'The petitioner-Commercial Union Insurance Company, Lahore has preferred this Constitutional petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 seeking direction to the following effect:
(i) That the orders dated 24-2-1993 passed by the Collector (Appeals), Customs House, Lahore and order dated 28-12-1992 passed by Deputy Collector (Central Excise and Sales Tax), Multan being void ab initio are of no consequence.
(ii) That the seizure of the vehicle subject-matter of the writ petition by the Directorate of Customs being without lawful authority, respondents Nos.1 and 2 be directed to hand over the custody of the vehicle to the petitioner.
2. Brief facts of the case giving rise to this petition are that Anti-Smuggling Squad (Customs), Multan upon an information that a vehicle Sunny, the description of which is detailed in para. 2 of the writ petition having been brought into Pakistan through unauthorized route and registered against fake documents, took it into custody on 10-1-1992 from the possession of one Muhammad Hussain. The vehicle in question having been found without the documents of import and lawful ownership was to be dealt under Customs Act, 1969. To justify the possession, said Muhammad Hussain claimed the purchase of the vehicle from one Malik Bashir, the owner of Punjab Motors, Multan against payment of Rs,3,95,000. However, during the investigation, the vehicle having been found registered on the basis of bogus bill of entry, the registration was suspended after necessary verification from Customs House, Karachi and in consequence thereof, the vehicle in question was seized to have been brought in Pakistan in violation of section 16 of the Customs Act, 1969 read with section 3(1) of the Imports and Exports (Control) Act, 1958.
' Deputy Collector, Customs, Multan at the conclusion of the adjudication proceedings confiscated the vehicle under clause 90 of section 156(1) of the Customs Act, 1969 vide order dated 28-12-1992 giving option to the owner under section 181 of the said Act for obtaining the vehicle against payment of redemption fine of Rs,5,000 with leviable taxes subject to the following conditions:
(i) The owner will produce Import/Clearance Permit /Release instructions or No-objection certificate issued by the Controller (Import and Export) for the release of said vehicle. .(ii) The duty and taxes along with fine shall be paid after fulfillment of conditions (i) above within two months of the receipt of this order.
' The petitioner being not party in the adjudication proceedings before the Deputy Collector having no other remedy has filed this Constitutional petition before this Court challenging the impugned order on the ground that the adjudicating officer without properly determining the question of his jurisdiction and origin of vehicle with its ownership passed the confiscation order.
3. The case of the petitioner is that the vehicle in question bearing Registration No,BC-I-4993 registered at Karachi in the name of Grindlays Modarba was insured by the petitioner vides Policy No, MP 1915828 on 16-11-1991. However, subsequently vehicle having been stolen, a case was registered with Police Station Gulberg, Karachi. It is stated that the petitioner under the insurance contract settled the claim of Grindlay Modarba by making payment of Rs,4,20,000 and acquired ownership of the stolen vehicle. The registration of vehicle at Lodhran vide Registration No,LD-1287 being based on fake documents was incorrectly seized as smuggled or imported without payment of leviable taxes. The adjudication proceedings having already completed without the participation of the petitioner, hence this Constitutional petition has been preferred before this Court with the following contentions:
(i) That not Muhammad Hussain from whose custody the vehicle was recovered but the petitioner is the lawful owner of the vehicle confiscated, hence, the adjudication proceedings in absence of the petitioner were nullity in law.
(ii) The vehicle having been imported in the lawful manner with payment of all taxes was not a smuggled item to be dealt with under Customs Act, 1969.
(iii) That the adjudication proceedings undertaken by the concerned Authority being based on insufficient material and a genuine mistaken of belief of the facts placed before them with no proper brobe and scrutiny was of no legal consequence.
' The learned counsel submits that the insurance company in full responsibility and satisfaction of the customs people could prove the claim of its ownership of the vehicle in question in terms of order, dated 28-12-1992 passed by the Deputy Collector, Customs, Multan.
4. The learned Standing Counsel submits that the vehicle being stolen property, its custody should remain with the official agency till finalization of the criminal case.
