COLLECTOR, CUSTOMS, SALES TAX AND CENTRAL EXCISE, CUSTOM HOUSE, QUETTA VS NAIMTULLAH, 2003 PTD-QUETTA-HIGH-COURT-BALOCHISTAN 2118 (2003)

(a) Customs Act (IV of 1969)---

----Ss. 196 &. 194-B---Appeal to High Court---Scope of appeal under S.196, Customs Act, 1969 is limited to the question of law arising out of the order passed by the Appellate Tribunal under S.194-B of the said Act.

(b) Customs Act (IV of 1969)---

----S. 187---Qanun-e-Shahadat (10 of 1984), Art.121---Possession of a non-duty paid vehicle---Person in possession of the vehicle in question had admittedly purchased the vehicle from the original owner who had got registered the same with the Authority---Burden of proof as to lawful authority---"Legal burden" and "evidential burden"---Concepts---Burden of proof as laid down under S.187 of the Customs Act, 1969 is "evidential burden" requiring the accused to only establish a prima facie case and ultimate burden or legal burden is on the Customs Authorities to prove the case against the accused beyond reasonable doubt-- Accused, prima facie having established that he was in possession of the vehicle under the valid.- permit issued by the Motor Registration Authority under the law, the burden cast upon him under S.187, Customs Act, 1969 was discharged by him---Principles.

Under section 187 of the Customs Act, 1969 when any person is alleged to have committed any offence under the Customs Act, 1969, the burden is upon the person found in possession of such thing to prove that he was in possession with lawful authority or under a permit, licence or other document prescribed by or under any law for the time being in -force.

Section 187 of the Customs Act, 1969 covers two situations; firstly, when a person is charged with an offence under the Customs Act; the burden of proof is cast upon him to show that he had lawful authority to commit that act, and secondly, when a person is found in possession of any goods the burden of proof is cast upon him to show that he was holding such goods under some lawful authority, permission or licence or other document prescribed by or under any law for the time being in force.

The facts of the present case fall under the second situation which provides for an eventuality where a person is found in possession of certain goods falling under the prohibitory category or which has been found in possession of accused unlawfully. In such case the burden is upon the accused to show that he was in possession of such goods under a lawful authority, permit or licence etc. The question is as to what extent such burden lies upon the accused and as to whether same at any stage shifts to Customs Authorities or not. Reference to Article 121 of the Qanun-e-Shahadat., 1984 would be relevant which provides that whosoever claims to fall under a preferential, exempt or excepted category he must show that he fulfils those conditions to fall within that category.

The second situation is essentially a statement of the general principle of the law of evidence contained in Article 121 of the Qanun-e -Shahadat, 1984. .

The phrase "burden of proof" has been assigned following three meanings:--

(i) The persuasive burden, the burden of proof as a matter of, law and pleading, the burden of establishing a case, whether by preponderance of evidence or beyond reasonable, doubt;

(ii) the evidential burden, the burden of proof in the sense of adducing evidence;

(iii) the burden of establishing the admissibility of evidence.

The legal burden is the ultimate and final burden whereas the evidential burden requires only establishment of a prima facie case. On general principles .to prove both these, the burden is upon the prosecution, however, in certain statutes and under Article 121 of the Qanun-e-Shahadat, 1984 the evidential burden has been laid on the accused to prove the existence of certain conditions, exception or exemption under which he claims his case falls but at the same time he has to only prove a prima facie case in his favour and if any doubt arises, thereafter; in the mind of Court or Tribunal, the benefit of same must go to the accused, on the basis of universal principle of "benefit of doubt".

The accused was entitled to a benefit of doubt where he offered a reasonable explanation which was either acceptable or raised a doubt.

In such cases the burden then shifted upon the prosecution to establish the case.

The presumption against the accused under this section is not to be drawn until the explanation of the accused is taken into consideration, the normal principle will apply, namely, that the accused is entitled to benefit of doubt and where reasonable explanation is offered, which is acceptable and raises a doubt, that the prosecution has not discharged the burden though the accused may not have proved the explanation.

Similarly, in event of evidential burden, it is not essential for the accused to adduce evidence in all circumstances. If the Court or Tribunal is satisfied from the circumstances appearing from the prosecution case, that the existence of circumstances bringing the case within the exception or exceptions pleaded by the accused has been proved or there is reasonable doubt whether such circumstances do exist or not; the accused is entitled to such benefit.

