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Civil Petition No. 69 of 1986 and Criminal Petition No. 455 of 1985, decided on 28th May, 1986.

(On appeal from the judgment, dated 23‑10‑1985 of the Lahore High Court Lahore in W.P. No. 2304 of 1984 and Criminal Revision No. 474 of 1968).

‑‑‑Art. 185(3)‑‑Sea Customs Act (VIII of 1878), Ss.167(8) & (81)‑‑Land Customs Act (XIX of 1924), S.9‑‑Imports and Exports (Control) Act (XXXIX of 1950), S.3(3)‑‑Leave to appeal granted to consider question, inter alia, whether Customs Authorities, without first recording a finding that goods were smuggled and without passing a formal order of confiscation, could detain goods.

M.M. Saeed Baig, Advocate Supreme Court and Rana Maqbool Ahmad Qadri, Advocate‑on‑Record for Petitioners (in both the Petitions).

Nemo for Respondents.

Date of hearing: 28th May, 1986.

‑‑This order will dispose of Criminal Petition No. 455 of 1985 and Civil Petition No. 69 of 1986, as both are directed against a common judgment, dated 23‑10‑1985 passed by a learned Single Judge of the Lahore High Court.

The facts, which form the background, are that Zulfiqar Ali, petitioner, was arrested on 25‑6‑1966 in Sua Bazar, Lahore, along with one Muhammad Rafique by a raiding party of the Customs Department and three golden bars (Rennies) Exh. P. 1 to Exh. P. 3‑‑weighing 10 Tolas were seized from them on the allegation that they were smuggled articles. On the next day another 9 golden bars (Rennies)‑‑Exh. P. 4 to Exh. P. 12‑‑were recovered at the instance of Zulfiqar Ali from his house by the police. The weight of these golden bars (Rennies)‑‑Exh. P. 4 to Exh. P. 12‑‑is stated to be 90 Tolas. All the twelve bars carried the inscription "Johnson Mathy". A case under section 167 of the Lands Customs Act was registered in this connection against Zulfiqar Ali and Muhammad Rafique.

The learned trial Magistrate, in his order, dated 30‑6‑1967, found that "Zulfiqar and Rafique accused were in possession of the gold P. 1 to P. 3 on 25‑2‑1966 in Sua Bazar and that Zulfiqar Ali accused was in possession of 9 golden bars (P. 4 to P. 12) on 26‑2‑1966 in Sanda Khurd. 1, therefore, hold both the accused guilty under section 167 (81), Land Customs Act and sentence them accordingly. They are sentenced to two years' rigorous imprisonment each". He further directed that the "pieces of gold (P. 1 to P. 12) are confiscated in favour of State after the period of appeal, if any".

Both the convicts filed appeals against the above judgment. While the appeals were still pending in the Court of the Additional Sessions Judge, Lahore, a show‑cause notice was issued by the Assistant Collector, Central Excise and Land Customs, Lahore, calling upon the petitioners to show cause why penal action should not be taken against them under the Custom Law for being in possession of 10 Tolas of smuggled gold in respect of which a case also stood registered against them on 25‑2‑1966.

The petitioners, accordingly showed cause but their explanations were found to be unsatisfactory and the Assistant Collector, vide order, dated 18‑11‑1967 ordered that the goods referred to in the show‑cause notice (i.e. 10 Tolas of golden bars) be confiscated "under section 167(8) and (81) of the Sea Customs Act, read with section 9 of the Land Customs Act and section 3(3) of the Import and Export Control Act, 1950".

Zulfiqar Ali, petitioner, challenged the above order by filing an anneal before the Collector but this was dismissed by the latter, vide order, dated 24‑11‑1967.

Feeling aggrieved, Zulfiqar Ali, petitioner, filed a revision petition to challenge the order of the Collector before the Central Board of Revenue, Islamabad. However, while this petition was pending, the appeal filed in the criminal case by Zulfiqar Ali and Muhammad Rafique, namely, against the order, dated 30‑6‑1967 of the trial Magistrate came up for hearing.

