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Ansar Rahman and Others Vs. Competent Authority - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT IT
Decided On
Reported in(1999)239ITR12ITAT
AppellantAnsar Rahman and Others
RespondentCompetent Authority
Excerpt:
.....va only to persons specified in subsection (2).as, the persons affected in these appeals are the persons convicted for ail offence punishable under the ndps act and also their relatives, the relevant provisions in section 68a are extracted hereunder : "68a. application. - (1) the provisions of this chapter shall apply only to persons specified in sub-section (2). (2) the persons referred to in sub-section (1) are the following, namely :- (a) every person who has been convicted of an offence punishable under this act with imprisonment for a term of five years or more; (d) every person who is a relative of a person referred to in clause (a) or clause (b) or clause (c)." 6. a reading of clause (a) of sub-section (2) of section 68a would show that every person who has been convicted of an.....
Judgment:
1. These appeals are by Ansar Rahman, his daughter, wife and son, respectively, challenging the order of the Competent Authority, Calcutta, passed under section 68-1(3) of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS), whereby the properties of Ansar Rahman were forfeited.

2. The appellant, Ansar Rahman, was convicted on July 30, 1988, for offences punishable under the provisions of the NDPS Act and was sentenced to undergo imprisonment for 15 years and a fine of Rs. 1,50,000 was imposed on him for possession of heroin. He was also convicted to undergo imprisonment for 10 years and a fine of Rs. 1 lakh was imposed for being in possession of charas. The Competent Authority issued a notice dated November 24, 1997, to the appellant under section 68H(1) of the Act, considering him as a person covered by section 68A(2)(a) of the Act to show cause as to why the properties mentioned in the annexure should not be forfeited as illegally acquired properties. In reply to the said notice, the appellant by letter dated December 26, 1997, stated that all the papers and documents along with some valuable articles relating to his income, bank account, etc., were taken away by the police and that he is not able to produce any documents.

3. The Competent Authority did not believe the version of the appellant that the documents were taken away from him by the police without issuing any panchnama or a receipt and he, therefore, issued another notice dated November 24, 1997, giving an opportunity to the appellant to be heard. The matter was postponed till after the Ramzan and the hearing was fixed on February 17, 1998, when the authorised representative of the appellant appeared and expressed his inability to furnish the evidence/documents regarding acquisition of assets by the appellant. The Competent Authority perused the income-tax assessment records of the appellant and other records and after considering the submissions made on behalf of the appellant, came to the conclusion that the properties mentioned in the annexure are nothing but illegally acquired properties covered under section 68B(g) of the Act and he passed the impugned order. S/Shri R. N. Chakravarty and Gautam Ghosh appearing for the appellants firstly contended that the provisions of the NDPS Act are not applicable, inasmuch as Chapter VA of the Act came into effect only on May, 29, 1989, by virtue of Act 2 of 1989, whereas, the conviction of the appellant was earlier on July 30, 1988. Their submission is that Chapter VA of the Act is prospective in operation and does not operate retrospectively, as there was no such retroactivity given under section 68J of the Act, either expressly or by implication. In reply, the Deputy Director appearing for the Competent Authority submitted that the language used in section 68A gives an indication that the said provision is meant to be retrospective in operation. He also submitted that a proviso to sub-section (2) of section 68C also gives an indication that wherever it was intended to put a limitation on the application of the provision of the Act, it was made explicit and the absence of a provision limiting the applicability of section 68j to future convictions only, should lead to the conclusion that it is meant to be retrospective.

4. Though the question of non-applicability of the provisions, of the NDPS Act to the appellants was not raised before the Competent Authority, we deem it necessary to go into the same, as the said contention goes to the root of the matter, affecting the jurisdiction of the Competent Authority.

5. Section 68A of the NDPS Act deals with the application of the provisions of Chapter VA only to persons specified in subsection (2).

As, the persons affected in these appeals are the persons convicted for ail offence punishable under the NDPS Act and also their relatives, the relevant provisions in section 68A are extracted hereunder : "68A. Application. - (1) The provisions of this Chapter shall apply only to persons specified in sub-section (2).

