IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: MR. JUSTICE MIAN SAQIB NISAR 
 
 
MR. JUSTICE MAQBOOL BAQAR 
 
 
MR. JUSTICE KHILJI ARIF HUSSAIN 
 
 
CIVIL APPEAL NO.490 OF 2009 
(Against the judgment dated 5.12.2008 
of the High Court of Sindh, Karachi 
passed in Custom Reference Application 
No.404/2007) 
 
 
Collector of Customs, Custom House, Karachi 
 
…Appellant(s) 
VERSUS 
Syed Rehan Ahmed 
 
…Respondent(s) 
 
For the appellant(s): 
Raja Muhammad Iqbal, ASC 
 
 
For the respondent(s): 
Ex-parte 
 
 
Date of hearing: 
10.11.2016 
… 
ORDER 
 
 
MIAN SAQIB NISAR, J.- This appeal, by leave of the Court, 
involves the question as to whether a technical member of the Customs 
Appellate Tribunal (Tribunal), sitting singly, has the jurisdiction to decide 
matters involving questions of law. 
2. 
 
The brief facts of the case are that the respondent imported 
goods from China consisting of 12 items at the invoiced value of US $ 
21,994.75 (C&F) and under self-assessment determined the liabilities of 
taxes and duties at Rs.316,987/-. After examination, the authorities 
found that the respondent had misdeclared the description, classification 
and value of the goods causing a potential revenue loss of Rs.558,460/-. 
A show cause notice was issued to the respondent and subsequently an 
order in original dated 4.2.2006 was passed confiscating the goods but 
with an option of redemption upon payment of fine by the respondent. 
Civil Appeal No.490 of 2009 
-: 2 :-
The respondent availed the option but also filed an appeal against the 
said order before the Collector (Appeals) who dismissed the same vide 
order dated 30.5.2006. Aggrieved, the respondent appealed before the 
Tribunal which (appeal) was accepted vide order dated 23.8.2007. 
Aggrieved, the appellant filed a reference before the learned High Court of 
Sindh which dismissed the same vide the impugned judgment holding 
that a technical member of a Customs Appellate Bench, sitting singly, 
does not have the jurisdiction to pass orders on matters involving 
questions of law. Thereafter, the appellant approached this Court and 
leave was granted on 6.5.2009 in the following terms:- 
 
“This petition has been filed against the order dated 5-12-
2008 passed by the High Court of Sindh, Karachi. Relevant 
para therefrom is reproduced herein below:- 
 
“We are, therefore, of the considered opinion 
that the deletion of the explanation to subsection 3-
A has empowered a Judicial Member sitting singly 
to hear a question of law but when the statute is 
interpreted as a whole the only interpretation which 
can be drawn is that the technical member sitting 
singly is not empowered to decide a matter 
involving a question of law. We would there, answer 
the 
common 
question 
in 
these 
reference 
applications in affirmative i.e. we hold that the 
member technical does not have the jurisdiction to 
adjudicate in matters involving questions of law.” 
 
2. 
Leave to appeal is granted, inter alia, to examine as 
to whether the learned High Court has rightly interpreted 
subsection 3-A of section 194-C of the Customs Act.” 
 
Civil Appeal No.490 of 2009 
-: 3 :-
3. 
 
The sole attack of the learned counsel against the impugned 
judgment was that a member of the Tribunal can only decide a matter 
singly if he was previously a member of a Bench to which the case had 
been entrusted. In support of his argument, he relied upon the case 
reported as Director, Intelligence and Investigation (Customs and 
Excise), Faisalabad and another Vs. Bagh Ali (2010 PTD 1024).  
4. 
 
Heard. Before interpret Section 194-C of the Customs Act, 
1969 (the Act) which (section) is germane to the instant matter, it may be 
useful to briefly discuss the Tribunal in general. The Tribunal consisting 
of both judicial and technical members is to be constituted by the 
Federal Government under Section 194 of the Act. The requirements of 
becoming a judicial or technical member is provided in sub-sections (2) 
and (3) of Section 194, and according to sub-section (4), one of the 
members shall be appointed by the Federal Government as a Chairman 
of the Tribunal. Section 194-A of the Act provides the types of orders 
against which an appeal shall lie before the Tribunal, while Section 194-
B stipulates, inter alia, the power to pass orders as the Tribunal may 
think fit, the time period for deciding an appeal before it and the power to 
rectify or amend orders made by it.  
5. 
 
