2004 P T D 1189

[Karachi High Court]

Before Shabbir Ahmad and Gulzar Ahmed, JJ

FEDERATION OF PAKISTAN and others

Versus

Messrs SAMAN DIPLOMATIC BONDED WAREHOUSE

H.C.A. No. 88 of 2003, decided on 10/10/2003.

(a) Civil Procedure Code (V of 1908)---

----S. 9---Jurisdiction of Civil Courts---Scope---Provisions in a statute ousting such jurisdiction---Interpretation of---Order or action of Authority or Tribunal, if violative of provisions conferring jurisdiction thereon or passed/taken in excess of jurisdiction or without jurisdiction or mala fide or violative, of principles of natural justice, can be challenged before Civil Court in spite of provisions in a statute barring its jurisdiction---Principles elaborated.

The Civil Courts under section 9, C.P.C., are competent to try all suits of civil nature except those of which their jurisdiction is barred either expressly or by necessary implication.

The provisions contained in a statute ousting the jurisdiction of Court of general jurisdiction is to be construed very strictly and unless the case falls within the letter and spirit of the barring provisions, it should not be given effect to.

The bat of jurisdiction can never be sustained, if it can be shown that impugned order/action was passed/taken not in bona fide exercise of powers conferred by the Act or the Rules.

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.

Where the jurisdiction of Civil Court is challenged on the ground of ouster of jurisdiction of the Civil Court, it must be shown that the authority or Tribunal was validly constituted under the Act; and that the order passed or action taken by authority or Tribunal was not mala fide, and that order passed or action taken was such which could be passed or taken under the law, which conferred exclusive jurisdiction on the authority or Tribunal; and that in passing the order of taking the action, the principles of natural justice were not violated. Unless all the conditions mentioned above are satisfied, the order or action of the authority or Tribunal would not be immune from being challenged before a Civil Court.

Where authority or Tribunal acts in violation of provisions of statute, which conferred jurisdiction on it or the order is exercised in lack of jurisdiction of mala fide or passed in violation of principles of natural justice, such order can be challenged before Civil Court in spite of provisions in a statute barring jurisdiction of Civil Court.

Commissioner of Income-tax, Companies-II and another v. Hamdard Dawakhana (Waqf), Karachi PLD 1992 SC 847; Rehmat Ali v. Additional District Judge, Multan 1999 SCMR 900; Industrial Development Bank of Pakistan v. Allied Bank of Pakistan and another PLD 1986 SC 74; Abbasia Cooperative Bank and another v. Hakeem Hafiz Muhammad Ghous and 5 others PLD 1997 SC 3; Deputy Collector of Customs (Appraisement) and another v. Messrs K.G. Traders and another H.C.A. No. 213 of 1997 and Abdul Rauf and others v. Abdul Hamid Khan and others PLD 1995 SC 671 ref.

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

----S. 13---Licence to set, up Bonded Warehouse, grant of ---Validity-- Setting up of Bonded Warehouse with necessary infrastructure by investing huge amount by licensee would not make such licence coupled with interest, irrevocable---Setting up of Bonded Warehouse and employment of necessary staff was essential for carrying on its business- Such acts were neither interior to licence nor were consideration to such right of licensee.

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

----S. 32---Untrue declaration or statement with regard to material particular in absence of any non-levy or short-levy---Effect---Such declaration or statement would attract other provisions of Customs Act, 1969.

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

----Ss. 2(s)(ii) & 32(1)---Import of excess quantity of liquor under Diplomatic Duty Free Licence by under-invoicing---Substitution of British currency with U.S. dollars in invoices after, attestation by Pakistan Consulate abroad---Contention of Revenue was that importer by such act sh0Ving low invoice value (under-invoicing) had succeeded in bringing into country against permissible limit a much larger quantity of liquor than what they could bring, had they not manipulated invoices in such manner---Validity---In absence of short-levy or non-levy, such was a misdeclaration in tens of S.32(1) of Customs Act,1969 as consignment being liquor would bring the case of excess quantity within mischief of S. 2(s)(ii) thereof.

Messrs Eastern Rice Syndicate v. Central Board of Revenue PLD 1959 SC 364; Messrs Kamran Industries v. The Collector of Customs PLD 1996 Kar. 68; Ebrahim Textile Mills v. Federation of Pakistan PLD 1989 Lah. 47; Messrs Al-Hamd Edible Oil (Pvt:) Ltd. and others v. Collector of Customs and others 2003 PTD 552; Assistant Collector Customs and others v. Messrs Khyber Electric Lamps 2001 SCMR 838 and Federation of Pakistan v. Messrs Ibrahim Textile Mills 1992 SCMR 1898 ref.

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

----Ss.32 & 180---Untrue statement with respect to material particulars-- Powers of Adjudicating Officer---Scope---Only Adjudicating Officer could determine the question, whether fact of such untrue statement was within knowledge of importer or not, and that whether excess quantity of liquor had been imported by under-invoicing.

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

----S. 180---Initiation of adjudication proceedings---Pre requisites---No order for confiscation of goods or imposition of penalty could be passed against any person without service of notice on owner of goods informing him in writing about grounds of proposed action and giving him reasonable opportunity of being heard.

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

----Ss. 2(a)(b), 13, 156, 179 & 180--"Adjudication proceedings" and "Cancellation proceedings"---Distinction---Both such proceedings are distinct and separate proceedings---Outcome of former proceedings can be a ground for initiation of latter proceedings---Former proceedings are initiated by Adjudicating Authority, while latter by appropriate officer.

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

----Ss. 13, 32, 156 & 180---Civil Procedure Code (V of 1908), S-9-- Import of excess quantity of liquor under Diplomatic Duty Free Licence by under-invoicing---Issuance of show-cause notice to cancel licence of Bonded Warehouse and refusal of authority to issue import permit-- Filing of suit in Civil Court to challenge such act of Authority-- Maintainability---Authority in absence of any finding had issued show cause notice with pre-supposition of proved violation of provisions of S.32. of Customs Act. 1969---Refusal to issue import permit also suffered from the same defect- --Proceedings initiated on such show-cause notice by authority were not within four corners of the Customs Act, 1969-- Plea of ouster of jurisdiction, held was, not available to the authority in circumstances.

Syed Tariq Ali and Ashfaq Hussain for Appellants.

Mrs. Navin Merchant for Respondent.

Dates of hearing: 20th, 28th August, 2003, 2nd and 3^rd September, 2003.

