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TMI Blog2019 (12) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... pplement the reasons for formation of reason to believe , which also are on mere suspicion, through the affidavit of the authority - A general practice in trade cannot be, ipso facto, applied and adopted to the instant case, for unless it is shown that the act and the conduct of the petitioner makes him to be a part and parcel of the trading community, based in the area or dealing with the illegal activities of such like nature. There is no track record of past history of the instant petitioners. While dealing with the expression reason to believe in relation to another confiscatory statute, i.e. Narcotic Drugs and Psychotropic Substances Act, 1985, S. B. Sinha J., in Aslam Mohammad Merchant Versus Competent Authority and others, (2008) 14 SCC 186 [ 2008 (7) TMI 852 - SUPREME COURT] , opined that proper application of mind on the part of the competent authority is imperative prior to issuance of a show cause notice, intending to confiscate the goods. Also there has to be some material leading to formation of some opinion or reason to believe for such action cannot be taken on mere ipse dixit and roving enquiry is not contemplated in law - In the Bar Council of Maharashtra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will render such goods liable to confiscation under section 111 or section 113. 5. Chapter IV of the Act empowers the Central Government to prohibit importation and exportation of any goods and Chapter IV-A and IV-B deal with the detection of illegally imported goods and prevention of the disposal thereof. 6. Section 111 defines the category of goods brought from a place outside India liable to be confiscated. 7. We are dealing with a case where betel nuts having its origin from a country other than India, are prohibited to be imported in India, and as such by virtue of Section 111, liable to be confiscated, i.e. the meaning of the expression liable to confiscation . But what is important and a condition precedent, sine qua non, is the belief of the officer seizing the goods of forming an opinion in terms of the statutory expression reason to believe of such goods being liable to confiscation. 8. In the instant case, goods having description cut dried Areca Nuts (dark pink in colour) weighing 15,865 Kgs of a total estimated value of ₹ 45,14,862/- along with the vehicle were seized by the Inspector-cum- S.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same set of facts, dismissed the writ petition holding that there was a report of the laboratory indicating the goods to be not fit for human consumption; that investigation would reveal as to whether the goods were liable for confiscation or not and that there are Circulars and Memorandum issued by the Government. 17. At this stage, we may point out that the endeavour of the learned Single Judge in distinguishing the judgement in M/s Ayesha Exports (supra), in relation to which SLP also stood dismissed, was adventurous, not maintaining comity of judicial consistency. (See: Sundarjas Kanyalal Bhathija and others v. The Collector, Thane, Maharashtra and others AIR 1990 SC 261). We find the learned Single Judge to have misconstrued and not fully appreciated the material on record. In fact, one of the Experts opined the product to be unfit on the basis of suspicion. We may notice that the goods were seized in February, 2019 and despite passage of 10 months, the investigation has not revealed the reasons of detention to be fortified in any manner. It is in this backdrop, holding the learned Single Judge to have committed a grave error, we proceed to hear the appeals on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence of any material or conditions leading to the belief, it would be open for the Court to examine the same, though sufficiency of the reasons for the belief cannot be investigated. 21. In Assistant Collector of Customs Verus Charan Das Malhotra, 1971 (1) SCC 697, Shelat J., has held reasonable believe to be relevant and not extraneous. 22. In Kewal Krishan Vs. State of Punjab, AIR 1967 SC 737, Kapur J., while dealing with identical provisions has clarified that confiscatory power based on reason to believe has to be exercised only on the satisfaction based on certain objective material. 23. Earlier in Hukma v. The State of Rajasthan, AIR 1965 SC 476, Das Gupta J., clearly opined that burden of proof postulated upon the private party is based on the existence of the satisfaction of reason to believe . 24. While dealing with the expression reason to believe in relation to another confiscatory statute, i.e. Narcotic Drugs and Psychotropic Substances Act, 1985, S. B. Sinha J., in Aslam Mohammad Merchant Versus Competent Authority and others, (2008) 14 SCC 186, opined that proper application of mind on the part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he existence of reasons for holding such belief. It contemplates existence of reasons on which the belief is founded, and not merely a belief in the existence of reasons inducing the belief; in other words, the Income Tax Officer must on information at his disposal believe that income has been under-assessed by reason of failure fully and truly to disclose all material facts necessary for assessment. Such a belief, be it said, may not be based on mere suspicion: it must be founded upon information. (Emphasis supplied) 28. The view stands reiterated in Income-Tax Officer I Ward, District VI, Calcutta and others Versus Lakhmani Mewal Das, (1976) 3 SCC 757. 