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

----Ss.168 & 169---Constitution of Pakistan (1973), Art, 199-- Constitutional jurisdiction of -High; Court---Scope---Disputed facts-- Seizure of imported goods by, the Customs Authorities ---Validity-- Contention of the Department was that the petitioner/importer had imported counterfeit goods and had also made misdeclaration in that behalf---High Court declined. to consider such contention for the reason that it was a question of fact which could not be ascertained and decided in exercise of the jurisdiction under Art.199 of the Constitution---High Court, under said jurisdiction could consider the admitted facts and the actions taken by the Department during the pendency of the Constitutional petition and could examine whether the Department had exercised their jurisdiction in accordance with law or had acted otherwise than in due course of law.

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

----S. 168(1)---Seizure of things liable to confiscation ---Concept-- Blockade of goods by an appropriate officer amounts to seizure within the contemplation of S.168(1) of the Customs Act, 1969.

Syed Muhammad Razi v. Collector of Customs and others C.P. No. D-713 of 2003 fol.

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

---Ss.168(1), (2) & 171---Provisions of Ss.168(1), 168(2) .& 171, Customs Act, 1969 are to be read together.

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

----Ss.168 & 171---Seizure of things liable to confiscation--Procedure-- If no grounds of seizure have been served as required under S.171, Customs Act, 1969 the order' under S.168, Customs Act, 1969, is rendered ineffective---Principles.

It is provided in section 168(1) of the Customs Act, 1969 that the appropriate officer, may seize any goods liable to confiscation under the Customs Act, 1969. The mandatory requirement contained in section 171 is that, when anything is seized or any person is arrested under the Customs Act, 1969; the officer or other person making such seizure or arrest shall, as soon as may be, inform in writing the person so arrested or the person. from whose possession, the things are seized, of the grounds of such seizure or arrest.

If no grounds of seizure have been served as required under 'section 171 of the Customs Act, 1969 the order under section 168 is rendered ineffective. and the owner/the person from whose possession the goods are seized is entitled to delivery of the goods.

Section 171 requires that when anything is seized, the officer making such seizure shall, as soon as may be; inform in writing the person from whose, possession the things are seized, of the grounds of such seizure or arrest.

N6n-compliance of the provisions contained in section 171 of the Customs Act, 1969 renders the seizure of goods illegal.

The things should be done as they are required to be done or not at all and the orders are to be made by the officer/authority specified in the law and not by any other person on his behalf until and unless authorized to do so in law. A bare reading of section 171. of the Customs Act, 1969, shows that, "the officer or other person making such seizure or arrest shall, as soon as may be, inform in writing the person so arrested or the person from whose possession the things are seized, of the grounds of such seizure or arrest". The language used by the Legislature is very clear and the officer or other person making the seizure has been enjoined upon to record the reasons of seizure/arrest in writing and inform the, same to the person arrested or the person from whose possession the things are seized. The law requires that` the officer or other person making seizure shall as soon as may be, inform the reasons for such seizure. It does not authorize or empower any other superior or subordinate officer to assign the reason for seizure and inform the same to the person arrested or from whose possession thing is seized.

Ilam Khan v. Government of Pakistan 1983 CLC 786; Muhammad Mahfooz v. Collector of Customs PLD 1986 Kar. 28 and Shaukat Hussain v. Zulfiqar Ahmed and others PLD 1981 Lah. 1318 ref.

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

----Ss.168, 171 & 180---Seizure of things liable to confiscation-- Extension of period for issuance of notice under S.180 of the Customs Act, 1969 by the Collector---Requirements to be complied with by the Collector--Guidelines by High Court. '

There appears to be no application of mind by the Collector of Customs, in the present case, while extending the period of limitation, he has not made any query from the Directorate of Intelligence as to what progress was made in the case in between 26-5-2003 when the goods were seized and 23-7-2003 when the extension of time under section 168(2) vas sought. The learned Collector did not examine that till then neither any notice was issued under section 171 of the Customs Act, 1969 nor any progress was made in the matter. The Legislature while enacting various provisions in the Customs Act has on the one hand empowered the Customs Officials to protect the State revenue and the evasion of tax, and at the same time has provided safeguards to the citizens so that the citizens may not be left at the vagaries of the tax officials and are not dealt with in an arbitrary manner. It goes without saying that any arbitrary act by its very nature is negation of the rule of law and has to be struck down in whatever manner and form it may be. The Legislature has thus, by empowering the tax officials on one hand for protecting the State revenue, has provided safeguards to the citizens on the other hand the by creating a check and balance. The provisions contained in sections 171 and 168(2) of the Customs Act, 1969 are in the nature of safeguards provided to the citizens. The period of two months provided in section 168(2) for issuance of notice under section 180 is not without purpose. The intention of the Legislature is that the citizens should not be left at the mercy of the tax officials for indefinite period. The Investigating Department including the appraisement officers are required to initiate the action for any violation of the provisions contained in the Customs Act, 1969 expeditiously and the adjudicating officers are required to apply their minds to the material placed before them in the contravention report and to decide within the period of two months if they intend to proceed with the adjudication, otherwise the person whose goods have been seized becomes entitled to the return of the seized goods.. However, if any offence has been committed the offender is not absolved of its civil/or criminal liability and the goods seized are to be returned if no notice is issued under section 180 within two months of the seizure of goods. This period can be extended by the Collector only and that too for the reasons to be recorded in writing. The extension of period is not to be granted without application of mind and without reasons to be recorded in writing. If these conditions are not fulfilled the extension of period under proviso to subsection (2) of section 168 is not sustainable in law.