JUDGMENT

SHABBIR AHMED, J.---Through this appeal, the appellants impugned the judgment and decree, dated 25-11-2002 passed by the learned Judge on Original Side in Suit No.706 of 2002 filed by the respondent against the appellants. By the impugned decree, show-cause notice and the order passed in adjudication proceedings in pursuance thereof passed by ,the appellant No.4 were declared to be without jurisdiction and void. Appellant No.3 was directed to renew the licence of the respondent forthwith. The appellant No.1 was also directed to issue import permit to the respondent immediately. The appellants Nos.3 and 4 were further directed to allow the respondent to continue In bonding of the goods and not to charge any penal surcharge for the custody of the goods in-bond from the respondent. The appeal has arisen in the following background:--

The respondent is a licence holder of Diplomatic Duty Free. Bonded Warehouse issued by the appellant No.3 for the import of different brands of liquor renewed from time to time and the validity of last renewal was up to 30-6-2000. On its expiry the application for renewal was submitted on 20-7-2000 by the respondent. During the validity of the licence, the respondent imported two consignments of Scotch Whisky, from Glasgow on vessel `SIMAR MADAN' to Karachi detailed as follows:---

(a)First consignment consisting of 1 x 20 STC 714 cases of Scotch Whisky reached Karachi Port vide IGM No. 518 of 2000, dated 30-3-2000.

(b)Second consignment consisting of 1 x 20 STC cases of Scotch Whisky reached at Karachi Port vide IGM No. 518 of 2000, dated 30-3-2000.

The respondent requested the appellant No.4 for permission to in-bond the goods which was granted for the period of one year. It was also the case of the respondent that licence is renewable by the appellants in the normal course of business and in case of any serious allegation against the licencee, the same cannot be cancelled without proof of the charge. According to the respondent, the appellant No.3 kept pending the matter of renewal of licence, without any reason with the result that the respondent was not able to operate the bonded warehouse, which is causing colossal loss as the goods imported are lying in the bond un utilized. It was also their case that import permits are issued by the appellant No.1 in routine either when the goods are on their way or when, it reach in Pakistan. It was also the case of the respondent that on arrival of the goods they requested the appellant No.1 for issuance of import permit which was delayed on one or the other pretext. Without the import permit, the respondent was not allowed to clear the goods. It was further their case that in order to create a new pretext for victimizing and harassing the respondent, the appellant No.3 issued a show-cause notice on 18-12-2000 alleging that the respondent with a view to under-value the invoice, had tampered with the same and printed the words US $ instead of the words GBP. The show-cause notice contains the fact that the Consulate of Pakistan in Glasgow has also confirmed that the value of the invoices were in Pound Sterling instead of US $ when the importer submitted the same for attestation. The respondent pleaded that the allegation in the show-cause notice was without substance as the respondent was not be benefited in any way by tampering with the documents and there was no loss to public exchequer by under-invoicing. It was their further case that the inquiry was completed by the appellant No.4 but no decision was given till the filing of the suit. The appellant No.1, did not issue import permit causing heavy losses to the respondent. As a consequence thereof, the renewal of licence for operation of the Diplomatic Duty Free Bonded Warehouse also remained stuck-up. Hence the suit was filed by the respondent for following reliefs:--

(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 No.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 to plaintiff to continue in-bond of the goods, as the designated period of one year is about to expire;

(f)direct the defendant Nos. 3 and 4 to charge any penal sur charge from the plaintiff for the custody of the goods in the bond.

The appellant No.1 in their written statement had taken the plea that the terms and conditions laid down in the office memorandum, dated 29-9-1992 for the import of liquor by Diplomatic Duty Free Bonded Warehouse was subject to inter alia, attestation of invoices by the Pakistan Embassy in the country of export. Their plea was that the respondent 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 of under-value the import. It was also pleaded that in order to confirm that the respondent has resorted to forgery/tempering with the invoices, the appellant No.2 sent relevant invoices to Vice Consulate of Pakistan in Glasgow for verification, who confirmed that all the invoices attested were in Pound Sterling and that the respondent had fraudulently erased the original currency Unit in GBP and replaced it with the US $ in order to undervalue the imports. It was also pleaded that as per licence issued by the appellant No.3 the respondent was eligible to keep the goods worth not exceeding Rs.5 million Duty Free. Since the respondent had indulged in forgery and tampered with invoices to misuse the said facility, the appellant did not grant the import authorization for liquor against the forged and tampered documents. The appellant No.2.was also informed about the forgery committed by the respondent with a request to cancel their licence.

The appellants Nos.2 to 4 in their written statement pleaded that the respondent committed an act of misdeclaration in the invoice value, an offence under section 32 of the Customs Act, punishable under clause 14 of section 156 ibid, therefore, show-cause notice was issued. Their further plea was that the respondent instead of contesting the matter, filed the suit with intention to pressurize the appellant. The filing of application for renewal by the respondent and report with regard to mis-declaration and forgery in the invoices value, by appellant No. 1, were admitted, on such account, the licence was not renewed. They pleaded delay in conclusion of the adjudication proceeding for the reasons that adjudication process taxes its own course and several documents and evidence brought on record were to be examined. It was also their plea that the respondent without exhausting the legal remedies, has filed the present suit which is not maintainable.

During the course of hearing, a statement on 14-10-2002 was made on behalf of the appellants Nos.2, 3 and 4 that the appellant No. 4 would decide the matter expeditiously and copy would be produced before the Court on 21-10-2002 and on that day copy of order passed by appellant No.2 on 19-10-2002 was produced with following conclusion:--

"in the light of the above factual and legal aspects of the case the respondents have knowingly, averments and with mala fide intentions indulged into an act of misdeclaration within the ambit of the provisions of section 32(1) of the Customs Act, 1969. 1, therefore, by dint of the powers vested in me under section 156(1) clause 14 order outright confiscation of the imported goods alongwith imposition of a penalty equal to 100% of the value of the goods. I further order cancellation of the respondent licence No. PWL 3/90 for violation of the conditions enumerated in the licence and for violation of the relevant provisions of the Act and Rules under section 13(3) of the Customs Act, 1969".

On production of the order it was pleaded that since the appellant No.2 has passed the order, the respondent may prefer an appeal against the said order before the Appellate Tribunal in terms of section 194-A of the Act.

Whereas, Mrs. Navin Merchant, the learned counsel for the respondent contention was that a perusal of the order shows that it is mala fide as the entire proceedings commencing from the issuance of show-cause notice and culminating with the passing of order after about six months of the filing of the suit was without jurisdiction. Her further contention was that an act is without jurisdiction and mala fide in nature, the affected person can always approach 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 appellant' counsel vehemently maintained that the respondent committed forgery/tampering with the invoices and resorted to under-invoicing, therefore, the non-renewal of licence, non-issuance of permit, issuance of show-cause notice, dated 19-10-2002 were within the jurisdiction vested in the appellants.

