Page 233 - ELT_15th July 2020_Vol 373_Part 2

2020 ] FIROZ ALAM v. UNION OF INDIA 215

Tax Officer (AIR 1961 Supreme Court, 372), a case under Section 34 of the
Income Tax Act, 1922 corresponding to Section 147(a) of the Income Tax
Act, 1961, the Apex Court held :
“The expression ‘reason to believe’ postulates belief and the existence
of reason for that belief. The belief must be held in good faith; it cannot be
merely a pretence. The expression does not (sic) purely subjective satisfac-
tion of the Income Tax Officer.”
In Sheonath Singh v. Appellate Assistant Commissioner of Income Tax
(Central) Calcutta (AIR 1971 Supreme Court 2451) it was held that the words
“reason to believe” suggest that the belief must be of an honest and reason-
able person based upon reasonable grounds and the officer may act or di-
rect or circumstantial evidence but not on mere suspicion, gossip or ru-
mour. It was further held that if the officer concerned acts on material
which is relevant then he acts without jurisdiction.”
19. Learned Counsel for the petitioner has raised further contention
that the impugned adjudicatory order dated 22-11-2013, contained in Annexure-1
to the interlocutory application, would also not be sustained as the adjudicating
authority, being the Assistant Commissioner, is also the same authority, who
issued the show cause notice to the petitioner.
20. This Court finds after a perusal of Annexure-4 and also the adjudi-
catory order that the Assistant Commissioner, Customs has issued the show
cause notice and has passed the order of adjudication, which is clearly contrary
to the settled principle of law that “No man can be a judge in his own cause”.
Thus, on this ground alone also the adjudicatory order stands vitiated and is fit
to be set aside. Moreover, the discussions and the findings, which have been
dealt with by the concerned officers, on the basis of the presumption and evi-
dences and the statement of persons recorded, are those persons who have never
been named in the show cause notice and cannot be admissible under the Evi-
dence Act.
21. Learned Counsel for the petitioner further submitted that the peti-
tioner cannot be subjected to the alternative remedy of appeal, as has been con-
tended by the respondents, as the orders passed by the authorities are wholly in
violation of the principles of natural justice and are also without jurisdiction as
they have not been able to prove and satisfy the test of reasonable belief and all
actions have been initiated on the basis of the presumption rather than actuali-
ties.
22. Under such facts and circumstances, the principles, which have
been stated in the case of Whirlpool Corporation v. Registrar of Trade Marks, report-
ed in (1998) 8 SCC 1, would hold good and the petitioner can well avail the rem-
edy under Article 226 of the Constitution.
23. Learned Counsel for the petitioner has also drawn the attention of
this Court to a decision of this Court in the case of Yogendra Prasad v. Union of
India, reported in 2004 (4) PLJR 675, wherein this Court has held that the allega-
tion against the petitioner that he was a habitual offender cannot be sustained
and the seizure cannot be justified referring to the fact of the earlier case. In the
said case at paragraph 6, it has been held as follows :
“6. On behalf of the petitioner it is alleged that the customs officials
were bent upon harassing him; his goods, duly imported into the country
on payment of customs duties and after observing all the legal formalities,

EXCISE LAW TIMES  15th July 2020  233