NAIMUDDIN, J.~ 1. This Constitutional Petition under Article 9 of the Provisional Constitution Order, 1981 was filed on 4-3-1985, in the following circumstances.
2. On 2-1-1981, at about 8-30 p.m. Some officers of the Customs (Preventive) working in the Customs House, Karachi, under the Collector of Customs (Preventive), respondent No. 1, searched the premises of Ittehad Re-rolling Mills situated at L-10/C, Block No. 21, Federal 'B' Area, Karachi, and took in their possession 96 ingots of refined tin of Malaysian origin and 102 ingots of refined tin "Wattan Metal" with, marks of Bunder Khomeini. The-search was admittedly made without obtaining search warrant. It is the case of the petitioner that the search was made without complying the provisions of section 163 of the Customs Act, 1969, (hereinafter called the Act) and it was effected by the officers who had no jurisdiction and who were not competent to do so.
3. The search was followed by a show-cause notice, dated 26-2-1981. It may be convenient to reproduce the notice in extenso which reads as follows: "On 2-1-1981, the Customs Officers raided and searched the premises of Ittehad Re-rolling Mills situated at L-10/C, Block 21, Federal B. Area, Karachi, and recovered 96 ingots of refined tin of Malaysian origin each weighing 42 Kgs. And 102 ingots of refined tin "Wattan Metal" each weighing 29/30 Kgs, with marks of Bunder Khomeini, which were seized under section 168 of the Customs Act, 1969.
(2) Investigations in the matter revealed that the ingots were supplied by one Lala Khan and were stored in the Mills by Yaseen Baig, Manager of the mill with the permission and authority of Partner of Mill Muhammad Mahfuz. Muhammad Mahfuz admitted that he was aware of the fact that the ingots were not imported against any import authorisation and that duty etc. Had not been paid thereon.
(3) The import of refined tin into the country is restricted under Federal Government Notification No. S.R.O. 920(i)/73, dated 25-6-1973 issued under section 3(i) of the Imports and Exports (Control) Act.
1950, except on an import authorisation and payment of duty etc. Leviable thereon. No such evidence is forthcoming. Read with section 3(iii) of the said Act, the contravention is deemed to be an offence under section 16 of the Customs Act, 1969, punishable under section 156(90)(ibid).
(4) Yaseen Baig, Muhammad Mahfuz and Lala Khan are, therefore, called upon to show cause why penal action should not be taken against them for violation of the aforesaid provisions of law. Their written reply should reach the undersigned within ten days of the issue of this notice, failing which the case will be decided ex parte.
(5) Hearing in the case is fixed for 22nd March, 1981 at 2 p.m. When they, their accredited representative or duly briefed lawyer ma> appear before the undersigned in his chamber in this Customs House to represent their case. If no one appears on the date and time so fixed, it will be taken that personal hearing is not required and the case will be decided on merits."
4. The petitioner on 12-3-1981, submitted his reply to the show-cause notice and thereafter, after hearing Mr. Jamilullah Khan, Consultant of the petitioner, respondent I by the order dated 9-5-1981, ordered the confiscation of the seized goods under section 156(90) of the Act, but under section 181 of the Act gave option to the petitioner to pay a fine of Rs. 2,50,000 in lieu of confiscation of the goods. He also imposed a penalty of Rs. 2,50,000 under section 156(90) of the Act. Before respondent 1, it was urged that the search and seizure of the goods was illegal as the same was made without any search warrant and without complying with the provisions of section 163 of the Act. It was also urged that the goods were importable under Free List and as such the onus of proof lay on the respondents.
5. Respondent 1 in his order held that the seizure was affected after complying with the provisions of the Act. It was, however , accepted in the order that the goods were importable under 'Free List' vide serial No. 262 (a) of the Free List of Import Policy Order, 1980, but it is stated that the petitioner failed to produce any evidence of lawful import of the goods and it was established that the goods were not imported against any import authorisation and the duty had not been paid.
6. Aggrieved by the aforesaid order, the petitioner went up in appeal before the Central Board of Revenue, respondent 2, which was decided on 22-9-1981 by Mr. Mumtazul Haq, Second Secretary.
Before respondent 2 also the same grounds as urged before respondent were urged. Dealing with the ground of search being illegal, the Second Secretary found as follows: "I have carefully gone through the records of the case and I find a statement of the Assistant Collector concerned on p.4 of the Customs House File No. SIB-104/81 in which he has recorded the ground of his belief for making the search and seizure and clearly mentioned therein the exact description of the foreign smuggled goods kept in the premises searched. In the same statement he has also stated that there was danger of the goods being removed before a search could be effected under section 162 of the Customs Act. A signed copy of the aforesaid statement was also left there. Thus all the requirements of section 163 were duly fulfilled by the Assistant Collector, Now the contention of the learned consultant that search warrant could be obtained under section 162 from a Magistrate is of no avail because of the reason given by the Assistant Collector in the said statement. The grounds given by the Assistant Collector are further supported by the fact that the search was made late in the evening at 8-30 p.m. And so his judgment about the strong possibility of the removal of the goods appears to be sound and correct."
