MR. JUSTICE MAULVI ANWARUL HAQ.--(l). This judgment shall decide W.P. No. 6711 of 2004 and W.P.
No. 6712 of 2004, as common questions are involved. Both the petitioners are stated to be engaged in the business of manufacturing and supply of ginned cotton and as such registered with the Sales Tax Collectorate, Multan. The grievance being made out is that on 29.9.2004 respondent No. 3 conducted a raid on the respective premises of the petitioners in violation of the provisions of section 40 of the Sales Tax Act, 1990 and took into custody records maintained by the petitioners regarding their business activities. The learned counsel for the petitioners in these cases relying upon the case of Federation of Pakistan through Ministry of Finance, Islamabad v. Master Enterprises (Pvt.) Ltd., and 4 others (2003 PTD 1034), Collector of Customs (Preventive) and 2 others v. Muhammad Mahfooz (PTCL 1992 CL. 155); N.P. Water Proof Textile Mills (Pvt.) Ltd., through Director, Karachi v. Federation of Pakistan through Secretary, Revenue Division/Chairman, Central Board of Revenue, Islamabad and another (PTCL 2005 CL. 32); Messrs Food Consults (Pvt.) Ltd., Lahore and others v. Collector Central Excise and Sales Tax, Lahore and 2 others (2004 PTD 1731) and Messrs Ihsan Yousaf Textile Mills (Pvt.) Ltd. Faisalabad v. Federation of Pakistan through Ministry of Finance, Islamabad and 4 others (PTCL 2003 CL. 564) contends that the said proceedings have been conducted in gross violation of the said section 40-A of the Sales Tax Act, 1990. Learned Standing Counsel for Pakistan on the other hand, contents that the proceedings were taken in accordance with the said law and further relies on the case of Collector of Customs, Lahore and others v.
Universal Gateway Trading Corporation and another (PTCL 2005 CL. 270) to urge that the rule earlier laid in the case reported as PTCL 1992 CL. 155 has been departed from by the Hon'ble apex Court.
2. I have examined the files of these cases. Admittedly no warrants were obtained for the search conducted and recovery of the records effected by the respondents. No doubt the said section 40- A of the Sales Tax Act, 1990, does cater for a situation where the said requirement of law can be dispensed with. However, this is subject to the conditions laid down in the said section 40-A itself.
Now I called upon the learned Standing Counsel as to whether the Assistant Collector prepared a statement in writing of the grounds of belief that there is a danger that the records or the goods may be removed before the search can be effected under section 40, the answer is in the negative.
3. This being so, rule laid down in the said case (PTCL 1992 CL. 155) becomes fully applicable. I have also examined the said judgment being relied upon by the learned Standing Counsel (PTCL 2005 CL. 270). Although their lordships were dealing with the case arising under the Customs Act, 1969 but there is no dispute that the provisions i.e. Sections 162 and 163 of the said Act, 1969 are in pari materia with the sections 40 and 40-A of the Sales Tax Act, 1990. Now I find that in the leading opinion of the Court reference has specifically been made in para. 9 of the judgment, at page 287 of the report, to the compliance by the Deputy Collector Customs and the provisions of section 163 of the Customs Act i.e. That the said officer had prepared a statement of grounds of his belief. In fact the Hon'ble Court has recorded finding in para 10 of the judgment that the search was conducted in accordance with the said provisions of law. I deem it appropriate to reproduce the following extract from the said judgment in para-8 thereof at pages 286-287 of the report:- "Insofar as the provisions as contemplated in sections 162 and 163 of the Customs Act, 1969, are concerned, the same have been interpreted in different cases on various occasions and judicial consensus seems to be that before embarking upon a search without warrant the Customs Officer shall prepare a statement in writing of the grounds of his belief that the goods liable to confiscation are concealed or kept in any place and that there is a danger that they may be removed before a search can be effected under the provisions of section 162 of the Act. The law further requires that the statement must also mention the goods, documents or things for which the search is to be made. These are stringent requirement prescribed by law in order to ensure that the enormous power ef search without warrant given to Customs Officers is exercised honestly and judiciously. By insisting that the grounds for his belief shall be recorded before hand by the Customs Officer concerned, the law seeks to ensure that the search without warrant is made for a bona fide purpose and on reasonable grounds' which can be tested later, if challenged by the aggrieved party. To put in differently, it seems that this is a safeguard prescribed by the legislature to ensure that the rights if the citizen in respect of private property are interfered with only, for genuine reasons related to the prevention of smuggling "and evasion of customs duty, etc. This safeguard can be effective only if the Procedure prescribed by law is faithfully and honestly followed by application of mind, in each individual case. Legislative wisdom behind the statutory requirement under sections ,162 and 163, which is legislative wisdom behind it which is to the effect that ordinarily a 'place Ts to be searched-only after search warrant is obtained from the Magistrate as is contemplated under the preceding section and only in extraordinary cases this section can be dispensed with as is permissible under section 163 but then grounds are to be staled by the Customs Officer who is allowed this facility for his belief and decision in not obtaining the search warrant. He must state that grounds which justify apprehension of danger of removal of goods. For example, information is received from such and such person that the party concerned has taken steps or is about to take steps for removal of goods and if search warrant is obtained the same will consume time or the Magistrate is not available, hence there is no other way but to go for the search without warrant. By providing such statutory requirement, the intention of legislature is to provide safeguard against mala fide interference with rights of citizens in respect of property and against violation of right of privacy."
4. Now this is precisely the rule laid down in the said case of Collector of Customs (Preventive) and 2 others v. Muhammad Mahfooz (PTCL 1992 CL. 155).
5. For the reasons stated above, both the writ petitions are allowed, the impugned action of respondent No. 3 in raiding the premises of the petitioners and consequent proceedings taken pursuant thereto by the respondent are declared to be- illegal, void and without lawful authority.
No orders as to costs.