SYED HAIDER ALI PIRZADA, J.--1. The petitioner through this petition has claimed the following reliefs:- - "(i) That the petitioner has been illegally deprived of 55 tolas of gold while he was in transit to Delhi.
(ii) That respondents wrongly confiscated the gold as the gold was not liable to confiscation as the provisions to section 2(s) are not attracted and the respondent No. 2 wrongly assumed the jurisdiction not vested in him.
AND While granting such declaration, this Hon'ble Court may be pleased to direct the respondents to return the 55 tolas of gold seized from the petitioner to the petitioner to be taken by him to Delhi.
(2) The petitioner prays for the costs of this petition.
(3) Any other relief which this Hon'ble Court may deem fit and proper under the circumstances of this case."
2. The facts giving rise to this petition are that on 27th May, 1986 when the petitioner was in transit at Karachi Airport having arrived from Dubai and bound for Delhi, was intercepted by the Customs Officer on duty i.e. Respondent No. 1 who illegally took the personal search of the petitioner and after personal search called for the water-cooler of the petitioner and from the water-cooler took in his possession the 55 tolas of gold in form of 6 slabs which were being carried by the petitioner and were to be taken to India. The case of the petitioner, as set out in the petition, is that he at the time of search and seizure was in custody of Immigration Authorities as he had no visa to enter Pakistan and his passport was also with Immigration Authorities who were to keep the petitioner in their custody till his departure.
3. The petitioner was prosecuted for an offence under section 2(s) of the Customs Act, 1969 (hereinafter referred to as "the Act") punishable under section 156(1)(8) of the Act. After usual investigation, the case was sent up to the Court of Special Judge (Customs and Taxation), Karachi.
Formal charge was framed against the petitioner to which he pleaded not guilty. The prosecution in support of its case examined P.W. Khalid Mahmood Tabasum, Preventive Officer. After the examination of the prosecution witness, the petitioner moved an application under section 265-K of the Code of Criminal Procedure for acquitting him. It was contended that the petitioner was under escort of Immigration Authorities when he was taken into custody and his passport was also with the said authorities and his ultimate destination was Delhi. In support of this submission, reliance was placed on a case reported in 1980 PCr. LJ 1971. This factual position was fairly conceded by the prosecution. In this view of the matter, the petitioner was acquitted.
4. During the pendency of the case before the Court of Special Judge (Customs and Taxation), the Deputy Collector of Customs, Karachi Airport, after show-cause notice issued to the petitioner, took up adjudicating proceedings under section 179 of the Act for the confiscation of the gold recovered from the petitioner. It appears from the record that the petitioner did not submit any reply nor appeared before the Deputy Collector on 19th August, 1986 and 30th September, 1986. He found that 55 tolas of gold was concealed in the bottom of plastic water-cooler. He further held that the import of gold into the country is restricted under section 8(1) of the Foreign Exchange Regulations Act, 1947 except on production of NOC from the State Bank of Pakistan. He further held that the contravention is deemed to be an offence under sections 2(s) and 16 of the Act which is punishable under section 156(1), 8(3), 8 and 9 of the Act. He, therefore, ordered confiscation of the seized gold.
The petitioner thereafter preferred an appeal against the confiscation of gold but the same was dismissed on 31st May, 1987. He therefore filed a revision petition before the Central Board of Revenue which also met the same fate. The order of Central Board of Revenue is dated 20th April, 1988. The petitioner has assailed the orders dated 8th November, 1986, 31st May, 1987 and 20th April, 1988.
Mr. Sohail Muzaffar has raised the following contentions:-
(1) The whole proceedings were vitiated by reasons of non-compliance of the provisions of section 171 of the Act.
(2) The petitioner having been acquitted by the Special Judge, gold recovered from him could not be legally confiscated under section 180 of the Act.
5. In support of the second contention, learned counsel relied on two unreported judgments of this Court in the case of Iqbal Hussain v. The Collector of Customs (C.P. No. D-146 of 1975), decided on 6th February, 1976 and Muhammad Umer Soni v. Government of Pakistan (C.P. No. D-864 of 1978), decided on 10th October, 1979. Besides these two unreported judgments, reliance is also placed on a case reported in 1988 PCr. U 213 decided by a learned Single Judge of Lahore High Court and another case reported in NLR 1991 UC 4(sic) decided by a Division Bench of this Court.
On the other hand, Mr. Zahiruddin Khan, learned counsel appearing for the respondents, has fairly conceded that the petition be allowed.
6. We have heard the learned counsel appearing for the parties and perused the impugned orders.
The petitioner has raised two contentions in this petition but the only one of which we must take notice and which goes to the root of the matter, is that the petitioner having been acquitted by the Special Judge, gold recovered from him could not be legally confiscated under section 78 of the Act. It is not in dispute that the adjudication proceedings before the certain authorities are independent and are not necessarily to be dictated by the proceedings in criminal Court but on the facts of this particular case, Mr. Zahiruddin Khan conceded that the findings of the Special Judge that the petitioner was in transit and there is no intention to smuggle gold into Pakistan, was binding on the Customs Authorities as they were party to this decision and they chose not to challenge the same by filing any appeal and the impugned order of the Central Board of Revenue also showed that the Board dismissed the petitioner's appeal on the decisive finding that no declaration under section 139 of the Act was made by the petitioner. Mr. Zahiruddin Khan further submitted that the power of the Customs Authorities to confiscate the goods emanates from sections 156(1)(8) and (9) of the Act itself which also provides for the trial of the accused persons. It follows therefore that the confiscation can be resorted to only if there has been attempt of smuggling; the latter charge having however failed in the instant case, the petitioner could not, in law, as well as equity, be deprived of this property and, therefore, this petition has to be allowed.
