KARACHI: Pakistan Customs, ASO has claimed before the High Court of Sindh that rupees 552 million are recoverable from Boyco Petroleum company against Sales Tax and Petroleum Levy on supply of HSD to tug boats at its SPM.

The customs claims to have unearthed illegal sale of HSD by the company on high seas and revealed the same in its detailed  comments filed in the two constitution petitons filed by the Boyco Petroleum , sixth largest oil company in Pakistan.

The following is the text of comments filed before High Court of Sindh.

Full Text :


It is submitted with great reverence and profound respect that the above respondents, before adverting to the para-wise comments as directed by this Hon’ble Court would like to submit statement of facts as well as preliminary legal objections hereinafter:


  1. That during ongoing drive against smuggled goods, the Boat Establishment of the Anti-Smuggling Organization, Karachi, while acting upon credible information, carried out a marine operation on high seas against the movement of smuggled/non-duty paid POL products. On 12.02.2020, an oil barge Wania-II, was intercepted near Churna Island, off Karachi, which revealed following serious irregularities:
  • Against 300,000 liters of bunker supply by M/s Byco to a tug MT SL Mallard, only 230,000 liters was found available on Wania-II.
  • US$ amounting to 13,200/- were recovered from Wania-II out of a concealment for which the crew failed to provide any plausible explanation or legal justification.
  • On the Shipping Bill, M/s Byco declared the instant bunker supplies as “ex-refinery sales tax paid HSD”, having declared value of PKR 38 million approximately. The said Shipping Bill was presented before an officer of respondent No. 3 and was processed as per the petitioners declaration i.e., “ Ex-Refinery, Sales Tax paid HSD’. Later upon inquiry, the petitioner stated it to be exempt under Section 13 of the Sales Tax Act which further strengthened doubt about possible evasion of taxes (Shipping Bill/Request letter – Annex-A).
  • During the same operation and on the indication of the crew of Wania-II, another barge named Sea Rose-III was intercepted. It revealed that Wania-II had illegally discharged the bunker supply of M/s Byco to Sea Rose-III to the tune of approx. 48,000 liters which was later seized.
  • The incident and subsequent seizure provided ample reason to believe that there are serious irregularities involved in the bunker supplies which require detailed investigation. An FIR No.ASO-80/2020-(HQ) was lodged against the owners of M/s Khurram Oils, the surveyor and office holders of M/s Byco u/s 2(s), 16, 32 and 157 (2) of the Customs Act 1969.


  • During the course of investigations, it has been established that the petitioner company is supplying HSD to various tug boats since almost 10 years, while declaring the same to be Sales Tax Paid. As per the period covered under Section 32 of the Customs Act 1969 i.e during the past 05 years, the petitioner has filed 149 shipping bills for the supply of HSD worth PKR 1.49 billion to various tug boats purportedly being used at the petitioner’s SPM, all of which was declared as Sales Tax Paid; was processed as per the declaration of the petitioner and the Declared Value was equal to the retail price inclusive of taxes (Copy of sample shipping Bills and the accompanying letters by the petitioner – Annex B).  
  • The HSD so supplied by the petitioner, involves Sales Tax and Petroleum Levy to the tune of PKR 552 million ( Sales Tax Rs. 385,056,058 + Petroleum Levy Rs. 167,632,416) which is recoverable from the petitioner against which Notice dated 25.03.2020 was issued to the petitioner in compliance of the order dated 20.03.2020
  • It is pertinent to recall that USD 13,200 were recovered from the possession of one Shahbaz Khan, Director Khurram Oils, a bunker supplier having a contract of supplying bunker fuel with the petitioner. It was learnt during investigation that the bunker supplier and the independent surveyor (both under contract with the petitioner) were involved in pilferage of HSD in lieu of payment of foreign currency to the crew of MT Mallard.
  • In order to establish the charge, the instant respondent Seized record of HSD receipts from MT Mallard and cross examined it against the Bunker Delivery Notes (BDN) submitted by the petitioner to the instant respondent after making deliveries to MT Mallard. The following discrepancies were observed after cross examination of the record:-

SR# Shipping Bill No and Date Quantity Received as per Petitioner’s BDN Submitted to Customs


