgery of the document and suppression/concealment of the same are ipso facto established from the invoices and statements submitted by the respondents themselves?

(8) Whether the respondents in terms of section 13(3) of the Customs Act, 1969 have indulged into an infringement/violation of the conditions of the License No. PWL‑3/90 issued to them by the Collectorate of Customs (Preventive) Custom House, Karachi, by importation of goods against tampered/forged invoices and have also violated any of the provisions of the Customs Act, 1969 or Rules framed thereunder?

30. She has submitted that the defendant No. 4. initially gave general finding on issues Nos. 1 to 6 by a consolidated finding. It was held that the invoices initially submitted to Pakistan Mission in Glasgow indicated the units of currency in G.B.P. Sterling and the invoices submitted before Ministry of Commerce, Collectorate of Customs (Preventive) showed the valuation in US $. According to defendant No. 4, it was prima facie established that the plaintiff altered the units of currency from GBP Sterling to US $ with mala fide intentions and has subsequently put up a lame and illogical stand that the perported mistake has been committed by the supplier who himself accepted the same through their certificate dated 13‑5‑2000. The defendant No.4, further came to the conclusion that the alteration of units from G.B.P. currency to US $ in the invoices constitutes untrue/false document/statement which was definitely in the knowledge of 'the plaintiff. The defendant No.4, further observed that, from the record it was nowhere indicated that the act of alteration of currency from G.B.P. currency was ever brought into the knowledge of either Pakistan Consultate Glasgow or Ministry of Commerce or Collectorate of Customs.

31. She has vehemently argued that all these observations have been made without any inquiry from the Pakistan Consulate as the verification letter of the Pakistan Consulate Glasgow is dated 10‑5‑2000 and certificate issued by the supplier is dated 13‑5‑2000 which was produced before the defendant No.4 after issuance of show‑cause noticed, dated 18‑12‑2000. In fact the certificate was produced before the defendant No.4, with the covering letter dated 1‑2‑2001 and thereafter the certificate issued by the supplier was neither sent to the supplier for verification nor any comments were sought in respect thereof from the Pakistan Mission at Glasgow. She has submitted that in the absence of any material to the contrary, plaintiff had established that the alteration in the currency units in the invoices was made by the supplier and there was no tampering on the part of plaintiff as alleged. She has pointed out that the defendant No.4, while giving specific findings on issue No.5, has observed that, the attestation of invoices by the Pakistan Mission in Glasgow has nothing to do with the quantity and values declared. The defendant No.4 has further observed that the values are probed into, price lists and contemporary commercial data procured by the foreign mission in the country of export, if a specific reference/request is made in this behalf by concerned Authorities in Pakistan. She has vehemently argued that the defendant No.4, in his order in original has reiterated time and again that the plaintiff committed act of tampering/forgery with the document with mala fide intention and ulterior motive, but has not stated as to what could be the possible motive for the alteration of units of currency when the imported goods were duty free and the payment of any tax on import of any quantity was not involved. She has further submitted that the defendant No.4, has reproduced subsection (3) of section 13 of the Customs Act, in the order in original which provides that the license granted under section 13 may be cancelled by the Collectorate of Customs for infringement of any condition laid down in the license or for any violation of any of the provisions of this Act or any rules made thereunder. He has thereafter observed that, the plaintiff has altered the units of currency with mala fide intentions which constitutes a violation of the conditions laid down in the license itself and also constitutes misdeclaration in the terms of section 32 of the Customs Act, 1969. The respondent No.4, has concluded that the act of alteration of the units of currency amounts to misdeclaration within the ambit of section 32 of the Customs Act, 1969 and, therefore, entire imported goods were confiscated under section 156(1) clause (14) and a penalty was imposed at 100% of the value of the goods and that for violation of the relevant provisions of the Act and rules, 'the license was cancelled under section 13(3) of the Customs Act, 1969.