7. The appellate authority, however, accepting the plea that the goods were importable under 'Free List', in paragraph 6 of the impugned order observed as follows: "6. Finally, the pleas of the learned consultant that the goods in question are importable on Free List and that the appellant himself is not responsible for their smuggling into Pakistan are, however, correct."
8. With regard to another plea raised on behalf of the petitioner before the appellate authority that the petitioner was not aware about the payment of duty on the goods, the Second Secretary observed as follows: "When the law raises a presumption against the accused and calls upon him to prove the contrary, it is well-settled that the contrary can be said to be proved if the accused succeeds in establishing that the act attributed to him is capable of an interpretation other than suggested by the prosecution."
9. In view of these pleas of the petitioner which according to the appellate authority had some mitigating effect on the case, it reduced the amount of penalty imposed on the petitioner from Rs.
2,50,000 to Rs. 1,50,000 maintaining the order of confiscation of the goods or payment of fine in lieu of confiscation of the goods.
10. Still dissatisfied with the order passed in the appeal the petitioner filed a revision application with the Federal Government, respondent 3. But before the same could be decided, he filed this constitutional petition under Article 9 of the Provisional Constitution Order. 1981, in this Court seeking a declaration that the search and seizure, confiscation of goods and imposition of penalty on the petitioner by respondents is without lawful, authority and for a direction to the respondents to return the goods without payment of fine or penalty.
11. However, during the pendency of this petition the revision application was decided and dismissed by respondent 3 by the order, dated 22-1-1984.
12. Before the Revisional Authority the jurisdiction of the officer who seized the goods was also challenged which has been dealt with by it in paragraph 7 of the order which reads as follows: "The factual position in this regard is that, vide Notification No. 57 of October. 2. 1953, officers of Customs stationed at Karachi had been authorised to exercise the powers of anti-smuggling under the Sea Customs Act, 1878. Therefore, notwithstanding the provisions of Notification No. 167(R)/67, the Officers of Customs were duly authorised and competent to seize contraband goods throughout Karachi while exercising the powers of anti-smuggling, it may be mentioned that after coming into force of the Customs Act, 1969 on 1-1-1970, the existing notifications, orders and regulations became subject to the provisions of the Customs Act, 1969. Section 4 of the Customs Act, 1969 provides that an officer of Customs appointed under section 3 shall exercise such powers and discharge such duties as are conferred or imposed on him by or under the Act ibid and such officer will also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him. As powers for the prevention of smuggling in the Federal Capital, Karachi were conferred on the officers of Customs vide Notification No. 57, dated 2-10-1953, they were legally competent to act and exercise the powers conferred on them under sections 161, 163 and 168 of the Customs Act, 1969 and to search and seize any goods liable to confiscation, notwithstanding the position emerging after the issuance of S.R.O. 167(R)/67, dated 1-9-1967. In view of the aforementioned situation, the seizure made by the Customs authorities were in order and there was no illegality involved in the orders passed by the Collector of Customs (Preventive), Customs House, Karachi."
13. Thereafter, an amended petition was filed on 27-2-1985-also challenging the order, dated 22-1- 1984, passed in the revision, as being "without lawful authority, wrong on facts and bad in law."
14. We have heard Mr. Zaheer Ahmed Khan learned counsel for the petitioner on 20-8-1985 and Mr. S. Inayat Ali learned counsel for the respondents on 21-8-1985, and Mr. S. Nasiruddin learned counsel for the petitioner in reply to the arguments of Mr. S. Inayat Ali on 21-8-1985.
15. Mr. Zaheer Ahmed Khan urged following points before us:
(1) That the officers of Customs (Preventive), who carried out the search under the direction of respondent I had no territorial jurisdiction.
(2) That the search and seizure of the goods without warrants and/or without complying the provisions of section 163 of the Act was illegal.
(3) That no notice as required under section 171 of the Act was served on the petitioner.
(4) That the burden of proof that the goods were unlawfully imported was on the. Respondents and not on the petitioner.
(5) That no action was taken against Lal Khan who had supplied the goods to the petitioner although a show-cause notice was also issued to him.
16. Taking up the first point it was urged that the goods were seized from the premises situated in Federal 'B' Area, Karachi, which was beyond the territorial jurisdiction of the Customs Officer and/or the Collector of Customs under whose orders they were acting. This point has been dealt with in the order passed in the revision by respondent 3 and we have already reproduced the same in extenso herein before.
In order to appreciate this point we may state that under section 3 of the Act the Board is authorised by notification in the official Gazette, to appoint in relation to any area specified in the notification (emphasis specified) any person to be:
(a) The Collector of Customs,
(b) The Deputy Collector of Customs,
(c) The Assistant Collector of Customs, or
(d) An officer of the Customs, with any other designation.
