Law: Customs Act, 1969

Section: 163(1)

  SUMMARY The Lahore High Court, per Muhammad Ajmal Zahid, J., held that a warrantless search under Section 163(1) of the Customs Act, 1969 is an exceptional power and can only be exercised upon strict compliance with the statutory conditions. The authorized officer must have objectively reasonable grounds to believe that the goods are in danger of being removed before a search warrant can be obtained under Section 162, and must record the grounds of belief in writing and comply with the prescribed procedural safeguards. The Court observed that receipt of information after court hours and the alleged presence of a furnace or burner near the godown, suggesting possible conversion of aluminium ingots into marketable utensils, do not independently justify a warrantless search. The possibility of transformation is not equivalent to the statutory danger of removal. The legality of the search must be assessed on the basis of the circumstances and contemporaneous record available at the time, and the subsequent recovery of 7,300 kilograms of foreign-origin aluminium ingots cannot retrospectively validate an unlawful exercise of power. The Court further emphasized that compliance with the separate notice requirement under Section 171 must be established through proper evidence, although that issue was not independently open for fresh determination in the reference proceedings. Similarly, the respondent’s claim that the aluminium ingots had been acquired through an auction required proper verification of the relevant documents. Applying the limited scope of reference jurisdiction under Section 196, the Court found that the department had failed to establish any error of law warranting interference with the decision of the Tribunal’s Referee Judge/Chairman. Consequently, the Customs Reference Application was dismissed, the order dated 19.08.2024 allowing the respondent’s appeal remained undisturbed, and no order as to costs was made.   JUDGMENT  MUHAMMAD     AJMAL    ZAHID,…