32. She has submitted that, it is an admitted fact that the imports made by the plaintiff were duty free and any amount of import was exempt from the payment of custom duty and as such the question of any lost to government revenue/exchequer does not arise. She has further argued that although the defendant No. 4, has not stated in the show -cause notice and in the order in original that with the alleged tampering/forgery of the invoices and the purported under‑valuation, the plaintiff could derive any benefit but an improvement has been made by the learned Advocate for the respondent at the time of arguments that the under invoicing was resorted to, because under the license issued to the plaintiff, he could store the liquor worth Rs.5 million at a time in the Bonded Warehouse and by under invoicing more quantity of liquor was intended to be store in the Bonded Warehouse. She has contended that on 21‑10‑2002 Mr. Mirza Yousuf Baig, Appraising Officer, conceded before the Court that neither any revenue loss has been caused or could be caused by under invoicing nor the liquor has been imported or stored in the Bounded Warehouse in excess of the permissible quantity. Mr. Yousuf Baig, Appraising Officer, further stated in Court that it was not possible to store excess quantity of liquor in the Bonded Warehouse as the entire process is computerized and once the permissible quantity is stored the Computer is automatically blocked. She has further, vehemently contended that it is a case of sheer highhandedness and harassment tainted with arbitrariness and illegality. She has concluded the arguments stating that the respondents have time and. again repeated that the plaintiff changed the units of currency with mala fide intention without specifying the consequences of the alleged tampering and on the contrary the mala fide of the respondents whereby they have ruined the business of plaintiff for a period of over two years is evidence on the record. She has submitted that the conditions precedent for exercise of jurisdiction on the party of respondent is lacking with the result that the issuance of show‑cause notice under section 32 and all subsequent act in pursuance thereof are without jurisdiction and are liable to be quashed as such. She has urged that the entire suit can be disposed of by deciding the preliminary issue holding the acts on the part of respondents as without jurisdiction and nullity in law.

33. On the other hand, Mr. Tariq Ali, learned Federal Counsel, has fully supported the issuance of show‑cause‑notice and the order in original dated 19‑10‑2002. He has submitted that although no revenue loss was involved in this case as any quantity of import of liquor was exempt from payment of custom duty but still no importer can be allowed to commit a forgery by tampering the documents. When asked as to what would be the intention for the commission of alleged tampering/forgery of the invoices he contended that by the process of under invoicing the, plaintiff intended to import liquor in excess of permissible quantity. However, he was not able to deny that no limit was prescribed for importing the liquor without payment of custom duty. However, he contended that a limit of storage of the liquor was provided in the license issued to the plaintiff and at no point of time the plaintiff could store the liquor in excess of Rs.5 millions. Thus, the entire emphasis of the learned Federal Counsel was on a single point that the plaintiff intended to store more quantity of liquor in the Bonded Warehouse than permissible in the license and consequently, it means to forgery/misdeclaration as defined m section 32(1) of the Customs Act, and entails the punishment provided in clause (14) of section 156 of the Customs Act and the cancellation of license under section 13(3) of the Customs Act.

34. I have given very anxious consideration to the contentions raised by the learned Advocates for the parties and the material available on record. I would like to observe that the preliminary issue can be decided on the basis of admitted facts and no evidence is required to be adduced for the purpose of deciding the preliminary issue.

35. From the perusal of show‑cause notice, the order in original consideration of the contention raised by the learned Federal Counsel before this Court, it is admitted fact that the plaintiff has not committed any violation pertaining to the import of the liquor. It is not denied that the plaintiff could import any quantity of liquor and the import permit is ordinarily issued by the defendant No.1, either when the imported goods are on it way or when it is actually imported. The entire case of the respondents hinges on the point that by committing the act of forgery with the change of currency units the plaintiff resorted to under invoicing with the intention to store the excess quantity of liquor than permissible under the license under section 13 of the Customs Act. At the same time, it is undeniable fact that the plaintiff did not store or at any time admitted to store the liquor in the Bonded Warehouse in excess of permissible limits. Mirza Yousuf Baig, the Appraising Officer, has stated to the extent that it is not possible to store liquor in excess of permissible quantity because of the computerized device and mechanism.

36. In order to decide the question of jurisdiction. for issuance of show‑cause‑notice under section 32 of the Customs Act and adjudication in pursuance thereof the first point requiring consideration is; as to when and in what circumstance the law gives, jurisdiction to the, Custom officials. In this regard, I am of the view that if a law prescribes‑certain conditions precedent for exercise of jurisdiction then the existence of F those conditions are sine qua non for acquiring the jurisdiction. If the conditions precedent are missing or lacking, it would be a case of lack of jurisdiction. For example the condition precedent for recording an F.I.R. under section 154, Cr.P.C. by an Officer Incharge of a police station is that, there should be an information relating to the commission of cognizable offence. If an information is given to an Officer Incharge of police station of the commission of an offence which is non‑cognizable it shall be merely entered in the book kept at the police station and the informant shall be referred to the Magistrate. No Police Officer shall investigate a non‑cognizable case without the order of the Magistrate. Likewise, for exercise of jurisdiction under section 32 of the Customs Act several situations have been visualized by the Legislature and the conditions precedent have been prescribed in the law. I, fully agree with C the categories of the cases and the conditions precedent for exercising of jurisdiction under section 32 as explained by the learned counsel for the plaintiff and reproduced in para. 26 of this judgment. For the sake of brevity they are not repeated at this stage. The situations Nos. 2, 3 and 4 are not relevant in the present case as all these three situations pertain to the non‑levy or short‑levy on the. customs duty or erroneous refund which is not involved in this case.