Quantity Received as per Record Seized from SL  Mallard (Liters) Difference


Value Declared by M/s Byco Value of Pilfered Diesel
1 KEXP-355-05-08-2019 148,000 130,000 18000 132.47 2,384,460
2 KEXP-1002-21-09-2019 300,000 289500 10500 127.69 1,340,745
3 KEXP-5410-25-01-2019 229,333 217490 11843 106.68 1,263,411
4 KEXP-6320-28-02-2019 223906 211,000 12906 106.68 1,376,812
5 KEXP-542-19-07-2018 195,500 178000 17500 112.94 1,976450
7 KEXP-3329-05-11-2018 199630 186000 13630 112.94 1539,372
8 KEXP-3641-17-11-2018 293659 276813 16846 112.94 1,902,587
9 KEXP-6033-02-02-2018 143643 135000 8643 95.83 828,258
10 KEXP-4861-24-12-2018 199879 189560 10319 110.94 1,144,789
    Total 120187   13,757,154
Copies of GDs, BDN/Survey report – Annex C

  • That the above Table is only to the extent of one vessel i.e MT SL Mallard, based on the available bunker receipts and illustrates not only the pilferage of HSD between the received quantities’ BDN submitted to customs and the actual receipts on the vessel. Almost all the submitted surveyor reports were fake/forged. Also, this phenomenon, if examined in view of foreign currency recovered from the crew of Wania-II, also points to presumably an organized network of foreign currency smuggling, the HSD supply to MT Mallard is just one aspect explored as yet. Exact role of each individual including the officials of the petitioner is one of the key aspects of the ongoing investigation the petitioner is willfully trying to obstruct by not cooperating with the I/O and engaging the instant respondents into endless litigation.
  • It is so far proved beyond doubt that non-tax paid HSD involving taxes worth hundreds of millions was being ruthlessly pilfered under the guise of the petitioner’s bunker supplies. The petitioner has yet to produce complete record of bunker delivery notes before the I /o of the case to ascertain the extent of this massive tax evasion and smuggling of HSD.
  • That in view of the huge discrepancies in the quantities of HSD delivered by the petitioner and received by the vessel hired by M/s Byco (petitioner), the role of the Surveyor (Service Provider) contracted by the petitioner, is of utmost importance.
  • That the petitioner has hired the services of M/s Fanks Marine Inspection Services (Pvt) Limited for the provision of bunker survey and related services for transfer of product from tank lorries to barge and onwards onboard vessels. As per the Scope of Work clause in Schedule A of the contract the said inspection company is responsible to:
  1. That the exact quantity of the bunker fuel is delivered and transferred to the vessel’s fuel tanks or otherwise, measured and determined
  2. During the period of bunker supply remain onboard to witness the smooth adequate transferring of fuel from barge to vessel

iii.    In case of short/excess supply, record and report the differences in due manner and

  1. Submit the formal survey report.
  • That throughout the currency of supplies of HSD the petitioner has been submitting Bunker Delivery Certificates along with the Surveyor Report to the instant respondent, and during all that time, the Surveyor Reports were never signed/stamped by the Surveyor company hired by the petitioner. No proper readings of density, mass and volume and no other crucial readings were ever recorded by the surveyor employed by the petitioner at the time of delivery. The examination of record suggests almost non-existence of the surveyor on the very documents he was contracted to prepare and present by the petitioner. (Contract @ ANNEX).
  • The above facts supported by documents, amply prove the acts of deliberate omission, mis-reporting and mis-declaration by the petitioner and the parties in contract with the petitioner. The petitioner has failed to submit the survey reports. Upon being questioned, the officials of the company replied however, that they never observed any discrepancy in the bunker fuel quantities supplied.


Before proceeding further, it is essential to dilate upon the legal  status of the business relationship between M/s Byco and various tug boats including MT SL Mallard purportedly deployed at the petitioners SPM. MT SL Mallard is owned by M/s Smit Lamnalco, Pakistan having FBR  NTN# 7162262 (Annex – D). The tug boat is chartered on a monthly rent basis. As per the charter agreement pertaining to SL Mallard, supply of fuel, lube and fresh water to the tug is the responsibility of M/s Byco. For all other provisions and supplies, M/s Smit Lamnalco Pakistan procures the same through their agent M/s Seamax Shipping Karachi. Due taxes are paid for all such procurement by the owners of the tug. MT SL Mallard was rented during 2017 and prior to that there were other Tug Boats being utilized by the petitioner under a similar charter agreement purportedly to support its SPM operations. Shipping Bills were filed for all such supplies by the Petitioner and were processed through the Oil Section, MCC E&C Karachi.i.e the instant respondent.


