P L D 1959 Supreme Court (Pak (PLP)

General Such goods shall be liable to confiscation and to person concerned in any such offence shall be liable to a penalty not exceeding five times the value of the goods or, on conviction before a Court, to imprison ment for any term of less than three years, or to fine, or to both." "Section 177‑A. Burden of proof in certain cases:‑Where in any proceedings under the provisions of this Act any question arises in respect of any goods as to whether‑ (a) duty has been paid or secured in respect of any goods ; (b) any goods have been lawfully imported or lawfully un loaded from any vessel; (c) any goods have been lawfully loaded into any vessel or lawfully exported or lawfully water‑borne; (d) any goods were lawfully brought into any place for the purpose of being loaded into any vessel or exported; then the burden of proof shall lie upon the person in whose possession the goods were found or from whose premises the goods were recovered or the person claiming the ownership of the goods." On the very day of the promulgation of this new law, a consider able quantity of foreign‑made art silk piece goods, was seized from the godown of the respondents, by the Customs authorities. The import of this class of goods was restricted and they could not have been brought into the country except under a licence issued under section 3 of the Imports and Exports (Control) Act 1950 (XXXIX of 1950) read with section 19 of the Act. A notice was issued to the respondents to show cause why action should not be taken against them under the above provisions of law and they were called upon to submit their written reply within seven days of the notice. The respondents complied with this requisition and raised the defence that they had acquired the goods by local purchases from persons named. It then seems, an Intelligence Officer of the Custom, Karachi, made a further investigation and placed his findings before the Assistant Collector of Customs who passed them on to the Collector. The last‑named officer by order dated the 18th April 1955, held that Messrs Sadiq Cloth House had failed to prove that the goods in question were lawfully imported, and ordered their confiscation, at the same time, giving an option to the owner under section 183 of the Act to pay a fine of Rs. 14,000, in lieu of confiscation, along with the duty, Sales Tax and other incidental charges, if any leviable on the goods. The respondents appealed unsuccessfully against that order to the Central Board of Revenue. They then approached the High Court of West Pakistan, Karachi Bench, in writ jurisdiction and succeeded in obtaining the impugned order. The new item 81 inserted in section 167 of the Act, for the first time made the possession simpliciter, of goods improperly imported, an offence, and the combined effect of that provision and of section 177‑A of the Act was that the burden lay on the person found in possession to prove that the goods had been lawfully imported and that all relevant Customs duties had been duly paid thereon. The learned Judges of the High Court found that the order of the Collector had been passed in disregard of the principles of natural justice, that the respondents had been penalised for their failure to discharge a burden which the law had imposed only a few hours before the seizure of the goods in question and that the action of the Customs authorities amounted to giving retrospective effect to a penal enactment in respect of transactions which had obviously taken place before its promulgation. They relied on the rule that there is a presumption against retrospectively of statutes especially when they are of a penal nature. Apparently, therefore, they thought that the new provisions did not cover respondents' case. The learned Attorney‑General, who appeared for the appel lants, contended that although mere possession of goods of this character was not an offence prior to the promulgation of Ordi nance III of 1954, yet such goods were already liable to seizure under item 8 of section 167 of the Act even if the amendments did not govern the facts of the case. This argument was also advanced in the High Court but was rejected. Item 8 of section 167 may be reproduced in extenso: Offences. Section of this Act to which offence has reference. 18 & 19 Penalties. "8.‑If any goods the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from the Provinces and the Capital of the Federation contrary to such prohibition or restriction ; or. if any attempt be made so to import or export any such goods; or if any such goods be found in any package produced to any officer of Customs as contain ing no such goods; or if any such goods, or any dutiable goods be found either before or after landing or ship ment to have been concealed in any manner on board of any vessel within the limits of any port in the Provinces and the Capital of the Federation; or if any goods, the exportation of which is prohibited or restricted as aforesaid, be brought to any wharf in order to be put on board of any vessel for exportation con trary to such prohibition or restriction. Such goods shall be liable to confiscation; and any person con cerned in any such offence shall be liable to a penalty not ex ceeding five times the value of the goods, or, on conviction before a Court, to imprison ment for any term not exceeding seven years, or to fine, or to both." A plain reading of the language of this provision leads to the conclusion that that item was aimed at the suppression of illegal import or export or attempts to commit such an offence or to evade payment of the duty leviable on the goods in question. The words "such goods shall be liable to confiscation" in the penalties) column could only refer to goods which had been the subject of an offence of that character by an importer or exporter or his abettor or agent. The mere finding of goods that may have been initially brought into the country against a prohibition or restric tion without paying the necessary duty, in the hands of an innocent transferee, was not within the mischief of item 8 of section 167 of the Act. If the argument of the learned Attorney‑General was valid, it would have been an act of supererogation to issue another Ordinance to add item 81 to the section. We, therefore, consider, this line of reasoning to be untenable. The position than appears to be that item 81 of section 167 creates a new substantive offence in respect of a certain class of goods, which was not contemplated by item