17. Under section 4 of the Act an officer of Customs appointed under section 3 is authorised to exercise such powers and discharge duties as are conferred or imposed on him by or under the Act, and he is further authorised to exercise powers and discharge duties conferred or imposed upon any officer subordinate to him. It is further provided that notwithstanding anything contained in the Act or the rules, the Board may, by- general or special order, impose such limitations or conditions on the exercise of such powers and discharge of such duties as it thinks fit.
18. Now, for the purpose of exercise of powers for search and seizure reliance is placed by respondent 3 on Notification No. 53, dated October, 2, 1953, wherein the officers of Customs mentioned therein and stationed at Karachi were authorised to exercise all powers conferred by Chapter XVII of the Sea Customs Act, 1878, on the officers of Customs duly employed for prevention of smuggling, we may reproduce the said notification, which reads as follows: "No. 33.--In exercise of the powers conferred b> section 6 of the Sea Customs Act, 1878 (VIII of 1878) and in supersession of the late Government, of Bombay Notification No. 9231, dated the 20th December. 1897, the Central Government is pleased to appoint the Collector of Customs, Karachi, to be Chief Customs Officer for all ports in the Federal Area and to be Chief Customs Collector in the said area." (emphasis specified).
19. This notification was further amended by Notification No. S.R.O. 167(R,. Dated 1-9-1967, whereby the words 'Federal Area' and "to be Chief Customs Collector in the said area" were substituted by the words "Karachi Division and to be the Customs Collector for such ports" and thus the amended Notification No. 53-Cus. Dated 1-10-1953, as amended, reads as follows: "In exercise of the powers conferred by section 6 of the Sea Customs Act, 1878 (VIII of 1878), and in supersession of the late Government of Bombay Notification No. 9231, dated the 20th December, 1897 the Central Government is pleased to appoint the Collector of Customs, Karachi, to be Chief Customs Officer for all ports in the Karachi Division and to be the Customs Collector for such ports."
20. It will be seen that by the amendment in the notification the chances made are that the Collector of Customs, Karachi, is appointed to be the Chief Customs Officer for all ports in the Karachi Division instead of the Federal Area and instead of being Chief Customs Collector in the said area he becomes the Customs Collector for all ports in the Karachi Division. Thus, the further question that arises for consideration is that what is the limits of the ports in Karachi Division as it is the Collector of Customs for ports in Karachi Division that would have territorial jurisdiction in the matter. Now, by Notification No. 6315, dated August 26, 1897, in the exercise of the powers conferred by section 11(b) of the Sea Customs Act, .VIII of 1878), the Central Government declared the following to be the limits of the port of Karachi:-- "To the North.- A line drawn from a point on the ridge dividing the harbour backwater from the Arabian Sea, (9) nine miles N.W. From Manora Point along the high-water mark ordinary spring, tides to boundary pillar No. 44 at the head of Soti Creek, and thence along a line demarcated at the angles by masonry pillars numbered 43 around Khudda village to 32 on the Harris Road, and from thence along the western edge of Harris Road to the north-east corner of the Native Jetty where it crosses the Bunder Road to the Queen's Road at the N.E. End of the Railway bridge and on to boundary pillar No. 2. From boundary pillar No. 2 round Scandal Point and Bath Island upto boundary pillar No. 24 on the Western edge of the Clifton Road.
To the East.~A line drawn from boundary pillar No. 24 on Clifton Road last abovementioned to boundary pillar No. 26 north of Clifton and from thence to the shore end of Clifton Pier and thence along the high-water line on the beach to a point 3-3/4 miles S.E. Of Clifton.
To the South.-A line drawn from that point last abovementioned on Clifton beach running in a S.W.
By W. 1/4 W. Direction to a point four miles S. By E. 1/4 E. From Manora break-water, and from thence along a line running in a N.W. 3/4 W. Direction to a point two .Miles out at sea S.W. 1/2 S. From the point first mentioned on the ridge dividing the harbour back-water from the Arabian Sea.
To the West-- A line drawn from the point last abovementioned running in a N.E. 1/2 N. Direction, to the starting point on the ridge abovementioned nine miles from Manora Point."
21. By another recent Notification No. 108(1)/83, dated 12-2-1983, the Central Board of Revenue specified the following to be the limits of the Customs-port of Karachi, namely: "To the North.-A line drawn from a point on the ridge dividing the harbour break-water from the Arabian Sea, nine miles N.W. From Manora Point, along the high-water mark ordinary spring tides to boundary pillar No. 44 at the head of Soti Creek, and thence along a line demarcated at the angles by masonry pillars numbered 43 around Khudda Village to 32 on the Harris Road, and from thence along the western edge of Harris Road to the. North-East corner of the Native Jetty where it crosses the M.A. Jinnah Road at the Moulvi Tamizuddin' Khan Road at the North-East, end of the Railway bridge and on to boundary pillar No. 2. From boundary pillar No. 2 round Scandal Point and Bath Island upto boundary pillar No. 24 on the Western edge of the Clifton Road.
