JAHANZAIB WAHLAH, MEMBER JUDIC IAL-III.---- Through this order , I intend to dispose off 02 Appeals bearing Nos. K-369 and K-370/2018, filed agains t Order-in-Appeals No.987/2018 and Order-in-Appeal No.986/2018 both dated 12.03.2018 passed by Collector of Customs (Appeals), Karachi by rejecting the appeals on the premise that the appellant Mr. Shoukat Ali could not produce proof of payment under Section 73 of the Sales Tax Act, against which the goods in question were purchased by the appellant Messrs Bahria Link Shell pump. These two appeals have identical issues of law and facts thus being heard, dealt with and disposed off simultaneously through this single consolidated judgment in the light of judgment of Hon'ble High Court of Sindh in Customs Reference No.157/2008 (S.M. Naqi son of Syed Muhammad Hussain Karachi v. Collector of Customs (Adjudication-I) and others Karachi).
2. The appeals relate to two different appellants wherein in Appeal No.K-369 appellant No.2 is the owner of the HSD oil and in Appeal No.K-370 the appellant No.1 owns the carrier to transport oil bearing Registration No.JP- 8834, however , both appeals are linked because of the charges of smuggling invoked on both appellants relating HSD oil which was brought by the Appell ant No.1 from an authorized dealership of M/s Total Parco located within the territorial limit of Karachi and was being transported by the tanker owned by Appellant No.2. Additionally since facts of both the appeals are one and the same by virtue of arising from the same incident, it is needless to reproduce separately facts of each case. Facts of Appeal No.K-369/2018 are taken into consideration for deliberation/decision which are, that the appellant No.1 during the course of his business activities contacted Messrs Kazan Associates, scheme 33, Karachi for purchase of 4,000 liters of High Speed Diesel Oil and contacted Appellant No.2 to transport the purchased HSD oil to Appellant No.1's pump located on main Super Highway , Karachi. The oil tanker was then intercepted by the respondent No.1 who confiscated the HSD oil on the presumption that the HSD oil was smuggled and thereafter prepared a seizure report having No.AS0146/2017. A show-cause dated 04.08.2017 was then served to only Appellant No.2 which resulted in passing of an Order-in- Original No.100/2017-18 dated 10.08.2017 through which he ordered outright confiscation of the HSD oil and imposed a 20% redemption fine on the value of the tanker including a personal penalty subject to release of the tanker . Since the tanker was the only source of livelihood of the Appellant No.2 he opted to pay the fine and penalty for the release of his oil tanker whereas respondent No.1 on finding out that desp ite non-issuance of show-cause notice as mandated under Section 180 of the Customs Act, 1969, he has been condemned unheard. The vires of the Order-in-Original passed by respondent No.2 was challenged before respondent No.3 on 08.09.2017 through Appeal No.Cus/2082/2017/ASO and Cus/2082/2017/ASO, which were fixed for hearing on multiple occasions, wherein the advocate of the appellant argued the case strictly in accordance with the adopted grounds in memo. of appeal. The respondent No.3 unilaterally rejected the appeals without the application of mind and without considering the facts and grounds produced before him. The appellant then assailed the above orders before this Tribunal through Appeals bearing Nos.K-369-370/2018.
3. Rival parties heard case record and relied upon judgments perused. This case revolves around the charge of smuggling of High Speed Diesel Oil procured by the Appellant from another Petrol Station A located within the territorial limit of Karachi, I have gone through the facts and law cited by the counsel for the appellants in the instant case and have determined the following:
4. The orders passed by the respondents Nos.2 and 3 are sketchy and bald and are based on assumption/presumption and conjectures and adamant attitude and conform that these have not been passed by an independent judicious authority , instead by the contravention framing authority and as such fails the test of judicial scrutiny . Therefore, these are not proper orders through any stretch of imagination, infact least reflect independence and application of judicial mind. Confirming unambiguously that these are non-speaking orders and least conform to the mandated requirement of section 24-A of the General Clauses Act, 1897 further validated from the fact, these does not contains substantial reasons showing being not passed on objective consideration. Such type of orders shall always be treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary . No room was available for such illegal, void and arbitrary orders in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record the same is considered illegal arbitrary and perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The orders are being violation of basic principle of the good governance and mandatory requirement of Section 24A of the General Clauses Act, are not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019 , 2007 PTD 2500 , 2004 PTD 1973 , 2005 YLR 1719 , 2003 PTD 777, 2003 PTD (Trib.) 2369 , 2002 MLD 357, 1983 CLC 2882 , 2005 PTD 2519 , 2005 PTD 1189, 2003 PTD 2369 and PLD 1995 SC (Pak) 272, PLD .1970 SC 158, PLD 1970 SC 173, 1984 SCMR 1014 and 2012 PTD (T rib.) 619 .