The Collector of Customs, while extending period provided in section 168(2) has acted mechanically and therefore, extension of time under proviso to section 168(2) is of no avail. When the Legislature has provided for recording reasons in writing by Collector of Customs, he is required to apply his mind and after making an objective assessment, if he comes to the conclusion that the extension of time is to be granted he has to grant the same. Mere reference to the request made by the Investigating Officers, would amount to grant the extension in a mechanical manner and thus, it is not in consonance with the intention of the law. A practice has developed in the Customs Department whereby the orders are being made mechanically. It is evident from the fact that a statement has been produced, in the present case, to the effect that the investigation in the case has been completed and seizure report has been submitted to the competent authority alongwith draft show-cause notice in respect of the petitioners for initiation of adjudication proceedings. The proceedings before Adjudicating Officer, under the Customs Act, 1969 are in the nature of quasi-judicial proceedings and issuance of notice under section 180 of the Customs Act, is very important document. The decision to issue show-cause notice is to be taken by the Collector Adjudication, by application of independent mind and not merely signing the draft show-cause notice submitted by the investigating agency. The conducting of investigation/inquiry has been assigned to an agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice to submit draft show-cause-notice by the Director General of Intelligence and Investigation to the Collector Adjudication is deprecated. It is for the C.B.R. which is occupying the apex position in the hierarchy of tax administration to ensure that the Collector Adjudication while granting extension under provisions of section 168(2) and issuance of notice under section 180 applies his own independent mind and no mechanical orders are made at the instance of Intelligence and Investigating Officers.

Abdul Zahir v. Director-General, Pakistan Coast Guards PLD 1990 Kar. 412 and Haji Noorul Haq v. Collector of Customs and others f998 MLD 650 ref.

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

----Ss.168, 171, 180 & 32---Constitution of Pakistan (1973), Art. 199-- Constitutional petition- --Seizure of things liable to confiscation---Goods in question were appraised and assessed to the customs duties and taxes and duties so assessed had already been deposited---Customs Authorities; in circumstances, were not entitled to retain the goods and such action on their part was illegal and without authority-- -Customs Authorities were directed by the High Court to release the goods forthwith to the importer with observation that Department would be at liberty to take appropriate action in accordance with the law---Principles.

Messrs Yousuf Re-Rolling Mills v. Collector of Customs (Appraisement, Karachi 1986 CLC 77 fol.

(g) Administration of justice---

---- Things should be done as they are required to be done or not at all and the orders are to be made by the Officer/Authority specified in the law and not by any other person on his behalf until and unless authorized to do so in "law.

S. Ali Bin Adam Jafri for Petitioner.

Syed Tariq Ali for Respondent No. 1.

Ashfaq Ali Khan, I.O. for Respondent.

Mohsin Inam for Respondent No.4.

Dates of hearing: 7th; 26th August; 3rd and 9th September,

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The petitioner engaged in the import business is aggrieved with the order of the respondents, whereby the goods imported by the petitioner are not being allowed to be released.

The relevant facts as gleaned from the material placed by the parties on record are that the petitioner imported consignment containing dry battery cells, small, antina for mobile phones and ear-phone from China against IGM No.791 of 2003, dated 21-5-2003. The Bill of Entry was submitted on 22-5-2003. The release of goods was blocked on 26-5-2003 by Deputy Director Intelligence Customs on the basis of some information received by the said officer.' According to petitioner the appraisement of the goods was finalized and assessment was made on 27-5-2003 levying custom-duty and taxes at Rs.3,58,050. The amount of duty and taxes assessed was deposited in the National Bank of Pakistan on 28-5-2003. However, the consignment was not released for the reason that it was blocked. On the insistence of petitioner for the release of goods he was served with the notice under section 26 of the Customs Act 1969, dated 11-6-2003 on 16-6-2003. The petitioner was called upon to furnish information/documents as follows:--

(i) Copy of pro forma invoice.

(ii) Mode of payment as is governed by the rules and procedure prescribed by the State Bank of Pakistan.

(iii) Proof of payment/transaction of foreign exchange.

The information sought for was furnished however, the goods were not released with the result that the petitioner filed this petition on 23-6-2003 seeking declaration that the blocking of goods was illegal and a direction for the release of goods. Notices were issued to the respondents who sought time. On 24-7-2003 it was stated on behalf of the respondents that there was apprehension that the goods imported were not original and the investigation was in progress. On the said date a Division Bench of this Court directed the respondents to complete the investigation within two weeks and if anything Wrong was found notice be given to the petitioner. The petitioner apprehended that the contents of the container may be changed and therefore, it was directed that the container be opened and sealed in presence of the petitioner. The respondents did not comply with the direction and submitted that there was some confusion and further time was allowed for complying with the direction of the Court, dated 24-7-2003. The Seizure Report, dated 6-8-2003, was submitted on 7-8-2003. The Seizure Report, dated 6-8-2003 was not in accordance with the directions given by the Court on 24-7-2003, therefore, further directions were given for making compliance of the directions given by the Court. Finally compliance report was submitted on 26-8-2003.

