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       ISLAMABAD: The Supreme Court on Thursday dismissed a set of appeals filed by the Federal Board of Revenue (FBR), ruling in favour of vehicle owners whose cars had been seized on smuggling allegations.

       The court also stressed the need for inter-departmental collaboration to prevent smuggling at the point of registration rather than punishing innocent owners later.

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       A three-judge bench, headed by Chief Justice Yahya Afridi and comprising Justice Irfan Saadat and Justice Muhammad Shafi Siddiqui, upheld a May 27, 2023, ruling of the Peshawar High Court, which had sided with the owners of several impounded vehicles.

       The Supreme Court ruling, authored by Justice Siddiqui, also emphasised the need for Customs officials to respect privacy during searches, including the presence of female officers for inspections involving families and evolved a systematic reform to curb smuggling without harassing legitimate owners.

       Says Customs must prove smuggling, not penalise innocent owners

       The case at hand involved 23 appeals filed by the Intelligence and Investigation Department of the FBR against certain vehicle owners. The authorities seized the vehicles, alleging they had been smuggled into Pakistan due to the owners’ inability to produce original import documents. The vehicles, many of which were purchased through government auctions or from previous owners with verified registration books, were confiscated under the Customs Act, 1969.

       The owners challenged these seizures, arguing that the vehicles were legally registered and that the Customs authorities had no right to demand import documents beyond the statutory period of five years, as per Section 211 of the Customs Act.

       The verdict explained that the substantive questions before the court were whether these vehicles, considered by the Customs department to have been smuggled, were rightly seized and confiscated, notwithstanding that admittedly they were either bought in “auction conducted by the government” or purchased from the respective owners who had shown the “verified registration books”.

       Moreover, the statutory period to demand import documents based on which the registration of some of the vehicles took place, as framed in Section 211 of the Customs Act, had lapsed. In contrast, others were registered based on auction reports. Some vehicles were manufactured in 1986 but seized in 2008, whereas the model year of some was 1991 but seized in 2005 or 2006.

       During the hearing, the Supreme Court appointed Sirdar Ahmed Jamal Sukhera as amicus curiae — an impartial adviser to a court in a particular case — and appreciated his valuable assistance.

       The cause to seize and confiscate the vehicles was triggered when show-cause notices were issued to individuals having custody of such vehicles.

       Presumption of legality

       The court ruled that vehicles registered through statutory processes and verified by authorities carry a presumption of legality. The Customs officials cannot seize them merely for the lack of import documents, especially if the statutory retention period of five years has expired.

       The burden of proving smuggling lies with the Customs authorities, not the owners, unless there is concrete evidence of fraud or tampering — for example, altered chassis numbers, the verdict said, adding that the auctioned vehicles or those with verified registration books provide a lawful excuse for ownership, protecting bona fide purchasers.

       “The conclusion in the above analysis is that the vehicles in question are those which were either auctioned or were brought into Pakistan and were registered through a statutory process and that the auction papers or registration papers of some other vehicles are not being used fraudulently. However, where it is established that the chassis/engine numbers have been tampered with after auction or registration to match the description of the auctioned or registered vehicle, the lawful excuse is not available,” the judgement said.

       The Supreme Court also clarified that vehicles with tampered chassis or engine numbers, unless explicitly disclosed in auction reports, would not qualify for this protection, as such alterations raise suspicions of fraud.

       Published in Dawn, April 20th, 2025