GHULAM HUSSAIN RAMZAN ALI VS COLLECTOR OF CUSTOMS (PREVENTIVE), KARACHI, 2015 PTD-SUPREME-COURT 107 (2014)

(On appeal from the judgment dated 24-12-2009 of the High Court of Sindh at Karachi passed in Special Custom Reference Application No.49 of 2007)

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

----S. 196---General Clauses Act (X of 1897), S. 27---Reference to High Court, filing of---Limitation---Commencement of time for purposes of limitation---Scope---Judgment of Appellate Tribunal sent to counsel by registered post---Presumption that such judgment was served---Time for filing reference before High Court would start to run from the date of service of post---Appeal, in the present case, was dismissed by Appellate Tribunal on 17-2-1998, and record showed that judgment had been dispatched to the counsel from office of Appellate Tribunal on 26-2-1998 through registered post---Even otherwise counsel moved first application for supply of copy of judgment on 2-5-1998, i.e. almost seventy days after the appeal had been heard and dismissed---Second application was moved by the counsel after almost 13 months on 5-3-1999, and third application was moved after more than three years on 11-6-1999---Gross negligence was exercised by the counsel in not bothering for at least 70 days to find out as to why the decision had not allegedly reached his office---Reference filed before the High Court on 16-2-2007 in such circumstances was hopelessly time-barred---Appeal was dismissed accordingly.

Raja Kumari v. P. Subbarama Naidu AIR 2005 SC 109 = (2004) 8 SCC 774 ref.

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

----S. 158---Power of customs authorities to search baggage of a transit passenger---Scope---Under S. 158 of Customs Act, 1969, Customs Authorities had the jurisdiction to search the baggage of a transit passenger when he was leaving the customs station.

(c) Void order---

----Challenge to a void order---Limitation---Party could not sleep over to challenge a void order and it was bound to challenge the same within the stipulated/prescribed time period of limitation from the date of knowledge before the proper forum in appropriate proceedings.

Messrs Blue Star Spinning Mills Limited v. Collector of Sales Tax and others 2013 SCMR 587 ref.

Sohail Muzaffar, Advocate Supreme Court for Appellant.

Raja Muhammad Iqbal, Advocate Supreme Court for Respondent.

Wazir Muhammad, Assistant Registrar, Custom Appellate Tribunal, Islamabad along with Rana Azhar, Assistant Registrar, Custom Appellate Tribunal, Lahore on Court's Notice.

Date of hearing: 28th May, 2014.

JUDGMENT

MUHAMMAD ATHER SAEED, J.---This Civil Appeal by the leave of the Court has been filed against the judgment of the learned High Court of Sindh at Karachi dated 24-12-2009 in a Special Custom Reference Application No.49 of 2007, whereby the learned High Court had dismissed the reference application as being barred by time and did not dilate upon the merits of the case.

2.Leave to appeal was granted by this Court vide its order dated 21-6-2010, which reads as under:--

"Learned counsel for the petitioner, inter alia, contends that the orders of the Customs Authorities, holding the petitioner guilty of violation of Customs Act by attributing him the offence of smuggling, was without jurisdiction, thus, there was no question of reference application being barred by time.

(2)Leave to appeal is granted in this petition, inter alia, to examine the above noted aspect of the case. The appeal paper books be drawn on the basis of available record. However, the parties are at liberty to file additional documents, if any, within two months."