The respondents filed their comments stating that the release of imported goods were blocked on the basis of information received by them to the effect that counterfeit mobile phones accessories and watches were being imported. The respondents submitted that the container was examined by a team of Custom Officials and it was found that the container was containing the goods other than the goods declared in the Bill of Entry. They further contended that samples were taken, and market survey was conducted. For ascertaining the correct facts notice under section 26 of the Customs Act was served. They further stated that the local dealers were requested to give opinion about the genuineness of the imported goods but the local dealers did not cooperate with the Customs Officials. The contact was thereafter established with the manufacturer at Japan through Director-General of Intelligence and Investigation (Customs and Excise); Islamabad.

The respondents alleged that they were competent in terms of sections 168 and 198 of the Customs Act, 1969 to detain/seize goods. They stated that the petitioner could not take the delivery of goods as the container was blocked/stopped on the basis of information received by the Directorate of Investigation. They further took plea that the petition was premature.

The respondents have produced copy of Seizure Report, dated 6-8-2003 containing the same facts as narrated in the comments filed before this Court. They have further produced copy of letter, dated 6-8-2003 addressed to Collector of Customs, Central Excise and Sales-tax (Adjudication-I) Custom House, Karachi whereby seizure report and a draft show-cause-notice was forwarded requesting initiation of adjudication proceedings against the petitioners.

The notice under section 168(1) of the Customs Act, 1969, dated 6-8-2003 issued by Ashfaq Ali Khan, Seizing Officer/Investigating Officer, has also been produced. Through this notice Messrs Megatrans Private Limited, the shipping agent was informed that the staff of Director-General Intelligence and Investigation (Customs and Excise), Karachi has seized foreign origin goods i.e. electronic parts of different countries imported from China through I.G.M. No. 791,. dated 21-5-2003: It further contains that the goods have been imported in violation of the provisions contained in sections 15,16,18,25,32(1)(2) and 79 of the Customs Act, 1969. It further contains that the shifting of seized goods to the Intelligence State Warehouse is not practicable therefore, the above seized goods were given in the Superdari of shipping agent in terms of -section 168(1). The shipping agent was directed not to remove, part with, alter; shift, mortgage or deal with, the seized property under any circumstances without prior permission of the' Directorate of Intelligence and Investigation (Customs and Excise).

The respondents have further produced a notice section 171 of the Customs Act, 1969, dated 6-8-2003 issued and signed by the same officer Ashfaq Ali Khan, describing himself 'as Seizing Officer. Through this notice the Investigating Officer has informed the reasons for the seizure of goods to the effect that they were imported in violation of various sections of the Customs Act, enumerated in the notice under section 168. It was further stated that the goods were misdeclared and grossly under-invoiced. It was informed that as per inventory-sheet the goods were seized. Copy of Mashirnama, dated 6-8-2003 has also been produced. It has been further contended that the Collector of Customs and Central Excise and Sales Tax (Adjudication-1) extended the time limit under section 168121 of the Customs Act, 1969 vide order, dated 23-7-2003 up to 26-8-2003 and a show-cause notice under section 180 has been issued on 19-8-2003 within the extended period as provided in proviso to section 168(2) of the Customs Act, 1969.

We have heard, Syed Ali Bin Adam Jafri learned counsel for the petitioner and Syed Tariq Ali, Federal Counsel assisted by Mr. Ashfaq Ali Khan, Investigating Officer, for respondent No. 1, Mr. Mohsin Inam. learned counsel for respondent No.4.