5. The appellant contended that intercepting goods transported with in the territory of Pakistan, by respondent No.1 is tantamount to abuse of power as no interception can be made unless a provisions exist in the Act or any notification is infield directing the appella nt to provide documents of import or purchase prior to booking of the goods meant for transportation within the territory of Pakistan and the driver of the carrier should contains those documents during the journey . No such section is available in the Act and nor any notification is in field. Resultant interception of the transported goods at New Sabzi Mandi by officials of respondent No.1 is patently illegal, rather confirms without any ambiguity abuse of power and high handedness. The statute mandates respondent No. 1 and his subordinates to act within the frame work of the definition of the word "smuggle" given in subsection 2(s) of the Customs Act, 1969. For ease verbatim of the same is reproduced here-in-under: a). "Smuggle" means to bring into or take out of Pakistan in breech of any prohibition or restriction for the time being in force, or evading payment of customs duties or taxes leviable thereon, i) Gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency , narcotics and narcotic and psychotropic substances; or ii) Manufactures of gold or silver or platinum or palladium or radium or precious stones, and any other goods notified by the Federal Government in the official Gazette, which in each case, exceed [one hundred and] [fifty thousand rupees] in value or iii) Any goods by any route other than a route declared under section 9 or 10 or from any place other than a customs station and includes an attempt, abetment or connivance of so bringing in or taking out of such goods; and all cognate words and expressions shall be construed accordingly .
6. That customs ports etc. as expressed in clause (iii) of Section 2(s) are notified through various notifications in terms of Section 9 of Customs Act, 1969. Whereas, the border area of Pakistan Territory , whereas restriction on the possession of goods in certain areas (borders) as expressed in Section 177 ibid is also notified vide Notification No.SRO 118(1)/83 dated 12.02.1983, ear marking the area of 5 miles adjacent to the Frontier of Pakistan with India and Iran to be the area to which Section 177 of the Customs Act, 1969 shall apply . The goods were purchased by appellant No.1 through a valid invoice and transported by the appellant No.2 to appellant No.1's petrol pump in Karachi i.e. within the territory of Pakistan confirming that the goods were not brought into Pakistan in breach of any prohibition or restriction for the time being in force under the Import Policy Order , 2016 or while evading payment of customs duties leviable thereon as expressed in clause (a) of Section 2(s). Now were brought into Pakistan by any other route than the routes expressed in section 9 or 10 of the Customs Act, 1969 or from any other place than a customs station as per clauses (a) (iii) of Section 2(s) inste ad were purchased and being transported within the city limits of Karachi and those cannot be considered as smuggled by any stretch of imagination. Hence interruption of tanker loaded with the HSD, the detention and seizure subsequently of both the vehicle and HSD for the purpose of adjudication is nullity to the definition of the word "Smuggle" rendering the entire act of the respondents Nos.1 to 3 right from interruption till issuance of show -cause notice and subsequently passing Order-in-Original as ab-initio, null and void. It is also imperative for the appellant to add that in the light of expressed provision of Section 2(s) and Section 177 of the Customs Act, 1969 and SRO 118(1)/83 that the transportation of goods within the' territorial limit of Pakistan do not constitute an offence, meaning thereby that transportation of goods within the limits of Karachi, Pakistan supported by valid purchase invoice and interception of those , at New Sabzi Mandi, Karachi by the officials of respondent No.1 cannot be termed as smuggling. In fact any checking by Customs officials during transportation of goods within the territory of Pakistan is beyond their jurisdiction as none of the provision of the Customs Act, 1969 authorizes any designated official of Customs to intercept the local transportation of good s on sham pleas of smuggling. Reference is placed on the order of the Tribunal in Customs Appeals Nos.K-719/02, H-720/02, H-686/03, Q-776/04, 2005 PTD (Trib.) 135 and PLD 1991 Supreme Court 630 .
