Sheikh EJAZ AHMAD VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2008 P T D 953
[Federal Tax Ombudsman]
Before Justice (Retd.) Saleem Akhtar, Federal Tax Ombudsman
Sheikh EJAZ AHMAD and another
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.1586-L of 2003, decided on 24/02/2004.
(a) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---
----S.9(2)(a)---Customs Act (IV of 1969), S.194-A---Complaint before Federal Tax Ombudsman against order already challenged in appeal before Appellate Tribunal---Withdrawal of appeal by complainant---Effect---Hurdle in entertaining complainant vis-a-vis provisions of S.9(2)(a) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 stood removed.
(b) Customs Act (IV of 1969)---
----S.168---Criminal Procedure Code (V of 1898), S.510---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.9 & 11---Seizure and confiscation of vehicle alleged to be non-duty paid on basis of report of Forensic Science Laboratory obtained in another case by Police showing its chassis number to be tampered one and not tallying with its number as entered in import and registration documents---Plea of complainant was that the Forensic test had been carried behind his back; that such report was inadmissible in evidence as such Laboratory was not notified under S.510, Cr.P.C.; that before using such report in evidence, examiner of vehicle, countersigning officer of report should have been summoned for cross-examination---Adjudicating Officer ordered release of vehicle on its recovery on payment of duty, taxes and penalty while observing that vehicle having been stolen was not available for re-test of its chassis number and that show cause had not been issued within period stipulated under S.168(2) of Customs Act, 1969---Validity---Was imperative to have first established, whether vehicle had been imported legally or illegally and whether same was duty paid or non-duty paid---If due to non-availability of vehicle, an independent test from independent laboratory was not possible for re-verification of its chassis number, Adjudicating Officer could call in experts/persons, who had examined and tested vehicle, signed/countersigned test report together with officials, who had earlier presented vehicle to laboratory for test, for recording their evidence and cross-examination by complainant, to which he was entitled---Maladministration was evident from order of Adjudicating Officer being arbitrary, unjust and unreasonable for having ignored legitimate demand of complainant---No appeal was provided against process employed by Adjudicating Officer, thus provisions of S.9(2) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 would not stand in way of investigation by Ombudsman---Federal Tax Ombudsman recommended to C.B.R. to direct Adjudicating Officer to consider complainant's case and pass order in accordance with law.
(c) Customs Act (IV of 1969)---
----S.168(2)---Release of property to owner due to issuance of time-barred show-cause notice---Validity---Duty and taxes could be recovered and penalty could be imposed for contravention.
PLD 1982 Pesh. 30; 1991 SCMR 647 and PTCL 1983 CL 209 fol.
(d) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---
----S.9---Constitution of Pakistan (1973), Art.199---Complaint before Federal Tax Ombudsman during pendency of constitutional petition in High Court---Maintainability---Where complainant withdrew constitu tional petition before hearing of complaint by Ombudsman, then bar of jurisdiction would stand removed and complaint would be- competent.
Complaint No. 100-K/2002 (Rep.No.59/2002-F.T.O.(LAW) fol.
Muhammad Akbar, Advisor (Dealing Officer).
Mumtaz-ul-Qayyum for the Complainant.
Muneeb Sarwar, D.C. (Customs) Sambrial for Respondent.