That it was not for the accused to have disproved the allegations of the Customs Authorities entirely without any obligation on the Customs, for the simple reasons, that it would amount to affording unfettered and arbitrary discretion to the authorities who may at their sweet will, make out false case against the innocent citizens without the need of proving the sanctity of their actions. The Courts are under an obligation to place such construction on statutes which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably.

The burden of proof as laid down under section 187 of the Act is evidential burden requiring the accused to only establish prima facie case and ultimate burden or legal burden is on the Customs Authorities to prove case against the accused beyond reasonable doubt.

Prima facie it is established that the accused was in possession of the vehicle under the valid permit issued by the Motor Registration Authority under the law, as such the burden cast upon the accused under section 187 of the Act was discharged by him. On the other hand the Customs Authorities failed to discharge the ultimate or legal burden cast upon them and it was doubtful as to whether the vehicle in question was registered on fake documents as no such document was produced nor the concerned Authorities initiated any proceedings regarding fake registration of the vehicle against the original owner or the concerned Officials of Motor Registration Authority which, if committed, was not only an offence under the ordinary law but also an offence punishable under the Customs Act. Thus it was doubtful under the given facts and circumstances of the present case as to whether the vehicle in question was got registered under the Motor Vehicles Ordinance through the valid 'documents or otherwise, as such; the accused .was entitled to the benefit of doubt on general principle.

Phipson on Evidence, 14th Edn.; PLD 1973 Kar. 659; PLD 1980 Lah. 145; 1983 CLC 414; 1984 CLC 325 and PLD 1990 SC 1051 ref.

(c) Interpretation of statutes---

---- Construction of a statute---Court is under an obligation to place such construction on statute which would be beneficial, to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably.

(d) Burden of proof-------.

Meaning.

Phipson on Evidence, 14th Edn. quoted.

K. N. Kohli, D.A.-G. for Appellant.

Respondent in person.

Date of hearing: 7th May, 2003.

JUDGMENT

AKHTAR ZAMAN MALGHANI, J.---This appeal under section 196 of the Customs Act, 1969 (hereinafter referred as "Act") is directed ,against the order dated 18-12-2002 passed by the Customs, Excise and Sales Tax Appellate Tribunal, whereby the appeal of respondent filed against the order dated . 30-9-2002 of Additional Collector, Customs, Quetta was allowed, -by setting aside the order whereby the vehicle bearing registration No.BB-5869 was confiscated under clauses (8) and (89) of section 156(1) of the Customs Act, 1969.

2. Briefly stated, facts of the case are that pursuant to secret information on 20-2-2002 Customs Staff intercepted Toyota Land Cruiser Jeep bearing Registration No.BB-5869 at Baleli Check Post on the ground that the same was a non-duty paid vehicle. The driver of the vehicle could not produce any document showing the lawful import of the said vehicle, however, he produced a photocopy of Registration Book showing that the said vehicle was registered with Motor Registration Authority, Karachi on 14-1-1991. According to the case of Customs Department the mater was referred to M.R.A. Karachi for verification of the Registration Book, in response whereof the Authority confirmed the registration of the vehicle with it but according to Registration Authority the original file was not available with it, as such; a show -cause notice was issued as required under the Customs Act, 1969.

3. According to record, the respondent appeared in response to the show-cause notice claiming to be the owner/bona fide purchaser of the vehicle in question and filed written objections to the show-cause notice.

4. The Additional Collector, Customs (Adjudication) after hearing the counsel for the respondent and seizing officer ordered for the outright confiscation of the vehicle as according to him the respondent failed to discharge his burden as provided under section 187 of the Act and prove that the vehicle was lawfully imported into the country and all payable taxes were duly paid.

5. The respondent feeling aggrieved by the confiscation order, preferred appeal before the Appellate Tribunal which was eventually accepted vide impugned order dated 18-12-2002 and after setting aside the confiscation order, the Customs Authorities were directed to release the vehicle to the respondent.

6. We have heard the preliminarily arguments of the learned Deputy Attorney-General:

7. The appeal has been preferred under section 196 of the Customs Act, the scope of which is very limited and permits appeal only on question of law arising out of the order passed by the Appellate Tribunal under section 194-B of the Act. The learned Deputy Attorney-General contended that in the present appeal the question of law with regard to burden of proof as laid down under section 187 Customs Act, 1969 is involved which has been wrongly decided by the learned Appellate Tribunal against the departmently shifting the burden. According to learned Deputy Attorney-General it was for the respondent to have proved the lawful import of the vehicle notwithstanding same has been registered with M.R.A. Karachi.

