Haji REHMATULLAH and another VS COLLECTOR CENTRAL EXCISE AND LAND CUSTOMS, QUETTA and others, 2007 PTD-SUPREME-COURT 157 (2006)

(On appeal from the judgment, dated 12-12-2005 of the High Court of Balochistan, Quetta, passed in C.P. No.331 of 2005).

Customs Act (IV of 1969)---

----Ss. 201 & 181---Customs General Order No.5 dated 19-4-1992---Customs Auction Rules, 1996---Constitution of Pakistan (1973), Arts. 185(3) & 199---Confiscated goods---Auction by Customs Authority---Tentative assessment of goods by Customs Authority---Goods sold below market value---Remedy for aggrieved person qua sold goods---Constitutional jurisdiction of High Court---Scope---Mobile squad of Customs Authority recovered wrist watches from especially designed cavities of bus travelling on highway---Authority's official issued show-cause notice whereupon petitioners claimed ownership of the watches---Authority, under S.181 of Customs Act, 1969, directed to release watches subject to payment of redemption fine---Petitioners after depositing fine amount, submitted application for release of said watches whereupon they came to know that said watches had already been released to CSD shop for sale---Authority informed petitioners to take amount as received by it---Petitioners being aggrieved by action of Authority filed constitutional petition before High Court which was dismissed---Petitioners contended that High Court did not appreciate legal and factual aspects of controversy in its true perspective and provisions contained in S.201 of Customs Act, 1969 had been misconstrued and misinterpreted; that mandatory formalities as contemplated under S.201 of Customs Act, 1969, read with Customs General Order No.5 dated 19-4-1992 escaped notice of High Court which resulted in miscarriage of justice; that Customs Auction Rules, 1996, had been violated while disposing of confiscated goods by Authority and that confiscated goods were sold far below the market value of goods---Validity---During pendency of constitutional petition, the goods in question had been auctioned by Customs Authorities and proceeds thereafter deposited in Government treasury, therefore it was not possible for High Court to restore original goods to the petitioners---Authority though had completed necessary formalities as envisaged under S.201 of Customs Act, 1969, but, had the adjudicating authority passed order under S.181 of the Customs Act, 1969, for release of goods, on payment of fine earlier, the question of disposal of seized goods was not to have arisen---Price of goods initially determined tentatively by seizing official of Authority was not to be considered as final---Question of fixation of price being a question of fact was not to be determined by High Court in exercise of constitutional jurisdiction---Customs Authority was vested with powers to assess actual value of goods for purpose of customs duty and in absence of any evidence contrary to determination of such value, the assessment of Authority was to be accepted---Customs Authority was required to adopt measures for obtaining better results qua auction of seized goods so that consequential legal rights or benefits accruing from such auction proceedings to either party were not jeopardized---Petitioners were at liberty to approach civil court for redressal of their grievance subject to all legal exceptions---Petition for leave to appeal was decided accordingly.

Obedullah v. Inspector-General, Frontier Corps 1997 SCMR 1833 and Raza Muhammad v. Inspector-General, Frontier Corps 1999 MLD 3414 distinguished.

Sheikh Ghulam Muhammad, Advocate Supreme Court and Gohar Yakub Yousufzai, Advocate-on-Record for Petitioners.

Ch. Mumtaz Yousaf, Standing Counsel, Muhammad Yahya, Collector Customs, Mamtaz Ali Khosa, Deputy Collector Customs and Haji M. Azam, Law Officer for Respondents.

Date of hearing: 14th September, 2006.

JUDGMENT

JAVED IQBAL, J.---This petition for leave to appeal is directed against the judgment, dated 12-12-2005 whereby the constitutional petition on behalf of petitioner has been dismissed.

2. Precisely stated the facts of the case as enumerated in the judgment impugned are to the effect that "the petitioners claim to have been in possession of assorted watches, which were taken into custody by Customs Mobile Squad, Quetta vide seizure case No.179-Cus/Seiz/MS-II, dated 11th December, 2004, allegedly being carried in a bus, intercepted in the way from Quetta to Taftan at 7-00 p.m. near Hazar Ganji Park; on thorough checking, wrist watches were recovered from the especially designed cavities, valuing Rs.10,22,000. It was stated that nobody had claimed the ownership of the recovered goods at the relevant time, and thus; seizure was prepared and reference was made to the Assistant Collector (Adjudication), who issued show-cause notice on 4th January, 2005, whereupon, one Rehmatullah and Allah Nazar claimed ownership of the watches etc. and were duly represented by their counsel. The learned Assistant Collector, vide order, dated 5th April, 2005 has directed release of wrist watches. However, subject to payment of redemption fine of 30% of the CIF value of cells of seized goods, which comes to Rs.33,600, has been imposed. It is stated that said amount was deposited and application for release of the said watches was submitted, whereupon; it was informed that the said watches have already been released to CSD shop for sale against amount of Rs.1,64,500, Rs.98,000 and Rs.35,000, total of which comes to Rs.2,97,000. The Customs Authorities informed the petitioner to take the amount as received by him". Being aggrieved the petitioner preferred a writ petition which has been dismissed vide judgment impugned, hence this petition.