To the East.- A line drawn from boundary pillar No. 24 on Clifton Road last abovementioned to boundary pillar No. 26 north of Clifton and thence to the shore, end of Clifton Pier and thence along the high-water line on the beach to a point 3-1/4 miles S.E. Of Clifton.
To the South.-A line drawn from the point last abovementioned on Clifton beach running in a S.W.
By W. 1/4 W. Direction to a point four miles S. By E. 1/4 E, from Manora break-water, and from thence along a line running in N.W. 3/4 W. Direction to a point two miles out at sea S.W. 1/2 S. From the point first mentioned on the ridge dividing the harbour break-water from the Arabian Sea.
To the West.--A line drawn from the point last mentioned above running in a N.E. 1/2 N. Direction to the starting point on the ridge abovementioned, nine miles from Manora Point."
22. Thus, it will be seen that the premises which were searched and from where the goods were seized and which are situated in Federal 'B' Area do not fall within the limits of the Port of Karachi.
The appointment under section 3 of the Act, of the Collector of Customs, Deputy Collector of Customs, Assistant Collector of Customs and an officer of Customs was for the Ports in Karachi Division and the Karachi Port did not cover the entire area of Karachi but only the Ports-Area.
22-A. The Revisional Authority has however, relied on Notification No. 57, dated 2-10-1953, published in the Gazette of Pakistan Extraordinary, dated 2-10-1953, issued under section 9 of the Sea Customs Act, 1878, (VIII of 1878), by the Central Board of Revenue which reads as follows:- "57. In exercise of the powers conferred by section 9 of the Sea Customs Act, 1878 (VIII of 1878), the Central Board of Revenue is pleased to direct that the following further amendment sf|all be made in the late, Government of India, Central Board of Revenue, Notification R. Dis. No. 499-1-Cus/25, dated the 14th May, 1925, namely:- In the said Notification, for Rule (1), the following shall be substituted, namely:- "(1) The Collector and Assistant Collectors of Customs, the Chief Inspector, Preventive Service, all Preventive Inspectors and Officers and Wharfinger stationed at Karachi or at the Outport of Wharf Hydri are required to prevent smuggling and are authorised to exercise all the powers conferred by Chapter XVII of the Sea Customs Act, 1878, on Officers of Customs duly employed for the prevention of smuggling."
So far as this notification is concerned the Officers named therein, in our opinion, could prevent smuggling in their territorial jurisdiction which in the present case was port of Karachi.
22-B. We have also come across a Notification No. S.R.O. 48(R)/67, dated April 14, 1967, issued under section 3 of the Land Customs Act, 1924 (XIX of 1924), which reads as follows: "S.R.O. 48(R)/67.- In exercise of the powers conferred by sub-section (1) of section 3 of the Land Customs Act, 1924 (XIX of 1924) and in supersession of the Ministry of Finance, former Revenue Division, Notification Nos. 14-Cus., 37-C and 23-C, dated the 1st April, 1953, the 14th October, 1955, and the 25th May, 1959, respectively, the Central Board of Revenue is pleased to appoint:-
(1) the officers specified in column 1 of the table below to be the Collector of Land Customs for the areas specified in column 2 thereof, and
(2) the Deputy Collectors, Assistant Collectors, Superintendents, Deputy Superintendents, Inspectors, Lady Inspectors, Jamadars, Havaldars, Naiks and Peons of the Collectorate of Central Excise and Land Customs duly employed in She said areas to be Land Customs Officers for those areas.
Officers Areas ' 1 2 Collector of Central Excise, Hyderabad. Commissioner's Division of Hyderabad, 'Khairpur, Quetta and Kaiat, Bahawalpur and the Districts of Muzaffargarh, Dera Ghazi Khan and Multan of Multan Divi- sion.
Collector of Central Excise, Lahore. Areas comprising the former province of Punjab excluding the Commissioner's Division Bahawalpur and the Districts of Muzaffargarh, Dera Ghazi Khan and Multan of Multan Division. {{WORDS MISARRANGED}} However, no such notification under the Land Customs Act, 1924 (XIX of 1924), in relation to area outside the Karachi Port Area and for the District or Division of Karachi has been brought to our 'notice nor have we been able to notice any such notification.
23. It has However, been brought to our notice that by another Notification No S.R.O. .446(i)/74, dated 4-4-1974, in exercise of powers conferred by the proviso to section 4 of the Customs Act, 1969, the Central Board of Revenue ordered that the powers and duties to be exercised and performed by the Collector of Customs (Preventive) in relations to the Customs Stations in Karachi shall be limited to the following, namely:-- "(1) Preventive Organization at Customs-Sea Port, Karachi, and at Keti Bunder, Shah Bunder, Sokhi Bunder, Port Muhammad Bin Qasim, Bram Hyderi, Giddani, Sonmiani and Ormara.
