' IMAM ALI G. KAZI, J.---This petition under Article 199 of the Constitution of Islamic Republic of Pakistan arises out of the facts mentioned hereinbelow:--
1. In the year 1977 M./s. Iqtidar Limited exported art silk synthetic fabrics to Singapore through various shipments. The company obtained a rebate of customs and excise duties in terms of S.R.O.
No,237(1)/77 and S.R.O. No,1189(1)/75 from the Customs Department. Subsequently it transpired that in fact no such commodities were actually exported by the said company and the company in question had received a rebate on the basis of false documents. A show-casue notice dated 17-6- 1978 was issued to M/s. Iqtidar Limited as to why an amount of Rs,14,48,700 as customs duty and Rs,70,000 as excise duty erroneously refunded to them should not be recovered under section 32 of the Customs Act, 1969, and penal action taken against them in accordance with the said enactment.
2. The Deputy Collector of Customs (Preventive) adjourned the hearing of the case for a number of times, as Messrs Iqtidar Limited did not respond to their notices. After a number of hearings before the Deputy Collector of Customs (Preventive) some one appeared on behalf of the company and sought an adjournment on the ground that the senior officer of the company had gone to India and proper representation cannot be made by them. Such request of adjournment was declined and the matter was proceeded with. Evidence was recorded and ultimately the Deputy Collector of Customs, by his order passed on 2-8-1978 recorded his finding that the said company had systematically committed fraud and recovered the rebate on customs and excise duties mentioned hereinabove. He therefore, ordered recovery of the amount received by them by such fraudulent method and an amount of Rs,24,00,000 as the penalty. Both the appeal before the Collector of Customs and a revision application before the Central Board of Revenue filed by the said company failed. As the amount ordered to be refunded and the amount of penalty imposed'on them was not paid a reference was made to the Assistant Commissioner, Karachi (South) to recover the same as arrears of Land Revenue. The Assistant Commissioner, Karachi (South) issued a notice on 23-8-1982 requiring them to pay an amount of Rs,29,32,008 in addition to the recovery charges within a period of 15 days from the date of such notice, failing which it was intimated, that compulsory action will be taken in accordance with law for the recovery of the entire amount. It appears that the notice was left at the registered address of the company (170, Cotton Exchange Building, I.I. Chundrigar Road, Karachi). The company in question however, did not make any reply to the said notice and instead a letter dated 25-9-1982 was addressed to the Assistant Commissioner, Karachi (South) by M/s. Textile Products having their office at the same address (Annexure `D'). It was intimated by them that Mrs. Razia Aizazuddin, F.S. Iqtadaruddin (the two petitioners herein) and Mst. Saeeda Begum who were on the Board of Directors of M/s. Lqtidar Limited in 1975-76 had since resigned and sold their interest. Although no notice was sent to them, M/s. Textile Products requested that the proceedings be dropped and enquiry be directed against the present directors.
' The Assistant Commissioner, Karachi (South) seems to have issued another notice dated 19-4- 1983 to Iqtidaruddin one of the directors of M/s. Iqtidar Limited (petitioner No,2) and required him to pay the amount mentioned in the notice. Another notice under section 200 of the Land Revenue Code demanding the same amount was also addressed to him by the Assistant Commissioner, Karachi (South). Ultimately the Assistant Commissioner, Karachi (South), the respondent No,1 herein, passed an attachment order on 21-4-1983 which is reproducedf hereinbelow:-- "OFFICE OF THE ASSTT. COMMISSIONER, KARACHI SOUTH NO:AC(S)/Customs/320/83, Karachi 21-4- 1983 ATTACHMENT ORDER UNDER SECTIONS 85-90. LAND REVENUE ACT, 1967 ' In exercise of the powers vested in me under sections 85-90 Land Revenue Act, 1967, I, S. Ali Imam Zaidi, Asstt. Commissioner Karachi South, do hereby attach the Bungalow. No,F.T.2/43 Rose Street, Karachi Cantt. Owned by Mst. Razia Aijazuddin, Director of M/s. Iqtedar Ltd. To the extent of Rs,29,32,008 on account of Customs dues & 2% Recovery charges and notice fee thereon Rs,58,640 totalling to Rs,29,90,648 (Rupees twenty-nine lacs ninety thousand six hundred forty-eight only) which is recoverable as arrears of Land Revenue.
' You are therefore directed not to transfer the above Bungalow till further communication from this office.