3. Sheikh Ghulam Muhammad, learned Advocate Supreme Court entered appearance on behalf of petitioners and contended that the legal and factual aspects of the controversy have not been appreciated in its true perspective and besides that the provisions as contained in section 201 of the Customs Act, 1969 have been misconstrued and misinterpreted. It is next contended that the judgment impugned is not in consonance with the dictum as laid down in case titled Obedullah v. Inspector-General, Frontier Corps 1997 SCMR 1833 and on this score alone is liable to be set side. It is argued .that the mandatory formalities as contemplated in section 201 of the Customs Act, 1969 read with CGO No.5 dated 19-4-1992 escaped the notice of learned High Court which resulted in serious miscarriage of justice. It is also pointed out that the Customs Auction Rules, 1996 have been violated while disposing of the confiscated goods by the Assistant Collector Customs, Quetta which culminated into huge loss suffered by the petitioners. It is urged with vehemence that the market value of the confiscated goods were assessed by the Customs Authorities in the tune of Rs.20,44,000 whereas the confiscated goods were handed over to CSD for Rs.2,97,000 by causing a grave loss to the petitioners.

4. Ch. Mumtaz Yousaf, learned Standing Counsel appeared for the respondents and supported the judgment impugned for the reasons enumerated therein with the further submission that the formalities as contemplated in section 201 of the Customs Act, 1969 have been completed and further more that the assessment made at the time of recovery of goods in question was tentative in nature and no assessment was ever made by the concerned appraisal officer and therefore, the tentative assessment qua the value of the goods cannot be taken into consideration. It is also pointed out that the order passed by learned adjudicating authority was never in their knowledge and the goods in question were disposed of on 10-3-2005 whereas the order passed by the adjudicating authority was a received after 4-4-2005, hence no mala fide can be attributed to the Customs Authorities as pressed time and again by the learned Advocate Supreme Court on behalf of petitioners.

5. We have carefully examined the respective contentions as agitated on behalf of the petitioners in the light of relevant provisions of law and record of the case. We have also examined the judgment impugned with care and caution It is an admitted feature of the case that during the pendency of constitutional petition the goods in question had been auctioned by the Customs Authorities and proceed thereafter deposited in the Government Treasury and therefore, it was not possible for the learned High Court to restore the original goods to the petitioners. There is no denying to the fact that the said goods were recovered from concealed cavities of the vehicle which was on its way from Quetta to Taftan and at the time of recovery none had claimed the ownership of the goods in question. No doubt that subsequently, an application was moved by the petitioners claiming ownership and the learned Assistant Collector Customs, after confiscation of goods gave an option pursuant to the provisions as contained in section 181 of the Customs Act, 1969 to the owners of the goods for redemption against payment of fine of 30% of the CIF value of the seized goods by means of order, dated 4-4-2005 but admittedly, the goods had been disposed of on 10-3-2005 being unclaimed goods. Had the order passed by the adjudicating authority been passed earlier the question of disposal of the seized goods would have not arisen. It reveals from the scrutiny of record that necessary formalities as envisaged under section 201 of the Customs Act, 1969 were completed by taking the following steps as informed by the learned Collector Customs who remained present pursuant to the notice issued by this Court:--

"Serving a proper notice under section 201 of the Customs Act, 1969 by the Assistant Collector S.W.H. Quetta but no reply received from any concerned.

The watches have got appraised by the Principal Appraiser who proposed Rs.35 per watch after conducting the market survey.

Watches were sold/released to Messrs CSD Quetta Cantt. vide Release Memo. No.7 of 2005 dated 10-3-2005.

The sale proceed was transferred accordingly into the account of Collector of Customs vide Challan No.4, dated 14-4-2005."

6. The steps taken by the respondents for the completion of necessary formalities as envisaged under section 201 of the Customs Act, 1969 were not refuted. It has also come on record that after receiving the copy of order, dated 4-4-2005 the petitioners were informed that since the case was registered against unknown persons therefore, after affixation of notice pursuant to the provisions as contained in section 201of the Customs Act, 1969 and in absence of any claim the goods in question were disposed in favour of CSD Quetta Cantt, by means of release memo. No.7 of 2005, dated 10-3-2005 and further showed its willingness to refund the sale proceed to the petitioners.

7. We have also adverted to the question of the price of the goods in question which initially was determined tentatively by the seizing officer which cannot be considered as. final. Even otherwise the question of fixation of price being a question of fact cannot be determined by the High Court in exercise of its constitutional jurisdiction. The Customs Authorities who are vested with the powers to assess the actual value of the goods for the purpose of customs duty and in absence of any evidence contrary to the determination of such value by the Customs Authorities it is to be accepted. The Collector Customs had informed that the value of the goods in question was assessed on the basis of invoices and bill of entry which could not be rebutted by the petitioners. The dictum as laid down in Obedullah's case (supra) cannot be made applicable to this case in view of its chequered history. It, however, needs hardly any elaboration that the Customs Authorities are required to adopt adequate measures for obtaining better results qua auction of seized goods so that consequential legal rights or benefit accruing from such, auction proceedings to either party are not jeopardized. We have also examined the dictum laid down in case Raza Muhammad v. Inspector-General, Frontier Corps 1999 MLD 3414 which being distinguishable hardly renders any assistance to the case of petitioners.

8. Be that as it may, the sale proceed be handed over to the petitioners who would be at liberty to approach the civil Court for the redressal of their grievances subject to all legal exceptions. The petition is disposed of in above terms.

S.M.B./R-20/SCOrder accordingly.