(2) Customs Airport, Karachi.
(3 Postal Appraisement Department.
(4) Expert Appraisement.
(5) Drawback, Rebates and Refunds.
(6) Sale of Goods, abandoned or confiscated.
(7) Adjudication of cases relating to the matters aforesaid."
24. It is, therefore, clear from the above notification that neither the Collector of Customs nor any other officer could have jurisdiction beyond their territorial jurisdiction to search and seize the goods. However, on February 12, 1983, another notification being S.R.O. 95(I)/83, was issued, whereby the Central Board of Revenue remedied the situation by appointing the officers mentioned below for the areas noted against their names.
Officers Areas 1 2 Collectors of Customs, Custom House, Karachi. The division of Karachi, in the Province of Sind and the District of Lasbella except Ormara in the Province of Baluchistan, including the following:
(i) the ports of Karachi, Keti Bunder, Shah Bunder, Sokhi Bunder, Port Muhammad Bin Qasim, Bram Hyderi, Giddani and Sonmiani; and (ii) the Customs-Airport (Civil) Shahre Shah Faisal Airbase, Masroor Airbase, Mauripur." Karachi, Karachi, SCHEDULE {{WORDS MISARRANGED}} Thus, it will be seen that the Collector of Customs is appointed to be the Collector of Customs for the entire area of Karachi Division and the District of Lasbella excepting Ormara in the Province of Baluchistan, including the Ports of Karachi, etc., and Customs-Airport (Civil) Karachi. Shahre Shah Faisal Airbase, Karachi Masroor Airbase, Mauripur.
25. No other notification has been relied upon in the impugned orders nor has any been brought to our notice except the one mentioned above whereby the entire Karachi was declared to be port area. However, with reference to the provisions of section 163(1) of the Customs Act, 1969, it was argued by Mr. Syed Inayat Ali that the Customs Officers could seize the goods sold or kept in any place and Mr. Syed Inayat Ali laid much emphasis on the word 'any place' in section 163(1) of the Act which we may immediately reproduce herein below: "163. Power to search and arrest without warrant.-(1) Whenever any Officer of Customs not below the rank of an Assistant Collector of Customs or any other officer of like rank duly employed for the prevention of smuggling has reasonable grounds for believing that any goods liable to confiscation or any documents or things which in his opinion will be useful for or relevant to any proceeding under this Act 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 section 162, he may, after preparing a statement in writing of the grounds of his belief and of the goods, documents or things for which search is to be made, search or cause search to be made for such goods, documents or things in that place."
26. In our opinion the word 'any place' has to be confined to a place within their jurisdiction and not any place beyond their jurisdiction for a Customs Officer posted at Karachi could not seize the goods in any other country or in any other province unless he was so authorised by law. In the present case the Customs Officers had jurisdiction to seize the goods from any place within their territorial jurisdiction and. If their jurisdiction was at the relevant time, confined to the Port of Karachi and other areas notified then they could not lawfully search or seize the goods from places which were beyond their territorial jurisdiction. We may repeat that no other notifications have been brought to our notice except Notification No. 53, dated 2-10-1953, as modified by the Notifications Nos. S.R.O. 167(R)/- 67, dated 1-9-1967, and S.R.O. 446(i)/74, dated 4-4-1974. But these notifications as already shown, are limited in their scope. Therefore, we find substance in the first point.
27. Now, taking up the second point that the said search and seizure were illegal, it may be stated that in order to carry out search without warrant the Customs Officer should have firstly, reasonable grounds for believing that (a) any goods liable to confiscation or any documents or things for which information will be useful for or relevant to any proceedings under the Act are kept in any place, and (b) that there is danger that they may be removed before a search warrant could be effected under the provisions~of section 162 of the Act, secondly, he should prepare a statement in writing of the grounds of his belief on both the points mentioned above.
28. It is urged on behalf of the petitioner by his learned counsel that firstly conditions Nos. 1 and 2 mentioned above were not ful filled inasmuch as the grounds of belief on both the points were not stated, in order to appreciate this contention it will be convenient to reproduce for future reference the statement under section 163 of the Act alleged to have been delivered by the Assistant Collector of Customs (Preventive) which reads as follows:-- "Whereas credible information has been placed before me that foreign smuggled refined tin slabs and other contraband goods are stored in the premises of M/s. Ittehad Re-rolling Mills, .L-10-c Block 21, Federal 'B' Area, Karachi, it is not expedient to obtain a search warrant as required under section 162 of the Customs Act, 1969 as the goods may be removed from the premises.
I, Afzal Ameer Khan, Assistant Collector of Customs (Preventive) under the powers conferred under section 163 of the Customs Act, 1969 order the search of the said premises."