3.Brief facts of the case are that the appellant, an Iranian National reached Karachi on 21-12-1987 on route to Singapore as a transit passenger. The Customs Authorities had received information that the appellant would try to smuggle gold. The appellant along with his hand carry luggage while attempting to go out of the Customs Examination Hall to the Hotel Inn for availing stop over was stopped by the Customs Authorities. On a question, he avoided making a formal declaration of having gold in his possession but on search of his baggage and person, 85 bars of gold each weighing 10 tolas, were found in his possession. Those were seized because the appellant did not have the necessary permit envisaged by the Federal Government. He was issued a show-cause notice under sections 2(S), 16 and 156(1) Clauses 8 and 89 of the Customs Act, 1969 read with section 8(3) of the Foreign Exchange Regulation Act, 1947. The appellant replied to the show-cause notice that he could not be deemed to have concern with smuggling anything in Pakistan being a transit passenger and that he was also acquitted on the criminal side. His plea, however, failed and he was held liable for bringing gold into Pakistan without permit in other words smuggling gold in Pakistan. Therefore, the gold was confiscated and he was subjected to a personal penalty of Rs.500,000. An appeal against the above order was filed before Member (Judicial), Central Board of Revenue, who dismissed the appeal vide his order dated 12-4-1992 upholding the Order-in-Original No.SIB/251/87 dated 15-6-1988 passed by the Collector (Preventive) Karachi. Initially a revision was filed before the Member Judicial, Central Board of Revenue. However, due to change in law, the revision was transferred as an appeal to the Customs, Excise and Sales Tax Appellate Tribunal, Lahore Bench Camp at Karachi and was heard on 17-2-1998 and was dismissed vide order dated 26-2-1998 and the reference application was filed before the learned High Court on 16-2-2007, seeking the opinion of the High Court on six (6) questions of law. The learned High Court, however, on the request of the learned counsel for the applicant before it took up the matter of condonation of delay in filing the reference application and dismissed the same on the point of limitation without going into the merits of the case. Hence this appeal with the leave of the Court.

4.We have heard Mr. Mr. Sohail Muzaffar, learned Advocate Supreme Court appearing for the appellant and Raja Muhammad Iqbal, learned Advocate Supreme Court appearing for the respondents.

5.The learned Advocate Supreme Court for the appellant submitted that though the appeal was heard on 17-2-1998 and was attended by his associate, namely, Mr. Pervaiz Mustafa but the judgment was not served on him despite the fact that he wrote various letters starting from 2-5-1998 but no reply to those letters was received. He further submitted that he then filed a writ Petition and under instructions, from the learned High Court of Sindh vide its order dated 6-2-2007, the judgment was finally supplied to him and he filed the reference application on 16-2-2007 which was within time. He further submitted that the law provides that the reference should be filed within sixty (60) days of the receipt of the judgment and he filed the same within ten (10) days of the receipt of the judgment and therefore, the learned High Court instead of dismissing the same on the point of limitation should have given its opinion on the questions of law raised. In this connection, he also referred to the judgment of the Sindh High Court, in Civil Petition No.D-1253 of 2006 dated 8-9-2006, wherein he pointed out that the departmental representative had submitted that since the Karachi Bench of the Tribunal has not received any information about the fate of appeal, which was originally a revision preferred before the Federal Government without seeking proper information it was stated that the subject appeal is pending in Customs Appellate Tribunal, Lahore. Arguing on the point on which the leave was granted the learned counsel submitted that the order of the Tribunal is void and illegal and, therefore, no limitation runs against such an order and therefore, the case should not have been dismissed on the point of limitation. His contention was that the appellant was a transit passenger and there is no provision in the Customs Act to search the baggage of a transit passenger and take coercive action against him for possession of contraband articles as he is not bringing these items in Pakistan and, therefore, the action taken against him was without jurisdiction and therefore void. He, however, did not rely on any judgment of this Court or any other Court on this point. He, therefore, prayed that the case may be remanded back to the learned High Court to decide the case on merits.

6.The learned Advocate Supreme Court for the respondent opposed the arguments of the learned Advocate Supreme Court for the appellant and supported the impugned judgment. He submitted that the learned High Court has rightly dismissed the case on the point of limitation as the reference application was hopelessly time barred. He submitted that the appellant was trying to leave the Custom Station with a bag for stay in the hotel without declaring what was in the bag and therefore the custom officials were justified in searching the bag and confiscating the gold recovered because it was apprehended that the gold would be passed on to someone in Pakistan at the hotel and thereby it would be smuggled into Pakistan. He further submitted that the Custom Officials had prior information that the appellant would attempt to smuggle gold into Pakistan as he had done earlier during his transit stay in Pakistan. He also submitted that there is no bar on carrying out a search of person and baggage of a transit passenger if he was attempting to leave the custom station with any baggage without declaring the contents of the same. On the basis of his above arguments, he prayed that the appeal being merit-less may be dismissed.