  • That in the light of the honorable Court’s orders dated 20.03.2020, the petitioner was issued Demand Notice dated 25.03.2020 for the deposit of disputed amount before the respondent (Demand Notice – Annexure E). However, the petitioner did not comply with the order of the honorable Court; made a self-suiting interpretation of the court’s order and once again resorted to making written representations to various functionaries including Respondent No.1 to intervene in the matter. It is most respectfully and most earnestly requested and prayed from the honorable court that the petitioner’s letter dated 26.03.2020 be made part of the proceedings in the instant petition. The petitioner’s contentions and para wise response to the same by the instant respondent is submitted as under  (Letter Dated 26.03.2020 – Annexure  F).
  • That the petitioner, in response to the Notice issued by the respondent for securing disputed amount in the light of the honorable court’s order dated 20.03.2020, submitted letter dated 26.03.2020 claiming that, as per the spirit of honorable court’s order the aforesaid 280,000 liters of HSD impounded on the pretext of being smuggled, shall have to be released by customs on receipt of security equaling the disputed amount of sales tax and other charges alleged to be payable thereon, pending final adjudication. It is most respectfully stated that the honorable court’s order dated 20.03.2020 is concise, clear and unambiguous beyond any doubt. The matter of previous supplies and shipping bills was particularly brought into the notice of the honorable court during proceedings on 20.03.2020 and the order was issued subsequently. The opinion expressed by the petitioner, in the said letter is a deliberate contempt of the honorable court. It is further stated that nowhere in the order dated 20.3.2020, has the court referred to the seized 280,000 ltrs of HSD and its release thereof. It is evident that the petitioner has misconstrued the court’s order to avoid deposit of disputed amount before the respondent
  • That the petitioner, vide the said letter contested the inclusion of the confronted amount that includes the amount of evaded sales tax and petroleum levy against past supplies and once again challenged the jurisdiction of the respondents in effecting the recovery thereon. It is most respectfully stated that the respondent initiated instant proceedings against the petitioner under Section 2(s),16, 157(2) read with Section 32 of the Customs Act 1969. Section 2(s) defines smuggling and besides customs duty, also covers all other leviable taxes. Likewise, Section 32 determine the period against which evaded duties and taxes can be recovered which is 05 years from the relevant date in the instant case. It is further added that the honorable court has already settled the matter of jurisdiction, wherein it directed the instant respondent to secure disputed amount of sales tax and other charges.
  • The petitioner vide the said letter, further contested that the transactions made by them fall in the category of “direct sales stage” with reference to the calculation of petroleum levy, whereas, the respondent calculated the liability on the basis of petroleum levy for “sales through retail outlets”. In this connection, it is pointed out that the petitioner, consistently declared values in their shipping bills as per values for “sales through retail outlets”, therefore, the evaded amount of petroleum levy is calculated accordingly.
  • The petitioner, further contended that the calculation of disputed amount was made in ‘indecent haste’. The said contention of the petitioner is vehemently denied. The respondent, while calculating the disputed amount examined the record of each and every GD filed by the petitioner with due diligence. Quantities, Rate of Sales Tax and Petroleum levy against the GD date for every GD has been calculated by the respondents with utmost accuracy. However, if the petitioner has any objection against the confronted liability, it may approach the respondent with supporting evidence for calculation of due amounts.
  • The petitioner vide the letter dated 26.03.2020, referred to an agreement reached with the respondent for payment of an amount of Rs. 142 million to reach an amicable solution. The said contention of the petitioner is vehemently denied as no such agreement was reached during any stage of the ongoing proceedings between the petitioner and the instant respondent. It is pertinent to mention that the petitioner, at para I of the very same letter dated, contended that the Sales Tax and other charges referred to in the honorable court’s order dated 20.03.2020, did not go beyond the scope of the quantity subject matter of the FIR case i.e 280,000 litre of HSD, whereas in the same breath, the petitioner, while contradicting their own stance, express willingness to deposit PKR 142 million to the respondent.


(i)       That the above titled Constitutional Petition instituted by the petitioner hits the provisions of Order-II Rule II of the Code of Civil Procedure 1908 therefore, not maintainable at the law.

(ii)      That the order passed by this Hon’ble Court in Constitutional Petition No D-1480/2020 on o2.03.2020 shall operate as the principle of Res-Judicata in terms of Section 11 of the Code of Civil Procedure 1908, hence the above titled petition is not maintainable at law.

(iii)    That the petitioner is precluded by rules from instituting a further suit / petition in respect of any particular cause of action in terms of Section 12 of the Code of Civil Procedure 1908, hence the above titled petition is not maintainable at law.

