2026 S C M R 816

[Supreme Court of Pakistan]

Present: Munib Akhtar, Ayesha A. Malik and Aqeel Ahmed Abbasi,

DIRECTOR, INTELLIGENCE AND INVESTIGATION (CUSTOMS),

FEDERAL BOARD OF REVENUE ---Petitioner

Versus

ZAMAN KHAN and others ---Respondents

Civil Petition No. 288-P of 2025, decided on 23rd April, 2025.

(Against the order dated 12.02.2025 passed by the Peshawar High

Court, Peshawar in Customs Reference No. 154-P of 2024 with C.M. No.

100-P of 2024).

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 156(1), clauses (8) & (89), 168(1), 187 & 211---Provincial

Motor Vehicles Ordinance (XIX of 1965), S. 25---Vehicle being smuggled,

allegations of---Seizure---Authority (powers) of Customs Department---

Scope---Vehicle having been registered with Motor Vehicle Registration

Authority---Effect---Burden of proof---Scope---Staff of the Customs

Department intercepted a Motorcar at road, and later seized the same

on the allegations of its being smuggled one---Customs Appellate

Tribunal ordered to release the subject vehicle holding the seizure of

the same by the Customs Authorities, on the allegations of its being

smuggled one, unlawful in view of the fact that the subject vehicle was

duly registered under Section 25 of the West Pakistan Motor Vehicles

Ordinance, 1965; thus, presumption of truth was in favour of owner;

which findings were maintained by the High Court in its Reference

jurisdiction---Validity---Authority of the Officials of the Customs

Department to seize an imported vehicle can be made if the

importer/owner of such vehicle fails to produce the import documents;

such vehicle having been imported more than five years ago plying on

road within territorial limits of the city yet duly registered by the

Motor Vehicle Registration Authority; inspite of the fact that the

importer/owner of such vehicle is under no legal obligation to keep

such record of import beyond the period of five years in terms of

Section 211 of the Customs Act, 1969---Further, the burden of proof in

terms of Section 187 of the Customs Act, 1969, stands discharged once

the importer/owner produces the registration documents and (burden)

shifts upon the Custom Authorities to prove otherwise by adopting the

legal course---Thus, the proposed questions are answered against the

Applicants / Department and in favour of the respondent (owner of

vehicle)---Petition for leave to appeal, being merit-less, was dismissed.

2021 PTD 1683 and Civil Appeals Nos. 1088, 1231 to 1236 of 2013 and

others dated 17.4.2025 ref. Ishtiaq Ahmad, Advocate Supreme Court (Via Video Link, Peshawar)

for Petitioner.

Nemo for Respondents.

Assisted by: Ms. Zainab Bashir, Judicial Law Clerk, Supreme Court of

Pakistan.

Date of hearing: 23rd April, 2025.

JUDGMENT

AQEEL AHMED ABBASI, J.---The instant petition for leave to appeal

is filed by the petitioner under Article 185(3) of the Constitution of the

Islamic Republic of Pakistan, 1973. The petitioner has challenged the

impugned order dated 12.02.2025 passed by the Division Bench of

Peshawar High Court, Peshawar in Customs Reference Application No.

154-P/2024, whereby the reference filed under Section 196 of the

Customs Act 1969, (hereinafter referred to as the Act ) against the

judgment dated 04.11.2024 passed by the Customs Appellate Tribunal,

Peshawar (Special Division Bench), was dismissed.

2. Brief facts of the case as recorded by the Division Bench of

Peshawar High Court in the impugned order while deciding the

aforesaid reference application are that the staff of the Field

Intelligence Unit, Mardan intercepted a Toyota Corolla Motorcar

bearing Registration No. BA-1812/Peshawar (hereinafter referred to as

the subject vehicle ) at Charsadda Road, Peshawar. On demand, the

driver Muhammad Jamil son of Damsaz produced a GD No. KAPR-HC-

137314 dated 06.04.2006 showing the import of a used Toyota Corolla

Car Model 2003 chassis No. NZE120-3027717. The vehicle was brought

to the office of Intelligence and Investigation Customs Peshawar and

was detained in terms of section 17 of the Act. Accordingly, a letter

dated 30.10.2022 was sent to Junior User Support Officer, Intelligence

and Investigation (PRAL), Hayatabad, Peshawar to verify the import

status of the vehicle and in response, it was reported vide letter dated

02.01.2022 that the record of the vehicle pertaining to chassis No.

