Messrs RAAZIQ INTERNATIONAL (PVT.) LTD., through Director VS ASSISTANT COLLECTOR OF CUSTOMS (LICENCING) DRYPORT MUGHALPURA, LAHORE, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 1865 (2002)

(a) Customs Rules, 2001---

---Rr. 103 & 104(3)---Action in case of violation---Scope---Constitution of Pakistan (1973), Art.199---Constitutional petition---Suspension of licence of customs clearing agent by the Licensing Authority---Scope---Suspension of licence pending action under R.103 Customs Rules, 2001 was an exceptional circumstance which could only be resorted to by the Licensing Authority where it considered immediate action to be necessary---Order of the Authority, in the present case, failed to set out the reasons for immediate action, and had not even stated that the Licensing Authority had any reason considered necessary by it to suspend the licence of the Agent forthwith---Validity---Right of the Agent to conduct its business, among other things, was a constitutionally protected right---If such right was to be curtailed, there should be valid justification for such curtailment---Rules 104(3) of the Customs Rules, 2001 envisaged an application of mind by the Licensing Authority to justify immediate suspension of a licence---Rationale of R.104(3) of the Rules was to protect the right of a Customs Clearing Agent to carry on his business, pending inquiry, except in extraordinary circumstances spelled out by the Licensing Authority to justify immediate suspension of his licence---Impugned order, therefore, was not legally sustainable to the extent it ordered immediate suspension of the licence of the Agent---Suspension of licence pending final adjudication under R.103, Customs Rules 2001 was therefore, declared to be illegal by the High Court---High Court, however, observed that present order of the Court, shall not, in any manner, preclude the Licensing Authority from initiating further proceedings under the Rules.

(b) Customs Rules, 2001---

----R. 103(2)---Action in case of violation---Appeal envisaged under R.103(2) of Rules was only in respect of final orders which might have been passed under R.103, Customs Rules, 2001.

Mian Abdul Ghaffar for Petitioner.

A. Karim Malik for Respondents.

Date of hearing: 12th September, 2002.

JUDGMENT

JAWWAD S. KHAWAJA, J.---This writ petition impugns the order, dated 6-9-2002 passed by the Licensing Authority, Customs Dryport, Lahore. Since the contents of the impugned order are relevant for the purpose of decision, the same are reproduced as under:--

"There is prima facie, a case of misconduct against Messrs Raaziq International (Pvt.) Ltd. (Chal No.110/74) 129E-I Main Boulevard, Gulberg-III, Lahore. The Customs clearing licence of the said agency is, therefore, placed under suspension under Rule 103 Chapter-VIII of S.R.O. 450(1)/2002, dated 18-6-2001 of the Customs Agents (Licensing) Rules with immediate effect. Further proceedings under the said Rules will be initiated in due course.

(Sd.)

Licensing Authority

Customs Dryport, Lahore

2. The petitioner, which is a limited liability company, is acting as a customs clearing agent since 1974 under a licence duly issued by the Customs Authority. According to the submissions of learned counsel for the petitioner, no complaint has been received against the petitioner since 1974.

3. Learned counsel for the respondent-Department, however, states that the Customs Department has now received a complaint from Ghazi Power Ltd., alleging that the petitioner has received sums of money from the said complainant with the object of paying illegal gratification to certain functionaries of the Customs Department. On the other hand, learned counsel for the petitioner has stated that all amounts received by the petitioner from Ghazi Power Ltd., have been duly recorded in a letter addressed to Ghazi Power Ltd., by the petitioner. The sums, alleged by the Ghazi Power Ltd., as being amounts paid for the purpose of illegal gratification, are, in fact, amounts which have been incurred as expenses by the petitioner. Learned counsel for the petitioner states that the expenses were incurred by the petitioner after obtaining approval of Ghazi Power Ltd.

4. In the present proceedings the limited question before me is the validity of the impugned order to the extent immediate suspension of the petitioner's licence has been ordered. It goes without saying that the Licensing Authority shall, after issuing show-cause notice to the petitioner and after hearing the petitioner, be entitled to exercise its power including the power contained in Rule 104 of the Customs Rules to cancel the licence of the petitioner. In order not to cause prejudice to either party in such proceedings I will not comment on the actual controversy between the parties noted above.

