Skip to content


Zahid Parwez Vs. Competent Authority - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT IT
Decided On
Reported in(2000)241ITR19ITAT
AppellantZahid Parwez
RespondentCompetent Authority
Excerpt:
.....68f(1) and that the subsequent order of confirmation is made in violation of the principles of natural justice as the appellant had no opportunity of showing cause as to why the account of the appellant should not frozen.3. the deputy director, appearing for the competent authority, submitted that there was no requirement under section 68f(1) that notice should be given to the affected person before the freezing order is passed under sub-section (1) of section 68f and hence there was no violation of the principles of natural justice in not issuing a notice before passing the order. he further submitted that the competent authority issued a show-cause notice dated august 13, 1998, to the appellant fixing the date of hearing on august 25, 1998, and the said notice was served on the.....
Judgment:
1. This appeal is by Zahid Parwez, partner of Gita Timber Co., Balasore, against the order of the Competent Authority, Calcutta, dated August 27, 1998, made under section 68F(2) of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS), confirming the order of the Intelligence Officer, Narcotic Control Bureau, Eastern Zonal Unit, Calcutta, made under section 68F(1) of the NDPS Act, whereby the current account No. CD-691 of Gita Timber Co. in the Balasore Branch was frozen.

2. Learned counsel for the appellant contended that the appellant was not issued with any notice before the freezing order dated August 11, 1998, was passed under section 68F(1) and that the subsequent order of confirmation is made in violation of the principles of natural justice as the appellant had no opportunity of showing cause as to why the account of the appellant should not frozen.

3. The Deputy Director, appearing for the Competent Authority, submitted that there was no requirement under section 68F(1) that notice should be given to the affected person before the freezing order is passed under sub-section (1) of section 68F and hence there was no violation of the principles of natural justice in not issuing a notice before passing the order. He further submitted that the Competent Authority issued a show-cause notice dated August 13, 1998, to the appellant fixing the date of hearing on August 25, 1998, and the said notice was served on the appellant on August 20, 1998. He further submitted that the appellant failed to appear on August 25, 1998, and did not send any reply by that date and that the Competent Authority had no option but to peruse the record and after being satisfied that the freezing order was justified, confirmed the same as the order becomes ineffective unless the same is confirmed within a period of 30 days from the date of the making the order under section 68F(1). He further submitted that the reply dated August 23, 1998, of the appellant was received by the Competent Authority only on August 31, 1998, after the Competent Authority passed the confirmation order on August 27, 1998, and hence there was no illegality.

4. In support of his contention, learned counsel for the appellant relied on a decision in Khalid Parwez v. Competent Authority [1994] 77 CLT 726 wherein it was held that the orders of the Competent Authority under section 68F(1) and (2) will be illegal if they are made without providing an opportunity of being heard to the affected person. In that case, an order passed under section 68F(2) of the NDPS Act was questioned. The said order was attacked on the ground that the principles of natural justice were violated as notice was not issued before passing the impugned order. It was held that where a statutory provision does not exclude natural justice, requirement of according an opportunity of being heard can be assumed. The order was set aside as no opportunity was given to the petitioner therein, before passing the impugned order.

5. The facts before us in the present proceedings is entirely different from the facts in the aforementioned case. It is relevant to mention certain dates for appreciating the contentions of the parties. As a result of search, 400 gms. of heroin was recovered on July 9, 1998, and investigation revealed that the contraband material belonged to Azad Parwez and further search of his residence resulted in recovery of 200 gms. of heroin. Azad Parwez was arrested as a heroin manufacturing laboratory was unearthed at his residence and he was detained under the provisions of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (PITNDPS), by order dated July 26, 1989. Financial investigation revealed that money deposited in Central Bank of India, Balasore branch, is the illegally acquired property of the detenue and his relatives and associates. An order dated August 10, 1998, was made by the Investigating Officer under section 68F(1) of the NDPS Act freezing current account No. CD-691 in the Central Bank of India in an amount of Rs. 31,132 standing in the name of Gita Timber Co., a partnership firm, in the name of the detenue and Rakeya Sultan.

This order would have effect only for a period of 30 days of its being made, unless it is confirmed by an order of the Competent Authority.

6. The Competent Authority took immediate steps by issuing a notice dated August 13, 1998, to the appellant to show cause as to why the order dated August 10, 1998, should not be confirmed and the appellant was directed to appear on August 25, 1998. None appeared for the appellant pursuant to the notice on August 25, 1998, and the Competent Authority was left with no option but to pass the impugned order. The appellant received the show-cause notice of the Competent Authority on August 20, 1998, as seen from the letter of the appellant dated August 23, 1998, addressed to the Competent Authority and received in the office of the Competent Authority on August 31, 1998. The appellant neither appeared before the Competent Authority on the date of hearing on August 25, 1998, nor sent the letter, so as to reach the office of the Competent Authority on or before the date of hearing fixed in the notice. It is pertinent to note that in the letter dated August 23, 1998, the appellant only took the plea that the notice issued by the Competent Authority has no legal value, as the Intelligence Officer of the Narcotic Control Bureau, Calcutta, has no power to investigate the matter under Chapter V-A. The appellant did not care to touch upon the merits of the case and did not give any reasons to show that the bank account cannot be frozen. This letter having been received by the Competent Authority only on August 31, 1998, after the passing of the impugned order, was of no consequence.

7. It is also very interesting to note that this appeal was presented on October 21, 1998, against the impugned order which is in the nature of an interim order passed pending passing of final orders after investigation under section 68E. Had the appellant given the reply to the Competent Authority relating to merits of the case within time, it would have been possible for the Competent Authority to consider the same and to pass the order. It is not as if the Competent Authority did not afford an opportunity to the appellant before making the order of confirmation.Liberty Oil Mills v. Union of India, AIR 1984 SC 1271, observed at page 1285 : "There can be no tape-measure of the extent of natural justice. It may and indeed it must vary from statute to statute, situation to situation and case to case. Again, it is necessary to say that pre-decisional natural justice is not usually contemplated when the decisions taken are of ad interim nature pending investigation or enquiry. Ad interim orders may always be made ex-parte and such orders may themselves provide for an opportunity to the aggrieved party to be heard at a later stage ...

The principles of natural justice would be satisfied if the aggrieved party is given an opportunity at his request. There is no violation of a principle of natural justice if an ex-parte ad interim order is made unless, of course, the statute itself provides for a hearing before the order is made ..." 9. As observed earlier, the order dated August 10, 1998, was in the nature of an ad interim order before the making of which, there was no requirement of issuing a notice under the statute, as observed by the Supreme Court in the aforementioned decision. The principles of natural justice are satisfied by the issuance of the notice dated August 13, 1998, by the Competent Authority and the appellant had an opportunity to show cause why the freezing order should not be confirmed. The appellant failed to avail the opportunity given by the Competent Authority and cannot complain of violation of the principles of natural justice. Even in the reply sent by him and received by the Competent Authority at the belated stage after the passing of the impugned order, he did not raise any grounds on merits for not confirming the freezing order. We have, therefore, no hesitation in holding that there was no violation of the principles of natural justice an we reject the contention of learned counsel for the appellant.

10. After all, the freezing order and the subsequent order of confirmation has not concluded the matter and has not put an end to all the proceedings which are pending with the Competent Authority. The Competent Authority has to make an inquiry in accordance with the law and pass an order under section 68-I. The Competent Authority will hold an inquiry as required in the law and will complete the proceedings and pass the final order, within four months from the date of receipt of this order, or earlier, provided the appellant co-operates and does not make requests for adjournments. With the above direction, the appeal is dismissed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //