MUHAMMAD BABAR KHAN VS State
2019 P T D 582
[Sindh High Court]
Before Fahim Ahmed Siddiqui, J
MUHAMMAD BABAR KHAN
Versus
THE STATE
Criminal Miscellaneous Application No. 295 of 2013, decided on 22/12/2017.
Customs Act (IV of 1969)---
----S. 32---Criminal Procedure Code (V of 1898), S. 265-K---Mis-declaration---Fraud---Intention---No revenue loss---Power of court to acquit accused at any stage---Scope---Prosecution case against accused was that he filed duty drawback claims before Federal Tax Ombudsman although he had already got encashed said claims from thedepartment---Plea of accused was that he was unaware about the claim being encashed---Validity---Report of Investigating Officer revealed that accused had furnished an old and inaccurate pendency list of rebate claims, it was not submitted before any Customs Officer but before Federal Tax Ombudsman and it was filed unintentionally, as such S.32, Customs Act, 1969 was not attracted---No penalty under S. 32,CustomsAct,1969couldbeimposedunlessitwasshownthat mis-declaration was made to a Customs Officer with intention to avoid payment of public revenue---No chance or likelihood of convictionexisted,therefore,accusedwasacquittedofthe charge.
2006 PTD 378 ref.
2003 PTD 552 and 2004 PTD 2977 rel.
Muhammad Rafi Kamboh for Applicant.
M. Taseer Khan, Special Prosecutor Customs.
Date of hearing: 7th November, 2017.
ORDER
FAHIM AHMED SIDDIQUI, J.---By preferring the instant criminal miscellaneous application, the applicant has questioned the order dated 21-10-2013 passed in Special Case No. 91 of 2013 by the Special Judge (Customs and Taxation), Karachi. Through the impugned order, the learned Judge dismissed an application filed by the applicant under Section 265-K, Cr.P.C.
2.The prosecution's case against the applicant is that the FIR was lodged against the applicant in compliance of the directives of the Federal Tax Ombudsman (FTO). According to FIR, the FTO has ordered for disposal of 3,60,000 Duty Drawback Claims pertaining to PaCCS legacy till a cut-off date i.e. 28-02-2013. After reconciliation of data obtained from the State Bank of Pakistan, it transpired that Messrs Multinational Export Bureau (NTN 1036984) had already got encashed the cheque amounting to Rs. 14,89,519/- pertaining to 58 claims but they again filed their claims through complaints against the department before the FTO. It is further stated in the FIR that as erstwhile system of Micro Clear Agility (PaCCS) has been switched off; therefore, no online data will be available to verify on two P.P.C. of their claims. The matter was reported to FTO, who ordered a probe in the matter and necessary legal action accordingly. As such, the FIR was lodged under relevant sections of the Customs Act, 1969 against the exporter/trader (present applicant) for knowingly and wilfully committing fraud with the government by claiming the forged and inadmissible Duty Drawback Claims.
3.The learned counsel for the applicant submits that the applicant is innocent and he has been falsely involved in this case without any valid reason. According to him, the applicant was unaware about Rs. 14,89,519/- and a claim was preferred but the same was not paid. According to him, from the act of the applicant, no loss to government was caused. He draws the attention of this Court towards the summary of investigation available in the interim final report (challan). According to him, although the FIR is allegedly lodged under the directions of FTO but no written directions of FTO is available on the record. He takes reliance from 2003 PTD 552, 2004 PTD 2977 and 2006 PTD 378.
4.Conversely, the learned Special Prosecutor Customs duly assisted by Mr. Malik Muhammad Hashim, MCC East, investigation Officer submits that the software is stopped functioning, as such they do not have record and it is hard to verify against which GD (Goods Declaration), the claim has come to the petitioner. He describes that the software was stopped from 28-02-2013. According to him, the software i.e. Micro Clear Agility is stopped functioning as there was dispute between government and the company. In response to a query, the Investigation Officer admits that the FIR was lodged on the written instructions from DC but no order of FTO in black-and-white is available.
5.After hearing the arguments and going through the record produced before me, I have observed that certain illegalities and irregularities are floating at the surface of record. It is an admitted position that the FIR was allegedly lodged on the directives of learned FTO but no written order is admittedly available on the record from FTO. The findings of FTO on a complaint in respect of 'duty drawback claims' are limited to certain directions pertaining to inefficiency and ineptitude in the administration and discharge of official responsibility of the Department but there was no direction regarding registration of FIR. The said FIR was lodged under Section 32 etc. of Customs Act, 1969 according to which, an action may be brought if knowingly a false information is given before the Custom Officer but in the instant case, the FIR was lodged because of a false claim before FTO, who is certainly not a custom officer. I am; therefore, of a considered view that the very initiatives against the applicant is unwarranted under the law.