7. The respondents themselves have to look into the 2nd aspect for confirmation of smuggling i.e. whether the goods so transported are retrieved from the hidden/false cavities made for time being or artificially made as defined in clause (b) of Notification No. 499(1)/2009 dated 13.06.2009, meaning thereby the tank on the back of a tanker truck would not fall within the definition of false cavity . Resultant, HSD being transported within the territory of Karachi, Pakistan with the exclusion of area given in Notification No. 118(1)/83 dated 12.02.1983, cannot be presumed even through a figment of imagination as smuggled. The appellant No.1 's purchased HSD was being transported openly at the hind of the tanker truck. Resultant, the HSD loaded on the tanker truck cannot be intercepted, detained, seized as has been done by the respondent No.1 and found condonable by both respondents Nos.2 and 3. The said act amounts to exercise of powers based on forced construction of law, rendering the same nullity to law. Reliance is placed on the order of Customs Appe llate Tribunal in Customs Appeal H-185/2009 Noor Muhammad son of Muhammad Gul, Imtiaz Ali son of Pir Buksh v. Deputy Collector of Customs (Adjudication) Hyderabad and Lahore High Court reported judgment 2010 PTD 2015 Collector of Customs v. Rehmat Afridi. The 3rd aspect to be looked into, for determination of the goods purchased/transported by the appellant No.1/2 or any other person is that whether those are freely available in the local market without any curb or restriction, if available then such goods does not fall within the degree of smuggled as defined in Section 2(s) of the Customs Act, 1969 and are presumed to have been tax and duty paid. The said opinion stood validated from the reported judgment of apex Court 1995 SCMR 387 Sikandar A. Karim v. The State . The Double Bench of the Hon'ble Supreme Court comprised of Justice Saeed-uz-Zaman Siddiqui and Justice Mukhtiar Ahmed Junejo held in unambiguous term that "If the item alleged to be smuggled by the prosecution were freely available in the open market and tat import of such goods were not banned in the country , presumption could arrive that the goods in question were lawfully brought in the country unless contrary was shown". As per dictum laid down by the Hon'ble Supreme Court the Appellate Tribunal in Customs Appeal No.339/2000 Mr. Muhammad Hanif v. The State and 301/2003 Nasser Ahmed v. Collector of Customs, Sales Tax and Excise, Quetta that held that "to produce legal import documents is nothing but to put undue pressure on the business community inspite of the fact that it has been observed number of time by the Supreme Court of Pakistan that the goods which are freely available in the market are presumed to be have been legally imported and duty paid. Even otherwise no reasonable ground has been given in the Order-in-Original and impugned Order- in-Appeal for out rightly dismissing the invoice produced by the appellant and issued by Messrs Khazan Associates.
8. Notwithstanding to the adumbration made here-in-above, the goods transported by appellant were validly purchased from M/s Khazan Associates located at Scheme 33 road corner , in front of Dawood Regency Flats, Super Highway (M/9), South Bound Carriageway , Sohrab Goth, Karachi vide invoice No.157 dated 20.07.2017.
Meaning thereby that the HSD was neither brought by the appellant into Pakistan in breach of any prohibition or restriction for the time being in force unde r the Import Policy Order , 2017-18 or while evading payment of customs duties leviable thereon as expressed in clause (a) of Section 2(s). Nor were brought into Pakistan by any other route than the routes expressed in Section 9 or 10 of the Act, or from any other place than a customs station as enunciated in clause (a)(iii) of Section 2(s) instead ' were lawfully bought and transported from within Karachi limits and cannot be considered as smuggled through any stretch of imagination. Therefore, interception of vehicle, detention, seizure, and preparation of contravention report for the purpose of adjudication is nullity to the definition of the word "Smuggle" rendering the entire act of respondent No.1 and his subordin ates and the issuance of show- cause notice and passing of Order-in-Ori ginal/Appeal by the respondents Nos.2 and 3 as ab initio, null and void.
The expressed provision of Section 2(s) and section 177 of the Act and SRO 118(1)/83 confirms that the transportation of the goods within the territorial limit of Pakistan does not constitute an offence, meaning thereby that transportation of the locally purchased goods cannot be termed even as smuggled goods and as such cannot be construed contrary to that. None of the officials are permitted to act beyond their allotted sphere alike respondents only for the purpose of denying transportation of the appellant goods on the sham plea of smuggling or acting in good faith.
9. It is of paramount importance to adduc e here that the framer of law in order to thwart the act of smuggling and flourishing business of smuggling goods have formulated a strict confiscatory regime with a very extended connotation and law is set in motion not only against the actual smuggler , but also against those who came into possession of the delinquent goods after having acquired the same. Section 187 and clause (2) of Section 156 of the Act come into motion on every occasion when goods are seized. Scrutiny of the essence and spirit of Section of the Act would transpires that these provisions are to be used in juxtaposition, the golden thread of Criminal Law that "it is the duty of the prosecution to prove the prisoner's guilt the question that then arise as to what extent such burden lies upon the person found in possession of alleged smuggled or prohibited goods and as to whether same at any stage shift upon the Customs Authorities or not; in this context placing reliance on reported judgment titled Kamran Industries v. Collector of Customs (Export) PLD 1996 Kar. 68 and 2019 PTD 1716 , Collector , Model Customs Collectorate, Multan, v. Customs Appellate Tribunal, Bench-I, Karachi and 3 others, wherein, the Division Bench held in regards to legal and persuasive burden and the evidential and technical burden on the litigants under Section 187 of the Act in so many words that: "For every offence for which the accused is charged under the Customs Act he shall have to dispr ye the allegation of the Customs Authorities: is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such cons truction on statues which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (see Mst. Zainab v. Kemal Khan (PLD 1990 SC 1051 ). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discreti on vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to disputed the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided."