(iv)     That Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 mandates Hon’ble High Court of Pakistan to issue writs and provide administrative control on the functionaries of the State where there is no statutory, efficacious and adequate remedy available to aggrieved persons. Whereas, the various provisions of the Customs Act, 1969, provide meaningful and comprehensive remedy for redressal of grievances which the Petitioner failed to invoke and filed the Petition in hand, without explaining any plausible reason and cause to supersede the drill and procedure expressly mentioned in the statute. Reliance is placed on the case of M/s Indus Trading and Contracting Company v. Collector of Customs (Preventive) Karachi, and others, reported as 2016 SCMR 842.

(v)      That Petitioner wants to resort the remedy by invoking the writ jurisdiction of this Hon’ble Court which is not maintainable under the law. Kind reference is invited to the case of Income Tax Commissioner V. Hamdard Dawakhana (waqf) reported vide PLD[1992] S.C 847) wherein the Hon’ble Supreme Court of Pakistan has held that when any party resorts to a statutory remedy against an order, he cannot abandon or by-pass it without any valid and reasonable cause and file constitutional petition challenging the same order. Such practice, in cases where statute provides alternate and efficacious remedy up to High Court, is disapproved.

 WITHOUT PREJUDICE TO ABOVE, Parawise Comments on above titled petition for and on behalf of Defendant No 1, 2 and 3 most humbly and respectfully are submitted hereinafter:


  1. That the contents of para 1 of  the facts of the petition relate to the characteristic or portfolio of the petitioner’s company, its registration, capacity of refining crude oil etc which has no direct nexus with the instant controversy  therefore, require no comments.
  2. That the contents of para  2 are formal, containing procedural activities in respect of off-loading crude oil from the ship and onward shifting to the refinery of the petitioner and the roll of the tugboats at SPM chartered by the petitioner therefore, left with no comments. The petitioner is however, still to produce evidence to confirm whether all that HSD actually originated from the refinery or not.
  3. That the statement made out by the petitioner in para 03 of the facts, denotes the routine wise steps with regard to proceed the fuel to the tugboats at SPM.  However, it is worth noting that the petitioner is accepting responsibility for proper documentation and accurate quantities and mentions the role of third party surveyor albeit till the HSD is handed over to the bunker supplier (Though no evidence to this effect is yet provided despite Notice by the I/o of the case). However, the petitioner has deliberately skipped the mention of the role of THIRD PARTY SURVEYOR, (hired by the petitioner under a contract) during the process of transfer of HSD from barge to the vessel. It is most respectfully stated that the third party surveyor also accompanies the bunker supplier during the journey and is responsible to ensure delivery of accurate quantities and report it to the petitioner as per the terms of contract referred above in the statement of facts. Investigation into the case has revealed that the Independent Surveyor deputed by the petitioner did not sign any Bunker Delivery Note. Moreover, investigation has also established discrepancy in the quantities transferred to MT Mallard as per the Bunker Delivery Note submitted to the instant respondent after delivery and actual documents of HSD receipt in MT Mallard. (ANNEX – C). The petitioner is trying to absolve itself of the responsibility of subsequent actions initiated by the Bunker supplier which is factually and legally false. Factually, the petitioner has a written contract with the bunker supplier for delivery of petitioner’s HSD to various tug boats. There is no such provision in the said contract which assigns the responsibility of filing GD to the bunker supplier. In strict legal terms, Section 209 of the Customs Act 1969, establishes the responsibility of Principal and Agent. The principal in this case is the petitioner, and the Customs Agent (absconder) acts on behalf of the principal and not the bunker supplier. Moreover, without exception, the instant respondent processes the GDs on a written request of the petitioner on its official letterhead (REQUEST LETTERS –ANNEX G). Therefore statement of the petitioner that the GD is filed by the authorized clearing agent of the bunker supplier is factually and legally wrong. Bunker supplier has absolutely no role in the processing of GD. Even in the contract between the petitioner and the bunker supplier there is no such clause which assigns the role of filing GD to the bunker supplier. The petitioner is the principal (owner of goods) and the Clearing Agent filing the GD acts on behalf of the principal as per the provisions of Section 209 of the Customs Act 1969.
  4. Para 04 of the petitioner’s statement of facts is vehemently denied mainly on two grounds. First, Serial No.4 of the Table No. II, of the Sixth Schedule to the Sales Tax Act 1990 is limited only to Raw Material and Intermediary Goods, whereas, in the instant matter the item supplied is High Speed Diesel which is a final product. The same is reproduced for ready reference:

“Raw material and intermediary goods manufactured or produced, by a registered person, consumed in-house for the manufacture of goods subject to sales tax”

