TaxTMI 
TaxTMI 
2020 (11) TMI 667
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....der/direction of the Hon‟ble Patna High Court. On getting the same, on 25.06.2020, the Registry of this Tribunal was directed to issue notice to both the parties to remain present on 10.07.2020 for hearing of the appeals. None appeared for the appellants on 10.07.2020 but a letter seeking adjournment was received from the learned counsel for the appellants and on his request the matters got adjourned time-to-time on 07.08.2020, 01.09.2020 & 07.09.2020 on the grounds reflected in the respective orders. The appeals were posted on 14.09.2020 for physical hearing on the request of the learned counsel for the appellants. The physical hearing of the appeals could not be taken up on 14.09.2020 as there was no Coram due to the fact that one of the personal staff attached to the Acting Chairman tested Covid-19 positive and the matter was adjourned to 28.09.2020 on which date the appeals were heard on merit. These appeals have been filed against the order dated 30.05.2018 passed by the Adjudicating Authority, PMLA, in O.C. No.873/2018 confirming the Provisional Attachment Order (PAO) No.01/2018 dated 01.01.2018 issued under Section 5(1) of the Prevention of Money Laundering Act (PMLA)....
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....Sheet No.42, Ward No.13, Holding No.74/81, Jamabandi No.196, Area 1.404 Dismal alongwith house & wall, District Registry Office-Munger, Bihar purchased vide Sale Deed No.3444 dated 11.11.2011 for a consideration amount of Rs. 7,51,000/- with charges of Stamp Duty-Rs. 60,180/- Reg. & other fees-Rs. 16,142/-, total amounting to Rs. 8,27,322/-. (v) Plot No.8949, Thana No.25, Jagdishpur Tauzi No.2618, Sheet No.81, Area 1.20 Dismal alongwith house, District Registry Office-Munger, Bihar purchased vide Sale Deed No.1242 dated 31.03.2013 for a consideration amount of Rs. 6,00,000/- with charges of Stamp Duty-Rs. 1,15,760/- Reg. & other fees- Rs. 30,362/-, total amounting to Rs. 7,46,122/-. (vi) Khata No.91, Khesra No.1250, Tauzi No.445, Jamabandi No.91, Mouza-Bariyarpur, Thana No.93, Area 12.93 Dismal, District Registry Office-Munger, Bihar purchased vide Sale Deed No.2965 dated 24.08.2015 for a consideration amount of Rs. 10,25,000/- with charges of Stamp Duty-Rs. 2,28,123/- Reg. & other fees-Rs. 76,891/-, total amounting to Rs. 13,30,014/-. (vii) Khata No.70, Khesra No.183, Tauzi No.9778, Jamabandi No.577, Mouza-Safiabad, Thana No.204/201, Area 11.75 Dismal, District Registry Offi....
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....i No.128/ 3290, 318/3290 Mauza-Shyamganj Mohalla-Caistairs Town, Deoghar Nagar Nigam Ward No.34, Thana No.413, Area 1988 Sq.ft. alongwith three storied building, District Registry Office- Deoghar, Jharkhand purchased vide Sale Deed No.835 dated 24.08.2012 for a consideration amount of Rs. 54,87,000/- with charges of Stamp Duty-Rs. 2,20,000/- Reg. & other fees- Rs. 1,65,000/-, total amounting to Rs. 58,72,000/-. (iv) Tauzi No.7641, Thana No.14, Jamabandi No.11, Mouza- Jamalpur, Nagarpalika-Jamalpur, Ward No.12 (Old-13), Holding No.124, Sheet No.42, Plot No.4397 ABCDEFG Minzumle, Area 18.75 Dismal alongwith old construction on 6952 Sq.ft., District Registry Office-Munger, Bihar purchased vide Sale Deed No.74 dated 08.01.2016 for a consideration amount of Rs. 12,00,000/- with charges of Stamp Duty- Rs. 19,69,197/- Reg. & other fees-Rs. 4,87,509/-, total amounting to Rs. 36,56,706/-. C. Movable Assets - 6 LIC Policies of total premium paid Rs. 29,08,988/- D. Balance lying in 8 Bank Accounts - Rs. 13,59,433/- Total Immovable and Movable Assets attached are valued at Rs. 4,23,61,990/-. BACKGROUND OF THE CASE On the basis of letter dated 04.11.2013, sent by the Superintendent of....