DECISION/FINDINGS
JUSTICE (RETD.) SALEEM AKHTAR (FEDERAL TAX OMBUDSMAN).---Facts of the case are that the complainant, a businessman, purchased Toyota Land Cruiser BC-8138 from Chaudhry Muhammad Jameel, the owner of Dera Flour Mills, Sheikhupura. The vehicle was originally imported under Transfer of Residence Rules on documents purchased from one Zahir Shah who sold the documents to the importer. Duties and taxes were duly paid on the subject vehicle vide Bill of Entry No.16035 dated 27-2-1997. The genuine chassis number of vehicle mentioned in both bill of entry and registration documents was HDJ 81-0029099. On 16-11-2000 the vehicle was intercepted by the police AS-I Mr. Asif Hameed and Hawaldar Mr. Muhammad Malik on the pretext that the vehicle was involved in a case and that its chassis number was 0031911. Despite complainants protest they took the vehicle into custody and started blackmailing him. The aforesaid officials obtained report from the police Forensic Science Lab. where one of the relatives of Muhammad Malik (Hawaldar) was posted. In the said report the actual chassis number of the vehicle was reported to be 0031911. The complainant brought the aforesaid officials illegal action to the notice of the senior police officers who allowed the complainant to get release of the vehicle on superdari from the Court of law. The aforesaid police officials also extorted money from him. While delivering the vehicle on superdari, the DSP mentioned the correct chassis number as was entered in the registration documents. The new number entered by respondents Nos.6 and 7 (ASI and Hawaldar) was manipulated. His complaint against the aforesaid police officials for extortion of money succeeded and an amount of Rs.40,000 was returned by the AS-I and the Hawaldar. Out of vengeance they got the subject Forensic Science Lab. report showing tampering of the chassis number of the vehicle which did not tally with the chassis number entered in import and registration documents. On 15-1-2001 the Anti Smuggling Squad of the Customs Department seized the vehicle. The complainant explained to them earlier role of the police and showed them the chassis/engine number in original form. At the demand of Deputy Superintendent Anti-Smuggling the complainant provided him a copy of the police Forensic Science Lab. report, which was managed by the police officials after tampering the correct chassis number. The Customs Staff got the particulars of the vehicle, including payment of duty thereon, verified and confirmed from Excise and Taxation Authority as is evident from Assistant Collector Custom's reference dated 31-2-1998 made to the Excise and Taxation Authority yet they detained the subject vehicle. Subsequently the vehicle was stolen from Custom House and an F.I.R. No.38/01 dated 27-1-2002 was registered with the police against the complainant. The complainant informed the authorities that the vehicle was stolen by the customs officials themselves because they were afraid that they would not be able to establish the case against the complainant. The police Investigating Officer declared the complainant as innocent. The respondent issued the complainant a show-cause notice dated 1-6-2001 asking him to explain as to why the vehicle be not confiscated and why penal action be not taken against him, which was replied to. Respondent No.1 decided the case holding that (i) show-cause notice was barred by time and (ii) since the vehicle was no longer available for re-checking of its chassis number and the only report available on record was that of the police Forensic Science Lab. ordered return of vehicle, on its recovery, to the complainant on payment of duty and taxes payable on the vehicle along with a penalty of Rs.5 lac imposed by him. The respondent's mala fides is also obvious from the fact that they included complainants name in complaint of theft registered with the police by tampering with the documents whereas originally his name was not included. During investigation Malik Abid, son of Malik Fazul-ur-Rehman, stated before the Investigating Officer that the vehicle was removed by the Customs Staff and it would be brought back only if the complainant withdrew his complaint against the Customs and C.I.A. employees. The Forensic Test was carried out at the back of the complainant. It is inadmissible in evidence because the subject lab was never notified under section 510 of Cr.P.C. Even if it was to be used as evidence the persons who examined the vehicle, countersigned the report and the officers who forwarded it should have been summoned by the Adjudication Officer and made available for cross-examination by the complainant. The customs detection memo had mentioned the correct chassis and engine number of the vehicle. The respondents may be directed to locate the vehicle and produce it before this forum for carrying out visual inspection of chassis number and also for obtaining fresh lab report to arrive at a correct conclusion. Show-cause notice was issued after expiry of four months. In cases where show-cause notice is not issued within time as stipulated under section 168(2) of the Customs Act, 1969 the proceedings are illegal and void as held by superior Courts. The Additional Collector (Adjudication) ignored many a point raised by the complainant during the proceedings, including the fact that even the Forensic Science Lab. report relied upon by him was in fact supplied to the Customs Department by the complainant. The said report cannot be made the basis for confiscation of vehicle and for demanding duty and taxes. The Adjudication Authority should have either kept the case pending till recovery of the vehicle and ordered its examination by Experts or should have ordered its return, on its recovery, unconditionally as required under section 168(2) of the Customs Act, 1969. Even according to Forensic Science Lab. report actual figures of chassis number are apparent and the report shows that someone tried to tamper the original chassis number. The complainant had filed an appeal against the O-I-O which was pending before the Customs, Sales Tax and Central Excise Appellate Tribunal but has withdrawn it for lack of faith in the Appellate Tribunal. The impugned adjudication order may be set aside being illegal, void and 'unjust. The respondents may be asked to recover and hand over the vehicle unconditionally. Strict action may be taken against respondents Nos.3 and 5 for registering a false case and misappropriation of the seized property.
