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SUMMARY;  The High Court disposed of the constitutional petition filed against the recovery notice dated 05.12.2023, through which the customs authorities demanded Rs.101,883,037 as regulatory duty on the basis of Audit Observation No.58 dated 24.04.2012. The petitioner, an export-oriented yarn manufacturer holding an EOU licence, claimed that its exports during May–July 2010 were exempt under S.R.O. 450(I)/2001. The Court held that an audit objection may identify a possible short levy or non-payment, but it is not itself a legal determination of customs liability. Where liability is disputed, the Customs Act, 1969 requires the competent authority to initiate proper proceedings, issue an appropriate notice, provide an effective opportunity of hearing, examine the taxpayer’s defence and documents, and pass an independent, reasoned speaking order. A mere recovery letter based on an audit objection cannot lawfully support coercive recovery of a disputed amount. The Court did not decide whether the exemption under S.R.O. 450(I)/2001 was actually available, whether regulatory duty was payable, or whether the claim was barred by limitation. Instead, it directed the competent authority to reconsider the matter afresh under the Customs Act, including the legal status of the audit observation, limitation and other statutory bars, the petitioner’s EOU status and exemption claim, and the relevant import/export record. If any amount is found recoverable, it may only be demanded after proceedings strictly compliant with law and after granting the petitioner a meaningful hearing. No coercive recovery may be made until a fresh determination is passed and communicated. The petitioner was directed to appear before respondent No.2 on 01.10.2026 at 11:00 a.m., and the authority was required to decide the matter within 30 days thereafter.   Judgment Sheet Muhammad Ajmal Zahid, J.— Through this constitutional petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, the petitioner has called in question the recovery notice dated 05.12.2023, whereby a demand of Rs.101,883,037/- has been raised against the petitioner…