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.... is seen from the said list that the appellant no.1 has been acquitted in 22 criminal cases out of 27. In one of the acquittal case i.e. FIR No.227/2010 out of aforesaid 22 criminal cases the appellant no.1 was acquitted on 08.05.2018 during the pendency of proceedings before the Adjudicating Authority. In another acquittal case i.e. FIR No.121/10 has also resulted in acquittal by Special Court, Munger vide order dated 11.06.2013 and that out of the remaining 5 FIRs it is contended that there was no FIR No.195/88 as no such case was registered in that relevant year and that the last case registered was 139/88 and that in FIR No.72/90 the appellant no.1 never made an accused and same is the case in FIRs No(s).78/90 & 8/99 and lastly that in FIR No.50/98 the appeal is still pending and that the criminal cases against the appellants were politically motivated and also on the ground of non-fulfilling of illegal demands of their political rivals. During the course of hearing it is submitted by the learned counsel for the appellants that only two cases bearing FIR No(s).121/10 & 227/10 were registered as scheduled offences under PMLA, 2002 against appellant no.1 Shri Bharat Yadav as men....
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....ons in section 8(3)(b) of PMLA, 2002 w.e.f.15.02.2013 are prospective in nature and amended provisions of PMLA, 2002 are only applicable to the cases which are registered/initiated/booked on or after 15.02.2013 and the alleged scheduled offences in the present cases are of 2010 and to substantiate the above mentioned arguments, the appellants have relied on the following judgments: (i) M/s. Mahanivesh Oils & Foods Pvt. Ltd. Vs. Directorate of Enforcement, AIR 2016, Delhi 54 on the point that once the appellant has been acquitted by the court of competent jurisdiction, no proceeding under PMLA would lie and this judgment was challenged in LPA No.144/2016 and Hon‟ble Delhi High Court has passed the order dated 30.11.2016 to the effect that opinion rendered in the said judgment shall not be binding and conclusive and this Tribunal is free to exercise its discretion and form its own opinion in the matter and (ii) this was the reason in the series of judgment post passing of the order dated 30.11.2016, PAO and its confirmation by Adjudicating Authority was set aside solely on the ground that court of competent jurisdiction has acquitted the accused in the schedule offence whic....
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....are derived from proceeds of crime. The appellant no.1, in his appeal memo, has made properties wise explanations including movable properties and the premium paid towards LIC policies. The said explanations are not repeated here. He has also in the appeal memo, inter-alia, stated about the details of Income Tax Returns, Cash Deposits in the accounts, issuance of two PAN Cards, the details of liquor licenses and that the total valuation made by the respondent is imaginary and not sustainable. With regard to the ITRs, it is submitted that ITRs were not analysed properly to determine the net income/immovable assets of the appellants and the firms in which they were partners and no efforts were made to call for the relevant information and the Auditor‟s Report, Balance Sheet from the Income Tax Department which could show actual income of the appellants. On the grounds mentioned above the appellants have sought relief to set aside the Provisional Attachment Order No.01/2018 dated 01.01.2018, Impugned Order dated 30.05.2018 passed in O.C. No.873/2018. CASE OF THE RESPONDENT (ED): On the other hand, the Respondent in their reply to the appeal as well as in their written submi....
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....en generated out of the alleged criminal activities in respect of these 2 FIRs on the basis of which the present PMLA proceedings are initiated. x) Loan has been taken from banks and the respondent has not considered the same. xi) The cases are politically motivated. xii) Liquor sales are through cash only. xiii) The sales registers are with the Bihar State Beverage Corporation Ltd. (BSBCL). The respondent has not called for the same from the BSBCL. xiv) Income Tax Refund amounts has not been considered by the respondent. It is also submitted by the learned counsel for the appellants that the judgments cited by the respondent have no application to the present facts and circumstances of the appeals. On the basis of aforesaid submissions the learned counsel for the appellants prayed that the appeals may be allowed by quashing and setting aside the PAO and the impugned order. On the other hand the learned counsel for the respondent reiterated the facts that are stated in the PAO/Impugned Order. The contentions of the learned counsel for the respondent in brief are as follows: Bharat Yadav was a habitual offender indulging in offences of robbery, dacoity (392/395/397 IPC)....