NZE120-3027717 could not be traced in one customs database. Further,

the Director FSL, Peshawar was also requested vide letter dated

02.11.2022 to chemically examine the chassis number of the vehicle

and through letter dated 08.11.2022, the Director FSL submitted his

report, according to which, no other number has been deciphered in

its chassis number. As there was reason to believe that the foreign-

origin Toyota Corolla Motorcar was a non-duty paid/smuggled one and

was brought into the country through unauthorized routes without

payment of leviable duty/taxes; therefore, the vehicle was seized on

10.11.2022 in terms of section 168(1) of the Act for violation of sections

2(s) and 16 of the Act read with section 3(1) of the Imports and Exports

(Control) Act, 1950 and SRO 566(I)/2005 dated 06.06.2005 punishable

under section 156(1) clauses (8) and (89) of the Act read with section

3(3) of the Imports and Exports (Control) Act, 1950 and SRO 499(l)/2009

dated 13.06.2009. After completion of requisite formalities, the matter

was placed before the Collector of Customs (Adjudication), Islamabad, who vide order-in-original 39/2023 dated 08.02.2023 ordered for

outright confiscation of the vehicle. The respondents feeling aggrieved

filed an appeal bearing No. Cus-160/PB/2023 before the worthy

Tribunal. The Worthy Tribunal allowed the appeal and released the

vehicle to the owner unconditionally vide impugned judgment dated

04.11.2024 .

3. The Division Bench of the Peshawar High Court after hearing the

learned counsel for the petitioner and scrutiny of entire record while

referring to the relevant provisions of the Customs Act, 1969 as well as

the provisions of West Pakistan Motor Vehicles Ordinance, 1965 was

pleased to dismiss the reference application by holding that the

seizure of the subject vehicle by the Custom Authorities on the

allegations of its being smuggled vehicle was unlawful. It has been

further held that in view of the fact that the subject vehicle was duly

registered under Section 25 of the West Pakistan Motor Vehicles

Ordinance, 1965, the presumption of truth was attached to the official

document of registration hence, the burden under Section 187 of the

Act was shifted from the owner of subject vehicle upon the Customs

Authorities to establish that subject vehicle was unlawfully imported.

While reaching to such conclusion the Division Bench of Peshawar

High Court, Peshawar has further held that since the subject vehicle

was more than 5 years old at the time of its confiscation by the

Customs Authorities, therefore, in view of Section 211 of the Act the

owner of the subject vehicle was not under legal obligation to keep the

record of such import beyond the period of 5 years. Accordingly, the

reference filed by the Customs Authorities before the Peshawar High

Court was dismissed and the order passed by the Customs Appellate

Tribunal was upheld.

4. The learned counsel for the petitioner while referring to the

questions proposed in the instant civil petition for leave to appeal

vehemently argued that the controversy involved in the instant case

relates to the authority of the officials of Directorate of Intelligence,

Customs, to intercept any imported vehicle while plying on road for

the purposes of verification of its lawful import, payment of duty and

taxes etc. Whereas, the burden to prove that such vehicle is lawfully

imported is upon the importer/owner of said vehicle in terms of

Section 187 of the Act and in case the importer/owner of subject

vehicle fails to discharge the burden, than the said vehicle can be

seized in terms of section 168(1) of the Act for violation of sections 2(s)

and 16 of the Act read with section 3(1) of the Imports and Exports

(Control) Act, 1950 and SRO 566(I)/2005 dated 06.06.2005 punishable

under section 156(1) clauses (8) and (89) of the Act read with section

3(3) of the Imports and Exports (Control) Act, 1950 and SRO 499(I)/2009

dated 13.06.2009. According to the learned counsel for the petitioner

the Customs Appellate Tribunal and the Hon'ble Division Bench of

Peshawar High Court, Peshawar have erred in law and facts while

holding that the burden of proof regarding the lawful import of

subject vehicle was lawfully discharged by the importer/owner of

subject vehicle in view of Registration of the subject vehicle under ection 25 of the West Pakistan Motor Registration Authority which

fact alone is sufficient to discharge such burden in terms of Section

187 of the Act. It has been prayed that the impugned order may be set

aside and instant civil petition for leave to appeal may be allowed.

