PAKISTAN INTERNATIONAL AIRLINES CORPORATION vs COLLECTOR OF CUSTOMS (PREVENTIVE) CUSTOM Ss

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PAKISTAN INTERNATIONAL AIRLINES CORPORATION VS COLLECTOR OF CUSTOMS (PREVENTIVE) CUSTOM Ss. 26 & 156(1), clauses (9), (10A) & (14)---Obligation to produce documents and provide information---Scope---Mens rea, absence of---Effect---Penalty, imposition of---Discretion of Court---Penalty disproportionate to guilt---Majority-owned Government Corporation---Whether penalty could be sustained in absence of mens rea and in circumstances where duty was voluntarily disclosed and paid?---Held: Record revealed that the Appellant, upon issuance of notice under S.26 of the Customs Act, 1969, produced the actual invoice issued by the foreign supplier and requested the department to accept payment of the amount in question---This fact was also reflected in the Order-in-Original---Penalty in the present case had been imposed under clauses (9), (10A) and (14) of S. 156(1), which use the expression “shall be liable to penalty”, thereby conferring discretion and not mandating imposition of penalty in every case---Imposition of penalty requires presence of a guilty mind, i.e. mens rea, which was absent in the present case---Mere payment of amount after issuance of show-cause notice or passing of order does not ipso facto establish intentional evasion or existence of mens rea unless supported by corroborative material---The mistake had been admitted prior to passing of the order and request for payment was made to the department---Penalty disproportionate to the gravity of alleged offence is unsustainable in law---The authority, while imposing penalty, must consider gravity of charge in the attending circumstances---The Appellant being amajority-owned Government Corporation, the burden of penalty would ultimately fall upon the Government itself and no useful purpose would be served in sustaining the same---The Tribunal had already reduced the penalty and the department itself was not aggrieved thereof---Thus, imposition of penalty was not justified---High Court set aside the impugned order---Appeal filed by the Government Corporation was allowed.

PAKISTAN INTERNATIONAL AIRLINES CORPORATION vs COLLECTOR OF CUSTOMS (PREVENTIVE) CUSTOM Ss — 2026 PTD 746 KARACHI-HIGH-COURT-SINDH

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