10. The appellant submitted purchase invoice of the transported goods, hence, he discharged burden laid upon him as held by the Hon'ble High Court of Sindh in the judgment referred in paras supra and the burden stands shifted on the shoulder of the respondent No.1 and his subordinates as per the contemplation of Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984), which they miserably failed to prove, evident from the fact that the respondent No.1 and his subordinate intentionally failed to obtain verification of the invoice from the seller or bringing into motion the provision of Section 165 of the Customs Act, 1969 despite mandated prior to levelling the charge of smuggling or transportation of smuggled goods. This was done purposely due to the fact that the purchase invoice supplied by the appellant were valid and ignored by the respondent No.1 and his subordinates only for achieving their desired results for depriving the appellant from his lawful legal purchased and transported goods and that also while playing havoc with their specified jurisdiction/powers, while construing those being unfettered, which is not the intention of neither legislate. After shifting of the burden of prod upon: the respondent No.1 to produce positive evidence through challenging the veracity/genuineness of the invoice produced before the court or to question the quality of the seized HSD oil from the empowered authority who is vested the power to check the quality of oil procured from petrol/gas stations within Pakistan i.e. Pakistan Standard Quality Control Authority , which has issued SRO Nos. 818(1)/82 dated 29.08.1982, 1203(1)/83 dated 31.12.1983, 979(1)/87 dated 17.12.87, 267(1)188 dated 13.04.88, 983(1)/88 dated 29.10.88, 157(KE)/92 dated 29.06.92, 453(1)/93 dated 26.05.93, 454(1)/93 dated 27.05.93, 451(1)/93 dated 31.05.93, 452(1)/93 dated 31.05.93, 638(1)12001 dated 12.09.2001, 705(1)/2001 dated 101.10.2001 and 06(1)/2002 dated 04.01.2002 under Section 9 of Pakistan Standard Institution Ordinance, 1961 and subsequent promulgation, of the Act. Hence, in categorical terms I hold that the charge levelled upon the appellants and held substantiated by respondents Nos.1 to 4 are not only without lawful authority but void illegal and ab initio by virtue of being in derogation with Section 2(s) of the Act.
11. In the instant case no show-cause notice has been issued despite mandated under law, issuance of show- cause notice is pre-requisite and cannot be dispense with under any circumstances. The entire proceeding are accordingly struck off" and the Hon'ble Supreme Court of Pakistan in judgment reported as 2001 SCMR 838 Assistant Collector of Customs, Dry Port Peshawar v. Khyber Electric Lamp MFG Co., Ltd., Peshawar held that "demand notices in the absence of statutory show-cause notices were without lawful foundation. It is well settled proposition of law that a thing required by law to be done in a certain manner must be done in the same trimmer as prescribed by law or not at all since pre-requisite show cause notices as required by law have not been served on the respondents, therefore the entire superstructure built upon it will collapse. Therefore, in the absence of statutory notice, conduction of adjudication proceedings and subsequent Order-in-Original was without lawful authority and as such of no legal effect." In accordance with the ratio decidendi of the judicial fora, I therefore hold that the Order of the respondent No.3 is without lawful authority , hence, null, void and ab-initio.
12. In deciding the subject case, I have given anxious consideration to the arguments of the rival parties and perused the impugned order , the relevant provisions of law, the case law referred specifically the interpretation of law, legal propositions and observations made thereon and infield ratio decidendi observed by the Superior Courts, I have reached to the irresistible conclusion that the appellant has been needlessly dragged into the unwarranted litigation by the respondent No.1 despite having no proof of the alleged offence. I hereby set aside the Order-in- Appeals dated 12.03.2018 passed by respondent No.3 as ab-initio, null and void having no merit with the direction that the seized HSD oil to be released along with the fine and penalty secured by the Respondents from the Appellant No.2 to be refunded forthwith. Appeal is accordingly allowed with no order as to cost.
13. Order passed and announced accordingly .