5. Heard the learned counsel for the petitioner, perused the record

and the impugned order passed by the Division Bench of Peshawar

High Court, Peshawar in the above aforesaid reference application

with his assistance.

6. Since the facts as recorded by the Division Bench of Peshawar

High Court are not disputed by the learned counsel for the petitioner,

therefore, we need not further elaborate the factual position and

would decide the legal issues involved in the instant case, including

seizure of an imported vehicle duly registered in Pakistan by the

Motor Vehicle Registration Authority by the Customs Authorities, while

plying on the road within the city limits, by invoking the provisions of

Section 168(1) of the Act requiring the owner to show the import

documents and in case of failure by the owner of such import

documents, to seize the on the presumption that such vehicle is a

smuggled vehicle.

7. It is pertinent to note that the questions as proposed in the instant

civil petition for leave to appeal as decided by the Customs Appellate

Tribunal and the Division Bench of Peshawar High Court, Peshawar in

aforesaid reference application have already been dealt with in detail

by the Division Bench of High Court of Sindh in the case of the

Additional Director, Directorate General of Intelligence and

Investigation-FBR, Regional Office, Karachi and another v. Imran Khan

and another (2021 PTD 1683) in Special Customs Reference Application

No. 110/2014 along with others. It will be advantageous to reproduce

the proposed questions of law which have been decided by the

Division Bench of High Court of Sindh in the aforesaid cited case

which read as follows:

"1. Whether banned goods (Notified vide Serial No. 26 of SRO

566(1)/2005 dated 06.06.2005, issued for the purpose of Sections

2(s) and 156(2) of the Customs Act, 1969, could be released by the

learned Customs Appellate Tribunal without any discussion

much less examination and analysis of the facts and law

involved?

2. Whether the learned Member (Technical), Appellate Tribunal,

Bench-II, Karachi, has seriously erred in law by not taking notice

and giving findings on the evidence of Chemical Examination

Report No.AIG/FD/OR/274/2012 dated 06.11.2012, confirming

therein tampering of the chassis frame?

3. Whether the learned Member (Technical), Appellate Tribunal,

Bench-II, Karachi, while concluding the impugned judgment has

seriously erred in law and failed to understand that in terms of

subsection (2) of Section 156 and Section 187 of the Customs Act, 1969, the respondent/possession holder of the vehicle has failed

to discharge burden of proof of lawful possession?

4. Whether registration of smuggled vehicle, having tampered

chassis number with Motor Registration Authority Civic Centre,

Karachi can regularize a smuggled vehicle and absolve it from

penal action under the Customs Act, 1969?

5. Whether "importation" and registration, in context of vehicles,

are not different and distinct concepts, the former being under

the Customs Act, 1969 and the latter being the Provincial subject

and whether mere registration of vehicle absolves the

owner/possessor of a vehicle to prove its legal importation

under the Customs Act, 1969?

8. However, above proposed questions were reframed in the

following terms:

(i) Whether a motor vehicle, duly registered with the Excise and

Taxation Department under the Motor Vehicle Registration

Ordinance, 1965, can be detained/seized by the Customs

Authorities on the charges of smuggling in terms of Section 2(s)

read with Section 156(1)(89) and (90) of the Customs Act, 1969, if

the owner is not in possession of the import documents?

(ii) Whether the Customs Authorities can ask for production of

record including import documents from owner in respect of a

Motor Vehicle or any other importable item, beyond the period

of five years in terms of Section 211 of the Customs Act, 1969?

