Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2022 (12) TMI 568

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 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. In Ganpati Dealcom Pvt. Ltd. [ 2022 (8) TMI 1047 - SUPREME COURT] which went to the Supreme Court from a decision of the Calcutta High Court, the question which was considered by the Supreme Court was whether the Benami Property Act as amended by the Amendment Act of 2016 has a prospective effect? While examining this question, Supreme Court went into the constitutionality of the original Act i.e., Benami Property Act. Supreme Court came to the conc .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... R: PER THE HON BLE THE CHIEF JUSTICE UJJAL BHUYAN Heard Ms. Anjali Agarwal, learned counsel representing Mr. P.S.P.Suresh Kumar, learned counsel for the petitioner; Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India appearing for respondent No.1; and Mr. B.Narasimha Sarma, learned counsel appearing for respondents No.2 and 3. 2. Challenge made in this writ petition is to the provisional order of attachment dated 27.12.2021 made by respondent No.2. 3. It may be mentioned that respondent No.2 in exercise of powers under Section 24(4)(b)(1) of the Prohibition of Benami Property Transactions Act, 1988 (briefly, the Benami Property Act hereinafter) had passed the impugned order dated 27.12.2021 provisionally att .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... hment 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. 7. Thus, from the above, it is evident that this Court took the view that Section 2(9)(A) and 2(9)(C) of the Benami Property 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. 8. 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 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ith respect to Sections 3 and 5 of 1988 Act. The answers to such questions cannot be assumed in favour of constitutionality, simply because the same was never questioned before the Court of law. We are clarifying that we are not speaking of the presumption of constitutionality as a matter of burden of proof. Rather, we are indicating the assumption taken by the Union as to the validity of these provisions in the present litigation. Such assumption cannot be made when this Court is called upon to answer whether the impugned provisions are attracted to those transactions that have taken place before 2016. 10. After elaborate deliberation, Supreme Court came to the conclusion that Section 3 (criminal provision), Section 2(a) (definition cla .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 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 provisions under Sections 3 or 53, does not arise. 12. Supreme Court has clarified that as it has held that criminal provisions under the Benami Property Act were arbitrary and incapable of application, the law through the 2016 amendment could not retroactively apply to confiscation of those transactions entered into between 05.09.1988 to 25.10.2016 as the same would amount to punitive punishment. Finally, the Supreme Court concluded as under: In view of t .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ecution 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 prior to 25.10.2016 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. 14. In view of the finality of the law declared by the Supreme Court, the provisional attachment order dated 27.12.2021 cannot be sustained. Accordingly, the same is hereby set aside and quashed. 15. Consequently, the writ petition is allowed. Miscellaneous applications pending, if any, shall stan .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates