TMI Blog1998 (6) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that it is difficult for him to prove that he acquired the properties out of his own income, as he did not maintain accounts relating to his business in synthetic stones and that he had earnings while he worked in Sri Lanka and Hong Kong. After giving sufficient opportunity to the appellant for filing the documents on which he sought to rely and after going through his contentions, the competent authority directed the forfeiture of the properties, holding that, the appellant had failed to substantiate his contention that the properties were not illegally acquired properties and that the nexus between the appellant and his detenue brother was established. The appeal was heard on May 8, 1998, during the sittings of the Tribunal at Bangalore and learned counsel for the appellant made submissions on the various contentions which were raised in the appeal. Shri Baba Prasad, Deputy Director, appearing for the competent authority made his submissions with regard to the contention raised by the appellant. He requested permission to file written arguments and he was accordingly permitted to do so. Learned counsel for the appellant sought permission to place the relevant income-tax files ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is the brother of Abdul Azeez, who was detained under the COFEPOSA. The reference to the unlawful activities and the acquisition of the properties by illegally earned income by the appellant in the said reasons recorded, are referable to the activity of receiving illegally earned income, which is an unlawful activity and the acquisition of the properties by utilising such income. Admittedly, the appellant is the brother of Abdul Azeez who was detained under the COFEPOSA and as such is a person within the meaning of section 2(2)(c) and the provisions of the SAFEMA are applicable to him. The question which falls for consideration is, whether the properties which were forfeited fall within the meaning of illegally acquired property as defined by section 3(1)(c). The constitutional validity of various provisions of the SAFEMA were examined by the Supreme Court in Attorney-General for India v. Amratlal Prajivandas [1995] 83 Comp Cas 804 ; AIR 1994 SC 2179. It was observed that the definition of illegally acquired properties in clause (c) of section 3(1) is quite wide and that it takes into its sweep not only the property acquired after the Act but also the property acquired b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the notice served under section 6 is not illegally acquired property shall be on the person affected. It is clear that the burden of proving that any property specified in the notice served under section 6 is not illegally acquired property is on the person affected. While referring to this provision, the Supreme Court in the decision referred to above observed in paragraph 42 (page 840 of [1995] 83 Comp Cas) : The violation of foreign exchange laws and laws relating to export and import necessarily involves violation of the tax laws. Indeed, it is a well-known fact that over the last few decades, smuggling, foreign exchange violations, tax evasion, drugs and crimes have all got mixed-up. Evasion of taxes is integral to such activity. It would be difficult for any authority to say, in the absence of any accounts or other relevant material among the properties acquired by a smuggler, which of them or which portions of them are attributable to smuggling and foreign exchange violations and which properties or which portions thereof are attributable to violation of other laws (which Parliament has the power to make). It is probably for this reason that the burden of proving tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n merits, the affected person was unable to even explain or prove the sources of Rs. 49,989 which was claimed to be available with the affected person before acquiring any property at all. Hence, the onus cast on the affected person by law was not discharged by him. Therefore, the competent authority was justified in concluding that the money utilised for various investments has actually come from the illegal activities of the detenu. We are unable to accept the contention of learned counsel that there was no application of mind by the competent authority before issuing the notice under section 6(1). It was clearly mentioned in the reasons recorded, that the appellant is the brother of the detenu, Abdul Azeez, and that he has illegally acquired the properties which were sought to be forfeited. The reasons given by the competent authority for proceeding further are relevant and hence we do not find any substance in this contention. We are also unable to agree with the contention that the continuation of the proceedings under section 2(2)(c) is illegal. The very fact that the appellant is the brother of the detenu was mentioned in the reasons recorded on September 23, 1988, attracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation in the present case. We are, therefore, unable to agree with the contention that the proceedings are vitiated by laches. The burden of proving that the property in the possession of a relative/associate is not illegally acquired, is placed upon the affected person. If the affected person is unable to discharge that burden, the very fact that the affected person is either the relative/associate is sufficient to hold that the nexus between the detenu/convicted person and the relative/associate is established. Based on the law laid down by the Supreme Court in Attorney-General for India v. Amratlal Prajivandas [1995] 83 Comp Cas 804, this view of ours finds full support. We are, therefore, to examine and to see whether the appellant could discharge the burden cast upon him to prove that the forfeited properties are not illegally acquired properties and whether he has established that the said properties have not been acquired with the monies or assets provided by the detenu/convict or they in fact did not or do not belong to the detenu, as laid down by the Supreme Court in paragraph 51 of the said judgment. There is no dispute with the proposition laid down in several decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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