Second, the instant supply does not qualify as In-House Consumption as the goods are being supplied by one registered person to another registered person (MT Smit Lamnalco Pakistan, owner of MT Mallard – NTN 7162262 (ANNEX – D).  Furthermore, reference to Section 2(33)a of the Sales Tax Act 1990 is not relevant in the instant case as it also relates to intermediary goods whereas High Speed Diesel is a final product. The contention of the instant respondent is further strengthened by the Commissioner Inland Revenue (Appeals-I), Karachi, who, vide Order No. STA/343/LTU/2019/18 dated 23.05.2019, in an identical matter deliberated on the issue of exemption under the Sixth Schedule, wherein the learned Commissioner Appeals has held that

“…… Perusal of S.NO. 4 of the Sixth Schedule reveals that specific exemption from Sales Tax has been allowed in respect of “raw materials” and “intermediary goods” for in-house consumption for the manufacture of goods subject to sales tax. But in this case “cement” is a finished end product of the appellant and it was admittedly used in the construction of the building and not in manufacturing of goods. The contention of the appellant that the supplies of self-consumed goods are exempt from sales tax as per Sr. No. 4 of Sixth Schedule to the Sales Tax Act, 1990 is held to be incorrect appreciation of law. Also, reference to Section 2(33)(a) is not relevant since it relates to the intermediary goods whereas, cement is an end product”

The above reference to the Order passed by the Commissioner Appeals clearly refutes the stance taken by the petitioner. Since the HSD supplied to MT Mallard was not exempt under the above referred provision of the Sixth Schedule to the Sales Tax Act 1990, therefore the petitioner was bound under the law to issue Sales Tax Invoices against each delivery of HSD (ORDER OF THE COMMISSIONER, IRS – ANNEX H)

  1. That contents of para 05 of the facts are the petitioner’s account of how the HSD was moved from the petitioners refinery and reached the port. The contents of para 05 are however denied to the extent that M/s Khurshid Aziz and Sons Challan No. 2360, was the authorized clearing agent of the bunker supplier. The respondent firmly holds that the clearing agent filed the GD on behalf of the petitioner and was therefore acting as agent of the consignor and not the bunker supplier who has no role within the Customs Act 1969. The bunker supplier simply acts as transporter after clearance of goods from the instant respondent. Once again, nowhere in the contract between the petitioner and the bunker supplier, the responsibility of filing GD and hiring clearing agent has been assigned to the bunker supplier. It is admitted that the GD was processed by the instant respondent after examining the declaration of the petitioner to the effect that the HSD being supplied was Sales Tax paid; and considering that the Declared Value of the Goods was equal to the retail price Inclusive of the Sales Tax and all other levies. The same fact was further endorsed by the respondent’s official on the written request of the petitioner. (ANNEX – G). The respondent did not observe any discrepancy at the time of clearance by the respondent as the discrepancy took place after clearance from the respondent, and it was the responsibility of the surveyor hired by the petitioner to point out any discrepancy en-route. Rather, the surveyor was found being accomplice in the pilferage of non tax paid HSD and smuggling of foreign currency during investigation.
  2. That the contents of Para 06 of the petitioner’s statement of facts need further clarification. After shifting of 280,000 litre of HSD to the Barge Wania-II, the said barge began its journey toward MT Mallard. The crew included a representative of the Surveyor contracted by the petitioner to ensure safe and accurate transportation of the HSD to the tugboat MT Mallard. Despite that, HSD around 50,000 litre was pilfered from the barge and shifted to another vessel Sea Rose – III, which was later seized on the pointation of the crew of Wania-II. The petitioner has not informed the honorable court about this admitted pilferage. Even if, for the sake of argument, the petitioner’s contention that the HSD was exempt is accepted, the pilferage of exempt goods is a cognizable offence under the law in which it is granted exemption. The barge as well as the loaded diesel was seized as per law under the provisions of the Customs Act 1969 as the crew could not justify the missing 50,000 litre of HSD and the possession of USD 13,300.
  3. That the action of the Seizing agency for the seizure of HSD and subsequent registration of FIR is justified and legal. Ample opportunity was allowed to the petitioner to justify their declaration on the Goods Declaration that the HSD was Sales Tax Paid. The petitioner failed to discharge the burden of proof under Section 156(2) of the Customs Act 1969. This overt and covert act of the petitioner falls under the ambit of Section 2(s), 16, 32 and 157 (2) of the Act of 1969, punishable under clause (8), (9), (14) and (89) of Section 156(1) ibid, therefore, the impugned goods were seized and FIR as warranted under the law was lodged in the Court of Special Judge (Custom, Taxation & Anti-Smuggling), Karachi.  The respondents have rightly discharged their duty under the four corners of law and exercised their powers conferred upon them by the statute and seized the impugned HSD which was being supplied to the tugboat which was not the entity of the petitioner without payment of leviable taxes thereon. This act of the petitioner falls under the definition of “smuggling”. The petitioner is absolutely responsible for the act of omission and commission as committed on behalf of petitioner. The petitioner cannot be absolved of the aforesaid offence merely by saying that it is the responsibility of the bunker supplier even when otherwise the bunker is not authorize to file GD as per contract. The culpable offence committed by the petitioner intentionally is required to be prosecuted under the law so that the mens-rea could be dug-out or unearthed and the criminals must be convicted in accordance with law.

