Page 155 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] OM SAI TRADING COMPANY v. UNION OF INDIA 545

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 judgment 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 rec-
ord. In fact, one of the Experts opined the product to be unfit on the basis of sus-
picion. 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 merits.
18. The consignor and the consignee are recorded and are identified.
The goods are not seized at any notified custom zone or area. Save and except for
what is recorded in the seizure memo, there is no other material available on rec-
ord. The Learned Additional Solicitor General has tried to supplement the rea-
sons for formation of ‘reason to believe’, which also are on mere suspicion,
through the affidavit of the authority. In the light of what is laid down by the
Apex Court in Mohinder Singh Gill and Another v. The Chief Election Commissioner,
New Delhi and Others, AIR 1978 SC 851, it would be impermissible for the authori-
ty to do so. When a statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so mentioned and cannot be
supplemented by fresh reasons in the shape of an affidavit or otherwise, for a
bad order, with the passage of time, and supplementing the reasons would be-
come good, which is not how the authorities are required to function, more so, in
a case of confiscatory legislation. But assuming hypothetically, accepting the rea-
sons furnished by the officer, even then it is nothing more than a mere suspicion.
A general practice in trade cannot be, ipso facto, applied and adopted to the in-
stant 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.
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.
EXCISE LAW TIMES  15th May 2020  155