MUHAMMAD ASLAM VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1113 (2003)

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

----Ss. 179, 179-A [as omitted by Finance Ordinance (XXX of 1979)] & 185-A---Decision of Special Judge on merits---Binding force---Extent---Adjudicating Officer in respect of same subject-matter and evidence could not disagree with or ignore decision of Special Judge on merits---Where decision of Special Judge was made on any technical plea or for non-production of material evidence by prosecution, then, Adjudicating Officer, on the basis of such evidence, if admissible, could consider matter afresh by giving reasons for difference of opinion, if any---Principles.

The decision of the Special Judge on merits commands respect by the Customs Authorities in respect of the same subject-matter and on same evidence. But where such decision is made on any technical plea and certain material evidence in possession of the prosecution or the Customs authorities was not produced, the Adjudicating Officer, in the light of such material evidence, if admissible, can have a fresh look into the matter by giving reasons for difference of opinion, if any. Section 179-A omitted by Finance Ordinance, 1979 provided that where the goods and things seized are to be or are being prosecuted before the Special Judge, an order of adjudication made under section 179 or under Chapter XIX shall be subject to the decision of the Special Judge and Special Appellate Authority in appeal or revision, if any. By omission of section 179-A, the statutory binding force of the decision of the Special Judge has been lost and the Adjudicating Authority can only differ within the parameters mentioned above, but on the same evidence, the Customs authorities cannot disagree or ignore the decision of Special Judge passed on merits.

Adam v. Collectors of Customs, Kar. PLD 1969 SC 446 and Muhammad Sarwar v. Fed. of Pakistan 1988 PCr.LJ 213 ref.

(b) Customs Act (IV of 1968)---

----Ss. 158(1)(89) & 168---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.9 & 11---Seizure and confiscation of arms alleged to be of foreign origin---Refusal of authority to release goods in spite of acquittal of complainant from both charges of possessing and smuggling of arms on ground of non-production of expert evidence regarding origin of arms by prosecution---Validity---Case property as referred to in F.I.R. was of foreign origin according to expert opinion---Prosecution had not produced expert evidence before Court---Had expert opinion been produced and expert witnesses examined, decision would have been different in cases before Special Judge and Judicial Magistrate, in such circumstances, if Adjudicating Officer takes a different view from decisions of Special Judge and Judicial Magistrate, same would not fall in realm of maladministration---Complainant had already filed appeal, where he could press his objections for final consideration---Maladministration identified was in respect of proceedings conducted before such Courts by prosecution and customs authorities for not producing expert evidence dishonestly, negligently and with improper motive---Federal Tax Ombudsman recommended to C.B.R. to investigate the reasons for non-production of expert evidence before Court and to identify all functionaries of tax administration responsible for such negligent and dishonest act and take action against them according to law with directions to Appellate Authority to decide appeal within specified time.

1993 PCr.LJ 1922 ref.

Khalid Pervez for the Complainant.

Ch. Muhammad Javaid, AC (Adjudication) for Respondent.

FINDINGS/DECISION

JUSTICE (RETD.) SALEEM AKHTAR (FEDERAL TAX OMBUDSMAN).---Brief facts of the case are that the complainant is an arms and ammunition dealer working under the name of Messrs Fine Arms, Faisalabad. In 1994 he ordered Messrs Sarhad Arms Company Peshawar for supply of Pak made arms and ammunition. The Customs Intelligence Staff Faisalabad detained the goods on 21-2-1994 on the suspicion of containing arms and ammunition of foreign origin and the complainant was also arrested on 3-3-1994 on the charge of smuggling when he visited the Railway Station, Faisalabad. The complainant was acquitted in both the cases by the Special Judge Customs Lahore as well as by Judicial Magistrate, Faisalabad on 10-3-1999 and 6-3-2000 respectively. Thereupon the complainant moved applications before the D.C. Customs, Faisalabad on 2-9-2002 and 4-11-2002 for release of the goods. Receiving no response the complainant filed a writ petition in the Lahore High Court and the Additional Advocate-General under instructions from the customs authorities stated before the Court that the matter regarding of the case property was under' process and the same would be completed within ten days. The customs authorities Faisalabad, instead of releasing the whole goods released a part thereof and the rest of the goods were confiscated. Hence this complaint stating that since the complainant was acquitted from the both charges of buying ammunition of foreign origin and smuggling such goods, the customs authorities who had not filed appeals against orders of his acquittal should have released the whole goods which speaks of high-handedness and constitutes maladministration on the part of the concerned customs authorities who were dragging the complainant for the last 9 years. It is prayed that the respondents be ordered to release the confiscated case property to the complainant.