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.... Singh have admitted that their ITRs were filed by appellant no.1 and the ITRs of M/s. Jay Maa Kali construction, M/s. Khusboo construction and M/s. Rani construction are without basis in absence of proper books of account which shows that Bharat Yadav has laundered his illicit wealth in the name of appellant no.2, appellant no.3 and Dharamraj Kumar Singh and in the name of firms operated by him and further to that appellant no.3 has illegally obtained two PAN in his name and he has entered into transaction to the tune of Rs. 1,73,11,057/- through two bank accounts maintained at State Bank of India, Jamalpur and Axis Bank, Munger during the assessment year 2012-13 and that Bharat Yadav has acquired benami liquor shops in the name of his employee Dharamraj Kumar Singh which shows his conscious involvement in money laundering and Bharat Yadav has admitted that he does not maintain books of account in respect of firms which is operated by him which leads to the inference that appellant no.1 is concealing his proceeds of crime through these firms so as to project the same is untainted and Bharat Yadav in his statement has admitted that he has acquired immovable and movable assets in th....
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....ome Tax Returns filed in the name of the appellants are without basis. Further, it is submitted that the Income Tax Act, 1961 and the PMLA, 2002 are two different sets of legislation. The aims and objectives of the said legislations are quite different and distinct. While on the one hand, Income Tax Act is primarily mandated to collect the tax on income to augment the Government Revenues, on the other hand, the PMLA, 2002 is directed towards the investigation with regard to legality and legitimacy of the income. If the income is found to be not from any licit sources, the PMLA is mandated to confiscate the same and dry up the sources of such income which would most likely be further used in criminal activities, funding of terror outfits and narco-terrorism or other trans-national organized crimes compromising the unity and integrity of India. The Respondent has relied on the judgment passed by Division Bench of the Hon‟ble Madras High Court on dated 04.10.2019 in the matter of "VGN Developers (P) Ltd. & Anr. Versus Deputy Director, Directorate of Enforcement, Chennai". The respondent has filed written submissions and the relevant portions of which are reproduced below to a....
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.... income tax return. (e) Appellant no.1 also has business of trading in liquor with licences in the name of his wife and brother as appellant no(s).2 &d 3 and as such appellant no.1 has invested his illegal money into liquor trading in the name of his wife, brother and another employee to legalize his tainted money generated from proceeds of crime. Appellant no.1 also runs a benami liquor shop in the name of his employee to legalise his proceeds of crime. A. Acquisition of Properties Bharat Yadav had acquired various immovable and movable properties after 01.07.2005 (i.e. after P.M.L.A. came into force) from criminal activities relating to the scheduled offences in his name and in the name of his family members. Bharat Yadav and other appellants remained in possession of these proceeds of crime, they used these properties. Bharat Yadav also projected proceeds of crime as untainted property, in the conspiracy with others appellants. Immovable Properties There are 14 properties, ten in the name of Bharat Yadav and four in the name of Smt. Satyabati Devi, the wife of Bharat Yadav (O.C. internal pages 8 to 13). Total value of these properties was when valued by authorized and comp....
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....at amount was paid, only Bharat Yadav was in position to explain and not Vishwa Raj, that is why it is legal/logical and correct that Vishwa Raj is not in position to disclose the source of said money. Shri Bharat Yadav is to explain the same and appellant Bharat Yadav was the defendant in Original Complaint No. 873/2018. (iii) Huge cash was deposited in the accounts of appellants Amit Yadav and Satyabati Devi within the relevant period The total cash deposited by Bharat Yadav in his account and in the account of Satyabati and Amit Kumar (no source is disclosed) was Rs. 16,66,48,823/- (internal pages of O.C. 35 to 39) (i) Income Tax Returns filed by appellants Bharat Yadav Page Rs. 21,87,410/- O.C.29/Appeal 175 (ii) M/s. Jay Maa Kali Construction Rs. 16,71,914/- O.C.30/Appeal 176 (iii) M/s. Rani Construction Rs. 5,824/- O.C.31/Appeal 177 (iv) M/s. Khusboo Construction Rs. 1,625/- O.C.29/Appeal 175 Total Rs. 38,66,773/- (a) Bharat Yadav stated in his statement that he has not filed the ITR during which no work was carried out (Appeal page 177, 178 OC page 31) (b) Income Tax Returns were filed without any basis. (c) ITR were c....