(2) The persons referred to in sub-section (1) are the following, namely :- (a) every person who has been convicted of an offence punishable under this Act with imprisonment for a term of five years or more; (d) every person who is a relative of a person referred to in clause (a) or clause (b) or clause (c)." 6. A reading of clause (a) of sub-section (2) of section 68A would show that every person who has been convicted of an offence punishable under the Act with imprisonment for a, term of five years or more is covered by the provisions of Chapter VA. The fact that by the words "who has been convicted", the past tense has been used in clause (a) in describing the conviction of a person for offence punishable under the Act, is an indication to show that Parliament intended that persons who have already been convicted before the insertion of Chapter VA by Act 2 of 1989 are to fall within the mischief of clause (a). Otherwise, there was no need to use the words "who has been convicted" in clause (a) and Parliament could have used the words "is convicted". It is a cardinal principle in interpretation of statutes, that every word in a statute has to be given a meaning and the presumption is that the Legislature does not use words unnecessarily. A construction which Would leave without effect any part of the language of a statute will normally be rejected.

7. By a reading of the proviso to sub-section (2) of section 68C, it is clear that Parliament has taken care to limit the operation of Chapter VA wherever it was found necessary. Section 68C is in the following terms : "68C. Prohibition of holding illegally acquired property. - (1) As from the commencement of this Chapter, it shall not be lawful for any person to whom this Chapter applies to hold any illegally acquired property either by himself or through any other person on his behalf.

(2) Where any person holds any illegally acquired property in contravention of the provisions of sub-section (1), such property shall be liable to be forfeited to the Central Government in accordance with the provisions of this Chapter : Provided that no property shall be forfeited under this Chapter if such property was acquired by a person to whom this Act applies before a period oil six years from the date on which he was charged for an offence relating to illicit traffic." 8. It is thus seen that if the property which is sought to be forfeited was acquired by the person affected prior to a period of six years from the date on which he was charged for an offence relating to illicit traffic, the provisions of the Chapter VA will not be applicable and the said property cannot be forfeited. If Parliament had intended to limit the application of Chapter VA only to persons who are convicted, subsequent to the coming into force of Chapter VA, Parliament would have explicitly said so.

9. Learned counsel, placing reliance on passages at pages 215 to 217 of Maxwell on the Interpretation of Statutes, 12th edition, contended that no statute shall be construed to have a retrospective operation, unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. He further submitted that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment.

10. In order to appreciate this contention, it is necessary to refer to the NDPS (Amendment) Act, 1988 (Act No. 2 of 1989), by virtue of which Chapter VA of the Act was incorporated in the NDPS Act, 1985. It was realised that trafficking in NDPS is highly detrimental to the society and certain very serious provisions were incorporated into the main Act by way of amendment, to serve as strong deterrent to illicit traffic in the narcotic drugs. One of the very serious consequences for subsequent conviction for engaging or abetting in the production, manufacture, etc., of narcotic drugs or psychotropic substances was the imposition of sentence punishable with death under section 9 of the Amendment Act.

Another provision which was inserted by way of amendment was, under section 19 of the Amendment Act, the Chapter VA in the main Act, meant to serve as deterrent as well as to take away illegally acquired properties from the persons covered by the Act. Having this intendment of the Legislature in view, the scope of clause (a) of section 68A(2) needs to be interpreted.

11. It is well-settled that a construction which would leave without effect any part of the language of a statute, will normally be rejected. Applying the said principle, it is not possible to leave without effect the use of the words "has been convicted" in clause (a).

It is useful to refer to Maxwell on the Interpretation of Statutes, page 40, in which the much celebrated Heydon's case [1584] 3 Co. Rep.

7a was referred to : "In Heydon's case [1584] 3 Co. Rep 7a, it was resolved by the Barons of the Exchequer (at page 7b) that for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered : (1) What was the common law before the making of the Act. (2) What was the mischief and defect for which the common law did not provide. (3) What remedy Parliament hath resolved and appointed to cure the disease of the commonwealth.

