MUHAMMAD FAROOQ VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2009 P T D 1254
[Federal Tax Ombudsman]
Before Justice (Retd.) Munir A. Sheikh, Federal Tax Ombudsman
MUHAMMAD FAROOQ through Attorney and another
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No. 505 of 2004, decided on 19/04/2005.
(a) Customs Act (IV of 1969)---
----S.168---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Seizure of things liable to confiscation---Release of vehicle after 18 days from the date of delivery of certified copy of court's judgment---Validity---Delay in releasing the vehicles after the High Court's decision declaring the acts of the department illegal, especially in the absence of any stay order, causing inconvenience/harassment to the complainants and the inaction and inattention to which some of the applications submitted by the complainants were subjected to acts which were tantamount to `maladministration'---Ombudsman observed that there was need for inquiry into causes of delay in the release of vehicles following Court's order and the alleged misconduct of the staff to pinpoint responsibility for taking appropriate action against those responsible for it.
(b) Customs Act (IV of 1969)---
----Ss.216 & 168---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---No compensation for loss or injury except on proof of neglect or wilful act---Release of vehicle---Complainant alleged that during detention of vehicle valuable parts such as suspensions, Gear Boxes, Clutches, Tyres, Batteries, Tool Boxes etc. were replaced/changed and the documents, including registration books were stolen---Complainants suffered a loss by way of repairs, replacement of parts, tyres etc. which were removed by the Department---Department's acts such as detention, seizure of vehicles, non-implementation of Court's orders resulting in heavy losses may be declared illegal, void and mala fide---Department he directed to pay the compensation for the financial loss suffered by them and appropriate actions may be initiated against delinquents for maladministration---Validity---Complainants were to prove before the Department that there was damage or loss and that it was caused wilfully---Complainants may lodge a claim with the department, prove their case and obtain decision on merit in accordance with the provisions of law---Intra-Court Appeals filed by the Department against High Court's order were pending and sub judice, it was not possible for Federal Tax Ombudsman to give any findings on the legality or otherwise of the Department's action to seize/detain the vehicles---However, in respect of wilful delay in releasing the buses, despite High Court's orders and allegation of misconduct on the part of staff, Federal Tax Ombudsman recommended that the Central Board of Revenue direct the D.G. (Inquiries) to inquire into allegations of delay in the release of buses after High Court's order declaring the respondents' action as illegal and harassment to the complainants, and pinpoint, in case the allegations are proved, the officials responsible for appropriate action under the Efficiency and Discipline Rules in force.
(c) Customs Act (IV of 1969)---
---S.216---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---No compensation for loss or injury except on proof of neglect or wilful act---for claim of loss on account of replacement/pilferage of parts and accessories, the complainants should have identified the missing parts and proved the same to the Customs authority before taking release of the buses or before moving the vehicles out of customs jurisdiction/charge.
Muhammad Akbar (Advisor) (Dealing Officer).
Mian Abdul Ghaffar for the Complainants.
Muhammad Talib Hussain, A.C. AFU, Multan for Respondent.
FINDINGS/DECISION
JUSTICE (RETD.) MUNIR A. SHEIKH, (FEDERAL TAX OMBUDSMAN).---Facts of the complaint are that Messrs Hino Pak Motors Limited Karachi sold buses having Chassis Nos.40085 and 40260 to Messrs Sindh Road Transport Corporation (SRTC), which were registered under Registration Nos.958-300 and 958-846. Subsequently the SRTC sold the vehicles to Messrs Al-Madina Engineering Works. Purchasing them from Al-Madina Engineering Works on 21-10-1998 the complainants got them registered in their names with the Motor Registration Authority (MRA), Shikarpur under Registration Nos.384 and 385 on 6-2-1999. The respondents seized the two vehicles on 3-10-2003 on the grounds that as per MRA's report, dated 11-10-2003 the record of the vehicles was not available nor were their numbers entered in the relevant register. It was also alleged that the chassis numbers were without codes and the vehicles in question were suspected to be smuggled. The complainants produced relevant documents in support of their contention that the vehicles were locally assembled/manufactured by Messrs Hino Pak Limited and were not smuggled but the respondents refused to release them presuming that vehicles registration numbers were fake. On approaching the MRA the complainants were informed that the relevant registration record was available and the vehicles were properly registered. The MRA's report, dated 11-10-2003 was manipulated by the Inspector and Superintendent of Customs. Subsequently, the MRA issued a certificate to the effect that the vehicles were duly registered. The complainants approached the Customs authority on the basis of MRA's certificate, dated 2-12-2003 for release of the vehicles but it did not accept the certificate and kept on relying on MRA's earlier report. The complainants requested the respondents to get the certificate verified from the MRA or ask Messrs Hino Pak Limited to inspect the buses at complainants' expense to confirm whether or not these were locally manufactured but their request was rejected. A contravention case instituted against the complainants was set up to the Collector for adjudication. As interception, seizure and continuous detention of the vehicles were illegal the complainants filed Constitutional Petitions (W.P. No.5519 of 2003 and 4429 of 2003) in the Lahore High Court (Multan Bench) which were accepted. The Honourable Court declared the seizure as illegal and without lawful authority vide its judgment, dated 22-3-2004. Following Court's decision the complainant submitted applications, dated 6-4-2004, 8-4-2004, 10-4-2004 and 16-4-2004 for release of vehicles in question but the same were not released. A detailed letter, dated 17-4-2004 was written to the Collector of Customs yet the vehicles were not released. These were, however, released on 24-4-2004 after repeated requests and visits to the offices of respondents Nos. 1 to 3 and sufferance The vehicles remained in the custody of respondents 1 to 4 from 2-11-2003 to 24-4-2004 resulting in a loss of Rs. 10,44,000 @ Rs.3000 per bus per day. The certified copy of the Court's judgment was delivered to the respondents on 6-4-2004 but the vehicles were released after 18 days. During detention valuable parts such as suspensions, Gear Boxes, Clutches, Tyres, Batteries, Tool Boxes etc. were replaced/changed and the documents, including' registration books, were stolen. The chassis numbers of the vehicles were rendered invisible by filing them. The complainants also suffered a loss of Rs.778,000 by way of repairs, replacement of part tyres etc. which were removed by the respondents. The complainants submitted applications to the Collector but no action was taken. The Inspector and Superintendent Customs threatened the complainants that if they made any complaint in this behalf the vehicles would be seized again. Unlawful seizure of the vehicles, manipulation of records and continuous refusal to release the vehicles amounted to maladministration. Respondents' high-handedness deprived the complainants' families of their source of income, causing heavy losses. It is pleaded that respondents' act such as detention, seizure of vehicles, non-implementation of Court's orders resulting in heavy losses may be declared illegal, void and mala fide. They may be directed to pay the complainants compensation for the financial loss suffered by them and appropriate actions may be initiated against delinquents for maladministration.
2. In his para-wise comments the Collector of Customs, Multan, has stated that the vehicles in question were seized under section 168 of the Customs Act, 1969 on the ground that these were smuggled. The MRA, Shikarpur confirmed vide its letter, dated 11-10-2003 that neither files relating to these vehicles were traceable in its office nor was their registration entered in the ledger. The chassis serial numbers were tempered. The chassis numbers of seized vehicles were got chemically examined from Forensic Science Lab. Islamabad. The Lab. confirmed that the chassis numbers were vague, tampered after deep filing of the original and hence were not genuine. The complainants filed writ petitions in the Lahore High Court, Multan Bench. The Court accepted the writ petitions on the grounds that (i) the owners of the vehicles were not associated by the department at the time of examination of these vehicles by the Forensic Science Lab. (ii) in such disputes Forensic Science Lab would submit report after examining the vehicles in the presence of the person/party and that ex pale report would not be accepted, and (iii) the notice should have been issued by the seizing authority to the owners or the persons from whose possession the vehicles were seized notifying them of the date on which the vehicles would be examined in the Lab. The Court, therefore, declared respondents' action as illegal, without lawful authority and of no legal effect. The department filed I.C.A. Nos.85/04 and 86/04 and 86/04 against Court's judgment which were admitted for regular hearing by a Division Bench. The complaint was premature, the matter was sub judice before the Division Bench hence, the complaint was not maintainable under section 9(2) of the Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000. The Collector has further explained that:---
(i) The vehicles were seized on information that these were smuggled by a Mafia who were smuggling vehicles across Pakistan-Afghanistan Border and tampering chassis serial numbers to make them match the serial numbers of locally manufactured vehicles and got them registered under fake and fabricated documents.