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....20/2020) d/o 06.08.2010", Hon‟ble High Court of Jharkhand held that "It would be the date of laundering which would be relevant. The laundering as used in Section 3 comprises of involvement in any process or activity by which the illicit money is being projected as untainted. The court concluded that thus, the relevant date is not date of acquisition of illicit money but the dates on which such money is being processed for projecting it as untainted. Therefore, the fundamental right of the petitioner guaranteed by Article 20(1) is not being violated. (c) In "Sajan Singh Vs State of Punjab", reported in AIR 1964 SC 464 and "A.K. Samsuddin Vs UOI", WP (C) No.15378 of 2016, d/o 19.07.2016. (d) In these cases similar view was taken. (e) In this respect Section 3, Explanation (ii) made the position very clear. 3. Appellant Bharat Singh acquitted in many cases i.e. schedule offences In this regard position is made clear in Section 44 (1) Explanation, which is as under:- "the jurisdiction of the Special Court while dealing with the offence under the Act, during investigation, enquiry or trail under this Act, shall not be dependent upon any orders passed in respect of the....
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.... In the said letter there was mention of various other FIRs against the appellant no.1. It has been pleaded by the appellant no.1 that in all the criminal cases registered against him have either been ended in acquittal or discharge except in one case i.e. FIR No.50/98 against which appeal is pending. It is also pleaded by the appellant no.1 that the FIR No.121/2010 and 227/2010 as aforesaid have also ended in acquittal. The appellant no.1 has filed the translated copy of the judgment dated 10.06.2013 passed by Ld. Additional District & Session Judge, Special Court, Second Munger. The criminal case initiated under FIR No.227/2010 also ended in acquittal vide judgment dated 08.05.2018 passed by Ld. Chief Judicial Magistrate, Munger. On the basis of the acquittal in the criminal cases arising out of the aforesaid FIRs the appellants are claiming that the proceedings under PMLA, 2002 does not survive. The appellants have also referred to the amended provisions of Section 8(3)(b) of PMLA, 2002 and submitted that it is prospective in nature. To substantiate their submissions the appellants have relied on the judgments quoted above. FINDINGS ON EFFECT OF ACQUITTAL ON ATTACHMENT PROCEE....
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....fence. However, the object, rationale and the scope enshrined under the Prevention of Money Laundering Act, 2002, being a special statute is distinct and different from one enshrined under the Indian Penal Code and the Prevention of Corruption Act. Though the facts may be overlapping the nature of investigation differs. Therefore, it cannot be stated that a mere closure by the Central Bureau of Investigation would provide a death knell to the proceedings of the respondent. In a given case, the complaint may emanate from a registration of a case involving scheduled offence. But the fate of the investigation in the said scheduled offence cannot have bearing to the proceedings under the Prevention of Money Laundering Act, 2002. Section 2(u) of the Act merely speaks of a criminal activity relating to a scheduled offence. Therefore, we are concerned with the criminal activity qua a scheduled offence. Section 3 deals with the offence on money laundering. Once the respondent is of the view that a person is involved in any process of activity connected with the "proceeds of crime", which definition is very wide then he gets the power to investigate further. When such an investigation get....
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....tachment Order and relied upon documents carefully and prima facie has reasons to believe that appellants have committed an offence of money laundering and they are in possession of proceeds of crime. Heard both sides on this issue and have also gone through the materials placed on record including the judgments cited by the appellants. Except what is stated above, the respondent has not filed any judgment in support of their contention nor rebutted the judgments relied on and cited by the appellants on the present issue. Similar, questions about "reasons to believe" was raised in the following matters: a) Judgment dated 23.08.2018 in the matter of M/s. Himachal Emta Power Limited Vs. UOI & Ors. passed by the Hon‟ble Delhi High Court in W.P.(C) 5537/2018, b) Judgment dated 11.01.2018 in the matter of J. Sekar Vs. Union of India & Ors. passed by Division Bench of the Hon‟ble Delhi High Court in W.P.(C) 5320/2017. c) Judgment dated 06.03.2020 in the matter of "Seema Garg Versus Deputy Director, Directorate of Enforcement" passed by Division Bench of Hon‟ble Punjab & Haryana High Court at Chandigarh. I have gone through the aforesaid judgments the latest bei....