(4) The true reason of the remedy; and then the office of all the judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico." 12. In enacting the Amendment Act 2 of 1989, Parliament had resolved to prescribe a bitter medicine as illicit trafficking in drugs is a dangerous disease, requiring a radical treatment. We have to so construe the provision of law, so that the mischief may be suppressed and the remedy advanced, by adding force and life to the cure or remedy, according to the intent of the makers of the law.

"If, however, the language or the dominant intention of the enactment so demands, the Act must be construed so as to have a retrospective operation, for 'the rule against the retrospective effect of statutes is not a rigid or inflexible rule but is one to be applied always in the light of the language of the statute and the subject-matter with which the statute is dealing.' Before the presumption against retrospectivity is applied, a court must be satisfied that the statute is in fact retrospective. In the words of Craies on Statute Law, a statute is retrospective 'which takes away or impairs any vested right acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect of transactions or considerations already past.'" 14. As observed by the learned author, the statute has to be applied in the light of the language of the statute and the subject matter with which the statute is dealing and the court must be satisfied that the statute is in fact retrospective. As the Act is made applicable to persons convicted of commission of offences under the Act and in view of the language in clause (a) of section 68A(2) of the NDPS Act, we have to hesitation in holding that the provisions of Chapter VA are applicable to persons who have been convicted of offences committed prior to the enactment of the Amendment Act 2 of 1989 and the introduction of Chapter VA, as well as to persons who commit offences under the Act, subsequent to the amendment and hence, sub-section (2) of section 68A is both Retrospective as well as prospective in operation. We, therefore, reject the contention of the appellants in this regard and hold that the appellants fare covered by Chapter VA.Gurbachan Singh v. Satpal Singh, AIR 1990 SC 209, argued that only procedural law can be retrospective. We do not find any force in this contention as both procedural and substantive laws can be enacted with retrospective operation.

16. The next submission made by learned counsel for the appellants is that the competent, Authority is not mentioned by name in the notification dated July 24, 1997, and hence Shri Bandyopadhyay who has passed the impugned order had no jurisdiction. This submission also has no substance, as whosoever is appointed as the competent authority has the jurisdiction to function in accordance with the notification under section 68D, which does not require that a person by name should be appointed as a competent authority. Any Collector of Customs or Collector of Central Excise or Commissioner of Income-tax or any other officer of the Central Government of equal rank can be authorised by the Central Government by order published in the Official Gazette, to perform the functions of the competent authority, under Chapter VA.17. It was also submitted on behalf of the appellants that they were not given sufficient opportunity to place all the materials before the competent authority. It is to be noted that notice under section 68H(1) was issued on November 24, 1997, to which the appellant replied by letter dated December 26, 1997. The matter was thereafter posted for hearing on January 6, 1998, and was adjourned to February 15, 1998, on the request of the appellants and was finally decided after considering the materials on record. The appellants had sufficient, opportunity to put forth their case.

18. The petitioner filed certain returns for the year 1977-78 which did not bear any date. No bank accounts were made available nor the dates of opening of such accounts were furnished. No books of account were produced and the appellants did not adduce any evidence regarding the claim that income was earned by doing job works. They did not even place any orders from any customers to substantiate the contention that job works were done and money was earned. The income-tax assessments done under section 143(1) of the Act were without any inquiry and such assessments without any corroborative evidence, are not sufficient to support the contention of the appellants. The competent authority was justified in rejecting the contention of the appellant, that they were unable to produce any documents as they were seized by the police, in the absence of production of any receipt or panchnama.

19. The appellants sought to file some documents without filing any petition for receiving additional evidence. These, documents cannot be looked into. In the absence of any evidence as required by section 8 of the SAFEMA to show that the forfeited properties were not acquired through illegal means, the competent authority was justified in holding that these properties are illegally acquired properties. We see no reason to differ with the findings of the competent authority and we confirm the same. The appeal fails and is accordingly dismissed.


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