Mrs. AFROZE SHAH through Attorney VS PAKISTAN through Secretary, Revenue Division, Ministry of Finance and another, 2007 PTD-KARACHI-HIGH-COURT-SINDH 167 (2005)

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

----Ss. 2(rr) & 168---Seizure of goods before finalizing of adjudication proceedings---Scope---Any restriction on disposal of goods pending adjudication would amount to detention, while seizure would imply physical custody of goods or deprivation of right to use them by its owner---No distinction between "detention" and "seizure" existed---Seizure could be effected even before finalizing of adjudication proceedings---Once import or possession of disputed goods finally established to be an offence under Customs Act, 1969 after due notice of its owner, then goods could be straightaway confiscated and such seizure could be termed as an interim measure prior to confiscation.

Collector of Customs v. S.M. Yousuf 1973 SCMR 11; Iqbal Akhtar v. Ch. Muhammad Mushtaq PLD 1977 Lahore 1318 and Collector of Customs V. Haji Noorul Haq PTCL 2003 CL 716 distinguished.

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

----S. 168---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Non-issuance of show-cause notice to petitioner within two months of seizure of vehicle---Non-filing of counter affidavit by authority---Validity---Initial period of two months was extendable within such initial period, but not after its expiry---After expiry of such period, goods would become liable to be returned to its owner and he could not be divested of such right after expiry of such period---In absence of counter-affidavit of authority, petitioner's contention regarding non-issuance of such notice was accepted---High Court accepted constitutional petition.

Khannan Jan and others v. Deputy Collector Central Excise and Land Customs PTCL 1983 CL 184 rel.

Dr. Muhammad Farogh Naseem for Petitioner.

Faisal Arab Standing Counsel along with Mr. Raja Muhammad Iqbal for the Respondents.

Date of hearing: 31st March, 2005.

JUDGMENT

SABIHUDDIN AHMED, C.J.---The petitioner claims to be the owner of a Hyundai Yellow cab, which had apparently been imported without payment of customs duty under the special exemption granted for import of such cars. However, according to the petitioner car met with a serious accident being hit by a police pick-up and had to undergo extensive repairs. Its body had been rusted and the petitioner was advised by his denter and painter that in order to remove the rust the whole body would have to be painted with anti-rust white paint and kept in that condition for four weeks before it could be repainted yellow. The first stage of the work was done but before completion of four weeks while the petitioner's son was using it for a household errand, the officers of the Respondent No.2 impounded the vehicle on 27-5-1999 and detention certificate was issued. Simultaneously notice was issued informing the petitioner that the colour of the yellow cab had been changed without permission and the provisions of section 9 punishable, under section 156(10-A) of the Customs Act had been violated. The factum of detention and the aforesaid notice has been called in question through this petition.

2. Mr. Farogh Naseem learned counsel for the petitioner in support of the petition raised the following contentions:

(i) That no seizure of the vehicle could have lawfully taken place without an actual finding in appropriate adjudication proceedings to the effect that the vehicle in question was liable to be confiscated under the Customs Act. As such the entire proceedings were unlawful and vehicle was liable to be returned as such.

(ii) That in any event for the purpose of confiscation under section 180 a mandatory notice was required to be issued under section 168(2) within two months of the seizure extendable by a further period of two months. Hence even if the vehicle be assumed to have been seized on 27-5-1999 since no such notice was given within the stipulated period, no further proceedings leading, to the confiscation of goods could take place and therefore; the vehicle was liable to be returned to the petitioner and the Respondents were to be restrained from taking any further action to the detriment of the petitioner.

3. In support of the first contention learned counsel relied upon the observations of the Honourable Supreme Court in Collector of Customs v. S.M. Yousuf (1973 SCMR 11) where while refusing leave to appeal against the judgment of the High Court, their Lordships observed that "goods in relation to which it has not yet been determined in proper proceedings whether any of the provision of the Sea Customs Act have been contravened or that they are liable to confiscation are not liable to seizure under section 178. It was further observed that "anything liable to confiscation under this Act makes it clear that the liability of confiscation is already determined or is no longer in dispute." Though the aforesaid order was passed in context of the Sea Customs Act, 1878, learned counsel pointed out that the provisions of section 178 of the 1878 Act were very similar to those of section 168(1) of the Customs Act and the principles emanating from the Supreme Court judgment were followed by a learned Single Judge of the Lahore High Court in case under the Customs Act i.e. Iqbal Akhtar v. Ch. Muhammad Mushtaq (PLD 1977 Lahore 1318).

4. Dr. Farogh Naseem further argued that taking of the vehicle in custody by the officers of Customs in the instant case could at best be treated as detention and no seizure as long as proceedings in relations thereto were yet to be finalized. He pointed out that there was a sharp distinction between "detention" and "seizure" of goods which has been highlighted through insertion of clauses (kk) and (rr) in the Customs Act in 1987 and clarified by the Honourable Supreme Court in Collector of Customs v. Haji Noorul Haq (PTCL 2003 CL 716). Indeed under section 2(kk) detention in relation to goods mean to prohibit on disposal or use of the goods pending finalizing of any proceedings under this Act in relation to the goods or the owners 'thereof. On the other hand the expression "seizure" under section 2(rr) means to take into custody physically or otherwise goods in respect of which some offence has been committed or is believed to have been committed under this Act or the Rules.

5. Learned counsel appears to be correct in contending that detention and seizure are different concepts under the Customs Act. Nevertheless, from a plain reading of the language of the Statute we are unable to subscribe to the view that the seizure can only be effected after finalizing of adjudication proceedings. The first distinction appears to be that any restriction on the disposal of goods pending adjudication would amount to detention, whereas seizure would imply physical custody of the goods or deprivation of the right to use them by the owner. Secondly while any goods in relation where to any proceedings can be undertaken could be detained only those goods in respect whereof an offence is allegedly committed could be seized. Moreover the expression "offence has been committed or is believed to have been committed" occurring in section 2(rr) clearly stipulates that there is no basis for assuming that a seizure can take place only after adjudication proceedings have been finalized. Once it is finally established that import or possession of goods in question amounts to an offence under the Act after due notice to the owners, the goods could be straightaway confiscated and seizure by its very term could only be treated as an interim measure prior to confiscation. With respect to the precedent cited at the bar we may observe in all humility that both under the Sea Customs Act, 1878 or the Customs Act, 1969, at the time when Iqbal Akhtar's case was decided. The distinction between "detention" and "seizure" did not exist and therefore, the above pronouncements do not appear to be applicable to the facts of the instant case.

6. With respect to the second contention however, learned counsel appears to be correct that section 168(2) stipulates that a show-cause notice in respect of goods liable to confiscation is to be served upon the owner within two months of the seizure which is extendable by a further period of two months" No counter-affidavit seems to have been filed by the respondents and therefore, we have no option but to accept the petitioner's contention that no such notice was served within two months. Indeed the further period of two months had not expired before the petitioner approached this Court but learned counsel relied upon a judgment of the Lahore High Court in Khannan Jan and others v. Deputy Collector Central Excise and Land Customs (PTCL 1983 CL 184), where Shafi-ur-Rehman J., held that extension could only be granted within the initial prescribed period of two months and not after its expiry. It was observed that since law requires that after the expiry of such period, the goods are liable to be returned to the owner he cannot be divested of such right after the period has expired.

7. For the aforesaid reason alone, we are constrained to allow this petition and the security bond stands discharged. At the same time, we must record our pain and anguish over the manner in which loss to the public exchequer is caused by the Respondents sheerly on account of their negligence and failure to take action within time allowed by law.

S.A.K./A-134/KPetition accepted.