(ii) Upon seizure of the buses the complainants could not produce documents showing legal import and possession. The chassis numbers were found manipulated and tampered with. The lab report obtained from the Forensic Lab. mentioned that the chassis numbers were not genuine, these had been engraved and tampered after deep Filing of original numbers and the original numbers could not be developed. The certificate, dated 2-12-2003 issued by the MRA, Sindh was managed by the complainants to twist the facts and obtain favourable results. The aforesaid certificate was issued to a person, who was neither the registered owner nor had anything to do with the vehicles. MRA did not even issue a clarification regarding the earlier certificate issued by them to the Anti-Smuggling Organization, Multan.
(iii) The complainants did not produce original registration books before the Investigating Officer or before any other forum which indicated that they were not the registered owners. According to memo. issued by Messrs Hino Pak Motor Limited the two AC buses model AK176KA Chassis No.40085 and No.40620 were sold vide invoice No 717, dated 11-2-1987 and No.1567, dated 5-8-1988 whereas the perusal of the certificate, dated 2-12-2003 issued by MRA revealed that Hino buses (model 1991) were registered by them against registration Marks P-0385 and P-0284, Shikarpur. The certificate, dated 2-12-2003 was not produced before the Investigating Officer nor did Sher Nawaz, owner of the seized buses, ever appear before the Investigation Officer or produce the documents of lawful possession.
(iv) On 6-4-2004 one Suhail Nawaz Baloach submitted an application before the Collector for release of vehicles in the light of Court's judgment, dated 1-4-2004 passed in Writ Petitions Nos.5519 of 2003 and 5529 of 2003. He was advised vide Collectorate's letter, dated 14-4-2004 to lake delivery from Incharge warehouse in compliance of Court's order. lie was also advised that as a team of experts from Forensic Science Lab was visiting Custom House, Multan and he may produce the buses on 18-4-2004 for reexamination of vehicles (registration numbers P-0384) by experts of Forensic Science Lab. in his presence or his duly authorized representative. This was done to comply with Honourable Court's order.
3. During the hearing the AR reiterated that the complainants purchased these vehicles from Al-Madina Engineering. The ownership was transferred in the names of the complainants by MRO Shikarpur. Inspector Mubeen Akhtar and Superintendent Tanveer Bhutta managed letter from MRO Shikarpur to the effect that the registration was fake and seized the vehicles. All relevant documents, including MRO's certificate, dated 2-12-2003 were provided but the respondents refused to release the vehicles. The applications submitted in the wake of High Court's judgment declaring respondents' action as unlawful remained unheeded. Even application, dated 17-4-2004 submitted to the Collector personally asking him to release the vehicles remained un-actioned. When released on 24-4-2004 after 18 days of High Court's order a number of items were found missing. (The D.R., however, stated that while taking delivery of vehicles no such objection was raised). The AR stated that the Inspector and Superintendent Customs had been seizing identical vehicles and releasing them against consideration. The department had filed ICAs but no stay was granted. To a query, the AR respondent that the civil suit filed by Mr. Sher Nawaz is for damages on account of his defamation and not for loss caused due to illegal detention and pilferage of parts. The complainants should be compensated.
