MESSRS ABDUL SATTAR & SONS Versus D.C., CUSTOMS

This is a constitutional petition filed by Messrs Abdul Sattar and Sons, Lahore, petitioner firm, through its partner Abdul Sattar, seeking a declaration that the seizure of its car by the Customs Authorities be held to be illegal, unauthorised and without jurisdiction and the respondent be ordered to return the same to it.

2. The brief facts of the case are that Dr. M.W.A. Qureshi had imported a Ford Opel Car, Model 1963, which he registered in Pakistan on 13‑8‑1983. On 1‑10‑1963 Dr. M. W . A . Qureshi transferred the said car to Mst. Ghulam Fatima on 7‑3‑1963. Mst. Ghulam Fatima transferred the same to one Mr. Muhammad Ikram. On 23‑10‑1963 the said Mr. Muhammad lkram transferred the car to Abdul Sattar and Sons, the present petitioner, against receipt of payment of price as Per document marked 'A' annexed with the petition. The car was used by the petitioner Firm, when on 14‑12‑1963 it met with an accident. The car was then delivered to Messrs National Motors Emporium at Regal Chowk, Lahore, for repairs. On 7‑2‑1964 the car was seized by the Customs from the garrage of Messrs National Motors Emporium. The certificate issued by the said Messrs National Motors Emporium evidencing the seizure of the car by the Customs Authorities of Lahore, is Annexure 'D' to the petition. On 10‑2‑1969 an inspector of Customs contacted the petitioner Firm and made inquiries as' regards whether duty on the car had been paid. Later the petitioner Firm wrote a number of letters to the Customs Authorities for the release of the said car. Being aggrieved by the delay in not returning the car, the petitioner Firm filed a constitutional petition in the High Court, which is now before me for disposal.

3. The case was fixed for arguments on 1‑6‑1988, but nobody turned up on behalf of the Customs Department. However. Mr. Muhammad Akbar Khan Maghzi, Appraiser, Customs, who was present in Court in connection with another case, was directed to inform the learned counsel for the Customs Department about the next date of hearing. He was also directed to ensure that the concerned Customs Officer who was in charge of this case produced before this Court on the next date of hearing a copy of the Import Permit granted to Dr. M.W.A. Qureshi or undertaking given by the said person which the condition that the vehicle would not be sold or transferred for a period of two years from the date of its import, was so contained. The case again came up on 4‑6‑1988, but only the departmental representative appeared. After a few days, the learned counsel for the Customs Authority intimated to me that the file was not traceable and the undertaking given by the original importer or the copy the Import Permit could not, therefore, be produced.

4. I have heard the arguments of the learned counsel for the petitioner and the Customs Authority. According to the written statement filed on behalf of the Customs Authorities, it is their case that the car was imported under a permit issued in favour of Dr. M.W.A. Qureshi, a condition whereof was that the car would not be sold or disposed of within two years from the date of its registration or import in Pakistan, whit never was later, and since the said import, had transferred the car to another and this affair continued till the car came into the hands of the petitioner Firm, the car was seized connection with adjudication under section 182 of the Sea Customs Act for violation of the condition of the permit, under which the same was imported. The written statement does not indicate that the import duty was not paid by Dr. W.W.A. Qureshi. It also does not indicate how the present petitioner is liable. The conditions of the Import Permit bound Dr. M.W.A. Qureshi, the holder of the permit. The written statement does not state that there was a condition In the Import Permit which. stated that the transferee would be liable for the confiscation of the car, in case the transferee purchased the car within two years from the date of its registration or import in Pakistan, whichever was later. The Customs Department did not file with its written statement a copy of the Import Permit granted to Dr. M,W,A, Qureshi or the undertaking given by him, if any, when securing the permit. In these circumstances, there is no evidence before me that the import Permit granted to Dr. M.W.A. Qureshi contained any such restriction which bound the transferee. The written statement does not disclose that the petitioner firm bought the car with knowledge of the condition barring its sale, as contained in the import Permit. The petitioner Firm being a bona fide purchaser of the car for value from one Muhammad Ikram, without knowledge of any restriction as to its transfer, cannot be bound to a condition, the obligation and burden of which is placed on the importer. Further no notice was issued by the Customs Authorities to Messrs National Motors Emporium under section 171 of the Sea Customs Act, 1878, giving the grounds for seizure. In the absence of such notice, the seizure was illegal.

5. Notwithstanding the above, the legal position, as it emerges from an inspection of the law on the subject, presents a totally different picture, The Manual of Imports and Exports Control issued by the Chief Controller of Imports and Exports, Government of Pakistan, on the 30th October, 1964, at page 399 contains Appendix 38 dealing with Application for Permit to Import Motor Vehicles, para. 1‑A whereof contains the following undertaking:‑

"(i) I undertake not to sell or transfer or otherwise alienate this motor vehicle for a period of two years from the date of its arrival in Pakistan.

(ii) I also undertake not to ask for repatriation of sale proceeds if I sell this motor vehicle in Pakistan."

At page 395 of the same Manual is Appendix 34 which contains a form of Import Permit which is used when a Pakistan imports a car as unaccompanied baggage, There are six conditions printed in the said permit. None of them clearly states that the transferor shall not sell or transfer or otherwise alienate or a transferee shall not purchase the vehicle within the period of two years from the date of its arrival in Pakistan. However, condition 6 contains the following condition.

"Any contravention of the conditions of this permit, or of the conditions on which this permit is granted or any breach of undertaking given by the applicant in consideration of which the permit is granted or any misuse of this permit may disqualify the permit‑holder for the grant of further permits /licences for import/export without prejudice to any legal action which may be taken against him."