8. We have anxiously considered the contentions put forth by the learned Deputy Attorney-General. It may be observed that under section 187 of the Act when any person is alleged to have committed any offence under the Customs Act, 1969, the burden is upon the person found in possession of such thing to prove that he was in possession with lawful authority or under a permit, licence or other document prescribed by or under any law for the time being in force. For the sake of convenience section 187 of the Act is reproduced hereinbelow:--

"Burden of proof as to lawful authority, etc,--When any person is alleged to have committed an offence under this Act and any question arises whether he did any act or was in possession of anything with lawful authority or under a permit, licence or other document prescribed by or under any law for the time being in force, the burden of proving that he had such authority, permit, licence or other document shall lie on him".

9. It is evident from the perusal of section 187 (supra) that it covers two situations, which are as under:

(a)when a person is charged with an offence under the Customs Act, the burden of proof is cast upon him to show that he has lawful authority to commit that act,

(b)When a person is found in possession of any goods the burden of proof is cast upon him to show that he was holding such goods under some lawful authority, permission or licence or other document prescribed by or under any law for the time being in force.

10. The facts of the present case fall under the above described situation (b) which provides for an eventuality where a person is found in possession of certain goods falling under the prohibitory category or which has been found in possession of accused unlawfully. In such case the burden is upon the accused to show. that he was in possession of such goods under a lawful authority, permit or licence etc. The question is as to what extent such burden lies upon the accused, and as to whether same at any stage shifts to Custom Authorities or not. At this juncture reference to Article 121 of the Qanun-e-Shahadat Order, 1984 would be relevant which provides that whosoever claims to fall under a preferential, exempt or excepted category he must show that he fulfils those conditions to fall within that category.

The situation (b) as described above is essentially a statement or the general principle of the law of evidence contained in Article 121 of the Qanun-e-Shahadat Order, 1984.

The phrase "burden of proof" has been assigned following three meanings in "Phipson on Evidence" (fourteenth edition):--

(i)the persuasive burden, the burden of proof as a matter of law and pleading, the burden of establishing a case. whether by preponderance of evidence or beyond reasonable doubt;

(ii)the evidential burden, the burden of proof in the sense or adducing evidence;

(iii)the burden of establishing the admissibility of evidence.

11. The legal burden is the ultimate and final burden whereas the evidential burden requires only establishment of a prima facie case. On general principles to prove both these, these burdens is upon the prosecution, however, in certain statutes and under Article 121 of the Qanun-e-Shahadat Order, 1984 the evidential burden has been laid on the accused to prove the existence of certain conditions, exception or exemption under which he claims his case falls but at the same time he has to only prove a prima facie case in his favour and if any doubt arises, thereafter, .in the mind of Court or Tribunal, the benefit of same must go to the accused on the basis of universal principle "benefit of doubt". In the judgment reported in PLD 1973 Karachi 659 the then Honourable Chief Justice Tufail Ali Abdul Rehman while discussing effect of section 177-A of the Sea Customs Act (corresponding to section 187 of the Customs Act, 1969) held that the accused was entitled to a benefit of doubt where he offered reasonable explanation which is either acceptable or raised a doubt. In such cases the burden then shifted upon the prosecution to establish the case. It would be advantageous to reproduce the relevant observations:--

"The presumption against the accused under this section 6 not to be drawn until the explanation of the accused is taken into consideration, the normal principle will apply, namely, that the accused is entitled to benefit of doubt and where reasonable explanation is offered, which is acceptable and raises a doubt, that the prosecution has not discharged the burden though the accused may not have proved the explanation"

12. The concept of shifting of burden is not alien to our judicial system. In number of cases the superior Courts of our country have discussed the shifting of burden and approved it. If any reference is needed we may refer to case-law reported in PLD 1980 Lah. 145, 1983 CLC 414 and 1984 CLC 325.

Similarly, in event of evidential burden, it is not essential for the accused to adduce evidence in all circumstances. If the Court or Tribunal is satisfied from the circumstances appearing from the prosecution case, that the existence of circumstances bringing the case within the exception or exceptions pleaded by the accused has been proved or there is reasonable doubt whether such circumstances do exist or not; the accused is entitled to such benefit.