29. Now, it is clear from the above statement that there is no mention that there was any danger of immediate removal of the goods for what is said in it is not expedient to obtain a search warrant as the goods may be removed. This statement in our opinion, was not sufficient for searching the premises without warrant. The requirement of law is that the officers of Customs searching a premises without warrant should have reasonable grounds for believing that (a) any goods liable to confiscation or other documents and things are concealed or kept in a place and that (b) there is a danger (italic for emphasis) that the goods may be removed and then he should prepare a statement in writing recording the grounds of his belief.
Now, nothing has been said in the statement about the grounds of belief that there was any danger that the goods might be removed. The respondents have not even filed any counter- affidavit disclosing the grounds. Thus we are of the view that one of the necessary condition to carry out search was not satisfied. We must emphasis that before any officer of Customs carries out search without warrant he must fulfil the conditions and these conditions have been provided by the Legislature as a safeguard against mala fide interference with the rights of citizen, in respect of property and against violation of right of privacy.
30. A similar notice under section 172(A) of the Sea Customs Act 1878, served on S.M. Yousuf came up for consideration of this Court in S.M. Yousuf vs. Collector of Customs PLD 1968 Kar. 599. We may here reproduce the notice from the judgment and it reads:-- "Notice for search under section 172(A) of the Sea Customs Act.- Whereas credible information has been received that certain docu-ments/prohibited and restricted goods/gold bullion, forged to effect illicit import of foreign goods have been prepared and secreted in....the premises known as...and whereas it is not expedient to take a search warrant, the said premises are being searched under section 172(A) of the Sea Customs Act, after serving this notice on you."
This notice was not held to be not in conformity with law and was, therefore, declared tc be illegal.
The arguments in this regard have been noticed in paragraph 9 of the judgment of Anwarul Haq, J.
(as the learned Judge then was), we may reproduce the same herein below:--- "9.--The case for the petitioners is that none of the requirements prescribed by section 172(A) of the Act were complied with by the Customs Officials, as there were no reasonable grounds for the belief mentioned in the section, nor was any written-statement of such grounds of belief prepared by the officials concerned before embarking on these searches, and no copy of the required statement was supplied to the petitioners at the time of the search; nor was any such copy delivered to them after the search. On behalf of the respondents Mr. Shah Jamil Alam submitted that reasonable grounds were available to the Collector of Customs and his subordinate Officers for believing that smuggled goods were concealed or kept in the place belonging to the petitioners, and that these goods would be removed before a search could be effected under the provisions of section 172; and that the notice under section 172(A) of the Act prepared and signed by the Customs Officer before commencing the searches was in the nature of the written statement envisaged by the section, it was further submitted by Mr. Shah Jamil Alam that the failure of the official concerned to deliver a sighed copy to the occupier of the premises at his last known address was really not germane to the legality of the search, and was only in the nature of something which had to be done after the event. The learned counsel for the respondents further contended that, in any case, the omissions pointed out on behalf of the petitioners amount to mere irregularities which would not vitiate the search, as the power to search without warrant was not dependent on the recording of the statement of the grounds of his belief by the Customs official, but arose from the statutory recognition of the necessity to search without warrant in certain situations calling for immediate preventive action."
Considering the arguments of the learned counsel for the petitioner it was observed in paragraph 15 of the judgment as follows: "15.-The petitioners are, however, on firmer .Ground when . They contend that the second requirement contained in section 172(A) to the effect that the Customs Officer shall prepare a statement in writing of the grounds of his belief, has not been complied with in these cases. As already pointed out, the only document available in these cases is the so-called notice under section 172(A) of the Act. I am clear in my mind that this notice falls far short of the relevant requirement laid down by the statute, in the first place, this is a cyclostyled and stereotyped document merely stating that 'credible information has been received....', thus showing beyond doubt that the Custom Officer concerned did not apply his mind to each individual case. The notices were already available at the Custom House and they were filed in at the spot by the officer concerned before commencing the search of a particular premises. In many cases they had already been signed by officers who neither searched the premises, nor caused the search to be made. Such a procedure can hardly satisfy the requirement of the law that before embarking upon a search without warrant the Customs Officer shall prepare a statement in writing of the grounds of his belief that smuggled goods 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 172 of the Act. The law further requires that the statement must also mention the goods for which the search is to be made. These are stringent requirements prescribed by law in order to ensure that the enormous power of search without warrant given to Customs Officer is exercised honestly and judiciously. By insisting that the grounds for his belief shall be recorded before hand by the Customs Officers 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 to me that this is a safeguard prescribed by the Legislature to ensure that the rights of 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. The notice relied upon by the Customs Authorities does not fulfil these requirements."
31. The condition required to be fulfilled under section 172(A) of the Customs Act, 1878 also came up for consideration in the case of Mirza Anwar Baig vs. Nazir Azhar and 4 others PLD 1979 Kar. 687.