7.We have examined the case in the light of the arguments of the learned counsel for the parties and have carefully perused the records of the case and the law on the subject. We had also requisitioned the R & Ps of the case including the dispatch register from the Tribunal.

8.A perusal of the impugned judgment shows the learned High Court has decided the case on the point of limitation and has exhaustively discussed all aspects of the case. As per the facts of the case, a perusal of the order passed by the Tribunal shows that the appeal was heard on 17-2-1998, which was attended by Mr. Pervaiz Mustafa, Associate of the learned Advocate Supreme Court arguing the case before us and a perusal of the R & P of the case shows that in order sheet of 17-2-1998, it has specifically been mentioned, as under:--

"Arguments have been heard. Vide the detailed judgment of even date, the appeal is dismissed."

From a perusal of this order sheet entry, it is clear that Mr. Pervaiz Mustafa was aware on 17-2-1998 that the appeal had been dismissed. However, the first application for the supply of the judgment was moved on 2-5-1998 i.e. almost seventy (70) days after the appeal had been heard and dismissed. The second application was moved after almost 13 months on 5-3-1999. The third application was moved after more than three (3) months of the second application on 11-6-1999. It may also be mentioned that in the revision application filed before the Secretary, Central Board of Revenue, the address of service has been given as under:--

"Muzaffar and Company Advocates, 27/Jehangir Kothari Building, M.A. Jinnah Road, Karachi."

The official of the Tribunal has produced before us dispatch Register No.2 from Serial No.1342/97 to 545/98 for the period from 31-10-1997 to 18-3-1998. In this register at Serial No.388 dated 26-2-1998, it is mentioned that the judgment in the case No.K-15/92 was dispatched to Messrs Ghulam Hussain Ramzan Ali, C/o Muzaffar and Company, (Mr. Pervaiz Mustafa, Advocate), 27/Jehangir Kothari Building, M.A. Jinnah Road, Karachi-74200 and a certificate of registered post has been attached.

Section 27 of the General Clauses Act is reproduced below for the sake of convenience:--

"27. Meaning of service by post.---Where any [Central Act] or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."

The interpretation of this Section came before the learned Supreme Court of Indian, who vide their judgment in the case of Raja Kumari v. P. Subbarama Naidu (AIR 2005 SC 109 = (2004) 8 SCC 774 held as under:--

"(13) Here the notice is returned as addressee being not found and not as refused. Will there by any significant difference between the two so far as the presumption of service is concerned? In this connection a reference to section 27 of the General Clauses Act, 1897 will be useful. The Section reads thus:

27. Meaning of service by post.---Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression 'serve' or either of the expressions 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, preparing and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

(14)No doubt Section 138 of the Act does not require that the notice should be given only by 'post'. Nonetheless the principle incorporated in section 27 (quoted above) can profitably be imported in a case where the sender has dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice."

9.We find ourselves in agreement with this judgment of the learned Supreme Court of India and since on the factual basis the appellant has been unable to prove that the order had not been served on him, therefore, it is clear that under the provision of section 27 of the General Clauses Act, the order had been presumed to have been served and time for filing of the reference application before the learned High Court would have started running from the same. Apparently, the sending of letter for delivery of decision in the above case was an afterthought and perhaps done to negate the presumption that the order had been served on the appellant. Even otherwise, despite the fact that Mr. Pervaiz Mustafa, Associate of the learned Advocate Supreme Court for the appellant was present at the time of hearing of the appeal and was also in the knowledge that the appeal had been dismissed gross negligence was exercised in not bothering for at-least 70 days to find out as to why the decision had not reached his office. The learned High Court in the impugned judgment has discussed the delayed filing in detail and reached the right conclusion that the case was hopelessly time barred.

10.We find ourselves in full agreement with the conclusion reached by the learned High Court and hold that the reference application filed before the learned High Court was time barred.

11.Now we take up the ground on which leave to appeal was granted that is that the order of the Customs Authorities, holding the petitioner guilty of violation of Customs Act by attributing him the offence of smuggling was without jurisdiction and therefore, being void and therefore, there was no question of reference application being barred by time. Although the learned Advocate Supreme Court except making a general statement that no action can be taken under the Customs Act against a transit passenger has not been able to deny that the appellant was searched when he was leaving the custom station for the hotel with a baggage, contents of which were not declared, but has contended that the jurisdiction did not fall with the custom authorities.

