2016 (4) TMI 96 - HC - Customs

Forfeiture of property under SAFEMA - Properties acquired illegally and non filing of income tax returns - Non production of evidence to prove his business activities so as to justify the income and purchasing of properties - Petitioner had issued show-cause notice under Section 6 of the SAFEMA calling upon the respondent to explain the source of income - Held that - there is no substance on a ground that the petitioner has taken so many factual and legal grounds so as to make an attempt to prove that show-cause notice was valid and proper as the law is well settled as interpreted and decided by the Honourable Supreme Court. Also it is difficult to believe that it would be difficult to get direct evidence to control grave offence and, therefore, burden of proof rests upon respondents to prove that what is pleaded by the authority is not correct rather than to ask the authority to prove that what is pleaded by them is correct fact. Petitioner has gone to the extent of challenging the impugned order by describing it as a non speaking order when it is pleaded that the Appellate Tribunal has neither considered the issue raised by the petitioner nor discussed the fact of the case. It is very much clear that the factual details are well discussed in such judgment and all issues are properly dealt with and answered by the Appellate Tribunal with reasonings and citations of relevant cases. Therefore, there is no substance in the petition when it is trying to misguide the judicial proceedings. Petitioner has disclosed relevant provisions of different Acts and few judgments and tried to emphasize that once the facts specified under the particular sections are established, then there may be statutory presumption of guilt which follows the punishment unless contrary is proved by the affected person. Thereby an attempt was made to submit that nexus is implicit and is not required to be established in such proceedings under the special act, wherein reverse burden is imposed upon the person against whom the action is initiated by the competent authority. Also the petitioner has tried to emphasize that the judgment in case of Fatima Mohammed Amin vs. Union of India 2003 (1) TMI 657 - SUPREME COURT is not a good judgment and that the Hon ble Supreme Court has not interpreted the judgment of Constitution Bench properly. If it is so, first of all it would be necessary for the petitioner to approach the Hon ble Supreme Court to rectify its interpretation but in absence of any such exercise, this Court has to rely upon the Hon ble Supreme Court s judgment in case of Fatima (supra). Even decision in case of Kesar Devi vs. Union of India reported in 2003 (7) TMI 650 - SUPREME COURT is also confirming the same view taken in the case of Fatima (supra) and, therefore, when two judgments of the Hon ble Supreme Court are conclusive in its findings, an attempt of the petitioner herein to allege that the interpretation of previous judgment in these two judgments is not proper, cannot be upheld. It cannot be ignored that this petition is filed under Article 227 of the Constitution of India, where the Court has to verify the limited issue that whether proper care has been taken by the authority in passing impugned order or not. Thereby only because petitioner is not comfortable with some of the judgments of the Honourable Supreme Court then they have to prefer petitions against such order, unless and until they get the Supreme Court judgments reversed by the Honourable Supreme Court itself, this Court cannot uphold their pleadings and submissions which are contrary to the decisions of the Honourable Supreme Court. - Decided against the petitioner

Summary

Issues:
1. Validity of show-cause notice under SAFEMA
2. Forfeiture of properties under SAFEMA
3. Nexus between detenue and properties
4. Interpretation of judgments by appellate authority
5. Burden of proof in special acts

Analysis:

Validity of show-cause notice under SAFEMA:
The petitioner, acting as the competent authority under SAFEMA, issued a show-cause notice to the respondent, calling for an explanation regarding the source of income for properties allegedly acquired illegally. The respondent, despite opportunities, failed to provide evidence justifying the acquisition of properties. The petitioner subsequently passed an order of forfeiture, which was challenged by the respondent in an appeal before the Appellate Tribunal.

Forfeiture of properties under SAFEMA:
The Appellate Tribunal, in a consolidated order for two appeals, quashed the show-cause notice and order of forfeiture. The tribunal found that the properties were independently acquired by the respondent, not traceable to the detenue, and legally reflected in income tax and wealth tax returns. The tribunal emphasized the lack of nexus between the detenue and the respondent's properties, leading to the appeal being allowed, and the show-cause notice being set aside.

Nexus between detenue and properties:
The appellate authority highlighted the absence of evidence linking the properties to the detenue's illegal earnings. It noted that the properties were acquired through registered sale deeds, with proper documentation and reflected in financial records. The authority rejected the petitioner's claim of illegal acquisition, emphasizing the legitimate sources of income and the lack of connection to the detenue's activities.

Interpretation of judgments by appellate authority:
The appellate authority relied on previous Supreme Court decisions to support its findings, emphasizing the need for a clear nexus between properties and illegal activities of the detenue. It criticized the competent authority for failing to consider documentary evidence proving the legitimate acquisition of properties by the respondent, leading to the quashing of the show-cause notice.

Burden of proof in special acts:
The petitioner attempted to argue for a statutory presumption of guilt under special acts like SAFEMA, shifting the burden of proof onto the affected person. However, the court dismissed these arguments, emphasizing the need for proper care in passing orders and adherence to established legal interpretations by the Supreme Court. The court highlighted the limited scope of review under Article 227 of the Constitution and upheld the appellate authority's decision to set aside the show-cause notice.

In conclusion, the court found no merit in the petitioner's arguments and dismissed the petition, affirming the decision of the Appellate Tribunal to quash the show-cause notice and order of forfeiture under SAFEMA.