(iii) Whether the Registration Book, Customs Auction Documents,

Form of Transfer Order, Bank challans towards payments of

additional duty and taxes, capital value tax (CVT), registration

fee transfer fee and other charges, unless proved to be bogus

and forged, constitute other documents prescribed by or under

any law for the time being in force in terms of Section 187 of the

Customs Act, 1969?

(iv) Whether production of documents as prescribed by or under

any law for the time being in force by the owner in respect of a

motor vehicle or any other importable item shifts the burden of

proof from the owner, upon the Customs Authorities to establish

the charge of smuggling through positive evidence or any

concrete material to the contrary, in terms of Section 2(s) read

with Sections 156(1)(89) and (90) of Customs Act, 1969?

9. Perusal of hereinabove questions shows that the controversy

involved in the above mentioned case is identical to questions

involved in the instant case, therefore, the decision on the aforesaid

questions has a direct bearing on the legal issues involved in the

instant case, hence the relevant findings on the said issues are

reproduced as under:

7. We have reproduced the relevant facts, questions proposed and

the findings recorded thereon by the Divisional Bench of this Court in the aforesaid reference application at length, as we are

of the view that the facts and legal issues involved in all these

cases are similar to the facts and legal issues of the above cited

case, and, therefore, would be relevant to decide the questions

of law and legal points involved in these reference applications

and the connected petitions as well as High Court Appeal. As we

have already observed that in none of these cases, there is any

allegation against the owners/subsequent purchases for having

committed an act of smuggling in terms of Section 2(s) of the

Customs Act, 1969, as neither they have imported subject

vehicles nor they have brought such vehicles into Pakistan from

routes other than specified under Section 9 or 10 from any place

other than a Customs Station, nor any evidence or material has

been produced by the Customs Authorities, which could

otherwise establish that documents produced, e.g. Registration

Books issued by Excise and Taxation Department, Motor Vehicle

Registration Authority, Government of Sindh, Form of Transfer

Order, the sale/purchase agreements, the Customs Auction

documents. Bank Challans towards payment of Additional

Customs duty and taxes, CVT, registration fee, transfer fee and

other charges etc., produced in respect of subject vehicles, are

forged or bogus documents. Admittedly, all the owners of the

subject vehicles in these cases are second, third or even fifth

owners, and have supplied the above documents which, prima-

facie, show that initial burden of proof to the effect that they are

the bona fide lawful owners/purchasers of the subject vehicles

and have not committed any act of smuggling nor they are in

possession of smuggled vehicles. The subject vehicles do not fall

within the category of banned items as defined in Appendix-A of

the Import Policy Order, 2009, 2012, and 2016, however, their

import is subject to certain conditions prescribed by the Federal

Government through Notifications issued in terms of Section 2(s)

(ii) read with section 156(2) of the Customs Act, 1969, Import

Policy Orders, 2009, 2012, 2013 and 2016, which includes

restriction of five years as to the age of manufacture of a vehicle

to be imported. In fact none of the Motors Vehicles, subject

matter of instant cases, is less than 5 years old rather, they are

mostly old Models of 1998 to 2004, therefore, reference to

provisions of Section 211 of the Customs Act, 1969, becomes

relevant as it provides that record required under subsection (i)

of Section 211 of the Customs Act, 1969, in respect of any

imported item shall be kept for a period of not less than five

years in such form as the Board may by Notification in the

official gazette, specify. In other words, any importer or owner

of the imported items is under no legal obligation to maintain

any record pertaining to import beyond the period of five years

under the Customs Act, 1969, nor the Customs Authorities can

demand such record under the Customs Act, 1969, hence non-

availability of customs documents, older than five years,

particularly in cases of Registered Motor Vehicles, would not attract the provisions of Section 2(s) read with Section 156(1)(89)

and (90) of the Customs Act, 1969.