After recording the contentions, and on the basis of pleadings, the learned Single Judge formulated preliminary issue under Order 14 Rule 2, C.P.C., as follows:--

"Whether in the facts and circumstances of this case the respondents Nos. 3 and 4 have the jurisdiction to with hold the renewal of licence in favour of the plaintiff'.

On the basis of pleadings and material available on record, after hearing the pros and cons contentions of the learned counsel for the respective parties, the learned Judge decided the preliminary issue in favour of the respondent and decreed the suit by the impugned judgment in terms of the decree referred to above, which is impugned through the present appeal.

We have heard Syed. Tariq Ali, learned Federal counsel, for the appellants Nos. 1 to 3 and Mrs. Navin S. Merchant, learned counsel for the respondent. Mr. Ashfaq Hussain, learned counsel for the appellant No.4, adopted the arguments of learned Federal counsel.

Syed Tariq Ali and Mrs. Navin S. Merchant, learned counsel for the parties, who argued the matter, had requested that this appeal may be disposed of finally at Katcha Peshi stage. Mr. Ashfaq Hussain, learned counsel for the appellant No.4 did not object to the request arid it was agreed that this appeal would be disposed of finally at Katcha Peshi stage.

The learned Federal counsel has raised following contentions in support of the appeal:--

(i)That the learned Judge has erred by exercising the jurisdiction in the matter in utter disregard of provisions of section 9 of C.P.C. and section 217 of the Customs Act which bar the jurisdiction of the Civil Court.

(ii)The learned Judge has erred by examining the adjudication proceedings and order passed thereunder in absence of a cause before the Court and thus exercised the appellate jurisdiction in respect of the adjudication proceeding and lastly.

(iii)The learned Judge has considered the extraneous facts not borne out from the record attributed to Mirza Yousuf Baig with regard to the facts that neither any loss of revenue has been caused by under invoicing nor the liquor has been imported or stored in the bonded Warehouse in excess of permissible limit/quantity.

Conversely, Mrs. Navin S. Merchant, learned counsel for the respondent, supported the impugned judgment by contending that the issuance of show-cause notice with regard to the adjudication proceeding and cancellation/non-renewal of the licence by the appellants was without jurisdiction mala fide. Her second contention was that in the absence of any loss of revenue by purported untrue statement in terms of section 32 of the Customs Act, all the actions taken by the appellants were without jurisdiction and mala fide as the consignment was duty free as no loss to public revenue had occasioned. Her third contention, was that where the public functionaries have acted without jurisdiction and mala fide, the aggrieved person can approach the Civil Court and cannot be compelled to seek the relief from the form provided in the statute as any act without jurisdiction and mala fide is void, in-operative and of no legal effect.

Her last contention was that the respondent has invested colossal amount in setting up the Bonded Warehouse and necessary infrastructure and so the licence was coupled with interest and thus irrevocable.

Before considering the pros and cons contentions of the learned counsel for the parties, it would be advantageous to recapitulate the provisions of the Customs Act, more particularly, section 2(a), (b) with reference to definition of `appropriate officer' and `adjudicating authority'. Section 13 pertains to the grant of licence to private Bonded Warehouse and its cancellation or suspension, whereas, section 32 pertains to misstatement and misdeclaration in connection with any matter of Customs. Section 179 with regard to powers of the Customs Officer in respect of adjudication proceedings and lastly section 180, pertaining to show-cause notice. The provisions read as follows:--

"2.(a) `Adjudicating Authority' means any authority competent to pass any order or decision under this Act, but does not include the Board, the Collector (Appeals) or the Appellate Tribunal; (b) `appropriate officer', in relation to any functions to be performed under this Act, means the officer of customs to whom such functions have been assigned by or under this Act.

(13)Power to license private warehouses. ---(1) At any warehousing station, the Collector of Customs may, from time to time, license private warehouse wherein dutiable goods may be deposited.

(2)Every application for a licence for a private warehouse shall be made in such form as may be prescribed by the Collector of Customs.

[(3)A licence granted under this section may be cancelled by the Collector of Customs for infringement of any condition laid down in the licence or any violation of any of the provisions of this Act or any rules made there under after the licensee has been given proper opportunity of showing cause against the proposed cancellation.]

(4)Pending consideration whether a licence be cancelled under subsection (3), the Collector of Customs may suspend the licence.

"32. [Untrue] Statement, error, etc.---(1) If any person, in connection with any matter of customs,--

(a)makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice certificate or other document whatsoever, or

(b)makes any 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, he shall be guilty of an offence under this section.

(2)Where, 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, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date, requiring him to show cause why he should not pay the amount specified in the notice.

(3)Where, 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, the person liable to pay any amount on that account hall be served with a notice within [six months] of the relevant date requiring him to show cause why he should not pay the amount specified in the notice.

(4)The appropriate officer, after considering the representation, if any, of such persons as is referred to in subsection (2) or subsection (3) shall determine the amount for duty pay able by him which shall in no case exceed the amount specified in the notice, and such person shall pay the amount so determined.

(5)For the purpose 'of this section, the expression `relevant date' means---

(a)in any case where duty is not levied, the date on which an order for the clearance of goods is made;

(b)in a case where duty is provisionally assessed under section 81, the date of adjustment of duty after its final assessment;

(c)in a case where duty has been erroneously refunded, the date of its refund;

(d)in any other case, the date of payment of duty or charge.

179.Power of adjudication.-(1) subject to subsection (2) in cases involving confiscation of goods or imposition of penalty under this Act or the rules made thereunder, the jurisdiction and powers of adjudication of the Officers of Customs shall be as follows:--

(i)CollectorWithout limit

(ii)Additional CollectorConfiscation of goods the

valueof which does not

exceedRs.1,500,000

excludingthe value of

conveyanceand the value

of non-dutiable goods, and

impositionof the penalty

under the rules.

(iii)Deputy CollectorConfiscation of goodsthe

valueof which does not

exceedRs.500,000

excludingthe value of

conveyanceand the value

of non-dutiable goods, and

imposition of the penalty

under the rules.

(2)The Board may, by notification in the official Gazette, vary the jurisdiction and powers of any Officer of Customs or a class of officers.