The learned Additional Sessions Judge came to the conclusion that no part of the entire gold that was seized (which consisted in all 12 gold Rennies‑‑Exh. P. 1 to Exh. P. 12) was smuggled but that the same was. purchased by Walayat Ali, father of Zulfiqar Ali, petitioner, from Ghulam Hussain, a bullion dealer. There was, moreover, no evidence on the record to prove that the golden Rennies were smuggled or imported articles. He, therefore, accepted the appeal, set aside the conviction and sentence of Zulfiqar Ali and Muhammad Rafique. He further ordered that all the golden Rennies (Exh. P. 1 to Exh. P. 12) shall be restored to its purchaser, namely, Walayat Ali, the father of Zulfiqar Ali (petitioner herein). This order was passed on 1‑4‑1968.

The State filed a revision (Criminal Revision No. 474 of 1968) to challenge the correctness and the legality of the order of the learned Additional Sessions Judge especially the legality of his direction regarding the return of the golden Rennies to Walayat Ali.

Meanwhile the revision filed by Zulfiqar Ali, petitioner, before the Central Board of Revenue against the order of the Collector was decided by the Second Secretary, Central Board of Revenue, Islamabad. The said learned officer by his order, dated 18‑11‑1975 dismissed the revision petition aforesaid. Whereupon Zulfiqar Ali and his father Walayat Ali filed Writ Petition No. 2304 of 1985 in the Lahore High Court to challenge the orders of the Custom authorities.

Both the writ petition and the criminal revision were heard together by a learned Single Judge of the Lahore High Court and were disposed of by him, vide his order, dated 23‑10‑1985.

The learned Single Judge relying upon The State v. Ghulam Jaffar etc. P L D 1970 Pesh. 66 held that the powers of confiscation under the Sea Customs Act survived to the Customs authorities even in those cases where the criminal Court acquitted the accused and held that the property in question was not a smuggled article. He, accordingly, set aside the direction regarding the return of golden rennies passed by the Additional Sessions Judge. So far as the writ petition of Zulfiqar Ali and his partner was concerned, it was held that the question whether the pieces of gold were smuggled or not being a question of fact could not be called in question in writ jurisdiction. The result was that the criminal revision filed by the State was accepted while the writ petition filed by Zulfiqar Ali and his partner was dismissed. Hence these petitions for leave to appeal.

Mr. M.M. Saeed Baig, in support of these two petitions, has submitted that the goods liable to confiscation are only such goods which have been imported without permission and without payment of duty; in other words goods which were smuggled into Pakistan. In view of the finding of the learned Additional Sessions Judge that the gold in question was not smuggled, hence the Customs authorities could not confiscate it. In any case the Customs authorities had, in point of fact, passed orders for the confiscation of 10 Tolas of gold only (Exh. P. 1 to Exh. P. 3) and no order was passed by them in respect of 90 Tolas of gold (Exh. P . 4 to Exh. P . 12) . On the contrary, the last mentioned pieces of gold (Exh. P. 4 to Exh. P. 12), according to the Customs Authorities, had been stolen from the Customs Warehouse. Be that as it may the fact remained that no formal order of confiscation was passed in respect of the aforementioned 90 Tolas of gold. As the Customs authorities could not, in law, retain any goods without first recording a finding that it was smuggled and, therefore, liable to confiscation and as no such finding was ever recorded with respect to the aforementioned 90 totals of gold, the Customs authorities were bound to return the aforesaid 90 Tolas of gold. Even if the said pieces of gold had since been 'stolen, the Customs authorities (in so far as the theft occurred when the pieces of gold were lying in the Customs Warehouse), were bound to return the gold of equivalent value to the petitioners.

These questions, inter alia, require further consideration. Leave is granted in both these petitions.

Security for costs in Civil Petition No. 69 of 1986 shall be furnished in the sum of Rs.2,500 and both the appeals made ready on the present record with liberty to the parties to add further documents, if any, and put up for hearing at a very early date.

M.Y.H. Leave granted.

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