Considering and analysing the same it was observed in paragraph 4 of the report as follows: "From the above decision it will follow that the respondents were bound to disclose in their counter- affidavit the grounds on which they promised their belief that specified smuggled goods had been stored in a particular place and that there were grounds to believe that if immediate action is not taken under section 172-A the goods will be removed. The respondent's case has been stated in the aforesaid paragraph 2 of the counter-affidavit and it is obvious that the paragraph does not disclose the material upon which the satisfaction of the respondent was founded at least as to the latter requirement, namely, that there were grounds to believe that the goods would be removed unless immediate action was taken without a warrant from a Magistrate under section 172 of the Sea Customs Act. In this connection we may also refer to the case of S.M. Yousuf vs. Collector of Customs and others in which also as action under section 172-A was under attack and the view that found favour was that it is within our jurisdiction to ascertain the material available to the relevant authorities which could furnish reasonable grounds for believing that action under section 1 /2-A of the Act was called for and what was to be adjudicated upon was the reasonableness thereof. In the present case, as aforesaid no material has been disclosed which warranted action under section 172-A of the Sea Customs Act against the petitioners for the only ground disclosed is that if action under section 172-A is not taken the goods will be removed."
And consequently, the orders were set aside.
32. We may also refer to Shoukat Hussain Vs. Zulfiqar Ahmad and others PLD 198l Lah. 1318 wherein search and seizure was carried out in the presence of a Magistrate but without search warrant under section 163 of the Act. It was urged that the search and seizure were vitiated by- non- compliance of the provisions of sections 162, 163 and 171 of the Act. On behalf of the respondent, it was urged that since the Magistrate was present at the spot and smuggled goods were produced, no warrant was required. Dealing with the contention it was observed by M.S.H. Qureshi, J., in paragraphs 3 and A of the report as follows: "(3) Section 162 of the Customs Act empowers a Magistrate to issue search warrant, on an application by a gazetted Officer of Customs under section 163, sub-section (1), an 'officer of Customs not below the rant of an Assistant Collector of Customs' or any other officer, of like rank duly employed for the prevention of smuggling', if he has reason to believe that any goods liable to confiscation under the Act are concealed or kept in any place and there is a danger that the same may be removed before a search can be effected under section 162, may 'after preparing statement in writing of grounds of his belief and of goods' for which search is to be made, search or cause search to be made for such goods in that place. The officer who makes the search or causes the search to be made, is further required by sub-section (2) to leave a signed copy of the aforementioned statement in or about the place searched and at the time of the search or as soon as practicable thereafter to deliver, furthermore, a signed copy of such statement to the occupier of the place at his last known address. Sub-section (3) of section 163 directs that all searches made under this section shall be carried out mutatis mutandis in accordance with the provisions of the Criminal Procedure Code. Section 171 requires that when anything is seized, the officer making such seizure shall, as soon as may be, inform in writing the person from whose possession the things are seized, of the grounds of such seizure or arrest."
"(4) The contention that there was no search involved is not correct because the act of entering upon the shop premises with a view to finding out if it contained any smuggled cloth and if so to seizing it, did constitute search. From the F.I.Rs. In both the cases and the written statements filed, it appears that the raid had been organized and conducted on the basis of an information that the petitioners had stock of foreign cloth in their shops. However, there is no mention in the F.I.Rs nor is it the case of the respondents that any attempt had been made to obtain a search warrant from the Magistrate as required under section 162 of the Customs Act, or a statement as required under section 163(1) of that Act had been prepared in writing of the grounds of the raiding officer's belief that goods liable to confiscation were concealed in the shops and that there was a danger that the same might be removed before a search warrant could be obtained. It is also not the case of the respondents that the raiding officer had, after the seizure, informed in writing the petitioners of the grounds of the seizure as required under sections 163(3) and 171 of the Act. It is, therefore, clear that there had been no compliance of the provisions of sections 162, 163(1) and (2) and 171 of the Customs Act."
33. We, therefore, are of the opinion that search and seizure of the goods were illegal for non- compliance of the provisions of sections 162 and 163 of the Act. We, therefore, hold accordingly.
34. As regards the third point that no notice under section 171 of the Act was served, we may state that a copy of the notice has been produced which bears the signature of Yaseen Baig who was then the manager of petitioner, in token of having received the original.
It was urged by the learned counsel for the petitioner that only signature of Yaseen were obtained on the seizure receipt but we cannot go into this question as it would require evidence. We, therefore, reject this point.
35. As regards the point that the burden of proving that the goods were unlawfully imported was on the Customs Authorities as tin ingots was not a notified item under section 156(2) of the Act, it is admitted that it is not 1 one of the notified item. In reply it is, however, submitted by Mr. Syed Inayat Ali that the burden of proving that the goods were lawfully imported under section 187 of the Act was on the petitioner. We may here reproduce the provisions of sections 156(2) and 187 of the Act which reads as follows: "156(2).-Where currency, gold, silver, precious stones ornaments or other manufactures of gold, silver or precious stones, or any other goods which the Federal Government may, by notification in the official Gazette, specify are seized under this Act in the reasonable belief that an act to defraud the Government of any duty payable thereon or to evade any prohibition or restriction for the time being in force by or under this Act has been committed in respect of such goods, or that there is intent to commit such act, the burden of proving that no such act has been committed or there was no such intent shall be on the person from whose possession the goods were seized."