(Sd.) 21-4-1983 (S. ALI IMAM ZAIDI) ASSTT. COMMISSIONER (SOUTH)& MAGISTRATE 1ST CLASS, KARACHI SEAL. To
1. The District Registrar City Customs, Karachi.
2. The Executive Officer Karachi Cantt., Cantt. Board.
3. The Asstt. City Survey Officer, Karachi South, Necessary charge should please be entered in the Property Register.
4. The Deputy Commissioner, Karachi South for information.
5. The Collector Customs, Karachi.
6. Mst. Razia Aizazuddin, Director of M/s. Lqtedar Ltd."
' It is against this order that the present petition has been filed by the two petitioners herein.
3. A joint counter-affidavit on behalf of Assistant Commissioner, Karachi (South) and Collector of Customs Karachi (respondents Nos.2 and 3 respectively) has been filed in the petition. The respondents have justified the action taken and have also disputed certain facts stated by the petitioners in the petition.
4. Mr. Khalid Anwar, Advocate for the petitioners, mainly contended that the two petitioners were admittedly the Directors of the company alongwith Mst. Saeeda Begum till 15-11-1976 when all the three directors resigned from the company and transferred their interest to Chowdhry Adalat Khan, Muhammad Hussain and Sycd Ibrahim Zaidi. Such intimation has been recorded in the prescribed Form XII kept under section 87 of the Companies Act, 1930 by the Registrar of Companies. He, therefore, contended that the two petitioners are not liable to refund any amount, as claimed, as at the relevant time both of them ceased to be the directors of the company. In support of his such contention he referred to the case reported in PLD 1975 Kar. 914 (Miss Shamsunnisa and another v.
Karachi Road Transport Coporation and others). He further contended that no show-cause notice was issued to the petitioners to determine their liability to pay the amounts claimed and action taken by the respondents is without lawful authority. He referred to the case reported in PLD 1962 SC 384 (Abdul Latif v. The Government of West Pakistan and others).
5. Mr. Nazar Akbar, Advocate appearing for respondents Nos.2 and 3, contended that as the present petition is based on disputed questions of fact the petition itself is not competent. He further stated that except an extract from register, Form-XII, kept by the Registrar of Companies, no evidence regarding transfer of their interests in M/s. Iqtedar Limited by the petitioners had been produced and such document is manipulated. He stressed that the petitioners as the directors of the Company are liable to pay the entire amount claimed.
6. Mr. A.A. Muhammadaly, Additional Advocate-General, Sindh, contended that the case is based on allegation of fraud and the petitioners have manipulated the register kept by the Registrar of Companies and have not approached this Court with clean hands, discretionary power vested in this Court under Article 199 :of the Constitution cannot be exercised in favour of the petitioners. He further pointed out that the notice of attachment dated 21-4-1983 is addressed to Mrs. Razia Aizazuddin only and therefore, the petition filed by F.S. Iqtidaruddin is not competent.
7. The main thrust of arguments advanced by Mr. Khalid Anwar, Advocate for the petitioners, in support of this petition is that the respondent No,1 could only have realized the amount claimed after liability to pay the same is determined under the provision of Sindh Land Revenue Act, 1967. He further contended that in order to determine such liability it was the duty of the Assistant Commissioner, Karachi (South) to have issued a show-cause notice for the purpose. In absence of both such grounds recovery through the coercive process contemplated by Sindh Land Revenue Act, 1967, cannot be resorted to.
8. Chapter VIII of the Sindh Land Revenue Act, 1967, deals with the procedure for the recovery of land revenue. Under this Chapter liability to pay the land revenue and other taxes payable and recoverable under the Act are to be governed by the provisions contained in this Chapter while Chapter IX of the said Act makes provision for the recovery of certain other demands under different enactments through revenue officers as arrears of Land Revenue. The demands in former cases also relate to demands for payment of land revenue or any other sums due and are recoverable as arrears of land revenue under the said Act. Any sums 'recoverable under other enactments can also be recovered as arrears of land revenue under section 114 of the said Act.
Amount claimed under the Customs Act, 1969, can be recovered through a revenue officer as arrears of Land Revenue as provided by its section 202. Similarly section 11 of the Central Excises and Salt Act, 1944, also authorizes recovery of dues .Under that act.
' Section 202 of the Customs Act, 1969, is reproduced hereinbelow:-- "Section 202: Recovery of Government dues.---(1) When, under this Act, a penalty is adjudicated against any person or notice or demand is served upon any person calling for the payment of any amount unpaid which may be payable by way of duty or under any bond or other instrument executed under this Act or the rules, the appropriate officer may deduct or require any other officer of customs to deduct such amount from any money owing to such person which may be under the control of the Customs authorities; or
(b) if it cannot be so recovered, may recover or may require any other officer of customs to recover such amount by detaining and selling any goods belonging to such person which are under the control of the customs authorities.
