ASSISTANT COLLECTOR OF CENTRAL EXCISE AND LAND CUSTOMS VS Mst. SIDDIQAN AFZAL and others, 2007 PTD-SUPREME-COURT 1485 (2007)

(On appeal from the judgment, of the Lahore High Court, Lahore, dated 26-9-2000 passed in Writ Petition No. 2454 of 1983).

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

----Ss. 168(2), 180 & 221---Sea Customs Act (VIII of 1878), Ss.178 & 167(81)---Land Customs Act (XIX of 1924), S.9---Gold of foreign origin seized on 19-5-1963---Issuance of show-cause notice on 8-8-1978---Validity---Seizure of gold under Sea Customs Act, 1878 would be deemed to have been made under repealing Act i.e. Customs Act, 1969---Issuance of show-cause notice and consequences of its non-issuance within prescribed period would be regulated by Customs Act, 1969---Show-cause notice to owner had been issued after fifteen years of seizure of gold and eight years after coming into force of Customs Act, 1969---Gold had become liable to be returned to owner after two months of coming into force of Customs Act, 1969 as no notice was issued within such period---Principles.

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

----S. 168(2)---Return of seized goods would not be an impediment in way of Adjudicating Officer to impose penalty on its owner, if legally permissible---Principles.

Haji Noor-ul-Haq v. Collector of Customs 1998 MLD 650 and Joint Secretary C.B.R. v. Raja Nazar Hussain and others 1991 SCMR 647 rel.

Izhar-ul-Haq, Advocate Supreme Court for Appellant.

Respondents: Ex parte.

Date of Nearing: 8th February, 2007.

JUDGMENT

NASIR-UL-MULK, J.--- By leave of the Court granted on 12-12-2000, the Assistant Collector of Central Excise and Land Customs has assailed the judgment of the Lahore High Court, dated 26-9-2000, delivered in writ petition filed by the respondents, Mst. Siddiqan Afzal and others, which was allowed and the order of confiscation of gold of 50-1/2 Tolas seized on 19-5-1963, from the predecessor-in-interest of the respondents, was set aside and the same ordered to be returned to the respondents.

2. The gold was seized under section 178 read with section 167(81) of the Sea Customs Act, 1878, further with section 9 of the Land Customs Act, 1924, on the allegation that the same was of foreign origin and that Muhammad Afzal, from whom it was seized, could not account for its lawful possession as he was unable to show payment of customs duty on its import. The criminal case registered as a result of the seizure was sent up for trial under the Frontier Crimes Regulation, 1900, then in force in the area. The entrustment of the case to the Jirga was questioned by Muhammad Afzal before the High Court of West Pakistan. The fate of the criminal proceedings is not known. However, it was not until 8-8-1978 that the Assistant Collector, Faisalabad, issued a show-cause notice to Muhammad Afzal as to why the gold be not confiscated. Upon adjudication the Assistant Collector on 21-4-1981 ordered confiscation of the gold, without imposing any penalty. Muhammad Afzal's appeal against the said order was dismissed by the Collector (Appeals) on 10-8-1982, and the revision petition before the Government of Pakistan met the same fate on 1-1-1983. As meanwhile the said Muhammad Afzal had passed away his legal representatives filed a Writ Petition (No.2454 of 1983) questioning the legality of the said orders, which was allowed by the impugned judgment.

3. The Honourable Judge in chambers was persuaded by the argument raised on behalf of the present respondents that upon repeal of the Sea Customs Act, 1878 by the Customs Act of 1969 the proceedings for adjudication with effect from 1-1-1970, the date on which the latter Act came into force, was to be conducted under the repealing Act in view of the provisions of section 221 thereof. That since the show-cause notice was issued on 8-8-1978, more than 8-1/2 years after the Act came into force the same was not within the time limit laid down in section 168(2) of the Customs Act, 1969, which provides that in case show-cause notice under section 180 of the Customs Act, 1969 before confiscation of the goods or imposition of penalty is not given to the owner of the goods within two months of their seizure, the same shall be returned to him.

4. Leave to appeal was granted in the following terms:

"Mr. Izharul Haque, learned Advocate Supreme Court appearing on behalf of the petitioner contends that seizure of the gold was completed under the Sea Customs Act (No.VIII of 1878) with the result that it was a past and closed transaction. He further contended that section 168 of the Act of 1969 is not applicable to this case, therefore, the learned Judge in Chambers of the Lahore High Court, Lahore was in error in giving currency to the latter provision read with section 221 of the Act of 1969. The precise plea is that seizure of gold could not be deemed to have been gone ahead under the repealing Act i.e. the Act of 1969. He also relied upon Haji Noor-ul-Haq v. Collector of Customs 1998 MLD 650, to contend that in the said precedent the seizure of the goods in question was effected under section 168 of the Act of 1969, therefore, the provision of notice contained under section 168(2) was applicable, which conditions are not applicable in relation to this lis.