The HSD being supplied to MT SL Mallard and all the other vessels chartered by the petitioner, is chargeable not only to the Sales Tax but also Petroleum Development Levy being a normal taxable supply in terms of Section 2(41) of the Act of 1990. The petitioner was required to Issue Sales Tax Invoice against this supply.

  1. That the petitioner lodged FIR with concerned Police Station when they came to know that their supply to MT SL Mallard, was impounded. Lodging of FIR at belated stage is nothing but an afterthought. In addition to the alleged evasion of taxes, the pilferage in the HSD being supplied by the petitioner was going on for years, however, not even once, the petitioner initiated any action. Moreover, as per the contents of para 08 and on bare perusal of the attached FIR, it becomes evident that the petitioner only filed FIR against the bunker supplier who was acting as a transporter. Whereas, the petitioner did not name the Third Part Surveyor in the said FIR who was actually assigned the job by the petitioner for the safety and sanctity of the cargo. The fact that the name of Surveyor under a solemn contract with the petitioner, was not mentioned in the FIR lodged by the petitioner, amply proves that the petitioner is trying to cover the mis-deeds of the surveyor or both are colluding.
  2. That the petitioner was deprived of its refined HSD on account of its own illegal and unlawful act of omission and commission which is culpable and cognizable offence under the provisions of the Act of 1969. The petitioner was accurately charged with the allegation as contained in para herein above for which criminal proceedings are warranted under the prevailing law. The petitioner may be directed to present proof with regard to the allegation of malafide intention and ulterior motives on the part of respondents. The petitioner is responsible for financial loss and damages of its reputation owing to its own act of evasion huge amount of taxes and other charges leviable under the law meant for the welfare of the poor people of the country.
  3. That the petitioner has admitted in this para that a constitutional Petition having No D-1480/2020 has already been instituted by the same petitioner against the same respondents for appropriate cause of action which is pending before this Hon’ble Court. The institution of further constitutional petition against the same respondent or their representatives hits the provisions of Order-II Rule-II of the Code of Civil Procedure 1908, which is reproduced as under:

“2.     Suit to include the whole Claim.–(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.

          Relinquishment of part of claim.–(2) where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.

Omission to sue for one of several reliefs.–(3)A person entitled to more than one relief in respect of the same cause of action my sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.

Explanation.- – For the purpose of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action.

The provisions of Section 12 of CPC however preclude the petitioner from instituting a further suit in respect of any particular cause of action, he shall not entitled to institute a suit in respect of such cause of action in any Court in which the Code applies. Keeping in view the aforesaid this petition is not maintainable under the law and liable to be dismissed with special costs.

  1. That the contention of the petitioner is vehemently denied as being incorrect, baseless and concocted. The petitioner has failed to establish that the supplies to above mentioned tugboat are not taxable supplies and are exempted under the law and has further failed to provide the material evidence in respect of payment of leviable taxes thereon. The seized HSD is a final product and not a raw material o intermediary good hence does not qualify to be an exempt good under the Sixth Schedule to the Sales Tax Act 1990. The impugned HSD was rightly seized under the four corners of law as neither the tugboat is the property of the petitioner nor the tugboat is the part of refinery, hence the fuel supply to tugboat against price consideration is excluded from the purview of Section 13 read with Sr. No 4 of Table 2 of Sixth Schedule to the Act of 1990. The clarification sought from the Commissioner Inland Revenue, Zone-IV, Large Tax Payer Unit is at best, a bunch of generalizations and carries nothing specific to the instant case has not been made part of the instant petition therefore does not merit comment.