37. Situation No. 1 only is relevant in the present case. It is un deniable fact that no material has been collected by the defendants to establish as to what was the figure of G.B.P. originally shown in the invoices when presented to the Pakistan Consulate at Glasgow for attestation of documents. No exercise has been made to show that with the change of units of currently in the invoices any actual under‑invoicing has been made and consequently the ratio of the Supreme Court judgment in the case of Messrs Eastern Rice Syndicate is fully attracted. In consonance with the law as laid down by the Hon'ble Supreme Court in the above judgment the Department should first make an attempt to furnish evidence that the prevailing price in the country of origin at the time of import was less than declared without which it would be impossible to impute the under invoicing to any one.

38. Secondly, it is admitted position that the imports enjoyed exemption with the result that the finding of Lahore High Court in the case of Lt. & G.M. Ltd. (supra) to the effect that, unless the goods are chargeable to duty and the taxable event occurs under section 18; the question of valuation of goods does not arise" is fully applicable.

39. Thirdly, the ratio of the Supreme Court judgment in the case of Eastern Rice Syndicate (supra) to the effect that the words 'untrue' carries the sense of falsity in the knowledge of person concerned. Thus, upon a point of mere valuation, if a declaration is made by such a person which on inquiry the Customs Authorities find to be too low, that will not be by itself sufficient to prove that the declaration was false to the knowledge of the maker. In this case the additional circumstance is that the plaintiff produced a certificate from the supplier to the effect that the correction in the units of currency was made by them and thereafter the invoices were forwarded to the plaintiff and the said fact was intimated to the Pakistan Consulate at Glasgow. The respondents have not collected any material to rebut this contention as discussed earlier. Thus, the ratio of Hon'ble Supreme Court judgment in the case of Latif Brothers (supra) is attracted wherein it has been held that in case the burden of establishing the misstatement by mustering evidence is not discharged by the Department, the importer cannot be held guilty of making misstatement within the meaning of section 32 read with section 156 of the Customs Act. The ratio of Lahore High Court ,judgment in the case of Ibrahim Industries Ltd. (supra) is also relevant in which it was held that in order to attract the provisions contained in section 32(1) it was necessary to show that the person who made or filed the declaration or furnished documents was cognizant of or had knowledge or apprehension of the facts that whatever declared or stated or, the document filed was incorrect or untrue in some `material f particular' and the non‑fulfilment of these requirements renders notice to be without jurisdiction. This view further gets support from the judgment in the case of Oskui Traders.'(supra), wherein it has been held that, at all such time an exemption S.R.O. or any of its like provisions hold the field, the Customs Authorities have no jurisdiction to scrutinize question of under valuation, calculation of duties and misdescription of goods imported." In this judgment it was further held that , the Customs Authorities were not justified to levy any penalty under section 32(1) when admittedly there was no motive on the part of the petitioner to evade tax due to the exemption in the field. In this judgment it was also I held that no penalty under section 32(1) is leviable for any alleged under valuation and misdiscription where there can be no motive ‑to evade tax and where such declaration would carry no fiscal consequence. It was ,also observed that any other interpretation shall lead to absurd situation where although no tax would be leviable on the main basic assessment nut there could possibly be imposition of penalty. Such exercise was held to be completely without jurisdiction, illegal, void ab initio and of no legal effect.

40. The ratio of judgment in the case of Messrs Kamran Industries (supra) is also fully attracted, the copious excerpts from which have been re‑produced to the earlier part of this judgment.

41. It has already been observed that, admittedly, neither any custom duty was leviable on import of any quantity of liquor as the exemption was available and that the plea raised for the first time before this Court that the under invoicing was resorted to, with the intention to store excess quantity of liquor than permissible under the licence stands belied by the Customs official Mr. Yousuf Baig, Appraising Officer.