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....ly or substantively unreasonable. In Collector of Customs v. Nathella Sampathu Chetty, [1962] 3 SCR 786 this Court observed: "The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity." It was said in State of Rajasthan v. Union of India, [1977] 3 SCC 592 "it must be remembered that merely because power may sometimes be abused, it is no ground for denying the existence of power. The wisdom of man has not yet been able to conceive of a Government with power sufficient to answer all its legitimate needs and at the same time incapable of mischief."" 58. A Court examining the constitutional validity of a provision, particularly on the ground of possible abuse of the powers thereunder, has to be satisfied that there are sufficient safeguards in the provision itself as introduced by the legislature. In that regard, if the second proviso to Section 5(1) PMLA is carefully perused, it will be noticed that there are several conditionalities that will have to be satisfied before the power thereunder can be exercised: (i) The power of provisional attachment can be exercised only by an officer of the rank not below the rank of a Deputy Director ....
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....viso, sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso. A proviso ordinarily is but a proviso, although the golden rule is to read the whole section, inclusive of the proviso, in such manner that they mutually throw light on each other and result in a harmonious construction." 61. Later, in Union of India v. Dilip Kumar (supra), the Supreme Court reiterated, "it is settled law that a proviso does not travel beyond the provision to which it is a proviso." Therefore, there has to be a satisfaction that the "proceeds of crime‟ are likely to be concealed, transferred or dealt with in a manner that might frustrate the confiscation proceedings under the PMLA. This is, therefore, another safeguard as far as the second proviso to Section 5(1) PMLA is concerned. 62. The further safeguards are that the order of attachment by the Director or the Deputy Director, as the case maybe, is only for a period of 180 days to begin with. Further, within a period of 30 days after the passing of such order, the AA takes over under Section 8(1) PMLA. Even under Section 8(1) PMLA, the AA is no....
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....ciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary. We are, therefore, of the view that arbitrariness in the sense of manifest arbitrariness as pointed out by us above would apply to negate legislation as well under Article 14." 68. Therefore, the Court is not satisfied that the second proviso to Section 5(1) PMLA of the PMLA is so excessive and disproportionate so as to render it arbitrary. Reasons to believe 69. What should constitute the "reasons to believe‟ that are to be recorded? In this context, it must be seen that even for the exercise of power under Section 5(1), the Director/Deputy Director/Authorized Officer has to record his reasons to believe in writing. That is the expression that is used in the second proviso to Section 5(1) PMLA as well. It is the same expression that is used even as far as the powers exercised by the AA under Section 8(1) PMLA are concerned. 70. The expression "reasons to believe‟ under Section 26 IPC is understood in the sense of "sufficient cause to believe that thing but not otherwise‟.....
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....n the face of the notice or they must be available on the materials which had been placed before him. We have noticed hereinbefore that when the authority was called upon to disclose the reasons, it was stated that all the reasons were contained in the show cause notices themselves. They, however, in our opinion, do not contain any reason so as to satisfy the requirements of sub-section (1) of Section 68H of the Act." 72. Reasons to believe cannot be a rubber stamping of the opinion already formed by someone else. The officer who is supposed to write down his reasons to believe has to independently apply his mind. Further, and more importantly, it cannot be a mechanical reproduction of the words in the statute. When an authority judicially reviewing such a decision peruses such reasons to believe, it must be apparent to the reviewing authority that the officer penning the reasons has applied his mind to the materials available on record and has, on that basis, arrived at his reasons to believe. The process of thinking of the officer must be discernible. The reasons have to be made explicit. It is only the reasons that can enable the reviewing authority to discern how the office....
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.... in the justice delivery system. j. Insistence on reason is a requirement for both judicial accountability and transparency. k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process. m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harvard Law Review 731-737). n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 200....
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....o be a communication of the "reasons to believe‟ at every stage to the noticee under Section 8(1) PMLA. (v) The noticee under Section 8(1) PMLA is entitled access to the materials on record that constituted the basis for "reasons to believe‟ subject to redaction in the manner explained hereinbefore, for reasons to be recorded in writing. (vi) If there is a violation of the legal requirements outlined hereinbefore, the order of the provisional attachment would be rendered illegal. (vii) There can be single-member benches of the AA and the AT under the PMLA. Such single-member benches need not mandatorily have to be JMs and can be AMs as well." In Himachal Emta Power Ltd. case the J.Sekar Judgment has also been followed. In Seema Garg matter also their Lordships has followed the J.Sekar matter and held as follows: "17. Q. Whether officer attaching property is required to record reason that property is likely to be concealed, transferred or dealt with in any manner which may frustrate proceedings relating to confiscation? Section 5(1) specifically requires that Director or any other officer authorized by him shall record reasons in writing on the basis of mater....