Mr. Ali Bin Adam Jafri, learned counsel for the petitioner has vehemently argued that the respondents Nos.2 and 3 in collaboration with Mr. Ashfaq Ali Khan, Investigating Officer, have illegally acted in blocking the goods imported by the petitioner with mala fide intention.. He has submitted that the Bill of Entry was filed on 22-5-2003 and the consignment was duly appraised and assessed to custom-duty and taxes on. 27-5-2003. The release of consignment was blocked on 26-5-2003 by the respondent No.2, Saifuddin Junejo , Deputy Director, Intelligence, Karachi, without assigning any reason as is evident from, the document produced by the petitioner and admitted by the respondents. He has further contended that the goods were seized by blocking the release thereof on 16-5-2003, however, no reasons whatsoever, were informed to the petitioner as required under section 1'71 till 6-8-2003. He has further submitted that the mala fide on the part of Custom official is evident from the fact that the goods were seized by blockage on 26-5-2003 under the purported orders of respondent No. 2, Mr. Saifuddin Junejo, Deputy Director, Intelligence, Karsaz but the order under section 168, dated 6-8-2003 is signed by the Intelligence Officer posing himself as, Seizing Officer. He, has further pointed out that the notice under section 171, dated 6-8-2003 has also been issued by Mr. Ashfaq Ali Khan, Intelligence Officer, describing himself as Seizing Officer, although in their comments the respondents have stated that a request was received from Regional Intelligence Laison Office (RILO) for Asia and Pacific Region C/o Tokyo Custom vide fax message, dated 7-5-2003 to monitor two containers destined for Karachi and other tax .message was received on 12-5-2003, therefore, vide letter, dated 26-5-2003 annexure `C' with the comments filed 'by the respondents, the container containing the goods imported by the petitioner was blocked. The letter, dated 26-5-2003 is signed by the respondent No.2 Mr. Saifuddin Junejo. Thereafter no other order was passed by any - Custom official pertaining to the seizure of goods and on the insistence of petitioner for the release of goods after the appraisement and assessment on 27-5-2003 a notice under section 26, dated 11-6-2003 was issued by the respondent No.3. Mr. Ali Bin Adam Jafri, has vehemently argued that according to the comments filed by the respondents the goods were seized by blockage under the directive of respondent No.2, Mr. Saifuddin Junejo and therefore, he was required to pass order under section 168 assigning reason as to why goods were liable to confiscation and to communicate the reasons for the seizure of the goods as required under section 171. He has further submitted that in their parawise comments the respondents have stated that after the appraisement and assessment and determination of duty and taxes the container containing the goods imported by the petitioner was examined by a team of officers of the Directorate , of Intelligence and Investigation (Customs and Excise), Karachi and it was found by-them that the container was also containing the goods other than the goods declared in the relevant Bill of Entry. Mr. Jafri has maintained that nor such inspection/examination report of the team of officers has been produced and the date of such examination has not been given in the comments. Mr. Jafri has pointed out that the petition was filed on 23-6-2003, notice whereof was issued to the respondents on 24-.6-2003. The petition was heard for the purpose of Katcha Peshi on 24-7-2003 when the learned Standing Counsel informed on behalf of the Custom Department that the investigation was in progress and further time was required, however, no orders were passed till then under sections 168, 171 and 180 of the Customs Act. On 7-8-2003, the comments were filed on behalf of respondents but even on that date the orders under sections 168(2) and 171 of the Customs Act were not filed. He has pointed out that the entire file of the Customs Department was produced by Mr. Ashfaq Ali Khan, Intelligence Officer and was perused by the Court but the order under sections 168(1), 171 and 168(2) were not available in the file and in reply to a specific question by the Court whether there was any other file pertaining the this case and any other orders were made by the competent officers, it was categorically stated by Mr. Ashfaq Ali Khan, Intelligence Officer that no other orders whatsoever, were passed. Mr. Jafri has submitted that the quarry was made by the Court for the reason that the release of consignment was blocked on 26-5-2003 and period of two months had already expired, and with the non-.issuance of notice under section 180, the petitioner had become entitled for the return of goods in accordance with the provisions contained in section 168(2) of the Customs Act. He has further pointed out that it was specifically asked from Mr. Ashfaq Ali Khan, whether any order has beer, passed by the Collector of Customs under proviso to subsection. (2) of section 168 of Customs Act, before expiry of two months from 26-5-2003 extending the period .for issuance of show-cause notice under section 180 and Mr. Ashfaq Ali Khan, had stated that no such order was passed hand at least no such order was available on the departmental file. On 7-8-2003, the Investigating Officer Mr. Ashfaq Ali Khan, was directed to examine the goods in presence of the petitioner as directed vide order, dated 24-7-2003 and to submit the report on 26-8-2003. He was verbally warned that no new order should be inserted in the departmental file. Mr. Jafri has urged that in spite o verbal warning given to Mr. Ashfaq Ali Khan, on 7-8-2003, he has manipulated the departmental record and while producing his report dated 26-8-2003 in compliance of the Court's order, dated 7-8-200 produced copies of forwarding letter addressed to Collector of Customs, Central Excise and. Sales Tax (Adjudication-1) as well as copies of notices under sections 168, 171, Mashiranama, dated 6-8-2003 showing detention and seizure of the goods. This Mashirnama is allegedly prepared by Ashfaq Ali Khan and is attested by -respondent No.3, Pir Alam Shah, Senior Investigating Officer and one Sakhi Mohammad. Although the Mashirnama of detention and seizure purported to have been prepared by Ashfaq Ali Khan contains that the officers of the Director-General Intelligence and Investigation, examined the goods and that the officers prepared a separate inventory of recovery of goods duly signed by the two Mashirs but no such inventory signed by the officers, who examined the goods has been produced. Mr. Jafri has next contended that on 7-8-2003, the departmental file which was examined by the Court did not contain any order of extension passed by the Collector of Customs under proviso to subsection (2) of section 168 of the. Customs Act, but on 2-9-2003 Mr. Ashfaq Ali Khan, has produced copy of such an order and the departmental file produced on 3-9-2003 contains such order which according to him has been inserted subsequently to avoid the consequences provided in subsection (2) of section 168 of the Customs Act.

Mr. Jafri has vociferously argued that the consignment imported by the petitioner has been blocked after the .appraisement and due assessment of customs--duty and taxes with ulterior motives and the departmental officers pave acted in an arbitrary manner violating the mandatory provisions of law and the orders under sections 168(1), 171 and 168(2) and section 180 of the Customs Act, have been manipulated with mala fide intention He has submitted that in these circumstances, the petition be allowed and the respondents be directed to release the goods as the assessed custom duty and taxes have already been paid.