5. The sole question to be determined is as to whether the vehicle subject-matter of the case was brought into Pakistan without payment of loveable taxes or it after having been stolen was registered afresh on the basis of fake documents of import. Undoubtedly the dispute of ownership of vehicle with no liability under the Imports and Exports Control Act, 1958 and Customs Act, 1969 cannot be subject-matter of adjudication proceedings for the purpose of Customs Laws. The registration of a stolen vehicle on the basis of fake document not involving any tax liability is a matter to be resolved on the basis of title by the Court having jurisdiction and not by the customs people. The function of the authorities under Customs Act, 1969 is to decide the matter of leviable taxes and in case it is found that an item was smuggled, an appropriate order including confiscation of the property can be passed under the relevant provisions of law. The mere finding that the goods to have been initially brought into the country against a prohibition or restriction in absence of any proof through an enquiry regarding the payment of customs duty is not sufficient to pass the order of confiscation. The vehicle sold bearing foreign registration number, if found in possession of a purchaser without relevant documents, the seizure and confiscation is valid, but if a vehicle brought into Pakistan and purchased after payment of leviable taxes confiscated as smuggled goods, for want of proof of its lawful import and payment of taxes at the relevant time shall not deprive the original owner to establish his claim before the concerned forum and appropriate order is to be passed after providing proper opportunity to such purchaser/owner.
6. The Assistant Collector in his comments to the writ petition stated that confiscation order was passed in consequence of producing no proof of the payment of leviable taxes of import before the relevant authorities and that after the adjudication proceedings nobody has approached the department showing genuine documents of import and payment of Government taxes. However, according to him the Customs Department was only concerned with the recovery of leviable taxes and that the ownership of the vehicle was not to be decided in the adjudication proceedings.
It is an admitted position that no notice was given to the petitioner before passing the confiscation order despite the knowledge of Seizing Officer and other concerned that vehicle was a stolen property and its possession with Muhammad Husnain was doubtful. There is also nothing on record that the concerned agency made probe from Customs House, Karachi and the Taxation Department about the origin of vehicle and its importer/original owner to join him in the proceedings. However, the petitioner being not original importer of vehicle in question and only acquired interest after it had been imported was not entitled to this notice but it was to be essentially given to the original importer to ascertain the correct position. The adjudication proceedings having conducted on the basis of incomplete facts with the participation of a person who was neither original owner/importer nor even a bona fide purchaser of the vehicle, the decision thereof on the basis of fake documents prepared by a third party not recovered or produced by a genuine claimant suffers from inherent legal defects.
7. Be that as it may the confiscation order in terms of clause 90 of section 156(1) read with section 181 of the Customs Act, 1969 entitles the owner of the goods to pay fine in lieu of the confiscation of the goods and not to a stranger hence it is legal obligation of the concerned authority in such cases under section 181 of the Customs Act to act judicially and give proper notice to the original owner. Where in a case an order of confiscation or penalty without proper enquiry and notice to the owner is passed the order not satisfying the requirement of law and it being violative of the principle of natural justice would be a nullity.
8. In the present case admittedly the person from whose custody the vehicle in question was recovered did not appear before the Customs authorities for failure of proving the ownership through the valid documents. The claim of the petitioner on the basis of genuine import document if any in his possession shall necessarily be looked into by the Customs Authorities for the purpose of section 181 of Customs Act irrespective of the fact that the petitioner remained associated in the adjudication proceedings or not.
'The nutshell is that without setting aside the adjudication proceedings as a whole the Deputy Collector, Customs, Multan shall consider the case of the petitioner for the purpose of giving effect to section 181, Customs Act, 1969 and if it is found by him that the vehicle was in fact brought into Pakistan through the genuine document and all taxes were also paid, he after determining entitlement and claim of the petitioner dispose of the case accordingly. However, the petitioner being not a party in the adjudication proceedings the penalty imposed shall not be recoverable from him in case he succeeds in proving that the vehicle was not a smuggled one and was brought into Pakistan through valid import licence issued and that all leviable taxes were duly paid.
In case of failure of the petitioner to prove lawful import of the vehicle and payment of leviable taxes the Deputy Collector shall pass an appropriate order without conducting fresh enquiry/proceedings.
' The petition with the above direction stands disposed of.