8. We would now examine the provisions of Section 187 of the

Customs Act, 1969, relating to discharge of burden of proof,

according to which, when any person alleged to have committed

an offence under this Act, and any question arises whether he

did any act or was in possession of anything with lawful

authority or under a permit, license or other document

prescribed by or under any law for the time being in force, the

burden of proving that he had such authority, permit, license or

other document shall be upon such person. In all the above

references and the petitions, it has been noted that original

Registration Book issued by Motor Vehicle Registration Authority

in respect of subject vehicles, along with Customs Auction

documents. Bank Challans towards payment of Additional duty

and taxes. Form of Transfer Order, Capital Value Tax (CVT),

Registration Fee and other charges were produced before the

Customs Authorities to justify the lawful ownership/possession

towards discharge of initial burden of proof in terms of Section

187 of the Customs Act, 1969. In the afore cited judgment, the

learned Divisional Bench of this Court has elaborately dilated

upon all the above legal issues related to discharge of burden of

proof and has been pleased to hold that in terms of Section 187

of the Customs Act, 1969, once the initial burden relating to

ownership and lawful possession of the imported vehicle has

been discharged through production of original Registration

Book issued by the Motor Vehicle Registration Authority or any

other document prescribed by law or under any other law for

the time being in force, then burden shifts upon the Customs

Authorities to establish that either the Documents produced are

forged, bogus or the same have been obtained illegally, hence of

no legal consequences. However, in these cases, no proceedings,

whatsoever, appear to have been initiated either against the

previous owners of the subject vehicles, whose particulars have

been provided by the respondents to the Customs Authorities to

verify the mode and manner in which such vehicles were

brought into Pakistan, nor any action against the officials of the

Motor Vehicle Registration Authority. Customs Authorities and

the Bank officials has been taken, for having issued the

Registration Books, Custom Auction documents and Bank paid

challans which, according to Customs Authorities are forged and

bogus documents. On the contrary, in the absence of any

material, inquiry/investigation or any steps required to be

undertaken for establishing the charge of smuggling in terms of

Section 2(s), or to make out a case that owners of the vehicles

are found in possession of smuggled vehicles in terms of

Sections 156(1), (89) and (90) of the Customs Act, 1969, and even

without following the legal course of adjudication as provided

under Chapter XIX of the Customs Act, 1969, subject vehicles

have been detained/seized on the charges of smuggling. In all these cases, subject vehicles have been detained / confiscated by

the Customs Authorities in a highly arbitrary manner while the

same were plying within the territorial city limits, inspite of the

fact that initial burden to prove the lawful ownership and

possession of subject Registered Vehicles was discharged by the

owners through production of aforesaid documents. Reliance in

this regard can be placed in the case of Messrs Muhammad

Ateeq Paracha and others v. The State (2005 PTD (Trib.) 135) and

Abdul Razzaq v. Directorate General of Intelligence and

Investigation - FBR and 2 others (2016 PTD 1861).

9. This Court in a recent judgment in the case of Collector of

Customs v. Messrs Muhammad Tahir Construction Company,

Loralai (2019 PTD 1599) while examining the scope of

importability of Hino Trucks in term of Import Policy Order,

2016 and the provisions of section 187 of the Customs Act, 1969,

relating to discharge of burden of proof, has been pleased to

hold as under:

"7. Learned counsel for the applicant has not been able to point out

any factual error or illegality in the impugned order passed by

the Customs Appellate Tribunal in the instant case, nor could

assist this Court as to how, on the basis of a purported certificate

obtained from local manufacturer of Hino Pak Truck, the age of

imported Hino Truck can be ascertained. Moreover. record

shows that respondent has discharged the initial burden to

prove that the subject vehicles were imported in conformity

with paragraph 9(ii)(5) of the Import Policy Order, 2016,

whereas, applicant has failed to produce any evidence or

material which could otherwise support the allegations of

violation of para 9(ii)(5) of the Import Policy Order, 2016. The

ratio of the case relied upon by learned counsel for respondent

as referred to hereinabove is also squarely attracted to the facts

of the instant case.