On the other hand, Mr. Tariq Ali, learned Federal Counsel, assisted by Investigating Officer, Mr. Ashfaq Ali submitted that the petitioner imported counterfeit mobile phones accessories and watches, and on receiving of such information the release of consignment was blocked. He has further submitted that the term of officers of Directorate of Intelligence (Customs and Excise), Karachi, examined the container and found that it contained goods other than the goods declared in the Bill of Entry. Mr, Tariq Ali, has reiterated the pleas taken in the parawise comments. He has submitted that the points for consideration are whether the respondent No.2, Deputy Director, Intelligence '(Customs and Excise) is competent and authorized to block the Bill of Entry and detain the goods and whether the cargo of an importer could be seized/detained on verbal orders of the respondent No.2 and whether the respondent No.4 could turn down the Bill of Entry He has contended that by virtue of the provisions contained in sections 168 and 198 of the Customs Act read with S.R.O: 388(1)/82, dated 22-4-1984 issued under section 3 of the Customs Act, 1969, the respondent No.2 is competent and authorized in law to block the container and detain/seize the same. It is further contended that the container of the petitioner was blocked as it was found expedient to do so on, the basis of well placed information provided by the Regional Intelligence Liaison Office, Tokyo. It is specifically stated in the parawise comments that the respondent No.4 blocked the container of the petitioner on the direction of respondent No.2. The respondents have taken plea `in the comments- that it is incorrect to allege that the petitioner was not aware of the reasons regarding blockade of the container. It is stated that the petitioner was informed by respondent No.2 when the petitioner met him in his office that the container was blocked on the information provided by R.I.L.O., Tokyo, Japan. The comments were filed on 31-7-2003 acid thereafter another statement has been field by Mr. Ashfaq Ali Khan, Investigating Officer on 3-9-2003 wherein it is stated that the staff of the Directorate Intelligence and Investigation, is empowered to detain/seize the goods liable to confiscation and that before submission of the report and issuance of show-cause notice under section 180, the Collector of Customs- (Adjudication-1) extended the time limit for said cause notice in terms of section 168(2). At this stage, it is divestment made that the order, under section 168(2) produced on 3-9-2003 is dated 23-7-2003 but in the comments filed on 31-7-2003 neither any such plea was taken nor the copy of such order was produced.

In the end, Mr. Tariq Ali has submitted that the petitioner has made misdeclaration and is trying to take the benefit of technicalities which should not be extended to him.

We have given our anxious consideration to the facts placed on record and the contentions raised by the learned Advocates for the parties. The plea taken on behalf of the respondents that the petitioner imported counterfeit goods and made misdeclaration in this behalf shall not be considered and determined by us, for the reason that it is a question of fact which cannot be ascertained and decided in exercise of the .writ jurisdiction. We shall consider the admitted facts and the actions taken by the Department during the pendency of the petition and shall examine whether the respondents have exercised their jurisdiction in accordance with the law or have acted otherwise than in due course of law.

The admitted facts are that the goods imported by the petitioner arrived at Karachi on.21-5-2003. The Bill of Entry was filed on 22-5-2003. The release of consignment was blocked by the respondent No.2 on 26-5-2003 under his verbal directions followed by his written order which reads as follows:--

"As already informed to you on telephone number of times you are once again requested to block containers at cash stage. The detail is given below:--

(i)GATU 1154479

(ii)TRLU2266342

GATU 1154479 is the container, which contained the goods imported by the petitioner. The goods were appraised and assessed on 27-5-2003 but consignment was not released: A perusal of Bill of Entry shows that in Principal Appraiser and Appraising Officer passed examination order to the extent of 5% examination and verification of description. quantity, brand and sizes as per invoice and Bill of Entry. The goody declared were mobile battery, mini telephone battery, mini camera battery, antina for mobile etc., of Japan origin, Taiwan, China, Singapore and Hong Kong. Although the release of consignment was blocked on 26-5-2003 but no farther order for seizure of goods was made on 27-5-2003 when the consignment was appraised and assessed. However, the goods were not released and on insistence of petitioner the notice under section 26 of the Customs Act, calling upon the petitioner to furnish information/ documents was issued on 11-6-2003.

Here the question arises whether the blockade order passed by respondent No.2, on 26-5-2003 amounts to an order of seizure within the contemplation of section 168(1) of the Customs Act. We have already considered this issue in, depth and detail in our judgment, dated 21-8-2003, in C.F No.D-713 of 2003, Syed Muhammad Razi v. The Collector of Customs and others. In this judgment we have held that the blockade of the goods by an appropriate officer amounts to seizure within the contemplation of section 168(1) of the Customs Act, 1969. It would be appropriate to observe that even the, respondents have treated the blockade order issued by respondent No.2., dated 26-5-2003 as and order of seized under section 168(1) of the Customs Act, 1969 and have therefore, the Collector (Adjudication) was approached on 23-7-2003 for extension of of time under section 168(2) poi the issuance of notice under section 180 and obtained an order in this behalf which is available on the file and has been communicated to various officers of the Customs Department vide letter, dated 23-7-2003. It has been produced by. Investigating Officer, Ashfaq Ail Khan, with his statement, dated 2- 9-200, (the is without prejudice and notwithstanding, the objection raised by her Ali Bin Adam Jafri, learned counsel for the petitioner that this order has been obtained by manipulation after expiry of the period of two months from the date of seizure). Thus, there appears to be no dispute On the point that the goods imported by-the petitioner were seized order the directed of respondent No.2., within the contemplation of section 168(1) of the Customs Act, 1969. There is no cavil to the proposition that the provisions contained in section 168(1), 168(2) and 171 of the Customs Act, are to be read together.