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....on from circumstances suggesting what is set out in sub-clauses (i), (ii) or (iii). If these circumstances were not to exist, can the government still say that in its opinion they exist or can the Government say the same thing where the circumstances relevant to the clause do not exist? The legislature no doubt has used the expression "circumstances suggesting". But that expression means that the circumstances need not be such as would conclusively establish an intent to defraud or a fraudulent or illegal purpose. The proof of such an intent or purpose is still to be adduced through an investigation. But the expression "circumstances suggesting" cannot support the construction that even the existence of circumstances is a matter of subjective opinion. That expression points out that there must exist circumstances from which the Authority forms an opinion that they are suggestive of the crucial matters set out in the three sub-clauses. It is hard to contemplate that the legislature could have left to the subjective process both the formation of opinion and also the existence of circumstances on which it is to be founded. It is also not reasonable to say that the clause permitted t....
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....ee from assessment. The reason for the formation of the belief must be held in good faith and should not be a mere pretence. Hon‟ble Court has observed as under: " The reasons for the formation of the belief contemplated by Section 147(a) of the Income-tax Act, 1961, for the reopening of an assessment must have a rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the I.T.O. and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the Court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the I.T.O. on the point as to whether action should be initiated for reopening the assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and farfetched, which would warrant the formation of the belief relating to escapement of the income of ....
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.... law this does not affect his exercise of his power. In the same way a private person has an absolute power to allow whom he likes to use his land, to release a debtor, or, where the law permits, to evict a tenant, regardless of his motives. This is unfettered discretion. But a public authority may do none of these things it acts reasonably and in good faith and upon lawful and relevant grounds of public interest. The whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good. There is nothing paradoxical in the imposition of such legal limits. It would indeed be paradoxical if they were not imposed. 33. The Court is entitled to examine whether there has been any material available with the State Government and the reasons recorded, if any, in the formation of opinion and whether they have any rational connection with or relevant bearing on the formation of the opinion. The Court is entitled particularly, in the event, when the formation of the opinion is challenged to determine whether the formation of opinion is arbitrary, capricious or whimsical. It is always open to th....
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....d out by counsel for Appellant in the case of Sanjay Agarwal (Supra) while dealing with detention under COFEPOSA has held that simply taking the words of Section 3(1) of COFEPOSA and repeating it as part of grounds would not constitute a finding arrived after an application of mind. Delhi High Court has observed in Para 42 and 43 as under: "42. However, that is not the case here. It is apparent to the Court that the Detaining Authority was unclear about the grounds on which it should authorise the detention of Mr. Sanjay Agarwal. This is evident from the reading of para 34 where repeatedly the word 'or' is used to separate out the different grounds. This is suggestive of two things: first, the Detaining Authority was unsure if the facts brought on record constituted one or more of these grounds; and second, there was in fact non-application of mind as simply taking the wording of the Section 3 (1) COFEPOSA and repeating it as part of the grounds would not constitute a finding arrived at after an application of mind. 43. The differences in the wording used between the order of detention and the grounds of detention are too stark to simply be dismissed as typographical er....
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....mit of Rs. 2 Crore was used by M/s Jaldhara Export which fraudulently availed VAT refund. Firstly, the aforesaid fact was not even raised before Tribunal leaving aside Adjudicating Authority and it cannot be raised in appeal filed by Appellant. Secondly, the allegation against Jaldhara Export is that it took VAT refund without actual export of goods which has no relevancy with cash credit limit availed on the basis of security furnished by Appellant. It is not case of bank fraud, thus said argument is totally out of context, misconceived & irrelevant, therefore rejected. 19. In view of above discussion, we summarise our findings as below: i) In case investigation is pending, filing of complaint against others is not sufficient to deprive any person from benefit of time cap of 365 days, ii) Property acquired prior to commission of scheduled offence i.e. criminal activity or introduction of PMLA cannot be attached unless property obtained or acquired from scheduled offence is held or taken outside the country. iii) Director or any other officer authorised by him is bound to record reasons which must be specific and mere reproduction of wording of Section 5 is not sufficient."....
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....of crime], he may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property." The plain reading of the aforesaid provisions indicates that the "reason to believe" to be recorded in writing that any person is in possession of any proceeds of crime and such proceeds of crime are likely to be concealed, transferred or dealt with in any manner, which may result in frustratin....