1999 (9) TMI 911 - AT - FEMA

Dismissed appeal under SAFEMA due to time bar; Competent Authority's illegal corrigendum set aside.

Smt. Usha Hemant Barot Versus Competent Authority

Smt. Usha Hemant Barot Versus Competent Authority - [2000] 241 ITR (A. T.) 37 Issues:1. Appeal against order of forfeiture under SAFEMA2. Barred appeal by limitation3. Service of notices and orders under SAFEMA4. Validity of affixture of orders5. Rectification of mistakes in the orderAnalysis:1. Appeal against order of forfeiture under SAFEMA:The appellants filed an appeal against the order of the Competent Authority forfeiting their properties under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. The Competent Authority found that the properties were acquired from unexplained sources of income traceable to illegal activities. The appellants contended that the properties were not illegally acquired, but failed to produce documentary evidence in support of their claim.2. Barred appeal by limitation:The appeal was presented beyond the prescribed time limit, leading to a contention by the Deputy Director that the appeal was barred by limitation. The appellants were directed to file an affidavit to address this issue. The order under appeal was passed on March 31, 1998, while the appeal was presented on July 28, 1998. The Deputy Director argued that the appeal was served through affixture due to unclaimed registered posts, making it time-barred.3. Service of notices and orders under SAFEMA:The Competent Authority served notices and orders to the appellants as required by section 22 of SAFEMA. The affixture of orders was done at the addresses where the appellants were served with notices. The Competent Authority was justified in serving the orders by affixture at the permanent addresses of the appellants as per the law.4. Validity of affixture of orders:The contention that the affixture of orders was improper due to lack of a valid panchanama was dismissed. The panchas affixed their signatures after the affixture of orders, fulfilling the requirements of section 22. The orders were properly served on the appellants through affixture, complying with the legal provisions.5. Rectification of mistakes in the order:The corrigendum issued by the Competent Authority on May 18, 1998, making material changes to the description of properties, was found to be illegal. The Competent Authority failed to afford the appellants an opportunity to show cause before making such significant rectifications. The corrigendum violated the proviso to section 20 of SAFEMA, which mandates giving a reasonable opportunity of being heard before making amendments affecting a party. Consequently, the corrigendum was set aside, and the Competent Authority was directed to take lawful steps for rectification within the legal framework.In conclusion, the appeal was dismissed due to being time-barred, and the corrigendum was set aside for not following the principles of natural justice. The Competent Authority was directed not to dispose of the properties mentioned in the corrigendum for a specified period, allowing for proper legal procedures to be followed.