Adverting to Section 194-C of the Act, it is pertinent to 
mention at the very outset that sub-section (3) thereof was amended by 
the Finance Act, 2009 (which received the Presidential assent on 30.6.2009) after the 
impugned order was passed. Therefore, the instant case will be decided 
on the basis of the relevant law in force at that point in time which reads 
as follows:- 
 
“194-C 
Procedure of Appellate Tribunal.– (1) The 
powers and functions of the Appellate Tribunal may be 
Civil Appeal No.490 of 2009 
-: 4 :-
exercised and discharged by Benches constituted by the 
Chairman from amongst the members thereof. 
 
(2) 
Subject to the provisions contained in sub-sections 
(3) and (4), a Bench shall consist of one judicial member 
and one technical member. 
 
(3) 
Every appeal against a decision or order deciding a 
case involving duty, tax, penalty or fine exceeding five 
million rupees shall be heard by a Special Bench 
constituted by the Chairman for hearing such appeals and 
such Bench shall consist of not less than two members and 
shall include at least one judicial member and one 
technical member: 
 
 
Provided that the Chairman may, for reasons to be 
recorded in writing, constitute Benches including special 
Benches consisting of– 
 
(a) two or more technical members; or 
(b) two or more judicial members: 
 
Provided further that any Bench referred to in 
clause (a) shall not hear the matters involving questions of 
law.1 
 
(3A) 
Notwithstanding anything contained in sub-sections 
(2) and (3), the Chairman may constitute as many Benches 
consisting of a single member as he may deem necessary to 
hear such cases or class of cases as the Federal 
Government may, by order in writing, specify. 
 
(4) 
The Chairman or any other member of the 
Appellate Tribunal authorised, in this behalf by the 
Chairman may, sitting singly, dispose of any case which 
has been allotted to the bench of which he is a member 
where– 
                                       
1 Subsequently omitted by the Finance Act, 2009 (I of 2009). 
Civil Appeal No.490 of 2009 
-: 5 :-
 
(a) the value of the goods confiscated without option 
having been given to the owner of the goods to pay a 
fine in lieu of confiscation under section 181; or 
(b) [* * *] 
(c) in any disputed case, the difference in duty or tax 
involved or the duty or tax involved, or the amount of 
fine or penalty involved 
does not exceed five million rupees. 
 
(5) 
…………………………………………………………… 
(6) 
…………………………………………………………… 
(7) 
…………………………………………………………” 
 
 
Section 194-C(1) of the Act empowers the Chairman to constitute, from 
amongst the judicial and technical members, Benches which are to 
exercise and discharge the functions of the Tribunal. Section 194-C(2) of 
the Act provides that the Benches constituted by the Chairman are to 
consist of one judicial and one technical member, subject to sub-sections 
(3) and (4) of Section 194-C. According to Section 194-C(3) a Special 
Bench, consisting of at least two members of which one must be a 
judicial and the other a technical member, shall hear appeals against 
decisions or orders involving duty, tax, penalty or fine exceeding five 
million rupees. However the proviso to sub-section (3) stipulates that 
such Special Benches may consist of two or more technical or judicial 
members, the constitution of which (Bench) must be done by the 
Chairman with written reasons for doing so. Further, the second proviso 
to sub-section (3) (which existed at the time of the impugned judgment) states that if a 
Special Bench constituted under such sub-section consists of at least 
two technical members it shall not decide matters involving questions of 
law. Section 194-C(3A) then provides that in spite of sub-sections (2) and 
Civil Appeal No.490 of 2009 
-: 6 :-
(3), the Chairman may constitute Benches consisting of a single member 
to hear such cases or class or cases as the Federal Government may, by 
order in writing, specify. Finally, as per Section 194-C(4) the Chairman 
or any other member of the Tribunal authorized by the Chairman may, 
sitting singly, dispose of any case which has been allotted to the Bench of 
which he is a member, where the value of the goods confiscated without 
an option having been given to the owner of the goods to pay a fine in 
lieu of confiscation under Section 181 does not exceed five million rupees 
or in any disputed case, the difference in duty or tax, the duty or tax, or 
the amount of fine or penalty involved does not exceed five million 
rupees. In light of the above, there appears to be three types of Benches 
of the Tribunal that can decide appeals under Section 194-A of the Act:- 
 
(a) 
A Bench of two members, one judicial and one technical, 
constituted under Section 194-C(2) of the Act; 
(b) 
A Special Bench of at least two members constituted under 
Section 194-C(3) of the Act to decide every appeal against 
decisions or orders involving duty, tax, penalty or fine 
exceeding five million rupees. Such Benches may however 
consist of two more technical or judicial members if the 
Chairman so orders in writing [clauses (a) and (b) respectively of 
Section 194-C(2) of the Act]; 
(c) 
A Single Member Bench constituted under Section 194-C(3A) 
of the Act to hear cases or a class of cases as specified by the 
Federal Government in writing. 
 
