ISLAMABAD: The Supreme Court on Thursday dismissed a series of appeals filed by the Federal Board of Revenue (FBR), ruling in favor of vehicle owners whose cars had been confiscated over alleged smuggling.
A three-member bench, led by Chief Justice Yahya Afridi and including Justices Irfan Saadat and Muhammad Shafi Siddiqui, upheld a May 27, 2023, verdict by the Peshawar High Court, which had sided with the vehicle owners. The ruling emphasized that law enforcement must target smuggling at the registration stage rather than penalizing innocent buyers after the fact.
In the detailed judgment authored by Justice Siddiqui, the court highlighted the need for cooperation among departments to prevent smuggling and stressed that Customs officials must respect individuals’ privacy during inspections. The court also suggested that searches involving families should include female officers and called for systematic reforms to address smuggling without harassing lawful vehicle owners.
Customs Must Prove Smuggling Allegations
The case involved 23 appeals from the FBR’s Intelligence and Investigation Department, which had seized vehicles on the grounds that they were smuggled due to the absence of original import documents. Many of the seized vehicles were either acquired through official auctions or purchased from previous owners with verified registration records.
The vehicle owners challenged the seizures, arguing that the Customs authorities had no legal standing to demand import documentation beyond the five-year retention period stipulated under Section 211 of the Customs Act, 1969.
The court determined that the key legal issue was whether Customs could lawfully confiscate vehicles that were either auctioned by the government or had been legally registered, even if the owners couldn’t produce original import paperwork. It concluded that vehicles registered under statutory procedures or acquired through official auctions are presumed legal, and Customs cannot seize them without solid evidence of fraud, such as tampered chassis or engine numbers.
Presumption of Legality Protects Innocent Buyers
The verdict reaffirmed that lawfully registered vehicles enjoy a presumption of legitimacy. The burden of proof lies with Customs, which must demonstrate clear evidence of smuggling to justify seizure. The court clarified that buyers who acquired vehicles with valid auction documents or registration papers cannot be penalized unless there is proof of deliberate tampering.
The judgment further stated that vehicles with altered chassis or engine numbers that are not disclosed in auction reports would not be protected under this presumption and could be subject to seizure due to suspected fraud.
The Supreme Court also recognized the contribution of Sirdar Ahmed Jamal Sukhera, appointed as amicus curiae, for his assistance in the case.
