2023 PTD 1049 CUSTOMS-APPELLATE-TRIBUNAL-KARACHI

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FAZAL IMPEX VS The DIRECTOR, INTELLIGENCE AND INVESTIGATION (CUSTOMS), CUSTOM HOUSE, HYDERABAD Equity is the soul of law in dispensation of justice. Head NotesCase Description Citation Name: 2023 PTD 1049 CUSTOMS-APPELLATE-TRIBUNAL-KARACHIBookmark this Case FAZAL IMPEX VS The DIRECTOR, INTELLIGENCE AND INVESTIGATION (CUSTOMS), CUSTOM HOUSE, HYDERABAD Ss. 2(s), 156(1)(8), 156(1)(89) & 156(1)(90)---Smuggling---Scope---If a person has been found without lawful excuse in possession of smuggled goods he would be dealt with under Cl. (89) of S. 156(1) and if the evidence produced by the prosecution establishes that accused was smuggling the goods outside or into Pakistan, then he would be liable to be dealt with under Cl. (8) of S. 156(1) and in such circumstances, would not be punished, under Cl. (89) of S. 156(1)---Thus, Cl. (8) applies in relation to the very act (or acts together) which constitute the offence of smuggling---As S. 2(s) makes clear, this would include an attempt to smuggle and/or an abetment or connivance thereof---Clause (89) on the other hand applies to, or at, the stage when the offence of smuggling is already complete---Such difference can also be understood by noting that in Cl. (8), the word "smuggled" is used as a verb, whereas in Cl.(89), it is used in a descriptive sense as part of the expression "smuggled goods" (i.e. as an adjectival participle or verb adjective to indicate a past or completed action)---If the act or offense of smuggling is proven, even if it occurred a long time ago, it is crucial to establish whether the goods in question are considered "smuggled goods" and whether S.2(s) is applicable---This determination determines whether Cl. (89) or (90) should be applied---Clause (89) applies to smuggled goods, and clause (90) applies to those goods to which the former does not apply, i.e., those which are not smuggled goods---It necessarily follows from this that clauses (89) and (90) cannot simultaneously, be held to apply to the facts and circumstances of a particular case---Either the goods involved are smuggled goods, or they are not---Determination on order that concludes that both clauses apply, or purports to hold a person liable in terms of both, is bad in law and cannot be sustained---Furthermore, when Cl. (89) is examined, it is seen that it applies to "smuggled goods" in two distinct situations---Firstly, it applies when it has been determined that the goods are indeed smuggled goods---But, secondly, it also applies when there is a "reasonable suspicion" that the goods are smuggled goods---This obviously sets or requires a lower threshold, but it is important to note that the focus must still be on the goods being smuggled goods---Thus, when clauses (89) and (90) are considered together, three situations emerge: (i) the goods can be smuggled; or (ii) there may be reasonable suspicion that the goods are smuggled goods; or (iii) the goods are those to which neither (i) nor (ii) apply---The first two contingencies come within clause (89) and the third within clause (90)---For a lawful determination to be made when a question arises in relation to any goods as to whether customs duty and other taxes leviable thereon have been evaded or that such goods have been brought into Pakistan in breach of any prohibition or restriction, it must be carefully considered whether (i) the goods are smuggled goods, or (ii) are those in respect of which there can be a reasonable suspicion that they are smuggled goods---For this purpose, the definition of smuggling in S. 2(s) must be carefully considered in order to determine whether it applies in the facts and circumstances of the particular case---If the answer is in the affirmative then (and only then) clause (89) applies---If not, then it is only clause (90) that can be applied---Onus of such determination lies on the customs authorities. Head NotesCase Description Citation Name: 2023 PTD 1049 CUSTOMS-APPELLATE-TRIBUNAL-KARACHIBookmark this Case FAZAL IMPEX VS The DIRECTOR, INTELLIGENCE AND INVESTIGATION (CUSTOMS), CUSTOM HOUSE, HYDERABAD S.187---Qanun-e-Shahadat (10 of 1974) Arts.117 & 121---Burden of proof as to lawful authority---Scope---Section 187 of the Customs Act, 1969, provides two conditions, which are as follows: (i) when a person is charged with an offence under the Customs Act, 1969, burden of proof is cast upon him to show that he had the lawful authority to commit that act; (ii) when a person is found in possession of any goods the burden of proof is cast upon him to show that he was holding such goods under some lawful authority, permission or license, etc---Clause (ii) provides for an eventuality where a person is found to be in possession of certain goods which fall under a prohibited category or which in an unlawful manner find place in the possession of custody of the accused---In such case the burden is upon the accused to show that he falls under some exemption or exception to hold such goods---Type of eventuality as envisaged and stated in clause (ii) essentially represents a statement of the general principle of