Now we proceed to examine whether the respondents have acted within the mandate of law contained in sections 168(1)(2) and 171 of the Customs Act and if they have not acted in accordance with the mandate of law what is the effect thereof.

The plea taken by the respondents is that the release of consignment imported by the petitioner was blocked by respondent No.2, under his verbal directions followed by his written order, which has already been reproduced in the earlier part of this judgment. In their comments the respondents have taken plea that the goods were seized on the basis of information received by them that the petitioner was trying to import some counterfeited goods. However, the letter, dated 26-5-2003 written by the respondent No.2 and addressed to Mr., Fida Hussain, Manager PRAL, the respondent No.4, in whose possession the goods were at the relevant time, does not, 'contain any reason for the seizure of goods as required under section 168(1) of the Customs Act. Investigating Officer, Ashfaq Ali Khan, has produced notice under section 168 of the Customs Act, 1969, dated 6-8-2003 addressed to shipping agent Messrs Megatrans Pakistan Private Limited informing that the staff of Director-General of Intelligence and Investigation (Customs and Excise), Karachi has seized foreign origin goods imported from China for the violation ,of provisions contained in sections 15, 16, 18, 25, 23(1)(2) and 79 of the Customs Act, 1969. The notice further contains that as the shifting of seized goods to Intelligence State Warehouse is not practicable, therefore, above seized goods were given under the Superdari of the shipping agent in terms of section 168 of the Customs Act, 1969. Mr. Ashfaq Ali Khan has produced copy of notice under section 171 of the Customs Act, 1969 addressed to one Mr. Masharaq Ali Khan intimating that the goods imported by the petitioner were seized for violation of several provisions of the Customs Act, enumerated in the notice. He has also produced Mashirnama prepared by him, dated 6-8-2003 and the Seizure Report of the same date. A perusal of all these documents shows that the alleged Seizure Report is in fact a contravention report which has been sent to the Collector of Customs Central Excise and Sales Tax (Adjudication-1) for initiation of adjudication proceedings.

The point for consideration is whether the course adopted by the respondents is permissible in law, or is in accordance with the specific provisions contained in section 168(1) .read with section 171 of the Customs Act. It is provided in section 168(1) that the appropriate officer may seize any goods liable to confiscation under the Customs Act. The mandatory requirement contained in section 171 is that, when anything is seized or any person is arrested under the Customs Act, the officer or other person making such seizure or arrest shall, as soon as may be inform in writing the person so arrested or the person from whose possession the things are seized, of the-ground of such seizure or arrest.

The provisions, contained in sections 168(1) and 171 of the Customs Act, came for consideration in various cases before the superior Courts. A Division Bench of this Court in the case of Ilam Khan v. Government of Pakistan 1983 CLC 786 held that, if no grounds of seizure have been served as required under section 171 of the Customs Act, the order under section 168 is rendered ineffective and the owner/the person from whose possession the goods are seized is entitled to delivery of the goods. An6ther Division Bench of this Court in the case of Muhammad Mahfooz v. Collector of Customs PLD 1986 Kar. 28, held that the non-compliance of the provisions contained in section 171 of the Customs Act renders the seizure of goods illegal. Inthis judgment a Single Bench judgment of the Lahore High Court in the case of Shaukat Hussain v. Zulfiqar Ahmed and others PLD 1981 Lahore. 1318, was referred with approval, wherein it was held that, "section 171 requires that when anything is seized,, the officer making such seizure shall, as soon as may be, inform in writing the person from whose possession the things are seized, of the grounds of such seizure or arrest... It is also not the case of the respondents that the raiding officer had, after the seizure, informed in writing petitioner of the grounds or the seizure as required under section 163(3) and 171 of the Customs Act. It is therefore, clear that there had been no compliance of the provisions of sections 162(3), 163(2) and 171 of the Customs Act."

In this case the admitted facts are that the goods/consignment imported. by the petitioners were seized under the direction of respondents No.2, Mr. Saifuddin Junejo vide written directions, dated 26-5-2003 but neither at the time of giving such direction, nor at any subsequent time the respondent No.2, informed the petitioners in writing, the grounds of such seizure. The Investigating Officer, after realizing this lacuna during the course of proceedings in Court on 24-7-2003 and 7-8-2003, produced the notices under sections 168 and 171 under his own signatures. This is established principle of law that the things should be done as they are required to be done or not at all and the orders are to be made by the officer/authority specified in the law and not by any other person on his behalf until and unless authorised to do so in law. A bare reading of section 171 of the Customs Act. shows that, "the officer or other person making such seizure or arrest shall, (emphasis provided by us) as soon as may be, inform in writing the person so arrested or the person from whose possession the things are seized, of the grounds of such seizure or arrest". The language user by the Legislature is very clear and the officer or other person making the seizure has been enjoined upon to record the reasons of seizure/arrest in writing and inform the same to the person arrested or the person from whose possession the things are seized. -It is also to be noted that the law requires that the officer or other person making seizure shall, as soon as may be, inform the reasons for such seizure. It does not authorize or empower any other superior or subordinate officer to assign the reason for seizure and inform the same to the person arrested or from whose possession thing is seized. Thus, it is held that preparation of. notices) under sections 168 and 171 of the Customs Act by Mr. Ashfaq Ali Khan, the Investigating Officer, is a futile attempt to cover the deficiency and violation of the mandatory provisions of law on the part of his officer Mr. Saifuddin Junejo, the respondent No.2.

