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Writ Petition No.1855 of 1964, decided on 7th April, 1985.

‑‑‑Art.199‑‑Central Excise Rules, 1944, R.226(iii)‑‑Altering entries in register‑‑Penalty for‑‑Mere fact that some alteration had been made in register maintained by petitioner, by itself, held, was not sufficient to lead to inference that fraud was intended by petitioner, particularly when there was nothing to indicate that altered entries were false.

‑‑‑Art.199‑‑Central Excise Rules, 1944, R.226(iii)‑‑Altering entries in register‑‑ Application of penal provision‑-‑Legality of‑‑Constitutional jurisdiction, exercise of‑‑Authorities below applying penal provision, imposed fine upon petitioner without recording findings and establishing that alleged alteration in register was made by petitioner with fraudulent intent for deceiving Excise Department there being no indication that altered entries in register were false‑‑Penal provisions having been misconstrued by Authorities, imposition of fine upon petitioner by Authorities below was held illegal by High Court in exercise of constitutional jurisdiction.

Zaheer Ahmad Khan for Petitioner.

Malik Muhammad Qayyum D.A.‑G. for Respondent.

S. Niaz Ali Shah Federal Counsel.

The petitioner is a partnership firm and is engaged in the manufacture of cloth. It has a factory in Lahore. Under the Excise Rules it was required to maintain a register in Form R.G. 19. In this register information was to be recorded with regard to the number of power-looms operated in every shift. In 1961 Mr. Muhammad Qasim, an Inspector in the Central Excises Department, visited the factory and inspected the said register. He found that a number of entries had been overwritten. He issued a warning to the petitioner. Subsequently, on the basis of the same over-writings a Deputy Collector imposed a fine of Rs.1,000 on the petitioner. The petitioner's appeal against the imposition of fine was rejected by the Collector and its revision before the Federal Government met the same fate. It then invoked the writ jurisdiction of this Court to challenge the illegality of the said penalty.

2. The fine has been imposed upon the petitioner under clause (iii) of Rule 226 of the Central Excise Rules, 1944. The penal part of this clause reads as follows:‑--

" ......And any person who fails to enter the required particulars within the time prescribed in the relevant rule, or who fails to keep such book, account or register, as the case may be, or to deliver it up to the officer on demand, or who obstructs or hinders such officer in making any minute therein or extract therefrom, or conveys away or conceals it, or destroys or tears out any leaf therefrom, or makes any false entry therein or fraudulently alters any entry therein, shall be liable to a penalty which may extend to two thousand rupees and all the goods of which due entry has not been made in such book shall be liable to confiscation."

The portion underlined above is only relevant for according to the department by altering the entries in the register the petitioner has incurred the penalty envisaged by the rule. It is unnecessary to say that as the clause is of a penal nature it has to be construed strictly. A perusal of the portion underlined would indicate that alterations simpliciter are not punishable and that b6fore the penal provisions are applied it must be established that the alterations had been made with a fraudulent intent, that is, with the purpose of deceiving the department. It is interesting to note that no such finding has been recorded by the Deputy Collector who imposed the fine or by the Collector or the Government which heard the appeal and the revision petition. The mere fact that some alterations had been made was by itself insufficient to lead to the inference that fraud was intended for the same could be explained away on the hypothesis of carelessness. There is also nothing to indicate that the altered entries were false. Thus, a very essential element of the penal provision is missing. Consequently, the imposition of fine upon the petitioner was entirely.

3. For the reason stated above, I accept this writ petition with the costs and declare that the order imposing fine upon the petitioner is without any legal effect.

H.B.T Petition accepted.

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