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TMI Blog2022 (9) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 1988. Taking note of the fact that Central Government had notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016, this Court held that these two provisions cannot be applied to a transaction, which took place prior to 01.11.2016. In that case, the transaction was dated 14.12.2011. Therefore, the show cause notice, provisional attachment order as well as the adjudicating order were declared null and void being without jurisdiction and consequently, quashed. Supreme Court has declared that the Amendment Act of 2016 is not merely procedural but prescribes substantive provisions. Therefore, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to coming into force of the 2016 Amendment Act i.e., 25.10.2016. As a consequence, all such transactions or confiscation proceedings shall stand quashed. Supreme Court has also clarified that in rem forfeiture provision under Section 5 of the Amendment Act of 2016 being punitive in nature can only be applied prospectively and not retroactively. In view of finality of the law declared by the Supreme Court, the impugned show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Property Act. Though the dates are different in each of the writ petitions, in the lead case of this group being W.P.No.33191 of 2022, the order passed by the adjudicating authority is dated 25.03.2022. 6. In the last case i.e., Group C, the challenge has been made to the order dated 12.04.2022 passed by the Commissioner of Income Tax, who is also the initiating officer of the Benami Transactions (Prohibition) Unit, Hyderabad under Section 24(4)(b)(i) of the Benami Property Act. 7. For the sake of convenience, let us take W.P.No.33191 of 2022 as the lead case. 8. In this case, show cause notice under Section 24(1) of the Benami Property Act dated 30.12.2019 was issued to the petitioner- M/s. Neopride Pharmaceuticals Limited by the Assistant Commissioner of Income Tax/Initiating Officer. In serial No.3 of the statement forming part of the show cause notice, the benami property i.e., the subject matter of benami transaction was described as under: The moveable property being 97,500 shares of M/s Neopride Pharmaceuticals Limited worth Rs.9,75,000/- allotted in FY 2014-15. 2. Proceeds thereof being corresponding Fixed Asset to the tune of equivalent amount acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned as follows: The moveable property being 97,500 shares of M/s Neopride Pharmaceuticals Limited worth Rs.9,75,000/- allotted in FY 2014-15 on 08.01.2015. Proceeds thereof being corresponding Fixed Asset added during the FY 2014-15 for Rs.4,38,33,534/- in the form of Immovable Property admeasuring 47790 sq. mts. In Sy.Nos.49P, 50P and 51P, Plot No.24E in laout T-1 in Lalamkodur (v) registered vide doc. Number 2717/2015 of SRO Yelamanchili , to the tune of Rs.9,75,000/- equivalent to the share capital routed through benami transaction and introduced in the books of M/s Neopride Pharmaceuticals Limited during the FY 2014-15. 15. Thus, the shares were allotted on 08.01.2015 and the fixed assets accrued therefrom finds place in the books of account during the financial year 2014-2015 i.e., being prior to 25.10.2016 or 01.11.2016. 16. The issue before us is no longer res integra not only in view of the law laid down by this Court in Nexus Feeds Limited v. the Assistant Commissioner of Income Tax 2022(5) TMI 262, but in view of the law declared by the Supreme Court in Union of India v. Ganpati Dealcom Pvt. Ltd. 2022 SCC Online SC 1064. 17. Mr. B.Narsimha S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tachment order dated 31.12.2019 and the impugned order dated 30.03.2021 are null and void being without jurisdiction. Consequently, the impugned order is set aside and quashed. 20. Thus, from the above, it is evident that this Court took the view that Section 2(9)(A) and 2(9)(C) of the Act inserted by the Amendment Act of 2016 are prospective in nature because these two provisions have significantly and substantially widened the definition of benami transaction than as was there in the unamended Benami Property Act of 1988. 21. Taking note of the fact that Central Government had notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016, this Court held that these two provisions cannot be applied to a transaction, which took place prior to 01.11.2016. In that case, the transaction was dated 14.12.2011. Therefore, the show cause notice, provisional attachment order as well as the adjudicating order were declared null and void being without jurisdiction and consequently, quashed. 22. In Union of India v. Ganpati Dealcom Pvt. Ltd. (2 supra), which went to the Supreme Court from a decision of the Calcutta High Court, the question, which was consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were stillborn law and never utilized in the first place. In this light, this Court finds that Sections 3 and 5 of the 1988 Act were unconstitutional from their inception. 24. Continuing with the deliberation, Supreme Court observed that once Sections 3 and 5 of the Benami Property Act were declared as unconstitutional, it would mean that the Amendment Act of 2016 would in effect create new provisions and new offences as the offences under Section 3(1) for the transactions entered into between 05.09.1988 (when the original Act received the presidential assent) and 25.10.2016 (when the Amendment Act of 2016 was notified), the law cannot retroactively invigorate a still-born criminal offence. Thereafter, it was categorically held that the Amendment Act of 2016 containing criminal provisions would be applicable only prospectively. Supreme Court held as follows: In the case at hand, the 2016 Act containing the criminal provisions is applicable only prospectively, as the relevant Sections of the pre-amendment 1988 Act containing the penal provision, have been declared as unconstitutional. Therefore, the question of construction of the 2016 Act as retroactive qua the penal provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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