Law: Customs Act, 1969

Section: 196

  Summary A 1991-model Toyota Hilux Surf (Reg. No. G-0211, Sindh) was intercepted at Rawalpindi on 28.11.2022. The owner could not produce import documents, and the vehicle was confiscated as smuggled under the Customs Act, 1969. The Motor Registration Authority, Jacobabad confirmed registration since 15.05.1991, but said its manual files were burnt in the 27.12.2007 riots. Forensic examination found no tampering with the chassis number. The Collector (Appeals) and the Customs Appellate Tribunal upheld the confiscation. Arbab Muhammad Tahir, J. allowed the Reference under Section 196. Relying on Abdul Karim (2025 SCMR 969) and the Division Bench ruling in Laal Mat Khan (Custom Reference No. 12 of 2022, decided 17.03.2026), the Court held that where a vehicle has been registered for longer than the Section 211(2) retention period (3 years before 2007, 5 years after), the defence of "lawful excuse" under Section 156(1)(89) is established. Customs then cannot demand import documents, loss of old records cannot be turned against the owner, and the Department must prove smuggling or the owner's culpability, which it did not. The orders below were set aside and the vehicle is to be released forthwith after verification. Questions 1, 3 and 4 were answered for the applicant, and Question 2 was answered by holding that his evidential burden was discharged. JUDGMENT SHEET.                                          Arbab Muhammad Tahir: Through the instant Reference Application filed under Section 196 of the Customs Act, 1969 ("the Act"), the applicant has assailed the judgment dated 23.08.2023 passed by the Customs Appellate Tribunal, Special Division Bench-II, Islamabad, seeking determination of the following questions of law: Whether as per facts and in the circumstances of the case, “seized vehicle clearly hit by section 2 (c), 16, 139 of the customs act, 1969? Whether as per facts and in the circumstances of the case, initial onus of proof, valid importation  and payment of duties and taxes are even its lawful possession is…