(3)A Collector, an Additional Collector or a Deputy Collector shall decide the case within forty-five days of the issuance of show cause notice or within such extended period for which reasons shall be recorded in writing, provided that such extended period shall in no case exceed ninety days,"

(4)The Board shall have the powers to regulate the system of adjudication including transfer of cases and extension of time limit in exceptional circumstances;

(180)Issue of show-cause notice before confiscation of goods on imposition of penalty.---No order under this Act shall be passed for the confiscation of any goods or for imposition of any penalty on any person, unless the owner of the goods, if any, or such person-

(a)is informed in writing (or if the person concerned consents in writing, orally) of the grounds on which it is proposed to confiscate the goods or the impose the penalty;

(b)is given an opportunity of making a representation in writing (or If the person concerned indicates in writing his preference for it orally), within such reasonable time as the appropriate officer may specify, against the proposed action; and

(c)is given a reasonable opportunity of being heard personally or through a counsel or duly authorized agent.

From the reading of section 13(3) it is manifest that licence granted is subject to cancellation by Collector of Customs on the ground (i) infringement of any condition laid down in the licence or; (ii) for violation of any of the provisions of the Customs Act or any rule made thereunder after proper opportunity to the licencee of showing cause. Whereas, section 32 contains three parts, subsection (1) provides that if any person in connection with any matter of Customs; (a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or (b)----------------------------------------------------------------------------------------------------[Knowingly or having reason to believe that such document or statement is false] is any material particular, he shall be guilty of an offence under this section. Whereas, subsection (2) pertains where, by reason of any 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, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice. Whereas, subsection (3) pertains where, by reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within six months of the relevant date requiring him to show cause why he should not pay the amount specified in the notice. The appropriate officer in terms of subsection (4) shall determine the amount of duty payable by him, which shall in no case exceed, the amount specified in the notice.

Likewise, section 179 pertains to power of adjudication by the officers of the Customs and such proceeding is a quasi judicial proceedings. Section 180 pertains to the issue of show-cause notice before confiscation of goods or imposition of penalty which mandates that no order under the Act shall be passed for the confiscation of any goods or for imposition of any penalty on any person, unless the owner of the goods, (a) is informed in writing (or if the person concerned consents in writing, orally) of the grounds on which it is proposed to confiscate the goods or to impose the penalty; (b) is given an opportunity of making a representation in writing (or if the person concerned indicates in writing his preference for it orally) within such reasonable time as the appropriate officer may specify, against the proposed action; and (c) is given a reasonable opportunity of being heard, personally or through a counsel or duly authorized agent.

Section 217 pertains to ouster of jurisdiction. The text thereof is:---

`217. Protection of action taken under the Act.-[(1)] No suit, prosecution or other legal proceeding shall lie against the [Federal Government] or any public servant for anything which is done or intended to be done in good faith in pursuance of this Act or the Rules

[(2)No suit shall be brought in any civil Court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act.]"

It may also be noted that the effigy of the respondent case is built on show-cause notice issued on.1-12-2000 which is not disputed by either side, the salient features thereof are as follows:--

`(1)The supplier in UK normally issues invoices in GBP currency whereas in this case word GBP was tampered with the word US$. The print of US$ was also different from other entries of the invoices. .

(2)The Consulate of Pakistan in Glassgow, which had attested the invoices also confirmed that value of the invoices were in Pound Sterling instead of US$ when the importer submitted the same for attestation. Therefore, it is clear that the invoices had been tampered with the intention to under-invoice the value. It is thus evident that the aforesaid tampered document were submitted to the Customs Authorities for the clearance of liquor from the Customs against the forged documents.

(3)The act committed by you Messrs Saman Diplomatic Duty Free Bonded Warehouse, Karachi attracts the provisions of section 32 of the Customs Act, 1969 punishable under clause 14 of subsection (1) of section 156 of the said Act. The aforesaid Act also tantamount to infringement of the conditions of the licence issued to them and also in view of the above cited violation of the provisions of the Customs Act, 1969, the Diplomatic Duty Free Bonded Warehouse Licence No. P.W.1-/3/90 issued to you Messrs Saman Diplomatic Duty Free Bonded Warehouse is liable to be cancelled under section 13(3) of the Customs Act, 1969.

Messrs Saman Diplomatic Duty Free Bonded Warehouse Karachi, are therefore, called upon to show cause within 15 days of the date of this notice as to why the Diplomatic Duty Free Bonded Warehouse Licence No. P. W. 1-3/90 issued to them should not be cancelled. Hearing is fixed for 2-12-2001 at 11-00 a.m. in the Chamber of the undersigned on 6th floor. Custom House, Karachi when you, your accredited lawyer or a duly briefed lawyer may appear to plead the

(5)If no reply is, received within the given time and no one appears for the personal hearing on the date and time so fixed, the case will be decided ex parte on merit on the basis of documents available on record.

(Sd.)

(ABDUL WAHEED KHAN)

Collector of Customs

Preventive

After recapitulating the relevant provisions of the Customs Act and the admitted facts, now we proceed to examine the respective

The crucial points in the instant appeal are that:--

(i)whether untrue statement in absence of its effect with regard to the non-levy or short-levy would have any penal consequences or not, the consignment being duty free.

(ii)Whether the Civil Court's jurisdiction is barred in view of the section 217(2) of the Customs Act.

The provisions of section 32 of the Act is the three parts. Subsection (1) pertains where an untrue statement has been made by any person in connection with any matter of customs knowingly or having reason to believe that such is false in any material particular, he shall be guilty of an offence under this section. Whereas, the substance, of subsection (2) is that by reason of any such document on statement, if any duty has not been levied or short-levied or has been refunded, in such event, it contemplates recovery process through show-cause, within specified time.

Pith and substance of the respondent's case is that the consignment is duty free, the alleged untrue statement has no consequence, therefore, the action of' the appellant is without jurisdiction.

Learned Federal counsel contention was that the jurisdiction of Civil Court in terms of section 9 is barred to try the suit of the instant nature as the cognizance thereof is expressly barred under section 217(2) of the Act. His further contention was that the respondent submitted to the jurisdiction under the customs hierarchy on receipt of show cause notice, therefore, once a party submits to the jurisdiction, they cannot bypass the remedy provided Under the Customs Act and to press into service the extraordinary civil jurisdiction of this Court by filing civil suit and to support his contention he referred the case of Commissioner of Income-tax, Companies-II and another v. Hamdard Dawakhana (Waqf), Karachi (PLD 1992 SC 847), wherein the tendency to bypass the remedy provided tinder the statute was disapproved by the apex Court that in cases where any party resorted to a statutory remedy against an order he cannot abandon or bypass it without any valid and reasonable cause and file Constitution petition challenging the same order. The relevant observations are as follows:--

"The tendency to bypass the remedy provided under the relevant statute and to press into service Constitutional jurisdiction of the High Court has developed lately, which is to be discouraged. However, in certain cases invoking of Constitutional jurisdiction of the High Court instead of availing of remedy provided for under the relevant statute may be justified, for example with the impugned order/action is palpably without jurisdiction and/or mala fide. To force an aggrieved person in such a case to approach the forum provided under the relevant statute may not be just and proper. "

There is no cavil with the proposition referred to above. It is to be examined whether the action challenged through suit is without jurisdiction or mala fide as contended by the respondent's counsel.