8. By virtue of the new section 177‑A, if any question arises in respect of such goods inter alia as to whether duty has been paid or secured in respect of them or whether they had been lawfully imported, the burden of proof would lie upon the person in whose possession the goods were found or from whose premises they were recovered or who claimed their ownership. Section 177‑A of the Act lays down a procedural rule and it is well settled that any change in procedure would affect pending actions or proceedings. There is no vested right in a mere course of procedure. The learned Judges of the High Court appear to have made an erroneous assumption that the date of acquisition of this class of goods was relevant to the question of culpability under the amended section 167 of the Act. The words of item 81 of that section are unambiguous and expressly make goods of the relevant kind liable to confiscation and their possession an offence C from the date of the amendment. No question of giving retros pective effect to such a provision arises. From the date of promulgation of the Ordinance, anyone who retained possession of such goods howsoever or whenever they might have been acquired,) could do so at his peril. Equitable considerations based on the) supposed harshness of the new law cannot be allowed to defeat a clear enactment passed by a fully competent legislature within the field of its jurisdiction. The mitigation of its rigour would be the function of the legislature itself and not of the law Courts, and we find that in fact there have been subsequent amendments of the law to that end. It would thus appear that the grounds on which the learned Judges of the High Court rested their judgment were not sound. This does not, however, conclude the matter. It appears to us that the full import of the amendments made in the law was not realised by the Customs authorities or even by the Central Board of Revenue. In view of the new law placing a definite onus on the possessor of this type of goods, clearly such a person is entitled to an opportunity of not only being heard but of adducing evidence, if necessary, to discharge that onus. This opportunity has in fact been denied to the respondents in the present case. After the receipt of a notice from the Assistant Collector to show cause and the submission by them of a written explanation together with certain receipts and vouchers, an Intelligence Officer appears to have been deputed to make an ex parte enquiry in order to verify whether the defence raised was true or not. Certain witnesses were apparently examined by the. Intelli gence Officer behind the back of the respondents who had no chance of cross‑examining them to elicit facts in their own favour. The statements made by those witnesses were not even put to the respondents at any stage and we have it on the authority of the learned counsel for the respondents that for the first time they became aware that any such statements had been recorded by a departmental officer, during the pendency of the writ proceedings in the High Court. We feel not a little disturbed that prejudicial action could be taken by the Customs officers in a matter touching valuable rights to property as well as the personal liberty of the subject, on the basis of a private enquiry in which the person con cerned was not allowed to participate. It does not appear from the documents on record, although the allegation finds a place in the affidavit of one of the officers of the Department, that the Collector either conceded a right of audience or the right to establish their defence by evidence to the respondents. The Collector's order, on the contrary, appears to have been based on certain departmental reports and a consideration of the initial written statement submitted on behalf of the respondents. In our opinion, the failure of the Collector to follow the correct procedure envisaged by the amended law, vitiated his order. The Central Board of Revenue, too, disposed of the appeal, it seems, without fixing a date of hearing or giving an opportunity to the respondents of being heard. The right of appeal given by section 188 of the Act to a person aggrieved by a decision or order passed by an officer of Customs, would become illusory if the appeal could be disposed of merely after perusing departmental reports. The word `appeal' in itself implies a right of audience and we are constrained to hold, therefore, that the Central Board of Revenue also failed to discharge its statutory duty in deciding the appeal, in the manner that it did. These were quasi‑judicial proceedings of which the substance of a fair hearing and oppor tunity for defence at the appropriate stage are essential incidents. We, therefore, find that the order passed by the Collector and the appellate order of the Central Board of Revenue cannot be sus tained. We uphold the quashing of these orders of the Collector though not for the reasons mentioned in the High Court Judgment, set aside the appellate order of the Central Board of Revenue and further direct the Collector of Customs, Karachi that he should now dispose of the case after granting the respondents an opportunity to discharge the onus that lies upon them under section 167(81) read with 177‑A of the Act in the light of the observations made above. The parties are left to bear their own costs in this Court. A. H. Order accordingly.