  1. That chartered Accountant M/s A.F Fergusons has no competent authority under the law to determine that which supplies are taxable supplies and which are not. The Federal Board of Revenue, Islamabad is empowered to make rule in this regard and clarification thereof. The supply of HSD to tugboats is excluded from exemption as mentioned under Section 13 read with Sr. No 4 of Table 2 of Sixth Schedule to Act of 1990, as HSD is neither a raw material nor an intermediary good and also as the tugboats are not the property of the petitioner and no right to ownership has been passed on thereto.   Hence, the aforesaid supplies are not exempted under the aforesaid provisions of law. However, perusal of the letter issued by M/s A.F Ferguson, reveals that it does not take the facts of the instant case into account and does not qualify the supplies being made by the petitioner to its rented vessels as In-House consumption. The said letter is a mix of certain definitions reproduced from the Sales Tax Act 1990 and some generalizations, issued on the request of the petitioner and is not specific to the facts of the case therefore the same is rejected as being irrelevant to the instant controversy.

  1. The Investigation into the case is ongoing and the record along with the reply to the Questionnaire is being examined. Need no further comments at this stage. It is however, brought to the Notice of this honorable court, that  the officials of the respondent company have neither submitted themselves before the court of the learned Special Judge Customs nor are they cooperating with the I/O of the case in supplying the crucial record. The petitioner is deliberately trying to deflect the matter under the cover of an ill-conceived, unjust and unlawful claim of exemption under the Sixth Schedule after declaring the goods to be tax paid all the while

  1. The investigating officer is an officer of Customs in terms of Section 2(O) read with Section 3 of the Act, 1969 and can exercise all powers as provided under Cr.P.C for the officer-in-charge of Police Station while conducting inquiry / investigation in pursuance of FIR. The petitioner is under the statutory obligation to comply with the notice(s) communicated to the petitioner. The investigating officer has rightly requisitioned the Sales Tax returns to determine that from what period the evasion of such taxes has been made out. It is appropriate to submit that evasion of custom-duty or other tax falls under the ambit of section 2(s) of the Act of 1969 for which the respondents are permissible under the law. Moreover, as the petitioner has admitted that GDs for all such supplies are processed by the instant respondent, therefore the respondent has complete jurisdiction to examine the evasion of Sales Tax and other charges as well as their recovery.

  1. That the contents of this para need no comments except that as per the petitioners own Press Release refinery operations were closed on account of depleted demand in the market. The allegation of pressurizing the petitioner to purchase Sales Tax Paid HSD from other Oil Marketing Companies is not supported by any proof and is therefore vehemently denied.

  1. The contents of para 16 are denied. In compliance of this this honorable court’s order dated 20.03.2020, the petitioner was allowed to supply HSD to its tug boats subject to securing disputed amount. The petitioner was issued a Notice dated 25.03.2020 to this effect, however, the petitioner once against circumvented the court’s clear directions while raising issue of jurisdiction and other objections thereon. (ANNEX – E)

  1. That the impugned HSD was seized under the provisions of the Act of 1969, the adequate and meaningful remedy is available for the petitioner under several provisions of the Act of 1969, instead of Civil Suit or Constitutional petitions as instituted by the petitioner without exhausting the statutory procedure upto the Hon’ble High Court. The efficacious, adequate and meaningful remedies are available under the several provisions of the Customs Act, 1969, but instead of availing the same the petitioner has opted to bypass them and instituted the above titled constitutional petition as well as the Civil Suit without any plausible justification. Hence, the above titled petition is not maintainable at law and liable to be dismissed with special cost on the following grounds:


  1. That the respondents have appropriate jurisdiction in the matter as for the supply of all the HSD consignments a declaration was filed before the instant respondent; a case has been instituted under the provisions of Customs Act 1969 which empower the instant respondent to recover the evaded amount of duties and taxes and other levies where applicable. Furthermore, the instant respondent is empowered in terms of SRO 581(I)/2013 dated18.06.2013 and SRO 13(I)/2019 dated 01.01.2019 read with Section 3 of the Act of 1990 to recover the Sales Tax and other charges.

  1. That the relevant authority of Inland Revenue of LTU are not permissible to take cognizance of the offence made out or fallen under the ambit of Section 2(s) of the Act of 1969, the matter is required to be adjudicated by or under the Collectorate of Customs, Adjudication-I, Custom House, Karachi in accordance with law as the impugned goods were seized under the provisions of the Act of 1969, which would be issued in accordance with law. The action taken by the officers of the respondent No 3 is covered under the four corners of law and rules made thereunder.