5. Mr. Izhar-ul-Haq, Advocate Supreme Court appearing for the appellant reiterated the contention already raised at the time of granting leave and added that even if the seized gold was to be returned to the owner in terms of subsection (2) of section 168 of the Customs Act, 1969, there was no bar against adjudication proceedings and thus, the Assistant Collector could still lawfully order confiscation of the gold. That factually it stands determined by the competent forum that the owner had failed to show the lawful import of the gold, which was of foreign origin. For this contention the learned counsel sought support from Joint Secretary C.B.R. v. Raja Nazar Hussain and others 1991 SCMR 647. Upon query as to why did it take so long to issue show-cause notice in the year 1978 of the goods seized in the year 1963 the learned counsel tried to explain away the delay by stating that the relevant documents pertaining to the case were held up in the High Court where the owner had filed constitutional petition against reference of the criminal case to Jirga.

6. The gold was seized in the year 1963 under the Sea Customs Act, 1878 read with section 9 of Land Customs Act, 1924. Till the repeal of the Sea Customs Act and the coming into force of Customs Act, 1969, with effect from 1-1-1970, admittedly no further steps after the seizure of the gold were taken towards adjudication of the question as to whether the gold was liable to be confiscated. The first step in the form of issuance of show-cause notice was taken on 8-8-1978. The notice refers to contravention of section 167(81) of the Sea Customs Act, 1878 as well as section 156(1) 89 of the Customs Act, 1969 and so did the order of confiscation by the Assistant Collector.

7. The determination of the question as to whether the requirement of issuance of show-cause notice and the consequences of its failure within the period prescribed under section 168(2) read with section 180 of the Customs Act, 1969 turns upon the interpretation of section 221 of the Customs Act, 1969, which reads as under:--

"Savings.--- (1) Notwithstanding anything contained in section 6 of the General Clauses Act, 1897 (X of 1897), anything done, or any action taken under the repealed enactments insofar as it is not inconsistent with the provisions of this Act shall, without prejudice to anything already clone or any action already taken, be deemed to have been done or taken under this Act."

Under the above saving clause anything done or action taken under the repealed enactments (which includes the Sea Customs Act, 1878) are deemed to have been done or taken under the Customs Act, 1969. In view of this deeming clause the seizure of the gold in question under the Sea Customs Act shall be deemed to have been made under the repealing Act with the result that action in pursuance thereof was also to be taken under the said Act. The issuance of show-cause notice and the consequences of its non-issuance within the prescribed period was therefore, to be regulated by the provision of the 1969 Act, more particularly section 168(2) and section 180 thereof. The adjudicating forums had rejected the contention raised on behalf of the owner of the requirement of issuance of the show-cause notice within two months on the ground that the repealed Sea Customs Act did not envisage the issuance of any show-cause notice. If that be the case, the show-cause notice to the owner could only have been issued under the 1969 Act, and which in fact does find mention in the notice as well as in the orders of the Assistant Collector.

8. As already stated the show-cause notice was issued fifteen years after the seizure of the gold and eight years after the coming into force of the Customs Act, 1969. Upon coining into force of the Act its provisions became applicable to the present case as the gold had already been seized under the repealed Act and therefore, before the goods could be confiscated or penalty imposed show-cause notice was to be issued under section 180'of the Act to the owner, providing him an opportunity to make representations against the notice. However, if the show-cause notice is not given within the two months of the seizure of the goods subsection (2) of section 168 mandates the return of the goods to the person from whom they were seized. In view of these provisions the gold in question had to be returned to the owner after two months of the coming into force of the Customs Act of 1969 as no notice was issued within that period.

9. The judgment of the Lahore High Court in the case Haji Noor ul-Haq v. Collector of Customs (supra), mentioned in the leave granting order and that of this Court in the case of Joint Secretary C.B.R. v. Raja Nazar Hussain and others (supra) cited at the bar is helpful to the appellant only to the extent that the return of the gold under subsection (2) of section 168 of the Customs Act, 1969 would not be an impediment in way of the adjudication proceedings. In other words, even after the return of the goods the Adjudicating Officer can still impose penalty, if legally permissible. Unfortunately for the appellant no penalty was imposed on the owner of the gold and only confiscation thereof was ordered. Thus, whereas the adjudicating proceedings were not illegal no order of confiscation of .gold was permissible.

10. In view of the above we do not find any legal flaw in the judgment of the High Court and resultantly dismiss this appeal with no order as to costs.

S.A.K./A-23/SCAppeal dismissed.