8. Accordingly, we do not find any substance in the instant

Reference Application, whereas, the finding as recorded by the

Appellate Tribunal in the instant case is predominately based on

the findings of facts which does not suffer from any factual

error or legal infirmity, hence does not require any interference

by this Court. Reference in this regard can be made to the case of

Irom Ghee Mills v. Commissioner of Income Tax 2000 SCMR

1871. Accordingly, the proposed questions are answered in

negative against the applicant and in favour of the respondent."

10. To be more specific about the brief facts and the legal issues

involved in all these cases we deem it appropriate to mention

the same in following terms so that there remains no ambiguity

regarding the facts and the legal controversies involved in all

these cases. In C.P. No.D-5230 of 2014, the description of subject

vehicle has been given as Toyota Land Cruiser, bearing

Registration No.BD-6648, Model 1998, Chassis No.HDT-101 0004534 and Engine No.015719. The petitioner has attached

registration book, issued by Excise and Taxation Department,

Government of Sindh along with customs auction documents

issued by Director General, Intelligence and Investigation

(Customs and Excise), Government of Pakistan, including

Certificate under Rule 72, paid bank challan of the bidding

amount i.e. CVT, registration charges, transfer charges etc., and

Form of Transfer Order. In C.P. No.D-7527/2017, the description

of subject vehicle has been given as Toyota Hilux Surf, bearing

Registration No.BF-6328, Model 2001, Chassis No VZN185-

9056058, Engine No. 5VZFE-1269447, whereas, petitioner has

attached registration book, issued by Excise and Taxation

Department, Government of Sindh along with customs auction

documents issued by Collectorate of Customs Appraisement,

AICT, Mauripur Road, Karachi, including Certificate under Rule

72, paid bank challan of the bidding amount i.e. CVT, registration

charges, transfer charges etc., and Form of Transfer Order. In

C.P.No D-3351/2017, the description of subject vehicle has been

given as BMW Sports Car, bearing registration No BEE-924,

Model 2005, Chassis No.WBAEK32050B740093. Engine No.

N25B3000, whereas, petitioner has attached registration book,

issued by Excise and Taxation Department, Government of Sindh

along with customs auction documents issued by Model

Collectorate of Customs Appraisement. Karachi, including Copy

of Order-in-Original whereby the petitioner has been given an

option to redeem in terms of SRO 172(I)/2013 dated 05.03.2013,

paid bank challan of additional duties and taxes, CVT,

registration charges, transfer charges etc., and Form of Transfer

Order. In C.P. No.D-5163/2018, the description of subject vehicle

has been given as Toyota Land Cruiser (Jeep), bearing

registration No.BE-0563, Model 2000, Chassis No.HDT101-

00076362UZ9002918, Engine No.T58857, whereas, petitioner has

attached registration book, issued by Excise and Taxation

Department, Government of Sindh along with customs auction

documents through approved Government auctioneer, paid

bank challan of the bidding amount i.e. CVT, registration

charges, transfer charges etc., and Form of Transfer Order. In

HCA No.334/2017, the description of subject vehicle has been

given as Toyota Hilux Surf (Jeep), bearing registration

No.BF8588, Model 2004, Chassis No. VZN215-0006060, Engine

No.5VZ-1828615, whereas, the appellant has attached

Registration Book, issued by Excise and Taxation Department,

Government of Sindh along with customs auction documents

issued by Collectorate of Customs Appraisement and Directorate

of Intelligence and Investigation, Customs House, Karachi,

including Certificate under Rule 72, paid bank challans of the

bidding amount, Addl. duty and taxes, CVT, Registration charges,

transfer charges etc., and Form of Transfer Order. In all these

cases, the owners have claimed to be owners/subsequent

purchases, and have produced the aforesaid documents to the customs authorities to discharge the initial burden of proof

regarding their lawful possession of the subject vehicles in terms

of Section 187 of the Customs Act, 1969, however, customs

authorities, without adopting legal course of adjudications or to

establish that the documents produced by the

owners/subsequent purchasers are forged or bogus, and the

subject vehicles are otherwise smuggled, detained the same in

violation of law, merely on the unlawful presumption that since

the owners could not produce the import documents of the

subject vehicles, which are admittedly manufactured beyond the

period of five years, whereas, there is no material or even

allegation that these vehicles have been smuggled within five

years from the date of their manufacture. If such authority is

given to the public functionaries to charge the owners of the

vehicles of a criminal offence of smuggling in the absence of any

evidence or material to this effect, would amount to giving them

unbridled powers to act arbitrarily and to abuse the process of

law, which is neither the intent of law nor could be approved by

Courts under any circumstances.

11. We have also observed that in some of the cases, there have been

allegations by the Customs Authorities that the chassis numbers

of the vehicles are found tempered, however, such allegations

have been seriously disputed, whereas there has been no

specific FSL Report to show as to whether chassis numbers of

the vehicles were erased for the purpose of theft or for any other

purpose. Mere allegation of tempering of chassis numbers and

such sketchy stereotype FSL Report, cannot be considered as

conclusive proof to establish a charge of smuggling, particularly,

when the make, model, engine number and other particulars of

the vehicles in question are found to be the same as mentioned

in the documents, including import documents, customs Auction

and bidding documents, paid bank challans and the original

Registration Books issued by the Motor Vehicle Registration

Authority. The Hon ble Supreme Court in the case of Federation

of Pakistan through Director-General of Intelligence and

Investigation FBR, Karachi v. Muhammad Jamal Rizvi and others

[2012 PTD 90], while examining the fate of similar allegation

regarding tempered chassis number and the FSL Reports has

been pleased, to hold as under:-

"5. Perusal of the impugned judgment reflects that the FSL Report

was not found specific and various queries made by the

Investigating Agency remained unanswered. In this behalf

learned Division Bench of the High Court observed that. "The

FSL report shows that the chassis numbers on the vehicle were

tampered. The FSL report is not specific and creates doubts as to

whether the chassis numbers of the vehicle were erased for the

purpose of theft and or for any other purpose. This issue is not

answered in the FSL report though the Directorate of Customs,

Intelligence and Investigation had sought report through a letter calling upon FSL to specifically mention the status of chassis

numbers. The FSL report is silent on queries made by the

investigating agency, except that chassis numbers were

tampered. The report of the FSL was insufficient to authorize the

Directorate of Customs, Intelligence and Investigation, to detain

and or seize the vehicle inter alia, on the ground that it was

smuggled vehicle." When asked, learned counsel had no reply to

furnish on the observation so made however, he admitted that

the make model. Engine number and other material about the

vehicle in question were same as were in the documents noted

hereinabove."

10. The aforesaid judgment was assailed by the Custom Authorities

before this Court in Civil Appeals Nos. 1088, 1231 to 1236/2013 and

Civil Appeals Nos. 142-K/2015 and 938/2018 and Civil Appeals Nos. 453

to 466/2022 and the aforesaid civil appeals have been recently decided

vide judgment dated 17.04.2025. Upholding the aforesaid judgment

and dismissing the departmental appeals in following terms: -

12. For the amended SRO's effect, (wherein vehicles were included),

the record of import is required to be kept in terms of Section

211(2) for a period of five years ("five" was substituted for the

word "three" by the Finance Act, 2007). For the sake of brevity,

such provisions of law is reproduced as under:

"211. Maintenance of record. All importers, exporters and claimants

of duty drawback, refunds or any notified concessions, terminal

operators, owners of the warehouses, customs agents and the

licensed customs bonded carriers, transport operators and

tracking companies, carrying out business under this Act or

rules made thereunder or under any other law, directly or

indirectly, relating to international trade, shall be required to

maintain and keep records and correspondence concerning

import, export and transit trade transactions.

(2) The records required under subsection (1) shall be kept for a

period not less than five years in such form as the Board may by

notification in the official gazette, specify.

(3) The provision of subsection (1) shall not be applicable to the

baggage of the passengers and crew of the conveyance and to

the recipients of gifts."