Section 187. Burden of proof as to lawful authority, etc.-When any person is alleged to have committed an offence under this Act and any question arises whether he did any act or was in possession of anything with lawful authority or under a permit, licence or other document prescribed by or under any law for the time being in force, the burden of proving that he had such authority permit, licence, or other documents shall lie on him.".
36. The distinction between section 187 and sub-section (2) of section 156 of the Act has been succinctly brought out by Mr. Justice (Retd.) Z.A. Channa in his book entitled 'General Manual of Customs Laws' at page 689 and we may reproduce the same here.
"Distinction between this section and sub-section (2) of section 156'.--Both sub-section (2; of section 136 and this section place the burden of proof on the person found in possession of goods or doing any specified acts. The scope of the two provisions, however, is vastly different, though there would obviously be a certain amount of overlapping.
(1) The application of sub-section (2) of section 136 is strictly limited to goods.
(i) specified in clause (s) of section 2 or in a notification issued thereunder, i.e., smuggled goods; and
(ii) which have been seized in the reasonable belief:-
(a) that an act to defraud the Government of any duty payable on such goods or to evade any prohibition or restriction inforce by or under this Act has been committed in respect of such goods; or
(b) that there is an intent to commit such an act.
The following three circumstances must, therefore, co-exist in order that the provisions of sub- section (2) of section 136(2) can be attracted:-
(1) There must be a lawful seizure of goods by an authorised officer.
(2) Such goods should be smuggled goods, i.e., falling within the definition of 'smuggle' as given in section 2(s).
(3) The seizure should be in the reasonable belief-
(a) that an act to defraud the Government of any duty payable on such goods or to evade any prohibition or restriction imposed by or under this Act in respect of such goods MS been committed; or
(b) that there is intent to commit any such act.
On the other hand the scope of this section (187) is much wider and more general. The twin requirements for its application are;
(i) A person should allegedly have committed an offence.
(ii) A question should arise whether he did an act or was in possession of anything with lawful authority or under a permit, licence or other document required by law.
This section 187 therefore, is applicable both to possession of any goods as well as to doing of acts, so long as the possession of such goods or the doing of the thing is required to be under a lawful authority or a licence, permit, or other prescribed document."
37. The observations of the appellate authority in paragraphs 5 and 6 of the order, dated 22-9-1981, are as follows: "5. Another plea of the learned consultant is that the possibility of the appellant not being aware about the payment of duty on the goods cannot be ruled out because, according to the Customs own findings, the goods were sold to the appellant by Lala Khan and also because such goods are openly importable on Free List. In this connection he has invited attention to a judgment of the High Court of Sind in the case of Barkat Ali and others vs. The State PLD 1973 Kar. 659 and has quoted paragraph 11 of the judgment which is as under:-- "When the law raises a presumption against the accused and calls upon him to prove the contrary, it is well-settled that the contrary- can be said to be proved if the accused succeeds in establishing that the act attributed to him is capable of an interpretation other than suggested by the prosecution."
This ruling of the High Court is not relevant to this case because during the course of search of the factory certain stenciled tin plates were found with inscription of different trade marking which revealed that these plates were being clandestinely used to imitate and fabricate the marking of legally imported goods in order to give a cover of genuineness and legality to the non-duty paid smuggled goods. The markings of port Khomeiny in Iran were also found on some of the slabs.
These important pieces of corroboratory evidence further go to prove that the appellant was actively involved in fraudulent evasion of customs duty chargeable on the goods recovered from him.
(6) Finally, the pleas of the learned consultant that the goods in question are importable on free list and that the appellant < himself is not responsible for their smuggling into Pakistan are, however, correct."
Since part of the goods had markings of foreign origin namely Port Khomeiny in Iran and though the goods were importable on free list but Custom duty was payable thereon, therefore, the burden of proving that those goods were lawfully imported and duty was paid thereon was on the petitioner, which he failed to discharge. Therefore, this point has no substance.
38. As regards the last point that no action was taken against Lala Khan who supplied the goods to the petitioner although a show-cause notice was issued to him, it may be stated that the petitioner can succeed or fail on strength of his own case not on the basis of non action against Lala Khan.
Surely, the appellate customs authority took into consideration the pleas raised on behalf of the appellant before him that the goods were sold to the appellant by Lala Khan and were importable on free list and that the appellant himself was not responsible for their, smuggling into Pakistan when it reduced the amount of the penalty 'from Rs. 2,50,000 to Rs. 1,50,000.
39. We, therefore, declare that the search and seizure of the goods were without lawful authority and the orders impugned in this case are not in accordance with law and, therefore, of no legal effect. However, in the circumstances of the case we leave the parties to bear their own costs.
Order accordingly.