Section 194-C(4) provides for an exception, where the Chairman or any 
other member of the Tribunal authorized by the Chairman, may sit singly 
and decide a case which has been allotted to the Bench of which he is a 
member. The pre-
Civil Appeal No.490 of 2009 
-: 7 :-
such member (or Chairman) can only decide such cases sitting singly 
where: (a) the value of the goods confiscated without option having been 
given to the owner of the goods to pay a fine in lieu of confiscation under 
section 181 does not exceed five million rupees; or (b) in any disputed 
case, the difference in duty or tax or the duty or tax involved or the 
amount of fine or penalty involved does not exceed five million rupees.  
6. 
 
We would like to observe at this stage that the phrase “any 
case which has been allotted to the bench of which he is a member” appearing in 
Section 194-C(4) of the Act is of immense importance which clearly 
suggests that there must have existed a Bench constituted under Section 
194-C(2) of the Act consisting of two members (or Chairman and a member), out 
of which the Chairman or a member authorised by the Chairman, may 
sit singly and dispose of a case already allotted to such Bench. To hold 
otherwise would be to render the aforesaid phrase redundant and 
superfluous. This is precisely why sub-section (2) of Section 194-C has 
been made subject to sub-section (4), the latter of which purports to 
create an exception to the former. Further, such decision by the 
Chairman to allow himself or any other member of a Bench to sit singly 
to dispose cases falling within the ambit of Section 194-C(4) should not 
be as a matter of course or right, rather should be done upon proper 
application of mind by the Chairman who shall himself make such 
decision, and not delegate it to any other officer to undertake as an 
administrative action. The Chairman is obliged to examine the 
circumstances warranting the decision of letting him or another member 
of a Bench to dispose of a matter sitting singly before taking such step. 
This is precisely what has been held by the learned Lahore High Court in 
the case of Bagh Ali (supra) as relied upon by the learned counsel which 
to our mind is good law.  
Civil Appeal No.490 of 2009 
-: 8 :-
7. 
 
Coming back to the proposition at hand, in order to answer 
the same, the legislative history of Section 194-C needs to be examined. 
Amongst other provisions, Section 194-C was introduced into the Act by 
the Finance Act, 1989 which read as follows:- 
 
“194-C. 
Procedure of Appellate Tribunal.—(1) The 
powers and functions of the Appellate Tribunal may be 
exercised and discharged by Benches constituted by the 
Chairman from amongst the members thereof. 
 
(2) 
Subject to the provisions contained in sub-sections 
(3) and (4), a Bench shall consist of one judicial member 
and one technical member. 
 
(3) 
Every appeal against a decision or order relating, 
among other things, to the determination of any question 
having a relation to the rate of duty of customs or to the 
value of goods for purposes of assessment, shall be heard 
by a Special Bench constituted by the Chairman for 
hearing such appeals and such Bench shall consist of not 
less than two members and shall include at least one 
judicial member and one technical member. 
 
(4) 
The Chairman or any other member of the 
Appellate Tribunal authorised in this behalf by the 
Chairman may, sitting singly, dispose of any case which 
has been allotted to the bench of which he is a member 
where— 
 
(a) 
the value of the goods confiscated without 
option having been given to the owner of the 
goods to pay a fine in lieu of confiscation under 
section 181; or 
(b) 
in any disputed case, other than a case where 
the determination of any question having a 
relation to the rate of duty of customs or to the 
Civil Appeal No.490 of 2009 
-: 9 :-
value of goods for purposes of assessment is in 
issue or is one of the points in issue, the 
difference in duty involved or the duty involved; 
or 
(c) 
the amount of fine or penalty involved; 
 
does not exceed one hundred thousand rupees. 
 
(5) 
……………………………………………………………. 
(6) 
…………………………………………………………… 
(7) 
…………………………………………………………….. 
(8) 
…………………………………………………………...” 
 
Thereafter the Tax Laws (Amendment) Ordinance, 2001 (Ordinance of 2001) 
was promulgated which introduced the two provisos to sub-section (3) of 
Section 194-C as reproduced in the earlier portion of this opinion and 
inserted sub-section (3A) of Section 194-C which read as follows:- 
 
“(3A) Notwithstanding anything contained in sub-sections 
(2) and (3), the Chairman may constitute as many Benches 
consisting of a single member as he may deem necessary to 
hear such cases or class of cases as the Federal 
Government may, by order in writing, specify. 
 