13. In view of above discussion we are not inclined to agree with the contention of learned Deputy Attorney-General that it was for the respondent to have disproved the allegations of the Customs Authorities entirely without any obligation on the Customs, for the simple reasons, that it would amount to affording unfettered and arbitrary discretion to the authorities who may at their sweet-will. make out false case against the innocent citizens without the need of proving the sanctity of their actions. The Courts are under an obligation to place such construction on statutes which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (PLD 1990 SC 1051 referred).

14. After coming to the conclusion that the burden of proof as laid down under section 187 of the Act is evidential burden requiring the accused to only establish prima facie case and ultimate burden or legal burden is on the Customs Authorities to prove case against the accuses beyond reasonable doubt, we now come to the facts of the present case in order to see that the initial burden or evidential burden have been discharged by the respondent or not. It is admitted feature of the case that the respondent has purchased the vehicle in question from the original owner who got registered the same with Motor Registration Authority Karachi, confirmed by the authority and not disputed by the Customs Department. It is also settled law that all the official acts are presumed to have been done in accordance with law and under the authority vested in this regard unless contrary is proved. Applying the said principle it is presumed that the vehicle was registered by the MRA under the valid documents required for registration of the vehicles. It is not the case of the appellant that the Registration Book under which the vehicle was registered was not issued by the MRA, as such; was a fake book. Prima facie it is established that the respondent was in possession of the vehicle under the valid permit issued by the Motor Registration Authority under the law, as such; the burden cast upon the respondent under section 187 of the Act was discharged by him. On the other hand the Customs Authorities failed to discharge the ultimate or legal burden cast upon it and it was doubtful as to whether the vehicle in question was registered on fake documents as no such document was produced nor the concerned Authorities initiated any proceedings regarding fake registration of the vehicle against the original owner or the concerned Officials of Motor Registration Authority which, if committed, was not only an offence under the ordinary law but also an offence punishable under the Customs Act. Thus it was doubtful under the given facts and circumstances of the present case as to whether the vehicle in question was got registered under the Motor Vehicles Ordinance through the valid documents or otherwise, as such; the respondent was entitled to the benefit of doubt on general principle and rightly extended by the learned Appellate Tribunal to him.

For the foregoing reasons we find no merits in the instant appeal within the meaning of section 196 of the Customs Act, 1969 and same is accordingly dismissed in limine.

Before parting with the judgment, we may observe that the arguments were heard on 7-5-2003 and matter was reserved for judgment, when on 14-5-2003, the learned D.A.-G. placed on record documents with an application for considering the same. At that time the proposed judgment was already dictated. However, in the interest of justice the documents are allowed to be brought on record. The perusal of these documents reveal that all the documents are dated 7-5-2003 or afterwards except one which is dated 18-3-2003 and the copies of Registration Book.

After careful perusal of the documents, most of which have been procured/managed by the appellant after the date on which arguments were heard, relates to notice under section 26 of the Customs Act, we are afraid that these documents are not going to help the cause of the appellant, simply because the proceedings under section 26 of the Customs Act, 1969 are to be drawn before the adjudication as it gives power to the appropriate officer to call for information relating to the goods as may be necessary for determining the legality or illegality of the importation of such goods. Admittedly no such proceedings were drawn by the Customs Department prior to the order of confiscation passed by the Adjudicating Officer not any such material was placed before him or before the Appellate Tribunal. Appeal under section 196 of the Customs Act has been provided against the order of Tribunal passed under section 194-B of the Act only on point of law and any material which was not before both the lower forums neither can be allowed nor considered while deciding appeal under section 196 of the Act. Otherwise it would amount to give unfettered powers to the Customs Department to frustrate the orders of competent forums passed in exercise of jurisdiction conferred under the Act by creating new evidence. It will also be unfair for the party in whose favour orders have been passed. It will not be out of place to mention here that after passing of order by the Tribunal on 18-12-2002, the vehicle was not returned to the respondent in pursuance of the order nor any appeal was filed challenging the said order. The appeal was only filed by the department after receipt of pre-admission notice regarding the Constitutional petition filed by the respondent praying for issuance of direction to the appellant department to comply with the order of the Appellate Tribunal. Any how, the documents filed- by the appellant are of worth no consideration for the foregoing reasons.

M.B.A./180/QOrder accordingly.