TaxTMI 
TaxTMI 
2026 (6) TMI 1250
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....espondent authorities. 3. The brief facts of the present case as it would appear from the materials on record are that the petitioner collected from different sources 17,200 Kgs of Assam dried Areca Nuts, and sold it to one Harun Rashid. 4. At this stage, it is very pertinent to take note of that the proprietor of the petitioner firm is also one Harun Rashid, who is the son of Abdul Gafur and whose Aadhar Number is 6261 5717 9012 and PAN Number is ALHPR00006M and his date of birth is 07.07.1978. 5. The person to whom the petitioner firm sold the said 17,200 Kgs of Areca Nuts was also one Harun Rashid, who is the son of Hazrat Ali, whose Aadhaar number is 2166 8362 2760 and PAN number is AYAPR9589F. 6. On the basis of a transaction carried out on 30.11.2025, 17,200 Kgs of Areca Nuts having the total invoice value of Rs. 33,81,000/- was sold to Sri Harun Rashid by the petitioner firm. 7. The said Areca Nuts were required to be transported by truck from Hailakandi to Rupohihat Godown at Nagaon, which is around 352 kilometers. The said truck was intercepted at Karimganj area by the Badarpur Customs Authorities. The said Areca Nuts thereupon were seized by the Inspector o....
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.... Laboratory, Bamunimaidan, Assam and it was opined that the samples conformed to the prescribed standards as per the Food Safety and Standards Regulation with respect to the test carried out. 13. A further perusal of the order dated 12.02.2026 would show that though the goods were found to be fit for human consumption, but on examination of the packages, no FSSAI License Number was printed on the packages as required under the FSSAI Act, 2006. 14. For the purpose of the present proceedings, it is relevant to take note of that the samples of the consignment were drawn to ascertain two material considerations. One, as to whether it was fit for human consumption; and second, as to whether the Areca Nuts in question were of foreign origin. In spite of the test being carried out, nothing could be shown that the Areca Nuts, in question were of foreign origin, and this aspect would be apparent from the order dated 12.02.2026. 15. Be that as it may, the application so filed for provisional release of the Areca Nuts was rejected. It is under such circumstances, the petitioner being aggrieved had approached this Court by filing the present writ petition. 16. The learned Coordinat....
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....hmani Mewal Das reported in (1976) 3 SCC 757, categorically observed that the reasons for formation of the belief must have a rational connection with or relevant bearing to 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 Officer and the formation of his belief that there has been escapement of income. The Supreme Court categorically observed that there is a difference between the terminology of 'reason to believe' with 'reason to suspect'. Paragraphs 11 and 12 of the said judgment being relevant are reproduced hereinbelow: "11. As stated earlier, the reasons for the formation of the belief must have a rational connection with 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 Income Tax Officer 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 in....
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....that the said material could not have led to the formation of the belief that the income of the assessee respondent had escaped assessment because of his failure or omission to disclose fully and truly all material facts. We would, therefore, uphold the view of the majority and dismiss the appeal with costs." 22. From the above principles laid down, it is apparent that there is a foundational distinction between the phrases 'reasons to believe' with 'reasons to suspect '. This foundational distinction is one of degree, quality and judicial reviewability. From the above-quoted paragraphs, it would show that when the phrase 'reasons to believe' is used, the Legislature have chosen a higher threshold than a mere suspicion. It cannot be on the basis of wholly vague, indefinite, farfetched and remote considerations. The reasons for formation of the belief must be in good faith and should not be a mere pretence, rather it should have live link or close nexus between the material available before the Officer and the belief which he has to form to the effect that the goods in question were of foreign origin. The Customs Officer should have materials for the formation of the belief that ....
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....eved to be of foreign origin. It was only mentioned that there was an attempt of smuggling/illegal import into India through a route other than the route specified under Section 7(1) (c) of the Customs Act 1962 (for short, 'the Act of 1962'), without having licit documents in support of its legal possession/transportation /importation, which was in violation of the provisions of law. There are also no contemporaneous materials produced before this Court by the respondents to show that from the size or features of the Areca Nuts in question, the Officer could have reasons to believe that the Areca Nuts were of foreign origin. Under such circumstances, it, therefore, appears that the seizure of the Areca Nuts were based upon a mere suspicion having no live link or rational nexus. 26. This Court has also perused the materials on record, i.e. the tax invoices and the payment of the GST, including the e-way bill, which clearly show that the documents in question were there to show that there was a sale between the petitioner as well as Shri Harun Rashid, and it is in pursuance to the sale, the goods were moving from Hailakandi to Rupahihat in Nagaon district. 27. This Court also t....