TMI Blog2014 (12) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... perties specified in the show cause notice are not illegally acquired properties is placed upon the person concerned. For this reason also, the SAFEMA does not prescribe any time-limit for issuance of show cause notice u/s 6(1). Whether the competent authority had “reasons to believe” that the properties of the original petitioners are “illegally acquired properties” under the definition of SAFEMA - Held that:- Section 6(1) of the SAFEMA provides that the competent authority is empowered to serve a notice of forfeiture upon such person whom it has reason to believe that all or any of the properties of such person is illegally acquired. The condition precedent for issuing a notice u/s 6(1) is that the authority should have reason to believe that all or any of such properties are illegally acquired properties and the reasons for such belief have to be recorded in writing. The language of the section does not show that there is any requirement of mentioning any link between the detenue and property ostensibly standing in the name of the person to whom the notice has been issued. Section 8 of SAFEMA states that the burden of proving that any properties specified in the notice u/s 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order dated 25-7-2002 passed by the learned single Judge in Special Civil Applications No. 11079/2000 and 11080/2000. By the impugned judgment, the learned single Judge allowed the two petitions and set aside the Notices dated 8-8-2000 issued to the respondents herein, original petitioners, u/s. 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short, the SAFEMA ) by the competent authority under SAFEMA. 2. The facts in brief are that the respondents herein, original petitioners, are husband and wife. The original petitioner of S.C.A. No. 11079/2000, respondent No. 1 in L.P.A. No. 1053/2003 (who shall hereinafter be referred to as AP-1, Affected Party No. 1 ) was detained by the competent authority, vide order dated 21-7-1982 passed by the State Government, under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (for short, the COFEPOSA ). The order of detention was revoked by the State Government on 18-10-1982. However, AP-1 was again detained by a fresh order of detention under COFEPOSA passed on that very day, i.e. on 18-10-1982. Ultimately, he was released from detention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enging the order passed u/s 7 of the SAFEMA by filing appeal before the Appellate Tribunal constituted under the said Act. He submitted that in a catena of decisions, the Apex Court has held that when a statutory forum is created by law for redressal of grievances, writ petition should not be entertained ignoring said statutory dispensation. 4.1 Learned counsel Mr. Desai submitted that the High Court should not entertain a petition under Article 226 of the Constitution of India if an effective alternative action complained of has been taken. He submitted that when a statutory forum has been created by law for redressal of grievance, writ petition should not be entertained, ignoring the statutory dispensation. He submitted that the High Court generally does not enter into a question which demands an elaborate examination of evidence to establish the right, to enforce which, the writ is claimed. The High Court, therefore, does not act as a Court of Record against the decision of a Court or a Tribunal to correct errors of fact and does not, by assuming the jurisdiction under Article 226 of the Constitution of India, trench upon an alternative remedy provided by the Statute for obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecretary, Ministry of Defence and Others v. Prabhashchandra Mirdha, (2012) 11 SCC 565. m. Trade Tax Officer, Saharanpur v. Royal Trading Company, (2005) 11 SCC 518. n. Jalaram Corporation v. State of Gujarat and Others, 1996 (3) GCD 445 (Gujarat). 6. Learned counsel Mr. Desai further submitted that the decision in State of Gujarat v. Patel Raghavnath, (1969) 2 SCC 187, relied upon by learned senior counsel Mr. B.B. Naik appearing on behalf of respondent, original petitioner, wherein, the view has been taken that proceedings have to be initiated within a reasonable time, would not apply to the case on hand since the said judgment is in respect of the provisions of Section 65 of the Bombay Land Revenue Code. 6.1 Learned counsel Mr. Desai drew our attention to the decisions rendered in M/s. Yashkamal Builders, Baroda v. State of Gujarat, 1989 (1) GLR 382 and Niranjanbhai Bhagwanbhai Patel and Others v. State of Gujarat, Through Secretary and Others, 2005 (2) GLR 1493 wherein, the view has been taken that powers u/s 65 of the Bombay Land Revenue Code are administrative in nature and that they are not even quasi-judicial. He, therefore, submitted that the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Orissa and Others, (1983) 2 SCC 433. c. Commissioner of Income-Tax and Others v. Chhabil Dass Agarwal, (2014) 1 SCC 603. 11. Learned counsel Mr. Desai lastly submitted that the records available with the competent authority showed that the original petitioner had entered into a cash transaction regarding a property which was not registered. Therefore, notice as contemplated under the SAFEMA was issued to the original petitioner. However, the learned single Judge set aside the notice without appreciating the fact that it was the duty of the purchaser to disclose the source of income behind the cash transaction. The learned single Judge lost sight of the provisions of the Finance Act, 1973 where the tax limit has been fixed at ₹ 15,000/. The property was purchased for more than ₹ 30,000/ through the power of attorney, who was the original petitioner-husband, which has subsequently, gone in the hands of the other original petitioner-wife. 12. Learned counsel Mr. Desai, therefore, submitted that the learned single Judge committed serious error in entertaining the writ petitions filed by the original petitioners and in quashing and setting aside the notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e action of issuance of notice itself is a malice in law and arbitrary. He, therefore, submitted that the learned single Judge was completely justified in setting aside the notices by exercising writ jurisdiction under Article 226 of the Constitution of India. 14.4 In support of his submissions, learned Senior Advocate Mr. Naik has placed reliance upon the following decisions : a. Calcutta Discount Co. Ltd. v. Income-tax Officer, Companies District I, Calcutta and Another, AIR 1961 SC 372. b. Chhanalal A. Patel, President, District Local Board, Mehsana v. State of Gujarat, AIR 1961 Gujarat 27. c. Ram Chand and Others v. Union of India and Others, (1994) 1 SCC 44. d. Mohamad Kavi Mohamad Amin v. Fatmabai Ibrahim, (1997) 6 SCC 71. e. Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others, (1998) 8 SCC 1. f. Fatima Mohd. Amin (Smt) (Dead) Through LRS v. Union of India and Another, (2003) 7 SCC 436. g. P.P. Abdulla and Another v. Competent Authority and Others, (2007) 2 SCC 510 = 2007 (207) E.L.T. 163 (S.C.). h. State of Punjab and Others v. Bhatinda District Cooperative Milk Producers Union Limited, (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SAFEMA. No appeal was filed by the aggrieved party within the stipulated period and therefore, possession of the immovable properties was taken over by the office of the competent authority 3-8-2000 and 6-8-2000. 18. It appears that, subsequently, the competent authority issued the impugned show cause notices dated 8-8-2000 u/s 6(1) of the SAFEMA in respect of the following two properties : A. Agricultural land bearing survey Nos. 646 870 (paikees), ad measuring 10 acres 34 gunthas and 7 acres 1 gunthas respectively, held by AP-2. The said lands were entered in the revenue records on 2-7-1983. B. Residential property being House No. 3486B at City Survey Ward No. 3, Nr. Om Plaza Building, Opp. Shriram Petroleum, Lal Tekri, Jyesthanagar, Bhuj ad measuring 185.94 sq. metres, which was also purchased in the year 1983. The said property stood in the name of Smt. Jayshree Mithu Bawa Padhiyar, who was also cited as wife of AP-1. However, subsequently, it was found that both AP-2 and said Smt. Jayshree Mithu Bawa Padhiyar are one and the same individual. 19. One of the main reasons that weighed with the learned single Judge was that the aforementioned two properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the petitions was not disclosed even after enquiries by the competent authorities and once it came to the knowledge of the competent authority, the impugned notice was issued. 22. Apart from that the proceedings are at the notice stage only. If the said two properties are acquired out of white money, then the competent authority would pass appropriate orders in that regard. However, considering the past record and criminal antecedents of the original petitioners and when different immovable and movable properties of the original petitioner have already been forfeited in the earlier proceedings arising out of notice dated 26-6-1986, we believe that the original petitioners should be put to the test of scrutiny, as it would also grant them the opportunity to come out with clean hands. 23. Further, the proceedings are at notice stage only. The learned single Judge set aside the impugned notices mainly on the ground that it was issued at a very belated stage. In our opinion, once the show cause notice was issued, the learned single Judge could have directed the original petitioners to respond to the same and dispose of the writ petitions reserving liberty to them to take r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal petitioners are illegally acquired properties under the definition of SAFEMA. Section 6(1) of the SAFEMA provides that the competent authority is empowered to serve a notice of forfeiture upon such person whom it has reason to believe that all or any of the properties of such person is illegally acquired. The condition precedent for issuing a notice u/s 6(1) is that the authority should have reason to believe that all or any of such properties are illegally acquired properties and the reasons for such belief have to be recorded in writing. The language of the section does not show that there is any requirement of mentioning any link between the detenue and property ostensibly standing in the name of the person to whom the notice has been issued. Section 8 of SAFEMA states that the burden of proving that any properties specified in the notice u/s 6 is not illegally acquired property shall be on the person affected. 25.1 In order to examine whether the notice issued by the competent authority satisfies the requirement of Section 6, it is necessary to reproduce relevant portion of the same, which reads as under : .... 5. Whereas investigation revealed that the AP-2 hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce of income. They were not income tax assessees. In spite of that the properties stood in their name and also in the revenue records. 25.4 Considering the antecedents of AP-1 and his criminal record and when AP-2, who is the wife of AP-1, was found to be having no ostensible source of income and also not an income tax assessee, the impugned notice u/s 6(1) cannot be said to have been issued without arriving at a subjective satisfaction regarding the alleged financial manipulation. 26. The learned single Judge, by placing heavy reliance upon the decision of Apex Court in Whirlpool Corporation case (supra), held that the proceedings were initiated in violation of the principles of natural justice and that the competent authority had assumed the jurisdiction again, though similar proceedings were already initiated by the very authority before several years, which had concluded much prior to the issuance of second/third show cause notice in the month of August, 2000. We disagree with the conclusion arrived at by the learned single Judge for the reason that we do not find the present case to be falling under any of the contingencies listed in Whirlpool Corporation s case (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... native remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 16. In the instant case, the Act provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram and Shyam Co. v. State of Haryana, this Court has noticed that if an appeal is from Caesar to Caesar s wife the existence of alternative remedy would be a mirage and an exercise in futility. 28. The SAFEMA provides a complete machinery for redressal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e points were not argued before the learned single Judge and that additional documents are sought to be produced for the first time before this Bench, which should not be permitted. 30.1 In response to the same, Mr. Desai has submitted that what is submitted by way of an additional affidavit are mere dates and details along with documents of the very case and as such is a detailed list of dates and events and therefore, there is no bar to look into the same at the appellate stage as, ultimately, what is brought to the notice of this Court is the details regarding the proceedings and that no prejudice can be said to have been caused to the original petitioners, instead, it ought to have been pointed out by the original petitioners. 30.2 The decision rendered in Aslam Mohammad Merchant s case (supra), relied upon by learned senior counsel Mr. Naik, would not apply to the case on hand since we do not find the impugned show cause notice dated 8-8-2000 to be illegal or without jurisdiction. 31. In view of the above discussion, both the appeals are allowed. The impugned judgment and order passed by the learned single Judge is quashed and set aside. Both the original petitioners- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
