IN THE HIGH COURT OF SINDH, KARACHI

Const. Petition No.D-4385 of 2014

Present

Mr. Justice Aqeel Ahmed Abbasi.

Mr. Justice Muhammad Junaid Ghaffar

M/S HASCOL PETROLEUM LIMITED…………………………………PETITIONER

Versus

THE FEDERATION OF PAKISTAN & ANOTHER…….…….RESPONDENTS

05.09.2014.

Mr. Omair Nisar, advocate for the petitioner.

Mr. Kashif Nazeer, advocate for the respondents.

Mr. Dilawar Hussain, Standing Counsel.

Jahanzaib Abbasi, Assistant Collector of Customs Preventive &

Atif Aijaz, Appraising Officer, Oil Section, Keamari.

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O R D E R

Through instant petition, the petitioner, who is a public limited company engaged in the business of purchase, sale, marketing and storage of petroleum products in Pakistan under the license issued by the Ministry of Petroleum and Natural Resources, has impugned the action of the respondents/Customs Authorities stated to be taken at the instance of the FIA officials, whereby, the respondents have detained the vessel as well as bonded ware-house of the petitioner, comprising of nine tanks, on the allegations that the petitioner, instead of importing Motor Gasoline has imported Pyrolysis Gasoline. It has been stated in the petition that the detention of Vessel and the Cargo is based on malafides, whereas, the impugned action has been taken by the respondents without any lawful authority.

2. On 26.08.2014 when the matter was taken up for hearing, following order was passed:-

“26.08.2014

Mr. Omair Nisar, Advocate for the petitioner

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1. Granted.

2. Deferred.

3. Granted subject to all just exceptions.

4&5. Through instant petition, the petitioner who has imported the Petrol (Motor Gasoline) in terms of Import Policy, has impugned the action by the respondent Customs Authorities along with F.I.A. officials, who according to learned counsel for the petitioner, have illegally detained the vessel as well as the bonded warehouse of the petitioner comprising of 9 tanks, on the false pretext that the petitioner, instead of importing petrol (Motor Gasoline) has imported Gasoline Pyrolysis. Per learned counsel, the cargo was already discharged as the gasoline was shifted into the tanks, therefore, the entire action on the part of the respondents besides being malafide is without lawful authority. Per learned counsel, the owners of the vessel have already threatened the petitioner to initiate legal proceedings against the petitioner due to illegal detention of the vessel. It is further contended by the learned counsel that atleast respondents may be directed to allow the delivery of the gasoline from the tanks other than tanks No.1, 5, 11 and 12, wherein the disputed gasoline has been stored by the petitioner. Learned counsel for the petitioner has further submitted that though, there is no lawful detention or any reference in the impugned detention notice regarding detention of the vessel, inspite of this fact, the respondents are not allowing the vessel to sail, which will cause huge financial losses on daily basis to the petitioner, hence requests that the respondents may be directed to immediately allow release/sailing of the vessel M.V. Songa Hawk. Whereas, the petitioner, without prejudice to its right and claim, is willing to deposit the post-dated cheque(s) as security for the value as detailed in the invoice amounting to US$ 2.3 Million. It is also contended by the learned counsel that another cargo of the petitioner is reaching at the Port day after tomorrow, and there is no capacity in the allocated storage tanks of petitioner for discharge of such cargo.

Let notice be issued to the respondents as well as DAG for 28.08.2014 to be taken up at 11.00 a.m, when some responsible officer of the respondent No.2 shall be in attendance. In the meanwhile, petitioner may furnish post-dated cheques of the aforementioned amount before the Nazir of this Court, whereafter, respondents are directed to release the vessel instantly without further loss of time. The respondents are further directed to release the gasoline, which was already stored in the tanks No.3, 4, 8, 9 and 10 (as per Annexure ‘O’ at page 147), other than the tanks i.e. 1, 5, 11 and 12 in which the alleged disputed Gasoline has been stored.”

3. Pursuant to Court Notice, Mr. Kashif Nazeer, advocate has shown appearance along with departmental officers and filed comments along with Annexures, whereas, report of Industrial Analytical Central @ H.E.J. Research Institute of Chemistry, University of Karachi, has also been received, copies supplied to both the counsel for the parties.

4. Learned counsel for the petitioner reiterated the submissions as referred to hereinabove and further submits that after having completed all the codal formalities, permission to inbond the cargo was granted by the concerned Collectorate vide their letter dated 19.08.2014, whereas, the respondents/Customs Authorities alongwith FIA officials raided the vessel of the petitioner without any prior notice and detained the gasoline as well as the vessel M.V. Songa Hawk. Learned counsel for the petitioner also read out the notice issued by the Collectorate of Customs Preventive under Section 168 of the Customs Act, 1969, and submitted that from bare perusal of the contents of such notice, it may be seen that no valid ground or reasons have been given for detention of the Vessel and the cargo (i.e. Motor Gasoline) imported by the petitioner, whereas, it has been alleged by the respondents that the petitioner has imported pyrolysis gasoline, which according to learned counsel for the petitioner, is neither prohibited in terms of Import Policy Order, 2013 nor there is any restriction under any other law including Petroleum Act, 1934 read with Petroleum Rules, 1937 or under Pakistan Petroleum (Refining, Blending and Marketing) Rules, 1971. It has been further contended by the learned counsel for the petitioner that the alleged Notification relating to specification of premier motor gasoline dated 22.02.2013 issued by Director General Oil, Ministry of Petroleum, which has been filed by the respondents alongwith their comments, is of no relevance as the same is not applicable to the case of the petitioner as it has been issued under Rule 11 of Pakistan Petroleum (Refining, Blending and Marketing ) Rules 1971, which relates to petroleum producing refineries only, and not to importers. Per learned counsel, even if such Notification is taken to be issued under Rule 11-A of the Rule 1971, which relates to the specifications for importers as well, the same does not create any rights and liabilities as it has not been Notified/Gazetted as required under the law. In this regard, learned counsel for the petitioner has placed reliance in the following cases of this Court as well as of the Hon’ble Supreme Court:

1. Mst. Ummatullah v. Province of Sindh

PLD 2010 Karachi 236

2. Government of Sindh v. Messrs Khan Ginners (Private) Limited PLD 2011 Supreme Court 347

3. Trustees of the Port of Karachi v. Messrs N.K.Enterprises PLD 2013 Sindh 264

4. Salahuddin Dharaj v. Province of Sindh

PLD 2013 Sindh 236

5. Tehsil Municipal Administration and others v. Noman Azam and others 2009 SCMR 1070

5. Learned counsel for the petitioner further submits that without prejudice to hereinabove legal objections the entire proceedings initiated by the respondents in the instant case are based on malafides, as the legal procedure laid down in the Customs Act, 1969 and the Rules made thereunder has not been adopted. Per learned counsel, there is no concept of detention of the vessel/cargo in terms of Section 168 of the Customs Act, 1969, wherein, only seizure can be made, however, after issuing notice in respect of goods which are liable to confiscation. Whereas, per learned counsel, the respondents did not confront the petitioner in respect of alleged discrepancies or short fall in the valid import of the Motor Gasoline. Per learned counsel, the petitioner has been discriminated as no action has ever been initiated against other importer of Motor Gasoline by the respondents on similar allegations, under Section 168 of the Customs Act, 1969. In support of his contention, learned counsel for the petitioner, has referred to the judgment of Hon’ble Supreme Court in the case of Collector of Customs and others v. S.M. Yousuf reported as 1973 SCMR 411, wherein according to learned counsel, it has been held that before making search or raid, the Customs Authorities are required to issue Notice, whereas, in the absence of such notice, no lawful proceedings can be initiated for detention or seizure. Learned counsel has also referred to the reports issued by HEJ Research Institute regarding the quantity of benzene in the Motor Gasoline imported and discharged into tanks. It has been prayed by the learned counsel for the petitioner that impugned action of detention/seizure by respondents may be declared as illegal, unlawful, null and void and respondents may be directed to release the vessel as well as Motor Pyrolysis Gasoline.

6. While confronted with such legal position as stated by the learned counsel for the petitioner, whereby, direct detention of vessel and cargo and the proceedings initiated by the respondents have been seriously disputed, the learned counsel for the respondents and the officers present in Court could not controvert such position nor supported the impugned act of detention of vessel and cargo, and issuance of notice under Section 168 of the Customs Act, 1969, on the other hand submitted that respondent has already withdrawn the notice of detention under Section 168 of the Customs Act, 1969 in respect of the vessel/cargo vide letter dated 27.08.2014 filed alongwith comments. However, it has been contended that since requirements of letter dated 20.04.2007 issued by Oil & Gas Regulatory Authority in terms of Section of 21(c) of the OGRA Ordinance, 2002 and other formalities were not complied with by the petitioner, therefore, impugned action was taken by the respondents in good-faith and there is no malafide on their part. However, he has candidly stated that perhaps the respondents have acted prematurely even before the GD could be filed, which has resulted in the present dispute. It has been contended by the learned counsel for the respondents that in view of hereinabove facts and the legal position as stated by the learned counsel for the petitioner and the ratio of the case laws as referred to hereinabove, the respondents are not inclined to justify the impugned action of the detention of vessel and the cargo (i.e. Motor Gasoline/Pyrolysis Gasoline) imported by the petitioner, however, submits that petitioner is still required to file the GD alongwith requisite documents, which will be processed in accordance with law by the respondents. It has been contended by the learned counsel for the respondents that instant petition may be disposed of by consent, whereas the respondent will withdraw the impugned detention notice and release the Motor Gasoline (Pyrolysis Gasoline) imported by the petitioner, which is presently stored in the four tanks in the bonded warehouse, in respect of which, tests have been conducted and reports regarding quantity of benzene have already been received, which show that benzene contents in the gasoline stored in such tanks is below 5%. It has been further contended that petitioner may be directed to file the GDs which will be processed by the respondents in accordance with law, without being influenced with the proceedings initiated by the respondents in this regard.

7. Learned counsel for the petitioner does not oppose the disposal of instant petition in the aforesaid terms, however, requests that the respondents may be directed not to cause any harassment or to create undue hindrance at the time of processing of the GDs, whereas, proper opportunity may be given to the petitioner, in case of any dispute or short fall in the documents as may be required at the time of processing of such GD.

8. The concerned officers of Customs Department, who are present in Court, have candidly stated that the petitioner will be dealt strictly in accordance with law and no harassment shall be caused to the petitioner, while processing the GDs, which may be filed by the petitioner in respect of the disputed Gasoline presently stored in the four tanks Nos. 1, 5, 11 and 12.

9. Accordingly, by consent of both the parties, instant petition is being disposed of alongwith listed application in the above terms. Respondents are directed to comply with the order of this Court in letter and spirit without further loss of time, whereas, Nazir of this Court is directed to return the cheque to the petitioner, which was deposited pursuant to order of this Court dated 26.08.2014, after proper verification and identification.

J U D G E