Now we come to the order produced by Mr. Ashfaq Ali Khan, under section 168(2) ,of the Customs Act, 1969. Before proceeding with the legality of this order, we would like to observe that, we find sufficient force in the contention of Mr. Ali Bin Adam Jafri that the comments were filed on behalf of respondent on 31-7-2003 and till then no reference was made to the order of Collector under section 168(2). dated 23-7-2003 extending the time limit for issuance of notice under section 180.

We have perused the file and have found that the Collector has extended the time simply for the reason that it is not possible to complete the investigation. There appears to be no application of mind by the' Collector of Customs, while extending the period of limitation and he has not made any query from the Directorate of Intelligence as to what progress was made in between 26-5-2003 when the goods were seized and 23-7-2003 when the extension of time under section 168(2) was sought. The learned Collector did not examine that till then neither any notice was issued under section 171 o1 the Customs Act nor any progress was made in the matter. The legislature while enacting various provisions in the Customs Act has' on the one hand empowered the Customs Officials to protect the State revenue and the evasion of tax, and at the same time has provided statements to the citizens so that the citizens may not be left at "the vagaries of the tax officials and are not dealt with in an arbitrary manner. It goes without saying that any arbitrary act by its very nature is negation of the rule of law and has to he struck down in whatever manner and forth it may be. The Legislature has thus, by empowering the tail officials of hand for protecting the State revenue, has provided safeguards to the citizens thereby creating a I check and balance. The provisions contained to sections 171 and 168(2) of the Customs Act, 1969 are in the nature of safeguards provided to the citizens. The period of two months provided in section 168(2) for issuance of notice under section 180 is not without purpose. The intention of the Legislature is that the citizens should not be left at the mercy of the tax officials for indefinite period. The Investigating Department including the appraisement officers are required to initiate the action for' any violation of the provisions contained in the Customs Act, expeditiously arid the Adjudicating Officers are required to apply their minds to the material placed before them in the contravention report and to decide within the period of two months 11 they intend to proceed with the adjudication, otherwise the person whose goods have been seized becomes entitled to the return of the suited goods. However, if any offence has been committed the offender is not absolved of its civil/or criminal liability. However, the goods seized are to be returned if no notice is issued under section 180 within two months of the seizure of goods. This period can be extended by the Collector only and that too for the reasons to be recorded in writing. the 4 period is not to be granted without application of mind and without reasons to be recorded in writing. If these conditions are not fulfilled the extension of period under proviso to subsection (2) of section 168 is not sustainable in law. This point came for consideration before a Division Bench of this Court in the case of Abdul Zahir v. Director-General Pakistan Coast Guards PLD 1990 Kar. 412, and it was held as follows:--

"We do not think that the requirement for recording of reason for the extension to issue a show-cause notice under the proviso to section 168(2) is merely mechanical or of a procedural character. Where the law requires that reasons shall be recorded for the passing of an order such reasons, if the order be judicial, must of necessity be found in the order itself and the order has to be a speaking order. If not the same would suffer from an error apparent on the face of the record and thus fall short of satisfying the requirement of law. Mere reference in the order to the request for the passage of the order, the request incorporating due justification or reasons, would not make such reasons to be part of the order because the contemplated reasons are to be found within the order itself and not beyond. In cases of quasi-judicial orders, requiring `reasons to be recorded in writing', as here, the onto plausible difference can, perhaps, be that while reasons in writing must still be recorded the relevant order may be retained on the file and a formal communication of extension may be addressed separately. Even-this is not the case in the these proceedings and a purely subjective satisfaction on the part of the Collector clearly falls short of the statutory requirement. On this score, we do not find the Collector's order of extension to be valid or sustainable."

The point was again considered by a Division Bench of Lahore High Court in the case of Haji Noor-ul Haq v. Collector of Customs and others. 1998 MLD 650. In this case period of two months was extended by the Collector of Customs, stating that the extension was required for the purpose of issuance of show cause notice, and completion of inquiry/investigation. It was observed as under:--

"10.A deeper look at section 168 of the Customs Act would show that the intention of law-makers appears to be that the period for seizure should not be prolonged and that the Customs Authorities must give a show-cause notice for confiscation of the goods in question within two months of seizure failing which the person from whom the goods were recovered earns a right to be restored the possession of those goods. This period of two months can be extended as provided in subsection (2) but the order of extension has to be justified by `reasons to be recorded in writing'. The Collector of Customs cannot abdicate his authority to a subordinate functionary and pass mechanical order. He has to justify the extension by reason. Even if the reasons are not contained in the order the reasons may be part of the relevant file indicating conscious application of mind on the part of the Collector."