2. In reply, the respondents have submitted that the Appellate Tribunal was the appropriate forum for deciding the case. The complainant has withdrawn his appeal from the Appellate Tribunal because he knew that it had no merit. If the complainant did not have faith in one Bench of the Appellate Tribunal he could have requested for transfer of his case to another Bench. Accepting representation from the respondents the President of Pakistan in a number of cases has accepted the appeals filed by the C.B.R. on the ground that in cases. where legal remedies of appeal, review or revision are available under the relevant Legislation and matters relate to determination of liability of duty and taxes, the Honourable F.T.O's. jurisdiction is hit by the provisions of section 9(2)(b) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000. Since the complainant had remedy before the Appellate Tribunal and the matter related to determination of liability the complaint was not entertainable. No `maladministration' could be attributed to the Customs staff because they themselves were the victim of theft of vehicle from their premises. The seized vehicle was smuggled one having tampered chassis number. The Bill of Entry No.16035 dated 27-2-1997 is not relevant as the chassis number mentioned in the bill of entry is different from one mentioned in the lab. report which is an independent source. It was not the police staff who provided information about the subject vehicle to the Customs staff out of vengeance, as alleged. The vehicle was seized on the basis of independent secret information received by the Customs staff that it was a smuggled vehicle having a tampered chassis number. The vehicle was intercepted along with copy of registration book. As per the police Forensic Science Lab. report the chassis number place has been deeply grinded and chassis number has been deciphered as HDJ 81-0031911 whereas the documents referred to by the complainant show its chassis number as HDJ 81-0029099 which proves that the vehicle was smuggled and was different from the vehicle cleared vide bill of entry number 16035 dated 27-2-1997. The fact that the superdari nama shows the chassis number as HDJ 81-0029099 does not vitiate the Forensic Science Lab. report wherein the chassis number has been deciphered as HDJ 81-0031911. The vehicle was stolen and a case of theft was registered on 24-1-2001 with police. The allegation that the customs staff is involved in the theft is baseless. If the complainant has been declared innocent of theft by the police, so have the customs staff. In the Murasala sent to the police the name of complainant No.1 was duly mentioned along with the name of the complainant No.2. At the time of seizure complainant No.2 had threatened the detecting agency with dire consequence which fact was inadvertently omitted from being mentioned in the Murasala. It was, therefore, amended through an addendum. The statement of Malik Abid is vague and has no value in the eyes of law. In any case, proceedings of this criminal case are still continuing and investigation is not yet over. The complainant is responsible for theft because he knew that the vehicle bore tampered chassis number and was smuggled one liable to outright confiscation. The Adjudication Authority has ordered to release the vehicle, on its recovery, to its original owner on payment of duty and taxes along with penalty of Rs.5 lac imposed for violation of law holding the vehicle as unlawfully imported and non-duty-paid. The O-I-O passed in the case is legal. The lab. test is fully authentic and trustworthy. If the complainant had wished to cross-examine the lab. officials the same would have been carried out at the adjudication stage. Right now there is no point in raising the issue. The lab. report is available on record and constitutes direct evidence. Return of vehicle for violation of section 168(2) of the Customs Act, 1969 does not absolve the complainant of payment of duty and taxes and penalty imposed as held by superior Courts in cases reported as PLD 1982 Pesh. 30(DB), 1991 SCMR 647 and recently in a case titled as Government of Pakistan versus Noor-ul-Haq. Property illegally grinded cannot be claimed for retrieval on account of technical mistake as held by the Lahore High Court in the case of Feroze Din reported as PTCL 1983 CL 209. The complaint is devoid of merit and may be dismissed.