the law of evidence contained in Art. 121 of the Qanun-e-Shahadat, 1984---This principle states that anyone claiming to be under a preferential, exempt, or excepted category must demonstrate fulfillment of the conditions to fall within that category---This obviously should not be confused with the factum of possession for which no presumption or burden of proof has been spelt out, in view whereof the possession itself has to be proved independently by the prosecution beyond all reasonable doubt---In case of clause (i) it is to be determined whether the burden of proof solely lies upon the accused to disprove allegations of mis-declaration and mis-description leveled by the customs authorities and whether the customs authorities are under no obligation to lead evidence and discharge any onus of proof---This part of S. 187 perhaps appears to be contrary to the general principle of law of evidence contained in Art.117 of the Qanun-e-Shahadat, 1984, that whosoever alleges existence of a particular fact must prove the same---There is little doubt that a special law of particular statute can provide for a distinct regime of rules of evidence contained in a general law---In fact the law goes on as far as providing that the laws of evidence can be altered even by mutual consent and contract---However, on a close scrutiny of the provisions of S. 187 it appears that in such a situation it is only the evidential and tactical burden of proof which is cast upon the accused while the legal burden to bring home the allegations remains with the prosecution. Head NotesCase Description Citation Name: 2023 PTD 1049 CUSTOMS-APPELLATE-TRIBUNAL-KARACHIBookmark this Case FAZAL IMPEX VS The DIRECTOR, INTELLIGENCE AND INVESTIGATION (CUSTOMS), CUSTOM HOUSE, HYDERABAD S.26---Obligation to produce documents and provide information---Scope---State functionaries have no power and authority to conduct fishing and roving inquiries without possessing definite and proper information, just in hope to unravel some concealment and illegality on the part of the assessee/taxpayer/citizen---In other words, before embarking upon any inquiry the state functionary must already possess some definite material so as to establish any illegal action having been taken by the citizen. Head NotesCase Description Citation Name: 2023 PTD 1049 CUSTOMS-APPELLATE-TRIBUNAL-KARACHIBookmark this Case FAZAL IMPEX VS The DIRECTOR, INTELLIGENCE AND INVESTIGATION (CUSTOMS), CUSTOM HOUSE, HYDERABAD Proper purpose of procedure in any system of administration of justice is to help and not to thwart the grant of rights to the people---All the technicalities have to be avoided unless it be essential to comply with them on the ground of public policy---Any system which gives effect to the form but not to the substance defeats substantive rights and is defective to the extent---Ideal must always be a system that gives to every person what is his right under the law. Head NotesCase Description Citation Name: 2023 PTD 1049 CUSTOMS-APPELLATE-TRIBUNAL-KARACHIBookmark this Case FAZAL IMPEX VS The DIRECTOR, INTELLIGENCE AND INVESTIGATION (CUSTOMS), CUSTOM HOUSE, HYDERABAD S.26---Obligation to produce documents and provide information---Scope---Object of S. 26 of the Customs Act, 1969 is to empower the authority to ask for information or require the production of documents or inspect the same in order to determine the legality or illegality of importation or exportation of goods which had been imported or exported, the value of such goods, the nature, amount and sources of funds or the assets with which the goods were acquired and the customs duty chargeable thereon---Such information can only be called for from the claimant for the specific purpose of determining the legality of possession of impugned goods---Authorized officer of the customs can call upon any importer or exporter to furnish information in case where such determination is required---Such officer cannot make a roving inquiry or issue notice by merely shooting in the dark in the hope that it would enable him to find out some material out of these documents and then charge the party with irregularity or illegality---Customs Authority has to state and disclose in the notice the purpose for which party is required to produce those documents or supply information---Unless such purpose is specified in the notice, the addressee would be clueless about the demand being made through such a notice---Section 26 does not provide for making indiscriminate roving and fishing inquiry, irrespective of fact whether any determination of legality or illegality in import or export of funds with which goods are acquired is to be determined---Even in cases of suspicion of commission of illegality, details should be provided to the party to enable him to have an opportunity to produce all relevant documents and disclose information---Depending on facts and circumstances of a case, any notice without disclosing any fact or particulars for which information or documents are required would be in violation of principles of natural justice and can be struck down as illegal and without jurisdiction. 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