  1. The contents of para C on the Grounds of petition is a repetition of para 04 of the facts; is vehemently denied and is already responded therein.

  1. That the clarification of the respondent No 4 in respect of Sections 2(33), 2(39), 2(41), 13 and Sr. No 4 of Table 2 of Sixth Schedule to the Act of 1990 carries no weight as the same clarification neither given by the FBR nor the Chief Commissioner of Inland Revenue of concerned Zone, therefore, the aforesaid clarification is not sustainable under the law. Also, the perusal of the clarification reveals that, it is nothing but a bunch of generalizations and carries nothing specific to the instant case

  1. That above respondents have vested with appropriate power to lodge FIR and initiate criminal proceedings in accordance with law and charge the Sales Tax as submitted hereinabove. The petitioner however, has not fallen under the exemption as mentioned in para D hereinabove.

  1. That the petitioner is absolutely responsible for the overt and covert act of omission and commission committed by the petitioner. The petitioner has caused the colossal loss to the Government Exchequer worth PKR 552 million. The respondents above have rightly seized the impugned HSD which was being supplied to above tugboat. The supplies of the petitioner have been allowed in the light of this honorable courts order dated 20.03.2020 however, the petitioner has yet to comply with the courts order regarding submission of disputed amount.
  2. This honorable court vide Order dated 20.03.2020 has already ordered that the disputed amount to be secured with the instant respondent.

  1. That the respondents crave leave of this Hon’ble Court to urge further grounds / arguments at the time of hearing.


In view of above stated position the contents of prayer clauses mentioned under heading “Prayer” are false, frivolous, vexatious therefore denied. The apparent facts, circumstances and legal objection give credence that the petitioner in any case whatsoever is not entitled for grant of any of the prayer sought by him in his memo of petition rather his petition is liable to be dismissed with special compensatory costs. This Hon’ble may be pleased declare that:

  1. i)the petitioner along with its affiliates has committed a palpable offence and damaged the revenue of the Government Exchequer which entails the punitive consequences under the provisions of the Act of 1969, therefore and the action taken by the respondent is legal, lawful having due force of statute;

  1. ii)the respondents above and their sub-ordinates have appropriate jurisdiction to curtail the smuggling activities and to safeguard the state’s revenue in pursuance of the supplies made out by the petitioner by disposing of refined HSD to SL Mallard without payment of leviable taxes as the taxable supplies to tugboats are made out by the petitioner by filing of GDs to the MCC Enforcement & Compliance, Custom House, Karachi.

iii)          the supplies to tugboats deployed at SPM may graciously be allowed subject to payment of leviable taxes and other charges on the refined HSD which is not the raw material or the intermediary product of the refinery and excluded from the definition of in-house consumption;

  1. iv)the impugned goods 230,000 liter HSD do not covered under section 13 of the Sales Tax Act, 1990, and so called in-house consumption therefore, petitioner is liable to pay the Sales Tax on the seized goods including other allied taxes occurred on the supplies made out to tugboats deployed at SPM under the period covered under Section 32 of the Customs Act 1969.

  1. v)Declare that locally refined product i.e., the HSD being consumed by the tugboats are not exempted from the leviable taxes as the tugboats are not assets of the petitioner nor right to ownership of aforesaid tugboats has passed on to the petitioner, therefore the supplies are not fall under the ambit of Sr. No 4 of Table 2 of Sixth Schedule to the Act of 1990;

  1. vi)To validate the action taken by the respondents on 13.02.2020 and dismiss the above titled petition in the light of facts, circumstances and preliminary legal objection raised hereinabove. The respondents may graciously be allowed to proceed further in accordance with law in pursuance of FIR and the petitioner may be directed to face the Trial Court and prove their innocence.

vii)         The petitioner may be directed to deposit the evaded amount of Sales Tax and Petroleum Levy, as per the Respondent No. 3’s Notice dated 25.03.2020, into the exchequer immediately and present its officials and record for further  investigation in the case

viii)       Grant any other relief / relieves which this Hon’ble Court deems appropriate for the respondents in above circumstances of the case.


Dated:    .04.2020                                                Muhammad Asim Awan

                                                                                        Deputy Collector for




I, Muhammad Asim Awan son of Muhammad Bashir Alvi, having CNIC No 35202-9772660-9, Muslim Adult, Deputy Collector of Customs, MCC Enforcement & Compliance, Custom House, Karachi do hereby state and verify on oath that whatever stated above and wherever in para-wise comments is true and correct to the best of my knowledge and belief.


CNIC No: 35202-9772660-9

Cell No:    0321-4243119