3. During the hearing the A.R. reiterated the arguments as advanced in the written complaint emphasizing that the vehicle was lawfully imported and was duty-paid. Since show-cause notice was not issued within the period stipulated under section 168(2) of the Customs Act, 1969 the vehicle should be returned unconditionally as the proceedings taken in this regard were unlawful. Neither duty could be charged nor could any penalty be imposed. The bill of entry indicates the chassis number as HDJ 81-0029099 and it was accordingly registered in Karachi. The respondents are relying on the police Forensic Science Lab. report dated 13-11-2000 which shows that the chassis number has been deciphered as HDJ 81-0031911. The aforesaid Lab. is not approved under section 510 of the Cr.P.C. The Forensic Lab. report is dubious because it was managed by police officials who took the vehicle in custody in the first instance. The report was obtained merely to harass the complainant. Section 9(2)(b) of the FTO Ordinance, 2000 is not applicable because it is a case of maladministration involving arbitrariness, injustice, corruption and illegality.
4. The D.R. submitted that F.T.O. is not the proper forum for redressal of complainant's grievance. The complainant should have sought redress of his grievance from the Appellate Tribunal. A speaking O-I-O has been passed. The chassis number on the bill of entry and other documents does not tally with that of the seized vehicle. Detection memo 'and other documents show the so-called chassis number whereas the Forensic Science Lab. report shows a different chassis number. The complainant did not challenge Forensic Science Lab. report at the time of adjudication. It is only an afterthought.
5. The arguments of the parties and the record of the case have been considered and examined. It is observed that the complainant had appealed against the impugned O-I-O before the Customs, Sales Tax and Central Excise Appellate Tribunal, Lahore but withdrew the same vide Honourable Appellate Tribunal's order dated 12-1-2004 (on record). Thus the hurdle in the way of entertaining the complaint vis-a-vis the provisions of section 9(2)(a) of the F.T.O. Ordinance stands removed. The O-I-O shows that the show-cause notice was not issued within a period of two months or within the extended period of four months as stipulated under the provisions of section 168(2) of the Customs Act, 1969 and as such the subject vehicle was ordered by the Adjudication Officer to be returned to the owner on payment of duty, taxes and a penalty of Rs.5 lac imposed in the case. The impugned order also shows that while deciding the case the adjudication authority relied mainly on the police Forensic Science Lab. report according to which the original chassis number HDJ 81-0031911 had been tampered and another number HDJ 81-0029099' was punched in its place. In Para 12 of his order the adjudication officer has observed "the vehicle having been stolen is no longer available for retest of its chassis number and the only report available (on record) is the initial Forensic test report which declared its chassis number to be tampered one." He, 'therefore, ordered that "in case the theft case is resolved and the vehicle is retrieved as a result it may be returned to Sheikh Ejaz Ahmad against payment of leviable duty and taxes as he has not been able to discharge his burden of proving its lawful import status in terms of section 156(2) of the Customs Act, 1969." He also imposed a penalty of Rs.5 lac on the complainant for violation of law. The adjudication officer's observation that since the vehicle had been stolen and it was no longer available for retest of its chassis number gives the impression that had the vehicle been available its chassis number would have been got retested to ascertain the correct/original chassis number. The vehicle having been stolen it was not possible to order retest of its original chassis number through another lab. However, the O-I-O also reveals that insofar as police Forensic Science Lab. report is concerned the complainant had challenged the same [para 8(k) of O-I-O] in the following terms:
"That even otherwise so-called Forensic test was carried out on the back of the respondent No.1 because he was neither associated in such test nor he was aware about it. Hence, so called lab. report obtained earlier by AS-I Asif Hameed and Hawaldar Muhammad Malik can neither be relied upon nor it is admissible in evidence because said lab. was never notified under section 510 Cr.P.C. However, if it is to be used in evidence, the person who examined the vehicle, countersigned the report and officer who forwarded it should be summoned and made available for cross-examining them. Moreover, officials who took the vehicle to the said lab: are also required to be cross-examined by respondent No.1 in order to meet the ends of justice."