4. The D.R. stated that the complainants who took the vehicles to of the Customs area did not point out nor prove that the parts were missing. The allegations of theft/loss of parts were baseless. The Collectorate maintained `watch and ward' and it is not possible to pilfer the parts. If there was any pilferage/removal of parts the complainants should have pointed it out before taking delivery of vehicles. Not only that they took delivery of vehicles they never even wrote to the Collector about the missing part. They could have applied to the Collector who could have conducted an inquiry to determine the truth. No maladministration was committed. The respondents acted lawfully on the basis of (i) MRA's report, dated 11-10-2003, (ii) the Forensic Science Lab. report that the chassis numbers were not genuine and (iii) reasonable suspicion that the vehicles were smuggled. The High Court had ruled that the respondents should have obtained the Forensic Science Lab report in the presence of the complainants. Following High Court's judgment a letter, dated 14-4-2004 was addressed to Mr. Sher Nawaz, power of attorney, to take delivery of the vehicles but produce the same on 18-4-2004 before a team of experts in terms of High Court's judgment. The complainants did not cooperate. The vehicles were, however, delivered on 24-4-2004. The AR, however, argued that the Lab. report was manipulated. The vehicles were never taken to the Lab in Islamabad which was also confirmed by Motorway Police's certificate, dated 12-3-2004. The DR, however, argued that the Motorway was not the only route to Islamabad. The Lab. from which the respondents obtained the report was not competent to issue the same as it was not a recognized institution. As far Collectorate's letter, dated 14-4-2004 asking for production of vehicles for inspection by experts, how could the vehicles be presented when these were not released? The AR stated that section 216 of the Customs Act, 1969 allowed compensation in case of damage/loss.
5. The arguments of the parties and the record of the case have been considered and examined. It is observed that the department had made out a case against the complainants principally on the basis of (i) suspicion that the vehicles were smuggled, (ii) MRA, Shikarpur's letter, dated 11-10-2003 informing the respondents that the files pertaining to the vehicles were not traceable in their office nor was the registration of the vehicles entered in the ledger and (iii) tampering of chassis of numbers, especially the chemical report of Forensic Science Lab, Islamabad, which revealed:---
"The above-mentioned chassis numbers are not genuine. There has been engraved and tampered after deep filing the original. The original number cannot be developed".
The complainants filed Writ Petitions Nos.5519 of 2003 and 5529 of 2003 in the High Court. Observing, among other things, that (i) the vehicles could not be seized without first determining that these were liable to confiscation under section 168 of the Customs Act, 1969, (ii) notice under section 171 of the Customs Act was not served on the owner/person from whom the vehicles were taken into possession and (iii) the only strong evidence, inferring the vehicles to be smuggled items was the report of Forensic Science Lab. that, too, was ex parte and obtained in the absence of the petitioner the Honourable Court ruled that: ---
"For future guidance, in such like dispute, the Forensic Science Laboratory will submit report after examining the vehicle in the presence of the concerned person/party, and ex parte report would not be accepted. At least notice, would have been issued by the Seizing Authority to the owner or the person from whose possession the vehicle would be taken into possession by the Customs/Police functionary, to the effect that on such and such date, the vehicle will be examined in the Laboratory.
For the foregoing reasons, the entire action of respondent Nos.1 to 4/Customs Authorities, seizing the vehicle/buses of the petitioners without determining the same liable to confiscation, is hereby declared illegal, without lawful authority and of no legal effect and as a result whereof, these writ petitions are accepted with costs".