12.We are of the view that section 158 of the Customs Act, provides that on reasonable grounds an appropriate officer, if he has reason to believe that any person is carrying about himself goods liable to confiscation or any documents relating thereto, may search any person, if he has landed from or is on board or is about to board a vessel within the Pakistan customs-water, or if he has alighted from, or is about to get into or is in any other conveyance arriving in or proceeding from Pakistan, or if he is entering or about to leave Pakistan, or if he is within the limits of any customs-area. Subsection (2) of this Section mentioned carrying of gold as an offence and petitioner was searched because the custom officials had received information that he would try to smuggle gold in the country during his transit in the country.

13.We are of the opinion that he was rightly searched and the customs authorities had the jurisdiction to search him when he was leaving the custom station. Even otherwise, the Customs, Excise and Sales Tax Appellate Tribunal had the jurisdiction at the relevant time to hear appeals of the Custom official against the order of the Customs Authorities and therefore, at-least the order of the Tribunal cannot be said to be without jurisdiction and reference application has been filed against the said order of the Tribunal and therefore, it had to be filed within time. It is now a well settled law that there is distinction between a void order and a voidable order and it has been held by this Court that party could not sleep over to challenge a void order and it was bound to challenge the same within the stipulated/prescribed time period of limitation from the date of knowledge before the proper forum in appropriate proceedings. In this connection reference may be made from the judgment of this Court reported as "Messrs Blue Star Spinning Mills Limited v. Collector of Sales Tax and others (2013 SCMR 587)", wherein this Court held as under:--

"The Court specifically adverted to the arguments raised by the petitioner's that no limitation runs against a void order and held that this is not an inflexible rule; that a party cannot sleep over to challenge such an order and that it is bound to do so within the stipulated/prescribed period of limitation from the date of knowledge before the proper forum in appropriate proceedings. This is in line with the law laid down by this Court in Chief Settlement Commissioner v. Muhammad Fazil (PLD 1975 SC 331) wherein it is observed that "direct proceedings for having a decision invalidated or set aside may be either by way of appeal, revision or review, initiated by the affected party, in accordance with the relevant law; or they may take the form of suo motu recall of the order by the Court or authority which made it or, lastly action to be taken by way of a regular suit before a Court of general jurisdiction for a declaration as to the invalidity of the order." Similarly in Muhammad Raz Khan v. Government of N.-W.F.P. (PLD 1997 SC 397) at page 400 this view was reiterated in terms as follows:-

"We earnestly feel that unless certain constraints apply against right of challenging void order specially relatable period of knowledge, the same may create complication leading to dangerous results. Principle of justice and fair play does not help those who were extraordinary negligent in asserting their right and despite becoming aware about alleged void order adverse to their interest remain in deep slumber. Therefore, according to our considered opinion, facility regarding extension of time for challenging order cannot be legitimately stretched to any length of unreason period at the whims, choices or sweet will of affected party. Thus, order termed as nullity or void could at best be assailed by computing period of limitation when he factullay came to know about the same. When a person presumes that adverse order is a nullity or totally devoid of lawful authority and ignores it beyond the period specified by law of limitation, then he does so at his own risk. Therefore, in all fairness terminus a quo will have to be fixed, the date of knowledge alleged void order; which too must be independently established on sound basis. In this behalf we derive strength from the observations contained in PLD 1975 Baghdad-ul-Jadid 29 (Syed Sajid Ali v. Sayed Wajid Ali) and 1978 SCMR 367 (S. Sharif Ahmad Hashmi v. Chairman Screening Committee."

14.We have also noted that this ground was not raised before the learned High Court and therefore, is a fresh ground and no basis has been furnished to us for allowing the learned Advocate Supreme Court for the appellant to argue on this ground before this Court. However, since we have already held that the order was not void and even if it was a void order the appellant could not sleep on it and should file the reference within the period of limitation, therefore, we will not adjudicate on this ground.

15.We are therefore of the considered opinion that the impugned judgment is unexceptionable and no interference is called for from this Court. This appeal, therefore, being merit-less is dismissed. No order as to costs.

MWA/G-3/SCAppeal dismissed.