5. Learned counsel for the respondent-Department has referred to Rule 104(3) of the Customs Rules to justify the immediately suspension of the petitioner's licence even prior to the determination that the petitioner has violated the terms of its licence or has committed any act specified in Rule 103(1) of the Customs Rules which would justify immediate suspension of his licence.

6. Rule 103(1)(vii) and Rule 104(3), which were cited by the learned counsel for the respondent-Department, are; reproduced as under:

"103. Action in case of violations.---(l) The Licensing Authority may, by order; suspend or revoke a licence for any of the following reasons, namely:

(i) ?????????..

(ii) ?????????..

(iii) ?????????..

(iv) ?????????..

(v) ?????????..

(vi) ?????????..

(vii) attempting to influence the conduct of any employee in the Customs House, Station, Port or Airport by use of threat, false accusation, duress or the offer of any special inducement or by the bestowal of gift;"

"104. Action upon conviction.---(1) The licence shall star, td revoked if the licensee or any partner of a licensed firm commits any act of insolvency or is convicted by a Court of Law for .any offence punishable under the Act, or for an offence involving moral turpitude or misappropriation of property or breach of trust under the Pakistan Penal Code.

(2) ?????????..

(3) The Licensing Authority may, in cases where immediate action is considered necessary against the licensee, suspend his licence forthwith pending final action under rule 103."

7. It is clear from Rule 104(3) referred to above that the suspension of the licence pending final action under Rule 103 is an exceptional circumstance which can only be resorted to by the Licensing Authority where it considers immediate action to be necessary. From the contents of the impugned order, dated 6-9-2002 it is obvious that let alone setting out the reasons for immediate action, it has not even been stated that the Licensing Authority has any reason considered necessary by it to suspend the licence of the petitioner forthwith.

8. Learned counsel for the respondent-Department states that the petitioner could have filed an appeal against the impugned order under Rule 103 sub-rule (2) of the Customs Rules. In order to appreciate the submission of learned counsel for the respondent-Department the said rule is reproduced as under:-

"103. Action in case of violations.--(1) The Licensing Authority may, by order; suspend or -revoke a licence for any of the following reasons, namely:

(i)????????????.. ?????

(ii) ????????????

(iii) ?????????????????

(iv) ?????????????????

(v) ????????????..????

(vi) ????????????..???

(vii) ????????????..??

(vii) ????????????..??

(viii) ????????????..??

(ix) ????????????..

(2) ?????? While passing orders under sub-rule(1), the Licensing Authority may also direct forfeiture of the security deposited by the Licensee under rule 95(2), in addition to any penalty to which he may be liable under the Act or any other law for the time being in force:

Provided that appeal against an order made under this rule 103 shall, within three months from the date of communication of such order, lie to the Collector of Customs and shall be accompanied by a certified copy of such order."

9. I am afraid the submission of learned counsel for the respondent-Department is without merit. The appeal envisaged under sub-rule (2) aforesaid is only in respect of final orders which may have been passed under Rule 103 of the Customs Rules. In the present case, admittedly, no final order has as yet been passed under Rule 103. In fact, by his own submissions learned counsel for the respondent-Department has argued that the impugned order has, in fact, been passed in exercise of powers conferred under Rule 104(3) of the Customs Rules.

10. The right of the petitioner to conduct its business among other things is a Constitutionally protected right. If this right is to be curtailed, there should be valid justification for such curtailment. Furthermore, as noted above, Rule 104(3) envisages an application of mind by the Licensing Authority to justify immediate suspension of a licence. The rationale of the aforesaid provision is to protect the right of a customs clearing agent to carry on his business, pending inquiry, except in extraordinary circumstances spelled out by the Licensing Authority to justify immediate suspension of his licence.

11. In the circumstances discussed above, I am not in any doubt that the impugned order is not legally sustainable to the extent it orders immediate suspension of the petitioner's licence. The suspension of the petitioner's licence pending final adjudication under Rule 103 of the Customs Rules, is therefore, declared to be illegal.

12. This order, however, shall not, in any manner, preclude the Licensing Authority from initiating further proceedings under the said rules as envisaged in the last line of the impugned order.

M.B.A./R-23/L??????????????????????????????????????????????????????????????????????????????????? Order accordingly.