2. In reply the respondent has stated that goods confiscated were of foreign origin which according to the complainant were of local origin. In this regard a show-cause notice was issued to the complainant on 24-5-1994 and after hearing by the D.C. (Adjudication) the case was decided against the complainant vide O.I.O. dated 2-5-2003. The complainant filed appeal against this O.I.O. before the Collector (Appeals) where regular hearings were currently being conducted. Now in addition to the appeal before Collector (Appeals) the complainant was also seeking relief from the Federal Tax Ombudsman. It was prayed that the complaint be directed to pursue his regular appeal.

3. Representatives of the both sides attended and reiterated their contentions. The A.R. of the complainant produced evidence that complaint was filed on 31-5-2003 which was prior to filing of appeal on 2-6-2003. He further contended that according to the S.R.O. 913(I)/86 dated 5-10-1986 the Railway Police was not authorized for seizure of goods under the Customs Act. He referred to the decision of High Court Karachi reported as 1993 PCr.LJ 1992 in this regard. He further reiterated that since two law courts have acquitted the complainant from charges of possessing arms of foreign origin and smuggling, the customs authorities could not confiscate his goods. He also argued that the Order -in-Original dated 2-5-2003 passed by D.C. (Adjudication) Faisalabad was arbitrary an illegal because according to section 168 the show-cause notice had to be issued within 2 months of seizure of goods i.e. upto 21-2-1994 whereas the notice was issued on 25-4-1994. It was further pointed out that the D.C. (Adjudication) had acted beyond jurisdiction because according to section 179 which deals with powers of adjudication the Deputy Collector could adjudicate in case where the value of confiscated goods did not exceed Rs.400,000 whereas in the case of the complainant the value of goods was determined at about 100,0000. The representative of the respondent stated that as per report of the G.H.Q., M.C.O. Branch, the goods were of foreign origin, hence the same were rightly confiscated vide O.1.O. dated 2-5-2003. It was also contended that show-cause notice was issued within extended time in terms of section 168(2) of the Customs Act.

4. The contentions and arguments of the both sides were considered and relevant record was examined. The goods were seized on 21-2-1994 at Faisalabad, Railway Station by the Custom Intelligence Staff along with Railway Police. The Special Judge Customs, Lahore by order dated 10-3-1999 acquitted the complainant of the charge of possessing goods of foreign origin in the following manner:-

"In view of the above discussion, I am convinced that the prose cution failed to prove a basic ingredient of section 156(1)89 of the Customs Act, 1969, that the goods were of foreign origin or smuggled earlier. The documents recovered from the accused at the time of arrest also make the case of the prosecution doubtful. I accordingly give benefit of such doubt to the accused and acquit him of the charge against him. He is on bail. He stands discharged from his bail bonds. The case property shall be disposed of by the Customs Authorities in accordance with law, after the period of .appeal/revision, if any."

5. The complainant was also acquitted from the charges of smuggling in the case filed by the customs department before Judicial Magistrate, Faisalabad vide his order dated 6-3-2003 as under:-

"The case is for the year 1994, the present case is outcome of a transaction for which the Customs Authorities have filed the complainant under Customs Act from which the accused have been acquitted. Therefore, it became clear that he has not smuggled any item. The case property mentioned have been declared as local made by the expert opinion while deposing the testimony in customs Court. Therefore, as the petitioner was having valid licence for selling and purchase and transport the ammunition and weapon, he is not guilty under the law. I am therefore, convinced that there is no probability of ending the trial in conviction against the accused Mir Muhammad Aslam, I therefore, by accepting the application under section 249A Cr.P.C. acquit the accused of the charge against him. He is on bail. He stands discharged from his bail bond. The case property shall be handed over to the petitioner in accordance with law after the expiry of period of appeal/revision if any."