29. In Bhikhubhai Vithlabhai Patel and others versus State of Gujarat and another, (2008) 4 SCC 144, while dealing with yet another legislation, i.e. Gujarat Town Planning and Urban Development Act, the Court reiterated that there is nothing like absolute or unfettered discretion and at any rate in the case of expression of a statutory powers. With approval it reiterated the following passage expressed and explained by Prof. Sir William Wade in Administrative Law (9th Edn.) in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mentioned in the statute. The grounds must be made out on the basis of the relevant material. If the existence of the conditions required for the exercise of the power is challenged, the courts are entitled to examine whether those conditions existed when the order was made. A person aggrieved by such action can question the satisfaction by showing that it was wholly based on irrelevant grounds and hence amounted to no satisfaction at all. In other words, the existence of the circumstances in question is open to judicial review. 31. The reason to believe as held in Sheo Nath Singh v. CIT, (1972) 3 SCC 234, cannot be basis on mere suspicion, gossip or rumour though belief on an honest basis and on reasonable grounds and the officer may act on direct or circumstantial evidence. However, if the officer were to act without any material or irrelevant, extraneous material, it would constitute an act without jurisdiction. 32. Sabayasachi Mukharji J., in Indru Ramchand Bharvani ors. v. Union of India Ors. (1988) 4 SCC 1, has clarified that the expression reasonable belief has to be adjudged from the perspective of a person having an experienced ey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to India. The driver could not produce any documents regarding importation of said Dried Areca Nuts. The truck along with the loaded goods (cut dried Areca Nuts) were detained by the Customs Officer. (Emphasis supplied) 36. The customs authorities sent the samples for analysis to two laboratories. The Expert as per the report used the word suspect . Based thereupon, petitioners request for release of the seized goods was rejected vide communication dated 2nd of April, 2019. However, vide order dated 9th April, 2019, the vehicle in question was released. 37. Perusing the impugned judgement, we find the Single Judge to have heavily relied upon the contents of the affidavit filed by the Revenue, wherein it stood averred that the Areca Nuts of Indian origin are normally oval in shape and it is this which made the Customs Officer forms a reasonable belief that cut dried Areca were illegally smuggled into India. As we have already observed that supplementation of reasons is impermissible in law, more so in the attending facts. 38. Record reveals that the writ petitioners had, in fact, placed on record, copies of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Circular No.3 of 2011 purportedly issued under the provisions of the Prevention of Food Adulteration Act, 1954, does not even deal with the issue in question. Firstly, the Prevention of Food Adulteration Act or its guidelines/Rules does not authorise the Customs Officer to issue any circular or take appropriate action under the provisions of the said Act. The Customs Officers are also not empowered or authorized under the said Act or the Rules framed thereunder. Even the Food Safety and Standards Act, 2006 does not empower the officers to take any appropriate action under the said provisions. Secondly, the said Circular does not deal with the product in question. It be only observed that there is no live link or tell a tale sign of the product being of a foreign origin or having passed through a territory other than India, much less Nepal. 43. Who were those customs officers who informed the seized nuts not to be of Indian origin, as recorded in the Panchnama, is embedded only in the mind of the officer and despite a period of 10 months, has not surfaced on the record. In any event, were they experts in the field, judging the Areca Nuts not to be of Indian origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njurious to health and such product complying with the Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011 which view stands affirmed by co-ordinate bench of this Court in LPA No.1186 of 2018, titled as The Union of India Ors. Vs. Salsar Transport Company Anr. decided on 25.11.2013. 49. We find no reason to take a contrary view, more so, when the goods in question are yet raw, as an unfinished product, meant to be transported to another State for it to be processed and packaged, whereafter, only, eventually sold in an open market and if the goods are actually unsafe food then it is not the provision of the Customs Act which can be invoked, for not falling within its purview. 50. Thus, in view of our aforesaid discussions, we set aside the judgement dated 05.09.2019 passed in CWJC No.10109 of 2019 titled as M/s. Om Sai Trading Company anr. Versus the Union of India Ors. by a learned Single Judge of this Court and allow the writ petitioners prayer of quashing the seizure memo dated 6th of February, 2019, as also all consequential actions seizing the goods and vehicle in question, for such action to be without any b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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