Intercepted registered vehicles: SC tells when defence of lawful excuse becomes indefeasible

ISLAMABAD: The Supreme Court declared that in cases of registered vehicles, if at the time the vehicle being intercepted, more than three years have elapsed for cases prior to the Finance Act, 2007 and five years for cases thereafter, the defence of “lawful excuse” appears to be indefeasible.

The judgment authored by Justice Muhammad Shafi Siddiqui said this is also because it is reasonable to assume that if a vehicle stands registered, the government is presumed to have exercised due care and diligence with respect to its obligation to see whatever duties and taxes as payable to the government before a vehicle can be registered, stand paid.

It must also be noted that the vehicles being registered, which registration was duly verified, is presumed to have been brought lawfully; after completion of notified period in case of used vehicles also.

The judgment said “if without any proof that a person (last owner) was involved in the registration of the vehicle knowing fully well that no duties and taxes, as required under the law, were paid, and that therefore the vehicle was fraudulently registered, the vehicle be seized from him on his failure to produce documents of import and payment of duties and taxes thereon and even that beyond the period of three years or five years, as the case may be, as required under Section 211(2).”

A three-judge bench, headed by Chief Justice Yahya Afridi, and comprising Justice Irfan Saadat Khan and Justice Muhammad Shafi Siddiqui dismissed the Customs appeals.

The bench lauded the assistance of Sirdar Ahmed Jamal Sukhera Advocate, who was appointed as amicus curiae.

The substantive questions before the apex court was/is whether the 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” and that the statutory period, to enquire/demand import documents on the basis of which the registration of some of the vehicles took place, as framed in Section 211 of Custom Act, had lapsed, whereas, others were registered on the basis of auction reports.

The judgment said that in most of the cases since first registration, the vehicles changed many owners on the strength of registration book and no adverse inference could be drawn for the ultimate bona fide owners unless otherwise proved contrary by appellant, in which exercise the appellant department has failed below. “The verified registration book and official record is enough for bonafide presumption that a valid title exist.”

The Court noted 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.

Copyright Business Recorder, 2025