Reverting to the plea of ouster of jurisdiction, it was contended by the learned Federal Counsel that the term "jurisdiction signifies" power and authority of the Court to decide issues in exercise of its judicial functions with reference to the subject-matter territorial extent, pecuniary value of the claim involved, nature of dispute and maintained that violation of section 32 is subject to the adjudication proceeding which is within the jurisdiction of customs officials detailed in section 179 of the Act, therefore, the jurisdiction of. Civil Court is expressly barred. He referred the case of Rehmat Ali v. Additional District Judge, Multan (1999 SCMR 900), wherein the distinction between the term 'want or lack of jurisdiction' and `irregular exercise of jurisdiction' was highlighted as follows:--

'The word `Jurisdiction signifies' the power and authority of the Court to decide issues in exercise of its judicial functions. The jurisdiction of the Case has reference to (1) subject-matter, (2) territorial extent, (3) pecuniary value of the claim involved, (4) nature of dispute and (5) amenability of the parties to the process of the Court. The jurisdictional defect may arise with reference to absence of any of the afore-noted defects or there may be legal bar itself by a Statute or something else having the force of law. On account of existence of any jurisdictional defect, the judgment passed can be said to have been passed `without lawful authority' and illegal and can be set aside of the ground of want of jurisdiction.'

His second limb of the arguments, with regard to the jurisdiction of this Court, was that where statute creates a new duty or imposes a new liability, and prescribes a specific remedy in case of neglect to perform the duty or discharge the liability, the general rule is `that no remedy can be taken but the particular remedy prescribed by the statute'. In other words, `where an act creates an obligation', and enforces performance in a specific manner as a general rule that performance cannot be enforced in any other manner and to support his contention, has referred the view taken in Industrial Development Bank of Pakistan v. Allied Bank of Pakistan and another (PLD 1986 SC 74) and the observation made therein as follows:--

`The ordinary rule of construction applies to this case, that where the Legislature has passed a new statute giving a new remedy that remedy is the only one which can be pursued.'

His further submission was that the dictum of Abbasia Cooperative Bank and another v. Hakeem Hafiz Muhammad Ghous and 5 others (PLD 1997 SC 3) has not been understood in its true perspective. His contention was that it was a case of recovery of loan under the provisions of Cooperative Societies and Cooperative Banks (Repayment of Loans) Ordinance (XIV of 1966), wherein the borrower's property was put on auction as the borrower in spite of notice failed to pay the amount and property was auctioned to one Malik Abdul Aziz, being highest bidder and auction in his favour was confirmed. The borrower having come to know about the said auction immediately tendered the amount of loan through pay order which was not accepted by the Bank which led to the filing of the civil suit by the borrower against the Cooperative Bank and auction purchaser for declaration that auction proceedings culminating in the auction of suit property and recovery of loan were illegal, void and mala fide. A perpetual injunction was also asked for in respect of the suit property and further direction was sought for cancellation of the auction proceedings. The suit was resisted-by the Cooperative Bank and the auction purchaser. Two issues were framed:--

(1)Whether the Civil Court has no jurisdiction to entertain this suit?

(2)Whether the defendants' proceedings in respect of auction and 'confirmation etc, are illegal, void and inoperative?

The trial Court, after recording evidence of the parties came to the conclusion that the auction proceedings were not held in accordance with the law, as such declared void. On the issue of jurisdiction of the Civil Court in the matter, the Trial Court held that as the auction was not held in accordance with the law, the Civil Court had the jurisdiction to entertain the suit. The judgment and decree of the trial Court was, however, set aside by the First Appellate Court in appeal and the suit filed by the borrower was dismissed on the ground that the jurisdiction of Civil Court to adjudicate the controversies raised in the suit was specifically barred under the provisions of Ordinance, (No XIV) of 1966. The decree of First Appellate Court, was assailed in civil revision before the High Court, which was allowed by learned Single Judge, whereby the judgment and decree passed by the trial Court was restored after setting aside the judgment and decree of the First Appellate Court.

The Bank and the auction purchaser filed petition for leave to appeal which was refused. It was noticed that the procedure for recovery of loan under section 8 of the Ordinance is the same which is prescribed under the Land Revenue Act. The procedure for conducting sale of immovable property for recovery of arrears of land revenue is contained in sections 92 to 112 of the Act (analogous provisions for sale and its confirmation and right of the judgment debtor for setting aside, the sale as contained in Rule 66 to 92 of Order 21, C.P.C.). It was also noticed that the auction sale was advertised on 15-4-1972 which took place on 18-4-1972 and confirmed on 19-4-1972. The apex Court concluded that the auction sale was to be conducted in accordance with the provisions of the Act, the auction sale in the present cases besides having been conducted with undue haste, was in utter disregard of the provisions of the Act application to such sale". The point of jurisdiction was commented as follows:--

`The Civil Court under section 9 of the Code of Civil Procedure are competent to try all suits of civil nature except those of which their jurisdiction is barred either expressly or by necessary implication. It is a well-settled principle of interpretation that the provision contained in a statute ousting the jurisdiction of Courts of general jurisdiction is to be construed very strictly and unless the case falls within the letter and spirit of the barring provision, it should not be given effect to. It is also well-settled law that where the jurisdiction of the Civil Court to examine the validity of an action or an order of executive authority or a special Tribunal is challenged on the ground of ouster of jurisdiction of the Civil Court, it must be shown (a) that the authority or the Tribunal was validity constituted under the Act; (b) that the order passed or the action taken by the authority or Tribunal; was not mala fide; (c) that the order passed or action taken was such which could be passed or taken under the law which conferred exclusive jurisdiction on the authority or Tribunal; and (d) that in passing the order of taking the action, the principle of natural justice were not violated. Unless all the conditions mentioned above are satisfied, the order or action of the authority or the Tribunal would not be immune from being challenged before a Civil Court, as a necessary corollary, it follows that where the authority or the Tribunal acts in violation of the provisions of the statutes which conferred jurisdiction on it or the action or order is in excess or lack of jurisdiction or mala fide or passed in violation of the principles of natural justice, such an order could be challenged before the Civil Court in spite of a provision in the statute barring the jurisdiction of Civil Court.