6. The learned counsel for the complainant has mainly relied upon the fact that the Special Judge Customs has acquitted by the holding that there is no evidence to prove that the seized goods were of foreign origin. Likewise the Judicial Magistrate has also discharged the complainant from charge of smuggling. It was further contended that in the circumstance the 'case property should be handed over to the complainant as observed by these Courts. The contention of the learned representative for the department is that the confiscation proceedings are completely independent as provided by the Customs Act and as the complainant has filed against the order-in-original which is pending the case should left to be decided by the Appellate Authority. It may be noted that the proceeding before the Customs Judge was instituted under section 185A of the Customs Act whereby he has the exclusive jurisdiction to take cognizance and try any accused charged of any offence punishable under this Act. Likewise proceedings before Judicial Magistrate were in respect of smuggling. On the other hand the adjudication of the seized property falls within the exclusive jurisdiction of the Customs Authorities. Reference can be made to Adam v. Collector of Customs, Karachi PLD 1969 SC 446. The question is whether the finding's and the orders passed by the Special Judge are binding on the Customs Authorities while exercising jurisdiction as Adjudicating Officer under section 179 of the Customs Act. It is well-settled principle that the decision of the Special Judge on merits commands respect by the Customs Authorities in respect of the same subject-matter and on same evidence. But where 'such decision is made on any technical plea and certain material evidence in possession of the prosecution or the Customs Authorities was not produced, the Adjudicating Officer in the light of such material evidence if admissible an have a fresh look into the matter by giving reasons for difference of opinion, if any. Reference may be made to section 179A omitted by Finance' Ordinance, 1979 which provided that where the goods or things seized are to be or are being prosecuted before the Special Judge, an order of adjudication made under section 179 or under Chapter XIX shall be subject to the decision of the Special Judge and of Special Appellate Authority in appeal or revision if any. By omission of section 179A the statutory binding force of the decision of the Special Judge has been lost and the adjudication authority can only differ within the parameters discussed above. It is made clear that on the same evidence the Customs Authorities cannot disagree or ignore the decision of Special Judge passed on merit. Reference can be made to Muhammad Sarwar v. Fed. of Pakistan 1988 PCr.LJ 213.

7. An examination of the order passed by Special Judge makes it clear that the complainant was acquitted because it was observed that seized goods were not of foreign origin. This order was passed on 10-3-1999. In this case evidence of the prosecution was recorded but strangely enough expert opinion being the material evidence was not produced. As stated in the F.I.R. the case property was referred to for expert's opinion who had sent his opinion on 10-4-1994 specifically stating that the seized goods were of foreign origin. The prosecution for reasons best known to them did not produce this material evidence before the Special Judge. It was a clear case of collusion, negligence and dishonesty. Had expert's opinion been produced and expert witnesses examined the decision may have been different in the case before the Special Judge and the Judicial Magistrate where the prosecution failed mainly because no evidence that the seized goods were of foreign origin was produced. In these circumstances in my view, if the Adjudication Authority takes a different views from the decisions of the Special Judge and the Judicial Magistrate the case will not fall in the realm of maladministration. The complainant has already filed an appeal where he can press his other objections for final consideration.

8. In the facts and circumstances the maladministration, which has been identified, is in respect of proceedings conducted before the Special Judge and the Judicial Magistrate by the prosecution and Customs Authorities. In pursuing, the matter they have acted dishonestly, negligently and with improper motive in not producing material evidence i.e. expert's opinion before the Court.

It is recommended that:--

(i) C.B.R. to investigate the reasons for non-production of the expert's evidence before the Special Judge, Customs and all those functionaries of tax administration responsible for such negligent and dishonest act be identified and action be taken against them according to law.

(ii) The appellate authority to decide the appeal within 45 days.

(iii) Compliance be reported within 60 days.

S.A.K./199/F.T.O.Order accordingly.