(2) If the amount cannot be recovered from such person in the manner provided in subsection (1), the appropriate officer may send to the Collector of the District in which such person resides or owns any property or carries on his business a certificate signed by him and specifying the amount recoverable from such person and such Collector shall on receiving such certificate proceed to recover the amount specified in the certificate as a public demand or an arrear of land revenue."
9. The section 11 of the Central Excises and Salt Act is also reproduced as hereunder:-- "11. Recovery of sums clue to Government.- Where any duty is not paid within the time in which it was required to be paid, any officer empowered by the Central Board of Revenue to levy duty may at any time
(a) deduct the amount so payable from any money owing to the, person from whom such duty may be recoverable or due which may be in the hands or at the disposal or control of such officer;
(b) require by a notice in writing any person owing any money to the person from whom such duty may be recoverable or due to pay to such officer the amount specified in the notice, or the whole of such money if it is less than the amount so recoverable or due; within seven days of the notice or within such longer time as may be allowed by such officer;
(c) recover such amounts:--
(i) in case of services, by attachment of the day to day charges for the excisable services rendered or provided or by attachment and sale of the building, land, plant or equipment in any premises where excisable services are rendered or provided; and
(ii) in case of goods, by attachment and sale of the exercisable goods or the building, land, plant, machinery, equipment or any other goods or property in any premises where excisable goods are manufactured or warehoused; or
(d) stop removal of any goods from such factory, bonded warehouse or premises till such amount is paid or recovered in full; ' and, if such amount is not so recovered, prepare a certificate signed by him specifying the amount due from the person liable to pay it and send it to the Collector of the District in which such person resides or conducts his business and the said Collector, on receipt of such certificate, shall proceed to recover the amount specified in the certificate as if it were an arrear of land revenue."
10. It will thus be noticed that section 114 of the Sindh Land Revenue Act, 1969, authorises a revenue officer to recover dues recoverable under enactments other that the Sindh Land Revenue Act, 1967, Thus a Collector (Revenue Officer) can only recover the Government dues recoverable under the Customs Act, 1969, or the Central Excises and Salt Act, 1944, only when an appropriate officer issues a certificate specifying amount so recoverable as provided by section 202 (2) of the Customs Act, 1969 or section 11 (d) of the Central Excises and Salt Act, 1940.
11. In a case where a person defaulted in payment of land revenue and other taxes recoverable under the Sindh Land Revenue Act, 1967 itself a Revenue Officer is required to issue a certified statement of account under its section 79 to enable the Collector to recover such amount as arrears of land revenue. Such certificate is by that provision of law treated as the conclusive evidence of such liability. Provision similar to the provision contained in section 79 of the Sindh Land Revenue Act, 1967, was also contained in section 66 of Punjab Land Revenue Act, 1887. The Supreme Court of Pakistan in the case reported in PLD 1962 SC 384, while considering the provision of section 66 of the Punjab Land Revenue Act, 1887 decided that before the authorities start operating to realize such arrears the concerned authorities must decide whether there is an arrear due or not and for that purpose a show-cause notice must be given to the person to be affected by the order.
Similar was also the view taken in the case reported in PLD 1969 Pesh.
324. After compliance of such legal provision is made and proceedings for recovery of dues as arrears of land revenue are taken a person who denies his liability to pay such dues can only pay the amount under protest and institute a suit in a Civil Court as provided by section 91 of the Sindh Land Revenue Act, 1967. In the present case although the amount of Government dues recoverable as arrears of land revenue has been determined by the orders passed by various authorities under the law no enquiry was required to issue such certificate by the appropriate authority under the Customs Act 1969 and Central Excises and Salt Act, 1944. In the present case the appropriate authority before issuing such a certificate was required to issue a show-cause notice to the defaulting parties to at least determine their liability to pay the same. In absence of such mandatory legal steps having been taken by the Customs Authorities and issuing necessary certificate the Assistant Commissioner, Karachi (South) could not take steps to recover the dues by ordering attachment of the property as a measure to recover such dues as arrears of land revenue.
12. For the foregoing reasons, we allow this petition and declare that the order passed by respondent No,1 so far as it relates to the property of the petitioner No,1 was passed without any authority and to be of no legal effect.
13. The petitihn in respect of petitioner No,2 must fail, as no steps have been taken against him and he cannot be said to be an aggrieved person.
'It will, however, be open to the respondents to follow the procedure prescribed by law and referred to hereinabove and take any steps for recovery of the dues in accordance with law. In the meanwhile the petitioners shall not encumber or transfer their immovable properties till their liability is determined by the authorities. There will, however, be no order as to the costs.