Conversely, Mrs. Navin S. Merchant, learned counsel for the respondent contention was that in absence of any loss of revenue, a statement with is purported to be untrue has no penal consequences, therefore, the jurisdiction assumed by the appellant was without jurisdiction and mala fide, therefore, the plea of bar of jurisdiction is not available in the present case and in support of her contentions, she has referred the Division Bench decision, dated 1-6-1999 of this Court consisting of one of us (Mr. Justice Shabbir Ahmed) with Mr. Justice Rana Bhagwandas (as he then was) in Deputy Collector of Customs (Appraisement) and another v. Messrs K.G. Traders and another (H.C.A. No. 213 of 1997), wherein the similar plea was raised by the learned Standing counsel that this Court has no jurisdiction in the matter in view of ouster of jurisdiction under the provisions of section 217(2) of the Customers Act, such plea was addressed as follows:--

`It is now settled that ouster of the jurisdiction can be claimed when the impugned order/action is found to be within four corners of the statute under which it is passed or taken. It is the consistent view of the superior. Courts that the provisions contained in statutes barring the Court of general jurisdiction is to be construed very strictly and unless the case falls within letter and spirit of the barring provision it would not be given an effect. Thus the view taken by learned Judge is in conformity with the view of the superior Court and gets support from the dictum given by the Supreme Court in case of Abbasia Cooperative Bank v. Hakeem Hafiz Muhammad Ghous (PLD 1997 SC 3).

Her further contention was that once an order passed or action taken under-a statute is not within the four corners of that Act, such order/action would be without jurisdiction and she referred the case of Abdul Rauf and others v. Abdul Hamid Khan and others (PLD 1995 SC 671) that whatever the phraseology employed, any provision in an enactment saying that orders passed under the enactment or by virtue of the powers conferred by the enactment would not be liable to challenge in a Court of law has reference only to orders passed with jurisdiction. It can be settled as a general rule, without reference to the language used in an enactment, that barring provisions like those with which are here concerned apply only to orders passed with jurisdiction. It was further held that the decision of the question whether the Civil Court had jurisdiction the present case would depend on whether the impugned orders and proceedings were without jurisdiction---------------A mala fide act is by its nature an act without jurisdiction. No Legislature when it grants power to take action or pass an order contemplates a mala fide exercise of power. A mala fide order is a fraud on the statute. It may be explained that a mala fide order means one which is passed not for the purpose contemplated by the enactment granting the power to pass the order, but for some other collateral or ulterior purposes.

The following ratio are deducible from the cases cited at the bar:--

(i)The Civil Courts under section 9 of the Code of Civil Procedure are competent to try all suits of civil nature except those of A which their jurisdiction is barred either expressly or by necessary implication.

(ii)The provisions contained in a statute ousting the jurisdiction or Court of general jurisdiction is to be construed very strictly and unless the case falls within the letter and spirit of the barring provisions, it should not be given effect to.

(iii)The bar of jurisdiction could never be sustained if it could be shown that the impugned order/action was passed/taken not in C bona fide exercise of powers conferred by the Act or the Rule.

(iv)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.

(v)Where the jurisdiction of Civil Court is challenged on the ground of ouster of jurisdiction of the Civil Court, it must be shown that the Authority or the Tribunal was validly constituted under the Act and that the order passed or the action taken by the authority or tribunal was not mala fide; and that the order passed or action taken was such which could be passed or taken under the law which conferred exclusive jurisdiction on the authority or Tribunal; and that in passing the order of taking the action, the principles of natural justice were riot violated. Unless all the conditions mentioned above are satisfied, the order or action of the authority or the Tribunal would not be immune from being challenged before a Civil Court.

(vi)Where the Authority or Tribunal acts in violation of provisions of statute which conferred the jurisdiction on it or the order is exercised in lack of jurisdiction or mala fide or passed in violation of principles of natural justice, such order could be challenged before the Civil Court in spite of provision of statute, barring the jurisdiction of Civil Court.

Now the decision of the question whether this Court had jurisdiction in the matter would depend on the finding that impugned action and proceedings were without jurisdiction.

The next point is whether untrue statement in absence of any effect on non-levy/short-levy has no penal consequences.

In Messrs Eastern Rice Syndicate v. Central Board of Revenue (PLD 1959 SC 364), with reference to the provisions of section 39 of the late Sea Customs Act, 1878, which is analogous,' to section 32 of Sea Customs Act, 1969, the effect and import of term "untrue" was examined while exercising the appellate jurisdiction, the comments are as follows:

'The essence of this penal provision appears to be that the offender has obtained an advantage at the hands of the Customs Authorities or has induced them to take some form of action authorized by the statute, by making a statement which `is untrue in any material particular'. There need be no doubt whatsoever that the word `untrue' carries the sense of falsity to the knowledge of the person concerned.

The import of the dictum of apex court in Eastern Rice Case is that in order to attract the provisions of this section (32) an oral or written statement must be untrue and not merely false. In other words, falsity of a statement must be. in the knowledge of the person concerned.

In 1981, section 32 was amended whereby the expression `such document or statement is untrue in any material particular' was substituted by the expression `knowing or having reason to believe that such document or statement is false' by Ordinance XXVII of ,1981.

In Messrs Kamran Industries v. The Collector of Customs (PLD 1996 Kar. 68) -referred by the respondent's counsel pertains to goods imported in E.P.Z. exempted from the payment of duty and it was held that till such time the exemption under S.R.O. 881(1)/80, dated 23-8-1980 is intact or a like facility is brought about the Customs Authorities have no jurisdiction to look into the question of under valuation, calculation of duties and mis description of goods imported into the E.P.Z., and therefore, the actions of the Customs Authorities were declared to be completely bereft of jurisdiction.

Learned counsel for the respondent has also maintained that in order to attract the provisions of subsection (1) of section 32 it is necessary to allege that person who make 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 such requirement renders the notice without jurisdiction and to support her contention reference was made by her to the case of Ebrahim Textile Mills v. Federation of Pakistan (PLD 1989 Lah. 47).

