LHC orders return of gold bar, $10,000 in 21-year customs case

LAHORE: The Lahore High Court has ordered the Customs Department to return a refined gold bar along with $10,000 to a petitioner, ruling that the authorities acted unlawfully by replacing confiscated property with an arbitrarily calculated monetary value.

A two-judge bench comprising Justice Malik Javid Iqbal Wains and Justice Khalid Ishaq passed the verdict while allowing a petition filed by Abbas Ali, bringing an end to a legal dispute that began in 2004 at Lahore’s Allama Iqbal International Airport.

According to the case record, the petitioner was stopped at the airport departure lounge on May 27, 2004, while travelling to Bangkok. Customs officials recovered 3.085kg of gold and foreign currency, including $12,000 and Thai Baht, from his baggage on the grounds that the items were not declared. The goods were confiscated under the Customs Act, 1969, and a criminal case was registered.

Over the years, the matter moved through multiple legal forums, including the Customs Appellate Tribunal and the Lahore High Court, producing differing outcomes at various stages. In 2012, a larger bench of the tribunal ordered release of the gold and partial return of foreign currency, though that decision was later set aside on technical grounds related to tribunal composition.

The tribunal subsequently again ruled in favour of the petitioner, directing release of the gold jewellery subject to a Rs100,000 penalty and return of $10,000. The Customs Department challenged the ruling before the Supreme Court, but its appeal was dismissed in June 2025, making the tribunal’s decision final.

During proceedings, it emerged that the seized gold had been sent to the Pakistan Mint in 2005, where it was melted and converted into a 2.47kg gold bar, later transferred to the State Bank of Pakistan in 2007 with its value deposited into the national treasury.

In 2025, Customs offered the petitioner Rs5.87 million along with foreign currency, calculated on earlier valuation, but the court rejected the stance. The bench observed that confiscated property remains under state custody and that destruction or melting does not extinguish ownership rights unless due legal procedure, such as auction or sale, is properly followed.

The court held that statutory disposal procedures were not adhered to and therefore subsequent actions could not be justified. It directed Customs to release gold bar No. 2959 weighing 2.47kg to the petitioner upon payment of Rs100,000 penalty, and also ordered return of $10,000 or its equivalent at the prevailing exchange rate at the time of payment.