The complainants' claim that they delivered certified copy of Court's judgment to the respondents on 6-4-2004 but the respondents released the vehicles on 24-4-2004 after 18 days of the judgment. During the intervening period the complainants submitted five applications for release of the vehicles in compliance of Court's order. The vehicles were not released. In a late response to application, dated 6-4-2004 the Superintendent Anti-Smuggling vide his letter, dated 14-4-2004 addressed to the complainants, asked them to take delivery of the vehicles from the Warehouse in compliance of Court's order but also to produce the vehicles on 18-4-2004 for re-examination by Forensic Science experts in the presence of the complainants or their authorized representatives. The other applications were not heeded. Addressing the Collector vide their application, dated 17-4-2004 the complainants brought to his notice the reluctance of the staff to release the vehicles and asked him to (i) direct the staff to release the vehicles in compliance of Court's order and (ii) withdraw Superintendent Anti-Smuggling's letter, dated 14-4-2004 for producing the vehicles on 18-4-2004 for re-examination by Lab. experts. In the same letter the complainants had also complained against the delaying and harassing tactics of the staff. The Superintendent, it appears, tried to apply the Honourable Court's order that "for future guidance, in such like disputes, the Forensic Science Lab. will submit report after examining the vehicles in the presence of the concerned person/party and ex parte report would not be accepted" to the instant case whereas in the instant case the Honourable Court had struck down the entire action of the Customs Authorities as illegal and without lawful authority. The vehicles were, however released on 24-4-2004. The Collector could have inquired into staff's refusal to release the vehicles and the delay in delivery thereof after Honourable Court's order as well as into the conduct of the staff complained against. The record does not show whether he did so or not. The delay in releasing the vehicles after the Honourable High Court's decision declaring the acts of the respondents illegal, especially in the absence of any stay order, and thus causing inconvenience/harassment to the complainants and the inaction and inattention to which some of the applications submitted by the complainants, including application, dated 17-4-2004 were subjected to arc acts which are tantamount to `maladministration' within the meaning of section 2(3) of the Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000. There is, therefore, need for inquiry into causes of delay in the release of vehicles following honourable Court's order and the alleged misconduct of the staff to pinpoint responsibility for taking appropriate action against those responsible for it.
6. As to the question whether or not the seizure/detention etc. of the buses in question was legal or unlawful the Honourable High Court declared the same as illegal and lawful. The respondents have, however, filed I.C.As. 85/04 and 86/04 against the judgment on various grounds, including that (i) the vehicles were lawfully detained, (ii) these were liable to be confiscated as there was reasonable belief that the vehicles were smuggled and (iii) the lab report had confirmed tampering of the chassis numbers. The case is, therefore, sub judice before the Honourable High Court.
7. As for the claim of loss on account of replacement/pilferage of parts and accessories, the complainants should have identified the missing parts and proved the same to the Customs authority before taking release of the buses or before moving the vehicles out of customs jurisdiction/charge. It appeared that the complainants did not lodge any formal claim for such loss before resuming the vehicles from the Customs authority. In this connection the AR referred to the provisions of section 216 of the Customs Act, 1969 which is reproduced below:---
"No compensation for loss or injury except on proof of neglect or wilful act.---No owner of goods shall be entitled to claim from any officer of customs compensation for the loss of such goods or for damage done to them at any time while they remain or are lawfully detained in any custom house, customs-area, wharf or landing place under the charge of any officer of customs, unless it be proved that such loss or damage was occasioned by gross negligence or wilful act of such officer".
If the above-stated section of the Act was relevant and applicable, it was for the complainants to prove before the respondents that there was (i) damage or loss and that (ii) it was caused wilfully. They may, if they so wish, lodge a claim with the department, prove their case in terms of the above-mentioned section and obtain on merit in accordance with the provisions of law.
8. In view of the foregoing position, especially the fact that the I.C.As. filed by the respondents against Honourable High Court's order are pending and sub judice, it is not possible for this forum to give any findings on the legality or otherwise of the respondents' action to seize/detain the vehicles. However, with reference to complainant's allegation that the respondents caused wilful delay in releasing the subject buses, despite High Court's orders and the allegation of misconduct (application, dated 17-4-2004) on the part of the staff it is recommended that the C.B.R. direct the D.G. (Inquiries), Islamabad to:---
(i) Inquire into allegation of (i) delay in the release of buses after Honourable High Court's order declaring the respondents' action as illegal and (ii) harassment to the complainants, and pinpoint, in case the allegations are proved, the officials responsible for appropriate action under the Efficiency and Discipline Rules in force.
(ii) Compliance be reported within 30 days.
C.M.A./438/F.T.O.Order accordingly.