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2022 (11) TMI 606 - HC - Benami PropertyBenami transactions - Scope of amendemnt by the Benami Transactions (Prohibition) Amendment Act, 2016 which came into effect on 01st November 2016 - HELD THAT - The Supreme Court in the judgment of Ganpati Dealcom 2022 (8) TMI 1047 - SUPREME COURT has at paragraph no.92 recorded the concession made by the Union of India that the offence under Section 53 of the Act of 2016 is prospective and would only apply to those transactions which were entered into after amendment came into force i.e., 01st November, 2016. The Supreme Court at paragraph nos. 94 and 130(e) of the said judgment has categorically held that the Act of 2016 which contains the criminal provisions is applicable only prospectively and quashed the prosecution proceedings. It is admitted in the present case that the alleged benami transactions undertaken by the Petitioner were entered prior to 01st November 2016. In light of the law as declared by the Supreme Court in Ganapati Dealcom 2022 (8) TMI 1047 - SUPREME COURT the present writ petition is allowed. The Show Cause Notice dated 04th April, 2022 shall stand quashed.
Issues:
1. Validity of Show Cause Notice under Section 53 of the Prohibition of Benami Property Transactions Act, 1988. 2. Retroactive application of amended provisions of the Act of 2016. 3. Effect of Supreme Court judgment in Union of India and Another v. Ganpati Dealcom Pvt. Ltd. Analysis: Issue 1: The petitioner sought to quash a Show Cause Notice (SCN) issued under Section 53 of the Benami Property Transactions Act, 1988, as amended by the Act of 2016. The petitioner argued that the SCN, related to land purchases by a company and share transfers, could not be applied retrospectively under the amended Section 53(1) to transactions predating the amendment. The petitioner's counsel relied on the Supreme Court's judgment in Ganpati Dealcom case, which held that criminal prosecution for transactions pre-dating the Act of 2016 should not be initiated or continued. Issue 2: The petitioner contended that the Act of 2016, specifically Section 53, should not be applied retrospectively to transactions conducted before its enactment on November 1, 2016. The Supreme Court's judgment in Ganpati Dealcom case clarified that the criminal provisions of the Act applied prospectively and could not be retroactively enforced. The Court emphasized the importance of Article 20(1) of the Constitution, ensuring that no person is convicted for an act that was not an offense under the law at the time of its commission. Issue 3: Referring to the Supreme Court's decision in Ganpati Dealcom case, the High Court noted that the Act of 2016's criminal provisions were prospective and could not be applied retroactively. The Court highlighted the Union of India's concession and the specific paragraphs of the judgment that declared the Act's application only to transactions post the amendment's enforcement. As the petitioner's transactions predated the Act of 2016, the Court allowed the writ petition, quashing the SCN issued on April 4, 2022. In conclusion, the High Court's judgment emphasized the prospective application of the Act of 2016's criminal provisions, as clarified by the Supreme Court's ruling in the Ganpati Dealcom case. The Court upheld that initiating criminal prosecution for transactions conducted before the Act's enforcement would violate constitutional principles and declared the SCN issued against the petitioner as invalid.
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