13. The consequence of this provision appears to be that if the

auction of the vehicle took place more than 3 years ago for cases

prior to the Finance Act, 2007 and 5 years for cases thereafter,

there would appear to be a "lawful excuse" to the person

(retaining the possession of vehicle under valid registration),

who is accused of an offence under Section 156(89) or (90) (for

not showing required import documents), unless it can be

demonstrated that he was told or knew that duties and taxes

were not paid and the same were required to be paid. 14. For auctioned vehicles such as in SCRA No. 263 of 2010 (Civil

Appeal No. 1235 of 2013), the vehicle in question was auctioned

on or about 25.11.1999, having registration No.BD-0689 dated

24.06.2005 and was intercepted on or about 09.10.2008. In these

circumstances. Section 211(2) seems to provide a "lawful excuse"

since no adverse inference for failure to produce the documents

can be drawn after the lapse of period provided in Section 211(2)

to be counted at-least from date of registration if not before, as

auction date in other vehicles is also a legitimate claim to count

time. The vehicle in question was in Pakistan on or about

25.11.1999, i.e. the date of auction, and the said period expired

before the vehicle was intercepted on or about 09.10.2008. There

does not appear to be anything on the record to suggest that as

per the terms of the auction, the auction purchaser had to pay

duties and taxes applicable in respect of the import of the

auctioned vehicle. Similarly, in all other cases where (not

auctioned cases) the registration record with Motor Registration

Authority and registration books (duly verified) are available,

the subject period of 3/5 years would apply to give beneficial

effect of Section 211 to those having custody and registration in

their names.

15. The provisions of Section 174 of Income Tax Ordinance, 2001, for

present controversy is pari materia to Section 211 of the Act. The

provisions of 174 of the Ordinance was discussed at length in

Panther Sports' specially in para-5. Since the two provisions are

pari materia therefore by applying doctrine of statutory

construction there cannot be a different interpretation of section

211 of Customs Act than the one given in the said judgment for

section 174 of the Income Tax Ordinance, 2001.

16. So in cases of registered vehicles, if at the time the vehicle being

intercepted, more than 3 years have elapsed for cases prior to

the Finance Act, 2007 and 5 years for cases thereafter, the

defence of "lawful excuse" appears to be indefeasible. This is

also because it is reasonable to assume that if a vehicle stands

registered, the government is presumed to have exercised due

care and diligence with respect to its obligation to see whatever

duties and taxes as payable to the government before a vehicle

can be registered, stand paid. It must also be noted that the

vehicles being registered, which registration was duly verified,

is presumed to have been brought lawfully; after completion of

notified period in case of used vehicles also. It seems harsh, to

say the least, if without any proof that a person (last owner) was

involved in the registration of the vehicle knowing fully well

that no duties and taxes, as required under the law, were paid,

and that therefore the vehicle was fraudulently registered, the

vehicle be seized from him on his failure to produce documents

of import and payment of duties and taxes thereon and even

that beyond the period of three years or five years, as the case

may be, as required under section 211(2). In most of the cases since first registration, the vehicles changed many owners on

the strength of registration book and no adverse inference could

be drawn for the ultimate bona fide owners unless otherwise

proved contrary by appellant, in which exercise the appellant

department has failed below. The verified registration book and

official record is enough for bona fide presumption that a valid

title exist.

17. The Motor Vehicle Ordinance, 1965 provides the mechanism for

registration of motor vehicles in terms of its sections from 23 to

43. Section 27 of ibid law even provides the production of the

vehicle at the time of registration and if the registration of a

vehicle passes through this statutory process conducted by

officials responsible under M.V.O 1965, then presumption of

truthfulness is eminent.

18. One must bear in mind that there is a distinction between the

expression "lawful authority" contained in Section 187 and the

expression "lawful excuse" contained in clause 89 of Section 156

(1). The distinction in both is reproduced as under:

Section 187 Clause 89 of Section 156(1)

Burden of proof as to lawful

authority etc. When any person

is alleged to have committed an

offence under this Act and any

question arises whether he did

any act or was in possession of

anything with lawful authority

or under a permit, license or

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Pak Law Citation

2026 S C M R 816

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