Explanation:--For the purpose of this sub-section, the 
expression “cases” means the matters involving decisions 
other than decisions in relation to a question of law under 
this Act or the Central Excises Act, 1944 (I of 1944) or as 
the case may be, the Sale Tax Act, 1990.” 
 
The effect of the amendments brought about by the Ordinance of 2001 
and the intent of the legislature in doing so is clear from a bare reading 
of both amendments, in that the second proviso to Section 194-C(3) 
Civil Appeal No.490 of 2009 
-: 10 :-
prevented a Bench consisting of at least two technical members 
constituted under Section 194-C(3)(a) from hearing matters involving 
questions of law, and the explanation to Section 194-C(3A) clarified that 
Single Member Benches constituted under sub-section (3A) would not 
hear cases involving decisions relating to a question of law. In both the 
aforesaid situations, it appears that the legislature did not want 
questions of law to be decided by the respective Benches, i.e. either a 
Bench consisting of at least two technical members or a Single Member 
Bench. However the explanation to Section 194-C(3A) was subsequently 
omitted by the Finance Act, 20072 (assented on 30.6.2007), thereby leaving 
sub-section (3A) to stand alone. This amendment posed an interesting 
question, i.e. whether the presence of the second proviso to Section 194-
C(3) barring a Special Bench consisting of at least two technical members 
from hearing cases involving a question of law meant that a Single 
Member Bench constituted under Section 194-C(3A) could not hear 
cases involving a question of law despite the omission of the explanation 
thereto? This was the precise conundrum faced by the learned High 
Court while passing the impugned judgment and the Court decided the 
aforementioned question in the affirmative by observing as follows:- 
 
“…When reading the statute as a whole we are of the 
opinion that although prima facie it is seen that the deletion 
of explanation will empower both judicial member and 
technical member to decide questions of law sitting singly 
but after considering the second proviso to subsection 2 
and trying to arrive at a harmonious interpretation the only 
interpretation which follows is that the intent of the 
legislature is that if Special Bench comprising of two or 
more technical members cannot hear a matter involving 
                                       
2 The Finance Act, 2007 also amended Section 194-C(3) to what it reads today, omitted clause (b) of 
Section 194-C(4) and substituted clause (c) of Section 194-C(4) to what it reads today.  
Civil Appeal No.490 of 2009 
-: 11 :-
question of law then it will be illogical and absurd to 
conclude that the legislature intended that a Technical 
Member sitting singly can hear a matter relating to a 
question of law and as the learned Amicus Curie has 
already opined that absurdity cannot be presumed in an 
interpretation.” 
 
We find ourselves in disagreement with the learned High Court of Sindh. 
While there is no cavil that a statute must be harmoniously interpreted, 
that is only needed to be done where there is a conflict and in this case 
we do not find there to be any conflict for the reason that the scheme of 
Section 194-C itself postulates for three different types of Benches to be 
constituted under three different sub-sections, i.e. (2), (3) and (3A), all of 
which have their separate and distinct features. Therefore, the 
amendment brought about by the Finance Act, 2007 which omitted only 
the explanation to Section 194-C(3A) and not the second proviso to 
Section 194-C(3) was a clear indication that the legislature no longer 
wanted the Single Member Benches constituted under Section 194-C(3A) 
to be prevented from hearing cases that involved decisions in relation to 
a question of law, and the second proviso to Section 194-C(3) was left 
intact. If we were to accept the interpretation of the learned High Court, 
that would mean that the amendment brought about by the Finance Act, 
2007 which omitted only the explanation to Section 194-C(3A) would be 
rendered absolutely nugatory and redundant. This is not something we 
are willing to do. Furthermore, Section 194-C(3A) begins with the phrase 
“notwithstanding anything contained in sub-sections (2) and (3)…” and thus it is a 
non-obstante clause. This means that sub-section (3A) is independent of 
sub-sections (2) and (3), making the former prevail even if the latter 
provide anything to the contrary. It is worthy to note that as of 
Civil Appeal No.490 of 2009 
-: 12 :-
30.6.2009, the second proviso to Section 194-C(3) stands omitted by 
virtue of the Finance Act, 2009. 
8. 
 
Since the learned High Court only decided the question of 
law and fixed all the independent cases for katcha peshi to be decided on 
the facts of each case, we have refrained from expressing our opinion on 
the facts of the instant case. In light of the above, this appeal is allowed 
and the impugned judgment is set aside. 
 
 
 
 
JUDGE 
 
 
 
JUDGE 
 
 
 
JUDGE 
Announced in open Court 
on 23.11.2016 at Islamabad 
Approved For Reporting 
Ghulam Raza/*