7. The statement of Mr. Zahiruddin is correct and we agree with him in his assessment of law, facts and the property on the facts of this case and would only add that an identical situation arose before the D.B. In Constitutional Petition No. D-146 of 1975 wherein the petitioner after his acquittal in the criminal case, had applied for return of the gold recovered from him and confiscated by the Collector of Customs. The petition was allowed and the impugned order was ordered to be set aside. The above judgment was further upheld by the Hon'ble Supreme Court in C.P.S.L.A. No. K-98 of 1976 filed by the Collector of Customs. The relevant observation made by the Supreme Court dismissing the petition for special leave to appeal may be reproduced as under:- "it may be mentioned at the outset that the High Court in its judgment dated 9th April, 1973, on going through the evidence, was not satisfied that the 44 gold bars in question were proved to be of foreign origin. In that connection in para. 13 of the judgment the Court observed:- 'The mere fact that the gold was so marked is by no means proof, muchless conclusive proof, that it was in fact brought in from outside or that it was in fact of a better degree of refinement that can be obtained in Pakistan. Indeed the defence asked for the examination of samples of this gold by an official of the Analyser Office of Pakistan Mint and the defence witness Abdul Hafiz, a Superintendent in that organization, gave evidence that the gold in question was of the refinement of 998.8 and 998.9 respectively. Statement on the gold therefore that they were of refinement of 999.0 was clearly false. That having been established to be false the reliance placed upon the fact that they were marked with the names of foreign companies loses importance. It requires little imagination to believe that gold was not of the requisite quality was marked in order to be able to sell it better and at higher rate in the market and it would be childish in the extreme, to assume that merely because the name of foreign company appeared thereon it must necessarily have been marked by the foreign company. A prosecution for cheating would appear to have been much more appropriate in this case. The witness Abdul Hafiz in fact stated that he could not really say whether the gold was of a foreign make though curiously enough this question was put to him and the answer elicited not in the examination-in-chief but in the cross-examination'."
On this finding, therefore, the impugned order of confiscation of the gold in question was wholly unwarranted and without lawful authority. As such, the High Court was fully justified in quashing the same.
As last resort before us the learned counsel contended that after the gold bars in question had been melted, the High Court was not justified in ordering the return of the melted gold equal in weight to what was seized by the Customs Authorities weighing 440 tolas:- "In view of the above finding by the High Court, the respondent was entitled to the return of the gold to him. In case the petitioner had already melted the gold, in law and equity, he was entitled to the return of the same or the equivalent in weight of that gold to him."
8. In the second mentioned case of Umer Sooni and another, a Division Bench of this Court relying on the judgment in Constitutional Petition No. 146 of 1975, ordered that the silver which was recovered from the possession of the petitioner in that case and which was confiscated by the Customs Authority, be restored to the petitioner as he was acquitted in the proceedings before the Special Judge, Customs relating to it.
9. In the third mentioned case of Muhammad Sarwar, a learned Single Judge of Lahore High Court held as follows:- "If the finding of the Special Judge, Customs is based on technical consideration, but not on merits, such as, for lack of sanction, or some technical defect in procedure, the adjudicating authority may conceivably confiscate the goods or impose a penalty. However, where the judgment of acquittal is substantially on the merits in which intricate questions of law and fact have been answered, it would be highly improper for the adjudicating authority on identical facts and charges to record any finding leading to the confiscation of goods or imposition of any penalty, without distinguishing the findings on solid and incontrovertible grounds. Whether it would be able to do so, would depend upon the facts of each case. A trial before the Special Judge Customs, proceeds upon the most searching scrutiny of facts and a most elaborate discussion of the law. Where the Special Judge, Customs holds that the goods are not smuggled, not on any technical plea, but on the merits, it is against the principles of natural justice that any Custom Officer, in adjudication proceedings, whether dealing with the matter originally or in appeal, should come to a different conclusion on the same question of fact, on the same evidence. If this principle is not observed, it would lead to the strange situation, where in respect of the same offence, a person would be punished by one Tribunal on the basis that he is guilty, and honourably acquitted by another, on the basis that he is not.''
10. In the fourth mentioned case of Syed Masood Ahmed and another, Division Bench of this Court, relying on the abovementioned unreported decisions, ordered that the gold and currency recovered from the petitioner in that case and which was confiscated by respondents be restored to the petitioner. We are in agreement with these decisions for the reasons given therein.
11. Applying the dicta in these decisions to the present case, it is clear that upon acquittal of the petitioner in the proceedings initiated against him for his trial under the Customs -Act for alleged offences of smuggling of gold by the Customs Authorities were not entitled to confiscate the gold recovered from the possession of the petitioner and confiscated by respondents.
12. For the foregoing reasons, this petition is accepted and it is hereby declared' that the impugned orders ordering confiscation of the petitioner's gold passed by the respondents, are illegal, void and without jurisdiction. The respondents are directed to restore to the petitioner the gold seized from him or reimburse Rs. 110,000 being value of 55 tolas of gold. In the circumstances of the case, the parties are directed to bear their own costs.