42. Lot of stress has been laid by the respondent No.4, in the order in original and by the learned Federal Counsel that, with the change in the units of currency a forgery has been committed. In this regard I am persuaded to agree with the contention of Mrs. Navin Merchant, learned counsel for the plaintiff that the contention is without substance because of the finding contained in para. (v) of the original order which reads as follows:‑‑‑

"It is an admitted position that commercial invoices of foreign supplies are duly certified in the first instance by the respective Chambers of Commerce in respect of the signatures of duly authenticated officials and later attested by respective foreign missions by way of the above referred to requirement in terms of the aforesaid office memorandum, dated 23rd September, 1992. It has got nothing to do with the quantities and values declared. Values are probed into, price lists and contemporary, commercial data procured by the foreign mission in the country of export if a specific reference/request is made in this behalf by concerned Authorities in Pakistan. In this respect enquiries are made from different quarters by the foreign mission through its economic enquiry wing and results intimated accordingly Pakistan Trade Counselors/Commissioners and attaches of the various Consulates posted in various different countries abroad in the past have been very helpful in establishing cases of fraud, under invoicing, under valuation etc. In the background of the above scenario, Vice‑Counsel of Pakistan Consulate in Glasgow attested both sets of the commercial invoices one in G.B.P Sterling and the other in US $ by way of a requirement in terms of the aforesaid office memorandum, dated 23rd September, 1992."

Thus, the defendant No.4 has reiterated the same view as contended by the plaintiff as well as contained in the certificate issued by the supplier that the attestation made by the Pakistan Consulate has nothing to do with the valuation of the goods. There is nothing on record to show that any requisition was made by the Customs Authorities in Pakistan to the Pakistan Mission in Glasgow for collecting the necessary data on the point of valuation of the goods imported. Thus, the question of any forgery/tampering as alleged does not arise.

43. Although in section 32(1) the word `forgery' had not been used but in the context of the present case a great emphasis has been laid on the plea that the plaintiff committed forgery. The expression `forgery' and `false statements' are not defined in the Customs Act. These expressions are defined in sections 463 and 464, P.P.C. which reads as follows:

"463. Forgery. ‑‑‑Whoever makes any false document or part of a document, with intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery."

"464. Making a false document.‑‑‑A person is said to make a false document.

First.‑‑‑Who dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document or part of a . document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed or executed, or at a time at which he knows that it was not made, signed, sealed or executed; or

Secondly.‑‑‑Who without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document in any material part thereof, after it has been made or executed either by himself or by any other person, whether such person be living or dead at the time of such alteration; or

Thirdly.‑‑Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document, knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by, reason of deception practiced upon him, he does not know the contents of the document 'or the nature of the alteration.

44. The illustrations given in the Pakistan Penal Code are also very helpful which are reproduced below:‑‑‑

"Illustrations

(a)A has a letter of credit upon B for rupees 10,000 written by Z.A. in order to defraud B, adds a cipher to the 10,000 and makes the sum 1,00,000 intending that it may be believed by B that Z so wrote the letter. A has committed forgery.

(b)A, without Z's authority affixes R's seal to a document purporting to be a conveyance of an estate from Z to A, with the intention of selling the estate to B and thereby of obtaining from B the purchase money. A has committed forgery. `

(c)A picks up a cheque on a banker signed by B, payable td bearer, but without any sum having been inserted in the cheque. A fraudulently fills up the cheque by inserting the sum of ten thousand rupees. A commits forgery.

(d)A leaves with B, his agent, a cheque on a banker, signed by A, without inserting the sum payable and authorizes B to fill up the cheque by inserting a sum not exceeding ten thousand rupees for the purpose of making certain payments. B fraudulently fills up the cheque by inserting the sum of twenty thousand rupees. B commits forgery.

(e)A. draws a bill of exchange on himself in the name of B without B's authority, intending to discount it as a genuine bill with a banker and intending to take up the bill on its maturity. Here, as A draws the bill with intent to deceive the banker by leading him to suppose that he had the security of B, and thereby to discount the bill, A is guilty of forgery.

(f)Z's will contains these words‑‑‑‑I direct that all my remaining property be equally divided between A, B and C". A dishonestly scratches out B's name, intending that it may be believed that the whose was left to himself and C. A has committed forgery.

(g)A endorses a Government promissory note and makes it payable to Z or his order by writing on the bill the words `Pay 'to Z or his order' and signing the endorsement. B dishonestly erases the words `Pay to Z or his order' and thereby converts the special endorsement into a blank endorsement. B commits forgery.

(h)A sells and conveys an estate to Z.A afterwards in order to defraud Z of his estate executes a conveyance of the same estate to B, dated six months earlier. than the date of the conveyance to Z, intending it to be believed that he had Conveyed the estate to B before he conveyed it to Z. A has committed forgery.

(i)Z dictates his Will to A, A intentionally writes down a different legatee from the legatee named by Z, land by representing to Z that he has prepared the Will according to his instruction, induces Z to signs the Will. A has committed forgery.

(j)A writes a letter and sign it with B's name without B's authority, certifying that A is a man of good character and in distressed circumstances from unforeseen misfortune, intending by means of such letter to obtain alms from Z and other person. Here, as A made a false document. in order to induce Z to part with property. A has committed forgery.