6.Another aspect of the case requires consideration which pertains to criminal intention of the accused. It is an admitted position that the software was not in operation since 2013 and due to absence of tangible record, the verification of claim was nearly impossible, as such benefit of doubt is very much available in favour of the applicant. This aspect is also considerable that the applicant admits about his unawareness, which must have been due to non-availability of operational software and the claim of the applicant is also verified by the Investigation Officer, at the bottom of the summary of interim final report (challan), from which it is apparent that 'mens rea' is missing in the entire prosecution case. The concluding paragraph of the interim final report (challan) is reproduced as under:
"By the statement of both employees, it proves that they filed the rebate claims, which were already been paid to the accused, but they filed such claims erroneously due to absence of record."
7.I am of the view that as there was no intention to deceive the custom officer and to cause loss to public exchequer; therefore, no offence was actually made out, As per the summary of the case mentioned in Interim Final Report (Challan) in which it has been stated by the Investigation Officer that Mr. Zahid Hussain, Manager (Accounts) has described that in spite of correspondence with the Customs Authorities and Bank for confirmation of paid claims of rebate, no information was communicated to him and the bank has shown its inability for verification of the same. It is also mentioned in the said report that ultimately the matter was referred to FTO on the advice of PHMA. It is further stated therein that the Manager (Accounts) of the applicant/accused also informed that due to the absence of proper record, they submitted an old/inaccurate list of rebate claims to the FTO erroneously.
8.It is now very much clear that the claim was submitted before FTO as no proper information or response was received to the office of applicant/accused from customs department; therefore, due to non-availability of a proper record, erroneously an old and inaccurate pendency list of rebate claims was furnished before FTO. It appears from the Interim Final Report that the fault of the applicant/accused is to furnish an old and inaccurate pendency list of rebate claims and the same was not submitted before any custom officer but before FTO and the same was also done unintentionally, as such it can be said that Section 32 ofCustomsActdoesnotattractintheinstantcase. Iamoftheviewthat no penalty under Section 32 can be imposed unless it isshown that a misdeclaration was made to a custom officer with the intention to avoid payment of public revenues. In this respect, I fortify my view from the case cited by the learned counsel for applicant and reported as Messrs Al-Hamd Edible Oil Ltd and others v. Collector of Customs and others (2003 PTD 552), wherein a division bench of this Court held as:
"A bare reading of the section clearly indicates that it relates to a situation where a person makes any statement or files any document which is false in any material particular by reason of which any duty or charge is not levied or is short levied or is refunded. In such event, the Customs Authority is empowered to issue to the person concerned a notice to show-cause why he should not pay the loss of revenue suffered by the Department and after giving him a hearing, beside any other action under law, order payment of the same, if a case is made out. The entire provision revolves around the central point of loss of revenue suffered by the Customs Department on account of the conduct of any person. Mr. lqbal has not urged that the Department has suffered any loss on account of the conduct of the appellants. The question of applicability of section 32 in the present circumstances apparently does not arise."
9.It appears that the applicant has placed his case documents before FTO imprecisely without realizing that the annexed documents are conveying inaccurate information and there was no criminal intention on his part. As far as knowledge or intention is concerned, the learned counsel for the applicant has rightly cited the case of Messrs A.R. Hosiery Works, Karachi v. Collector of Customs (Export), Karachi and another 2004 PTD 2977 wherein it is held as:
"It is important to bear in mind that initially section 32 of the Customs Act, 1969 or its predecessor i.e. section 39 of the Sea Customs Act, 1878, did not expressly stipulate knowledge of the person making the declaration. Nevertheless, through the aforesaid amendment section 32 (1) expressly requires that to attract the penal provision a person must be knowing or having reason to believe that such document or a statement is false in any material particular."
10.In the instant case, it has been revealed through investigation that an inaccurate information was communicated to FTO, who is definitely not a custom officer. The Investigation Officer has already reached to a conclusion that the information was erroneously furnished before FTO, meaning thereby that there was no intention or 'mens rea' to cause loss to public revenues. It is also important to note that due to complaint before FTO regarding duty drawback claims, no loss to government revenues was caused as no payment was made on this account from the public exchequer. I am of the view that in the case initiated by Customs Authorities there is no chance or a likelihood of conviction, there is no need to rile the accused and utilised judicial resources in a futile trial and the same should be disposed of as early as possible. In such types of cases, the legislature has equipped the trial Court with the power under Section 265-K, Cr.P.C.. I am of the considered view that the instant matter is a fit case of acquittal without vexing the parties to go through a trial.
11.Resultantly, the instant application is allowed and after setting aside the verdict of trial Court, it is directed that the applicant should be acquitted. He is present on bail, his bail bond is cancelled and surety is discharged.
SA/M-4/Sindh Application accepted.