The complainant had also pleaded before the adjudication authority that the stolen vehicle may be recovered for carrying out visual inspection of its chassis number and for obtaining a fresh independent lab. test to arrive at correct conclusion. Complainant's contentions were, however, ignored. If the vehicle was not available for a possible retest through an independent lab. then the leapt the adjudication officer could do was to call in the police Forensic Science Lab. experts who examined and tested the chassis of vehicle together with officials who signed/countersigned the test reports for recording their Experts opinions and making the experts and others available for cross-examination by the respondents. Considering that the vehicle was taken into custody in the first instance by the police and the Lab. report was prepared by the police Lab. there was a case for closer scrutiny of the police Forensic Science Lab. report, examination of experts and others associated with its testing to form an independent opinion about the authenticity and viability of the report for arriving at a fair and informed decision. The decision not to do so despite complainant's pleadings during the proceedings is arbitrary, unjust and unreasonable.
6. As to payment of duty and taxes and imposition of penalty in cases where the property is returned to the owner due to failure to issue show-cause notice within the period stipulated under section 168(2) of the Customs Act, 1969, it is observed that duty and taxes could be recovered and penalty imposed for contravention as held by superior Courts in cases cited as PLD 1982 Pesh. 30 (DB), 1991 SCMR 647, PTCL 1983 CL 209. It is however, imperative that it should have been in the first instance objectively established whether the vehicle in question had been imported into the country legally or illegally and whether it was duty-paid or non duty-paid. If due to non-availability of the vehicle an independent test/analysis from independent Lab. was not possible for re-verification of chassis number etc., it was possible for the adjudication officer to call in and record the statements/evidences of the experts who examined the vehicle and conducted the tests and of those who signed and countersigned the test report, including officials who put up the vehicle, to the police Forensic Science Lab. for testing.
7. As respects objection by tin Revenue to the jurisdiction of the F.T.O. to entertain the complaint, the same is based on misreading of the provisions of section 9(2) of the F.T.O. Ordinance. Clause (b) of sub-section (2) of section 9 relates only to decisions on matters enumerated therein "in respect of which remedies of appeal, review or revision are available in the relevant legislation" itself. On the other hand, no such remedy has been provided of a process employed in the conduct of assessment or related proceedings. Since the matter in the complaint in hand relates to the process employed by the respondent, against which no appeal (etc.) is provided in the Customs Act, 1969, the provisions of section 9(2) of the F.T.O. Ordinance do not stand in the way of investigation by the F.T.O. In the present case `maladministration' is obvious in that the adjudication officer did not call in the experts of the police Forensic Lab. who conducted the test/analysis and others associated with the test for recording their evidence and for cross-examination by the complainant as was pleaded by him before the adjudication officer and to which the complainant was entitled. The adjudication authority ignored the legitimate demand and concerns of the complainant. The adjudication was thus carried out in an arbitrary, unjust and unreasonable manner, which is tantamount to `maladministration' in terms of section 2(3)(i)(b) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000. It may be pointed out that in Complaint No.100-K/2002 (Rep. No.59/2002- F.T.O. (LAW)) the President has held that where the complainant had withdrawn the petition from the High Court before the complaint was heard by the Federal Tax Ombudsman the bar on jurisdiction was removed and the complaint is competent. The case needs to be revisited and adjudicated for consideration and resolution of basic issues involved i.e. (i) the identification of correct chassis number of the vehicle, (ii) whether or not the vehicle was lawfully imported, and (iii) whether or not it was duty-paid. It is recommended that the C.B.R. direct the competent adjudication authority to
(i) Examine/consider the complainant's case for passing the adjudication order on merit in accordance with the provisions of law after (i) close scrutiny of police Forensic Science Lab. report, examination of persons/experts who examined and tested the vehicle together with persons who presented the vehicle to the lab. for test, (ii) extending the complainant the opportunity of defence, including the opportunity of cross-examination of experts and other witnesses, before deciding the case on merits.
(ii) Compliance be reported within 30 days.
S. A.K.1251/FTOOrder accordingly.