Her further contention was that the provisions of section 32 has been misapplied by the appellants as the untrue statement attributed to the respondent has not resulted in non-levy/short-levy of duty. In short, there has been no loss or evasion of any revenue by the respondent and to support her contention, she referred the view taken by the, Division Bench of this Court in Messrs. Al-Hamd Edible Oil (P.) Ltd. and others v. Collector of Customs and others (2003 PTD 552) that a bare reading of the section clearly indicates that it relates to a situation where a parson makes any statement or files any document which is false in any material particular by a reason of which any duty or charge is not levied or is short-levied or is refunded. In such event, the Customs Authority is empowered to issue to the person concerned a notice to show cause why he should not pay the loss of revenue suffered by the Department and after giving him a hearing, beside any other caution under law, order payment of the same, if a case is made out. The entire provision revolves around the central point of loss of revenue suffered by the Customs Department on account of the conduct of any person. It was not urged that the Department has suffered any loss on account of the conduct of the appellants. The question of applicability of section 32 in the present circumstances apparently does not arise.

She also referred the case of Assistant Collector Customs and others v. Messrs Khyber Electric Lamps (2001 SCMR 838). In above case, demand notice for payment of alleged short-levy were issued, though no pre-requisite show-cause notices as required under sub sections (2) and (3) of section-32 were given to respondents, to show cause as to why they should not pay the defaulted amount, which was challenged in the writ jurisdiction that in absence of statutory show-cause notices the demand notices were without jurisdiction.

It was held that it is well-settled proposition of law that a thing required by law to be done in a certain manner must be done in the same manner as prescribed by law or not at all. The pre-requisite show-cause notices as required by law have not been served on the respondents, therefore, no straightforward demand notice for payment of alleged short-levy could be issued. Show cause notices under subsections (2) and (3) of section 32 of the Act are two distinct and separate types of notices as different grounds and different period for service. The writ petition was allowed and the notices were found to be defective and not in accordance with law and such were stuck down. The leave was granted to consider the contentions that the learned Judges after having reached the conclusion that the notices, dated 25-7-1995 served on the respondents were not in accordance with the Law i.e. under section 32(2)(3) of the Customs Act, should have either remanded the cases to the Customs Authorities or, left it open to them to proceed against the respondents in accordance with the law instead of merely declaring such notices to be as without lawful authority and of no legal effect. And that whether the goods cleared by the respondents by declaring them as raw material, were in fact raw material of a sub component, was a question of fact which could only be determined by the Customs Authorities and the learned Judges of the High Court could not, in exercise of jurisdiction under Article 199 of the Constitution, record a binding finding in this behalf.

The apex Court observed that `it is necessary under sub section (1) of section 32 of the Act to show that the declarant had the knowledge or had the reason to believe that declaration or statement made by him was untrue/false and in absence of such allegation notice would be vague and would not be in accordance with law. Similarly, notice under subsection (2) of section 32 of the Act must contain the allegation of collusiveness and notice under subsection (3) of section 32 of the Act should speak of inadvertence, error or misconstruction and without such allegations the notices would be defective and against law. It was ruled that notices under the relevant subsection of section 32 of the Act had to be served on the importer within the specified time but it failed to issue/serve any such show-cause notice in accordance with law, therefore,, in absence of statutory notice, demand notices were without lawful authority and thus, of no legal effect. The contention of the appellants counsel did not find favour that the High Court should have remanded the case to the Customs Authorities for proceedings in accordance with the law for the reason that the period prescribed by law for service of notices has already expired and it would be a futile exercise in remanding the cases to the Customs Authorities. In case of Federation of Pakistan v. Messrs Ibrahim Textile Mills (1992 SCMR 1898), it has been ruled that in case of short-levied duties on account of inadvertence, error or misconstruction. Section 32(3) of the Act provides, that for recovery, notice shall be served within six months, if that is not done, like a suit for recovery of money after lapse of time prescribed by law of limitation, the recovery becomes unenforceable and the appeal was dismissed.

Conversely, Learned Federal counsel contention was that the respondent has admitted the substitution of the words "GBP" with 'US,$' after the attestation of the invoices by the Consulate of Pakistan, Glasgow deliberately and knowingly which amounts to misdeclaration, that fact has not been disputed by the respondent but their plea is that the invoices were submitted to Pakistan .Embassy, Glasgow for attestation when the invoices were returned to them, they realized that there had been an error made regarding the currency. The currency should have been in US$ and not Ponds. 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. His further contention was that in view of such position, the provisions of subsection (1) of section 32 ibid is attracted, which has penal consequences. He further maintained that it is wrong to contain that if an untrue statement do not effect the revenue due to non-levy or short-levy, it would have no consequences. His further contention was that ratio decided in cases of Kamran Industries and Al-Hamd Edible Oil are not applicable to the instant case as in above cases the question involved were of non-levy or short-levy and exemption from the customs duty of goods imported in E.P.Z. He maintained that if a mis statement was made to, avoid payment of duty or with object of short levy of duty then the provisions of subsection (2) would be attracted. If such mis-statement has other consequences such as, with the object of importing goods which were totally prohibited for import the provisions of section 32 (1) would be attracted. He pointed out that on account of under-invoicing the respondents have imported excess quantity of liquor than permissible limit, attracting the provisions of provisions. of section 2(s)(ii). Thus an offence of smuggling and to support his contentions he referred the case of Messrs Baba Khan v. Collector of Customs Quetta and 2 others (2000 SCMR 678), wherein while interpreting section 32(l), the apex Court ruled that if a statement is untrue in any material particulars and that the statement or declaration is made in `connection' with any matter of Customs and if mis declaration was made to avoid payment of duty or with the object of avoiding payment of duty or with the object of importing goods which were totally prohibited of import.

Learned Federal counsel also pointed out that the suit filed by the respondent was based on cause of action accrued to them on 9-7-2001, when the application for renewal of licence and issuance of import permit were filed and the appellants inaction resulted in non renewal of licence and non-issuance of import permit. Though show cause notice, dated 18-12-2060 was received by the respondent with regard to the adjudication proceedings and cancellation of licence/non renewal. The respondent participated and such proceedings culminated by order, dated 19-10-2002. He pointed out that the said order was produced during hearing aped the learned Judge also considered and examined the said order without amendment in the pleadings, as if the learned Judge was exercising the appellate jurisdiction though the appellate jurisdiction under the Act lies with the Appellate Tribunal Customs). His further submission was that the factual controversies whether the statement was untrue To the knowledge of the respondent was within the domain of the adjudicating authority and Appellate Authority under the Act and the Civil Court has no jurisdiction to examine the factual aspect by assuming the appellate jurisdiction.