By placing reliance 'on the Division Bench judgment of this Court .in the case of Abdul Zahir (supra) it was held that, the orders of extension by the Collector did not give any reason therefore, the orders were of no consequences and the show-cause notices under section 180 of the Customs Act, have not been issued within the period of two months as contemplated in law are not sustainable in law. The owner of goods have earned the right to return the goods.

Respectfully following the case-law referred to above, it is held that the Collector of Customs while extending period provided in section 168(2) has acted mechanically and therefore, extension of time under proviso to section 168(2) is of no avail. When the Legislature has provided for recording reasons in writing by Collector of Customs, he is required to apply his mind and after making an objective assessment, come to the conclusion that the extension of time is to be granted. Mere reference to the request made by the Investigating Officers, would amount to grant the extension in a mechanical manner and thus, it is not in consonance with the intention of the law. We have observed that, a practice has developed in the Customs Department whereby the orders are being made mechanically. It is evident from the fact that a statement has been produced before us to the effect that the investigation in the case has been completed and seizure report has been submitted to the competent, authority alongwith draft show-cause notice in respect of the petitioners for initiation of adjudication proceedings. The proceedings before Adjudicating Officer, under the Customs Act, are in the nature of quasi-judicial proceedings and issuance of notice under section 180 of the Customs Act, is very important document. The decision to issue show cause notice is 'to be taken by the Collector (Adjudication), by application of independent mind and not merely signing the draft show cause notice submitted by the investigating agency. The conducting of investigation/inquiry has been assigned to an agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice to submit draft show-cause notice by the Director-General of Intelligence and Investigation to the Collector (Adjudication) is deprecated. It is for the C.B.R. which is occupying the apex position in the hierarchy of tax administration to ensure that the Collector (Adjudication) while granting extension under provisions of section 168(2) and issuance of notice under section 180 applies his own independent mind and no mechanical orders are made at the instance of Intelligence and Investigating Officers.

In the facts and circumstances of the case, there is another aspect, which requires consideration.. Admittedly, the goods imported by the petitioner were appraised and assessed to customs-duty and taxes. The duty and taxes so assessed have already been deposited with the National Bank of Pakistan. The effect of assessment and payment of duty came for consideration before a Division Bench of this Court in the case of Messrs Yousuf Re-Rolling Mills v. Collector of Customs (Appraisement, Karachi 1986 CLC 77. The relevant facts were that the petitioner imported two consignments of iron and steel scrap. The consignments were inspected by the Principal Appraiser and the Assistant Collector of Customs and the goods were declared by them to be the scrap metal in the form as imported. The duty and taxes were assessed and the petitioner sought the release of the consignments from K.P.T. He was informed that under the orders of Customs official the goods cannot be released unless no objection was obtained. He was: further informed that the goods were to be re-examined. The goods were' not allowed to be released till re-examination was done. The petitioner filed writ petition contending that the total amount of custom duty ands taxes have been, paid but the delivery was being refused. In the said case also the inspection of consignment was directed in presence of the Official Assignee who submitted his report (in the present case also the inventory has been prepared on re-examination of the goods under they orders of this Court). After considering the facts and various provisions, in the Customs Act, 1969, it was observed that the Custom Authorities) have the power to re-assess the duty if duty is not levied correctly Such action can be taken under section 32 of the Customs Act. It was) contended that once the goods have been assessed to duty and taxes which have been paid. the Custom officials have no jurisdiction to refuse the release of the good. It was contended that once payment has been made the Customs of iliac are bound to allow the release of the goods' and they are not entitled to retain the same. On behalf of Custom officials it was contended that the petitioner has not paid the actual duty.' It was held as follows:--

"The respondents were competent under section 32 of the. Customs Act to assess the actual duty even where the goods have been cleared by the respondents. They are not debarred to take action under the Act. Even in those cases where the provisions of section 168 have been violated the only consequence would be that the goods shall be returned to the persons from whose possession the goods have been seized. Adjudication proceedings) under section 179 is an independent provision which could be taken by the Customs Authorities. The adjudication proceedings would not be invalidated simply because goods have been returned to the person. The proceedings could be started after the principle of natural justice has been complied with by the Customs Authorities.

11. However, the respondents have no authority to detain the goods under section 32 of the Customs Act and in the present case they had already examined the goods and in fact cleared the goods; but after the judgment of the Court in Constitutional Petition No. 424 of 1983 the respondents started fresh enquiry, therefore, while maintaining the action of the respondents under section 32 of the Act, we declare that the detention of the petitioner's goods were illegal and without authority. The goods have already been examined by the respondents and they be released to the proceedings under section 32 of the Customs Act day be taken in accordance with law. "

In view of the findings given by us and respectfully following the law as laid down in the case of Messrs. Yousuf Re-Rolling Mills (supra) the petition is allowed in the terms that the respondents are not entitled to retain the petitioner's goods and such action on their part is held to be illegal and without authority. The respondents are directed to release the goods forthwith to the petitioner. However, they shall be at liberty to take appropriate action in accordance with the law.

M.B.A./Z-51/KOrder accordingly