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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.
19. Public orders made by authorities are meant to have public effect
and must be construed objectively with reference to the language used in the or-
der itself.
20. While dealing with the same very provision, Rohinton Fali Nariman
J., in Tata Chemicals Limited v. Commissioner of Customs (Preventive), Jamnagar,
(2015) 11 SCC 628 = 2015 (320) E.L.T. 45 (S.C.), has explained the meaning of
“reason to believe” by opining it to be not the subjective satisfaction of the officer
concerned, for “such power given to the officer concerned is not an arbitrary
power and has to be exercised in accordance with the restraints imposed by law”
and that such belief must be that of an honest and reasonable person based upon
reasonable grounds. Further, if the authority would be acting without jurisdic-
tion or there is no existence of any material or conditions leading to the belief, it
would be open for the Court to examine the same, though sufficiency of the rea-
sons for the belief cannot be investigated.
21. In Assistant Collector of Customs v. Charan Das Malhotra, (1971) 1 SCC
697 = 1983 (13) E.L.T. 1477 (S.C.), Shelat J., has held reasonable believe to be rele-
vant and not extraneous.
22. In Kewal Krishan v. State of Punjab, AIR 1967 SC 737 = 1993 (67)
E.L.T. 17 (S.C.), 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 = 2008
(228) E.L.T. 8 (S.C.), 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 v. Competent Authority and
others, (2008) 14 SCC 186, 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. Further “It is
now a trite law that whenever a statute provides for “reason to believe ”, either the rea-
sons should appear on the face of the notice or they must be available on the materials
which had been placed before him.”
25. In the Bar Council of Maharashtra v. M.V. Dabholkar and others, (1976)
2 SCC 291, Krishna Iyer J., has observed that ‘reason to believe’ cannot be con-
verted into a formalised procedural roadblock, it being essentially a barrier
against frivolous enquiries.
26. In dealing with the provision of the Income-tax Act, where one in-
variably finds the expression ‘reason to believe’, the Apex Court in S. Narayanap-
pa and others v. The Commissioner of Income-tax, Bangalore, AIR 1967 SC 523 has
held such expression not to mean a purely subjective satisfaction but to be one
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