His second contention was that the learned Judge has also recorded the finding (if fact, ors extraneous ground not borne out from the record, that neither loss of revenue has been caused by under invoicing nor the liquor has been imported in excess of permissible quantity, on the contention of respondent's counsel attributed to Mirza Yousuf Baig; contention so recorded are:---

`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 Bonded Warehouse in excess of permissible quantity. He also pointed out that the learned Judge further recorded that Mirza Yousuf Baig. Appraising Officer further stated in Court that it was not possible to store, excess quantity of liquor in the Bonded Warehouse a the entire process is computerized and once the permissible quantity is stored the computer is automatically blocked.'

Learned Federal counsel also pointed out that on the basis of above contention of the learned counsel of the respondent, the learned Judge recorded the following finding:--

`in view of the undeniable fact that no excess quantity of liquor was stored or appeared to be stored by the plaintiff in the Bonded Warehouse than the permissible under the licence and held that no infringement of any condition laid down in the licence oar violation of any provision of Customs Act.'

He pointed out that Mirza Yousuf Baig was not examined during presence before the Court was noticed during the He also criticized the above findings by contending that learned has accepted the statement of respondent counsel at the bar with of a fact attributed to an official of the appellants made by the counsel of the respondent is neither t nor a fact proved merely a hearsay.

We have examined the proceedings of suit particularly, the order sheet, dated 11-6-2002, 15-9-2002 to 30-9-2002, 7-10-2002. 14-10-2002., 21-10-2002 and 23-10-2002, to verify the presence of Mr. Mirza Yousuf Baig, the Appraising Officer in Court and the purported admission made by him. We may record that neither his presence is reflected to the orders referred to above, nor the purported admission is on, the record.

Learned counsel for the respondent was not able to rebut the contentions of learned Federal Counsel that on production of the order, dated 19-10-2002, the learned Judge has examined and discussed the order in paras. 29 to 32 of the judgment in the manner as if the learned Judge was exercising the appellate jurisdiction.

Likewise the finding of undeniable fact; recorded by the learned Judge that no excess quantity of liquor was stored in the Bonded Warehouse near excess quantity was imported, therefore, no infringement of condition of the licence'. Such findings recorded by the learned judge is against the provisions of Article 71 of the Qanoon-e-Shahadat Order. Therefore, are liable to be erased from tire record, accordingly the following findings are set aside:--

'In view of the undeniable fact that no excess quantity of liquor was stored or appeared to be stored by the plaintiff in the Bonded Warehouse than the permissible under the licence and held that no infringement of any condition laid down in the licence or violation of any provision of Customs Act.'

Mrs. Navin S. Merchant lastly has made a feeble attempt to persuade us to believe that the licence of Bonded Warehousing is coupled with interest in favour of the respondent on account of investment of colossal amount of funds in setting up the Bonded Warehouse.

We may observe that the investment of colossal amount of funds in setting up the Bonded Warehouse and necessary infrastructure will not make the licence coupled with interest, thus irrevocable. In our view, setting up Bonded Warehouse with infrastructure facilities, employment of necessary staff was essential for carrying on the business of Bonded Warehouse. These acts were neither interior to the-licence nor were consideration to such right of the respondent. Therefore, it cannot be a licence coupled with interest.

Federal counsel is right in his submission that it is wrong to contend that the declaration or statement which is untrue in any material particular in absence of any non-levy or short-levy would be of no consequences, such statement may attract other provisions of the Act: The case of the appellants is that the invoices basically attested by the office of Pakistan Consulate in Glasgow have been tampered with by substituting the words "GBP" with words "US $" by changing the "GBP" currency into "US$" thus the respondent undervalued the cargo only to bring more quantity of 'liquor than permissible, limit. The substitution of the GBP with US$ in invoices After the attestation by Consulate at Glasgow is not dispute. It is also not disputed that the exchange rate of US$ and Pound Sterling is not equivalent. It is the case of the appellant that by such act, the respondent by showing low invoice value (under-invoicing), they succeeded in bringing into the country against their permissible limit a much larger quantity of the liquor than which they could have brought, had they not manipulated the invoices by substituting currency of invoices by US$ in place of GBP. In absence of short-levy or non-levy, the misdeclaration in terms of section 32(1), the consign ment being liquor will bring the case of excess quantity within the mischief of section 2(s)(ii) of the Act and this view gets support from the case of Messrs. Baba Khan (supra) that the wrong declaration or mis-1 statement would not only attract the non-levy/short-levy. If, it is with object of importing goods which are totally prohibited for the import as well.

We may state that whether the fact of untrue statement with material particulars, i.e., currency, was with the knowledge of the respondent or not is the question determinable by the adjudication officer. Likewise, whether excess quantity of liquor was imported by under-invoicing is also a fact determinable by the same fora.

The next point is whether the jurisdiction assumed by the functionaries of Customs were in accordance with the law.

We have reproduced the show-cause notice in extenso and the conclusion reached by order, dated 19-10-2002.

The perusal of show-cause notice reproduced in earlier part of the judgment would show that paras. 1 to 2 thereof are the narration of facts, whereas, para. 3 contains grounds for cancellation of licence, whereas, para. 4 contains the show-cause with regard to the cancellation of licence only. On the basis of said notice appellant No.2 simultaneously proceed, with adjudication proceedings as well as cancellation proceedings.

We may point out that pre-requisite for initiation of the adjudication proceeding is the service of statutory notice under section 180 of the Act which requires that no order under this Act shall be passed for the confiscation of any goods or for imposition of any penalty on any person, unless the owner of the goods is informed in writing of the grounds on which it is proposed to confiscate the goods or to impose the penalty and the requirement of section is he be given reasonable opportunity of being heard.

We may also state that the `adjudication proceedings' and cancellation proceedings are two distinct and separate proceedings. The outcome of the former proceedings could be a ground for initiation of the latter proceedings The former proceedings by Adjudicating Authority and latter by appropriate officer.

The show-cause notice for cancellation of licence in the instant case was issued with pre-supposition of proved violation of the provisions of section 32 of the Act, in absence of any finding. The refusal by appellant No.1 to issue import permit also suffers from the M same defect. Therefore, we are of the view that the proceeding initiated on show-cause notice, dated 18-12-2000 by the Customs is not within the four corners of the Act, therefore, the plea of ouster of jurisdiction is not available to the appellants.

We here set aside the finding recorded by learned Judge on the material points except the issue of ouster of jurisdiction, therefore, we allow the appeal and set aside the judgment and decree. The appellant would be at liberty to initiate the adjudication proceedings in accordance with law by serving the pre-requisite notice under section 180 ibid and conclude the same within three months, once the proceeding is terminated and findings is recorded against the respondent. Further steps may be taken in accordance with law.

With the above observations, the appeal stands disposed of, however with no orders as costs.

S.A.K./F-1/KOrder accordingly.