It is apparent that tie clog on the transfer of the vehicle within a period of two years from the date of its arrival in Pakistan is on the importer, by virtue of the undertaking given by him and not by virtue of any condition contained in the Import Permit. In any case, the undertaking and the Import Permit being documents furnished and received originally by the importer, a subsequent transferee of the car would have no knowledge of the undertaking given by the importer, much less would he be able to connect condition No.6 of the Import Permit with the undertaking given ‑‑

6. Section 3 of the Imports and Exports (Control) Act, 1950 and section 19 of the Sea Customs Act, 1878, as they were in force in 1963, are reproduced hereunder, as they are relevant to this case:

Section 3 of the Imports and Exports (Control) Act, 1950:

"(1) The Federal Government may, by order published in the official Gazette and subject to such conditions and exceptions as may be made by or under the order, prohibit, restrict or otherwise control the import or export of goods of any specified description, or regulate generally all practices (including trade practices) and procedure connected with the import or export of such goods, and such order may provide for applications for licences under this Act, the evidence to be attached to such applications, the grant, use, transfer, sale or cancellation of such licences, and the form and manner in which and the periods within which appeals and applications for review or revision may be preferred and disposed of, and the charging of fees in respect of any such matter as may be provided in such order.

(2) No goods of the specified description shall be imported or exported except in accordance with the conditions of a licence to be issued by the Chief Controller or any other officer authorised in this behalf by the Federal Government.

(3) All goods to which any order under subsection (1)applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 19 of the Sea Customs Act, 1878, and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word "shall" therein the word "may" was substituted.

(4) Notwithstanding anything contained in the aforesaid Act the Federal Government may, by order published in the official Gazette, prohibit, restrict or impose conditions on the clearance whether for home consumption or warehousing of shipment abroad of any imported, goods or class of goods.

Section 19‑ of the Sea Customs Act, 1878:

"The Central Government may from time to time, by notification in the official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of Pakistan across any customs frontier as defined by the Central Government."

The object of section 3 (3) of the Imports and Exports (Control) Act, 1950 is to treat all the goods to which any order under section 3 (1) applies as if they are goods of which the import or export has been prohibited or restricted under section 19 of the Sea Customs Act, 1878, so that if the prohibition or restriction as regards its import or export is violated, action under the Sea Customs Act, 1878, can be taken. Even under section 19 of the Sea Customs Act, 1878, the powers to prohibit or restrict the impost into or export from Pakistan of goods is independent of the power which is conferred on the Federal Government or any other authority to prohibit or restrict the import or export of goods either under the other provisions of the Sea Customs Act or under any other law Under the various orders published in the official Gazette under section 3 (1) of the imports and Exports (Control) Act, 1950, some of which are codified in The Manual of Imports and Exports Control (published. 1964), Import and Export Licences are issued according to Import and Export Policies where remittances of foreign exchange are involved and Permits and Clearance Permits ere issued in, respect of those imports and exports where no remittances of foreign exchange are involved. (See Chanter III‑IMPORT CONTROL PERMITS in the aforesaid Manual). A number of conditions imposed in the Import and Export Licences or in the Permits or Clearance Permits all do not amount to prohibition or restriction relating to the import or export of goods. Such of the conditions as amount to prohibition or restriction appertaining to the import or export, would be those which the Customs Department would take notice, by virtue of section 19 of the Sea Customs Act, 1878, because of section 3 (3) of the Imports and Exports (Control) Act, 1950. The. violation of these conditions not relatable to prohibition or restriction appertaining to the import or export of the goods concerned, would not be covered b‑ section 19 of the Sea Customs Act, 1878. Supposing the car in Pakistan had been imported without an Import Permit, an offence under section 3 (1) of the Imports and Exports (Control) Act, 1950, would have been committed, for the import was subject to the issue of a permit and the prohibition being there not to import a car without a permit, its violation would be covered by section 19 of the Sea Customs Act, 1878. If the case relates to the violation of the undertaking given by the importer, not relating to the import, the case is not one relating to the prohibition or restriction relating to import and section 19 of the Sea Customs Act would not apply. In Messrs East India Company Limited, Calcutta and others v. Collector of Customs A I R 1962 SC 1893, where licence to import goods was given, subject to the condition that the imported goods would not be sold, but the goods after they were received and delivery taken on payment of customs duty, were sold and disposed of, the Indian Supreme Court held that the breach of condition of the ,licence was not a breach of an order made under section 19 of` the Sea Customs Act. In these circumstances, so far at least where the present petitioner is concerned, who was not the importer, it cannot be said that violation of the condition contained in the undertaking constituted an offence under section 3 (1) of the Imports and Exports (Control) Act, 1950, which covered a prohibition or restriction relating to the import of the car in question, so as to bring the case within section 19 .of the Sea Customs Act, 1878. In these circumstances, the Customs Department had no right or authority to prosecute the petitioner or to confiscate the car through adjudication proceedings under the Sea Customs Act, 1878.

5. For the foregoing reasons, this petition is accepted and the seizure by the Customs Authorities of the Ford Opel Car, Model ‑1963 belonging to Messrs Abdul Sattar and Sons, petitioner firm, is hereby declared to be illegal and without lawful authority and the same is set aside. The Bank guarantee furnished by the petitioner firm in favour of the Customs Authorities stands discharged and the Collector of Customs, Lahore, should return the same to the petitioner firm, after discharging and cancelling the same, under his signature and seal.

6. Rupees Two Thousand (Rs.2,000) is fixed as counsel's fee. The petitioner shall be entitled to his costs.

M.B.A./A‑362/L Petition accepted.