Karachi, February 11, 2025 – The Sindh High Court (SHC) has overturned the suspension of multiple customs agents whose licenses had been revoked by the Federal Board of Revenue (FBR) over alleged manipulation of the faceless customs assessment system.
A division bench of the SHC, while hearing the petitions filed by the affected customs agents, ruled in favor of the petitioners and suspended the FBR’s suspension orders. The court directed the petitioners to respond to the show cause notices issued to them, and ordered the Licensing Authority to proceed with the adjudication of these notices in strict compliance with the law. The court further emphasized that due process must be followed, ensuring all concerned parties are given an opportunity to present their case.
The ruling clarified that if the petitioners remained dissatisfied with the final decision, they could seek further legal remedies as permitted under the law.
The controversy began when the Competent Licensing Authority, under the Collectorate of Customs Appraisement (West), Custom House, Karachi, invoked Rule 102(4) of the Customs Rules, 2001, to suspend the operational license of Customs Agent Chat No. 2470 belonging to M/s New Vision. The suspension, issued without prior notice, was deemed necessary under the rule’s provisions that allow immediate action in urgent cases.
However, during the court proceedings, legal counsels Dr. Farogh Naseem and Shahab Imam contended that the suspensions were arbitrary, as they lacked prior notification or justifiable reasons. They cited previous SHC rulings, including K.A. Traders and Docks Private Limited, which established that an immediate suspension without due process contradicts legal precedents and the principles of natural justice.
The government’s legal representatives argued that the suspensions were processed through the customs computer system and that no specific order was available in physical form. The court rejected this defense, emphasizing that digital systems cannot override fundamental legal requirements. It further stated that while Rule 102(4) does permit immediate suspension under exceptional circumstances, such actions must be accompanied by clearly documented reasons.
Additionally, the court expressed concern over the prolonged nature of the suspensions, noting that failure to resolve such cases promptly can result in irreversible financial and reputational damage to the affected businesses. The show cause notices issued to the petitioners cited allegations primarily based on WhatsApp messages allegedly exchanged between the petitioners, a Customs Appraiser, and an intermediary named Ayaz Ali. The court observed that these allegations were vague and lacked substantive evidence, further reinforcing the decision to reinstate the licenses pending a final verdict on the show cause notices.