TMI Blog1995 (12) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... three packages. When he got down from the bus, certain officers of the Customs Department approached him and asked his name and address ; the petitioner furnished them and also produced two tickets showing his travel from Bombay to Bhatkal. Thereupon the Superintendent of Customs informed the petitioner that he had reasonable belief that he was carrying smuggled goods and he was therefore asked to accompany them to the Customs office for detailed examination and search. On search by the Customs Superintendent at the Customs office, it was found that the two cardboard packages carried by the petitioner contained homeopathic medicines and personal articles of domestic use and nothing else. The third package (a sack hand bag) that was being carried by the petitioner contained Indian currency notes of the value of Rs. 5,55,000, wrapped in old newspapers. The petitioner claims that he had explained to the Customs officials that the amount had been received as a loan at Bombay to be handed over to his father at Bhatkal. However, the Superintendent of Customs seized the currency notes of Rs. 5,55,000 on the ground that they were unaccounted and the petitioner had failed to produce proof f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ths of the seizure, the person from whom the currency was seized became entitled for the return of the same, under section 110(2) of the Customs Act, 1962. In regard to the seizure by the first respondent on February 20, 1986, this court held, relying on the decisions of the Supreme Court in Gian Chand v. State of Punjab, AIR 1962 SC 496 and CIT v. Tarsem Kumar [1986] 161 ITR 505, that seizure means taking possession against the will of the person possessing the property, and at the time of seizure on February 20, 1986, as the Indian currency had already been seized by the customs officials and was in the custody of the customs department, the said currency notes could not be once again seized and, therefore, the second seizure was illegal. Consequently, this court quashed the mahazar, dated February 20, 1986, and directed the first respondent herein to return the money to the person from whom it had been taken possession (that is the Superintendent of Customs, Anti-Smuggling Unit, Bhatkal). This court also held that the petitioner was entitled to receive the currency notes from the Superintendent of Customs, on the same being redelivered by the Enforcement Directorate subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner under article 19(1)( f ) of the Constitution of India and contravened the decision of the Division Bench of this court in W.A. No. 356 of 1989; and ( b )The seizure was not in accordance with section 38 of the Act. Re: Contention ( a ) : Elaborating on the first contention, learned counsel for the petitioner contended that the deletion of the words "even by seizing the currency on return of the same to the petitioner by the customs department" by the Division Bench in appeal from the order of the learned single judge in W.P. No. 18180 of 1986, would mean that the Division Bench had given a finding that the seized currency had to be returned to the petitioner and should not lie seized again by the first respondent. But a careful reading of the order of the learned single judge with the order of the Division Bench does not lead to such a finding or inference. The order of the Division Bench made it clear that it was open to the Enforcement Directorate to take such action as is available to them under law to pursue the matter further. If seizure under section 38 of the Act is an action available to the Enforcement Directorate under law, having regard to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 4, 1989, cannot be called as a "re-seizure" at all. Secondly, this court expressly reserved liberty to the Enforcement Directorate to take action as is available to them under law and pursue the matter further. Thus this is not a case of re-seizure after an order to return unconditionally. In the Calcutta case, relied on by the petitioner, the first seizure was not found to be not a "seizure" and the court did not expressly reserve liberty to the department to take further action in accordance with law. Hence, there is no violation of any fundamental right of the petitioner and the first contention is rejected. Re : Contention (b) : Learned counsel for the petitioner contended that under section 38 of the FERA, an authorised officer of the Enforcement Directorate may seize any document or thing, if he has reason to believe that such document or thing will be useful for, or relevant to, any investigation or proceedings under the Act or in respect of which, a contravention of any of the provisions of the Act or any rule or directions made thereunder has taken place. He contended that the impugned mahazar, dated April 4, 1989, does not disclose that the first respondent ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a bona fide purchase, it was for the customs authority to prove that the gold was imported contrary to law. It was held (page 140): "Though a court of law would not be sitting in appeal over the decision of the inquiring officer, and must be content to consider whether there is a ground which prima facie justifies such a reasonable belief, the condition precedent that there was such a reasonable belief anterior to the seizure is necessary before the presumption under section 178A can be invoked. Where section 178A cannot be invoked and where the person against whom the order is passed contends that he was in possession of the goods as a result of a bona fide purchase by him and that the goods were not smuggled goods, it would be the customs authorities who would have to prove that the goods were imported after the restrictions against import were imposed." Reliance was also placed on the decision of the Punjab and Haryana High Court in Ramesh Chander v. CIT [1974] 93 ITR 244 arising under section 132 of the Income-tax Act, 1961. In that case, certain currency carried by a person was recovered by the police. The police found that the person had not committed any offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a doubt that an officer who does not have any reason, in praesenti, to believe that documents are secreted in a place or conveyance, cannot direct search of a place or conveyance. The fact that several years ago, such officer had a reason to believe that some documents were secreted in such place or conveyance may not be sufficient to effect a search unless he had a reason to believe, immediately before effecting a search, that documents are secreted in the place or conveyance to be searched. On the other hand, section 38 is differently worded. Under section 38, the time of formation of the belief may not be relevant in all circumstances. Under sections 36 and 37, having reason to believe that documents which are relevant being secreted, is the basis for the search and consequential seizure. Section 38, on the other hand, does not deal with search nor concerned with any document being "secreted". Section 38 comes into play where the authorised officer is aware of the existence of the document or thing. All that is required for seizure is reason to believe that such document or thing will be useful for or relevant to any investigation or proceeding under the Act or in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nection with any investigation under the FERA or that the things seized were the subject matter of contravention of the provisions of the FERA were the very reasons which existed earlier on February 20, 1986. The seizure on April 4, 1989 was made not on account of any fresh contravention of the Act nor in connection with any fresh investigation, but on account of the very same contravention for which it was seized on February 20, 1986. The seizure on April 4, 1989, became necessary on account of this court finding that the seizure on February 20, 1986, suffered from a technical defect and this court permitting the department to take fresh steps. The seizure on April 4, 1989, is nothing but an action taken in pursuance of the Act, for doing which, express permission was given by this court while disposing of the earlier case. In the mahazar dated April 4, 1989, it is recorded that the first respondent had reasonable belief that there existed a contravention of the provisions of the FERA in regard to the Indian currency and the documents seized. Hence, the seizure under mahazar, dated April 4, 1989, is in accordance with section 38 of the FERA. Hence, the contention of the petitioner ..... 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