(k)A without B's authority writes a letter and signs it in B's name certifying to A's name certifying to A's character, intending thereby to obtain employment under Z. A has committed forgery inasmuch as he intended to deceive Z by the forged certificate, and thereby to induce Z to enter into an express or implied contract for services."

45. A perusal of the definition of forgery shows that an intention to cause damage or injury to the public or to any person; or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud is necessary to constitute act of forgery. What amounts to making of false documents is clearly defined in section 464, P.P.C. Now applying the above provisions to the facts of the present case we find that the commercial invoices are issued by the supplier and the plaintiff who is an importer produces certificate from the supplier stating that a. mistake was committed by them in describing the units of currency in the invoices and the said mistake was rectified by them. In these circumstances, it K was incumbent upon the defendants to inquire from the supplier if any such certificate was issued by them or not. In the absence of any , verification the .act of change in the unit of currency cannot be attributed to the plaintiff. Secondly; the necessary ingredient for making of false document is dishonest and fraudulent intention. In the present case, it is admitted position that no incidence of tax was involved, and as such the question of any tax evasion was not involved and further Mr. Yousuf Raig, the Appraising Officer, has clearly stated that neither any excess quantity of liquor was stored in the Bonded Warehouse by the plaintiff nor it was possible to do so. In these circumstances,, the question of making any false document or of any dishonest or fraudulent intention does not arise. The expressions `dishonestly' and `fraudulently' are not defined in the Customs Act and are defined in sections 24 and 25, P.P.C. The expression dishonestly has been defined as follows:‑‑‑

"'Dishonestly'. ‑‑‑Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing `dishonestly'."

The expression "fraudulently" has been defined as under:‑‑‑

" 'Fraudulently'. ‑‑‑A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise."

46. In the present case it is admitted position that because of the exemption provision in the field there was no question of any wrongful gain to the plaintiff or wrongful loss to the Revenue or any other person. In the facts and circumstances of the case the plea that by resorting to under‑invoicing the plaintiff could store more quantity of liquor in the Bonded Warehouse than permissible under the licence appears to be totally presumptive and far‑fetched.

In view of the undeniable fact that no excess quantity of liquor was stored or attempted to be stored by the plaintiff in the Bonded Warehouse, than permissible under the licence, it is held that no infringement of any condition laid down in the licence or violation of any provisions of the Customs Act and Rules made thereunder was committed, with the result that the licence granted to the plaintiff could not be cancelled, and the renewal thereof. could not be refused by resorting to section 13(3) of the Customs Act.

48. Consequent to the above discussion, it is held that the defendants are not able to show that the conditions precedent for issuance of notice under section 32 of the Customs Act and cancellation of licence under section 13(3) were existing. It is, therefore, held that the show‑cause notice issued by the defendants the order in original in pursuance thereof and the imposition of penalty by the defendant No.4 and the cancellation of the licence in favour of the plaintiff are without jurisdiction, void, ab initio and nullity in law.

49. At this stage, I would like to clarify that for the purpose of acquiring jurisdiction as discussed above, the Custom officials are not required to establish beyond reasonable doubt the conditions precedent specified in section 32.‑For the purpose of acquiring jurisdiction a prima facie evidence is required to be shown satisfying the existence of the conditions precedent specified in section 32 and for the purpose of penalties, after acquiring of jurisdiction, the conditions precedent are required to be established beyond reasonable doubt. In the present case, there are no prima facie circumstances, pertaining to the existence of the conditions precedent for acquiring jurisdiction under section 32 and consequently, all the acts in pursuance of the issuance of the show‑cause notice are without jurisdiction.

50. In pursuance of the above finding, it is held that the issuance of show‑cause notice and all subsequent acts in pursuance thereof being without jurisdiction and nullity in law, the plaintiff cannot be asked to have recourse to the forum of appeal provided in the Customs Act. The entire exercise on the part of the defendants in this case being without jurisdiction, the plaintiff has right to invoke the jurisdiction vested in the Civil Court and this Court is fully competent to declare such act as null and void.

51. Consequent to the above findings, the suit is decreed as prayed. The show‑cause notice and the order in original in pursuance thereof made by the defendant No. 4, are hereby declared to be without jurisdiction and void. The defendant No. 3 is directed to renew licence of the plaintiff forthwith. Defendant No.1 is also directed to issue the import permit to the plaintiff immediately. The defendants Nos. 3 and 4 are directed to allow the plaintiff to continue in bond of the goods and not to charge and penal surcharge from the plaintiff for the custody of the goods in the bond.

The suit is decreed as above.

M.B.A./S‑242/KOrder accordingly.