Rakesh Chandulal Mehta v. Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 14329 of 2020 =============================================RAKESH CHANDULAL MEHTA Versus ASSISTANT COMMISSIONER OF INCOME TAX ============================================= Appearance:PARIMALSINH PARMAR(7296) for the Petitioner(s) No. 1MR MR BHATT SR. ADVOCATE for M R BHATT & CO.(5953) for the Respondent(s) No. 1NOTICE SERVED for the Respondent(s) No. 2,3============================================= CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR andHONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI Date : 14/09/2022 ORAL ORDER (PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR) 1.We have heard of Mr. Parilamsinh Parmar, learnedadvocate appearing on behalf for the petitioner, Mr. M.R. Bhatt,learned Senior Advocate appearing for respondent No.1 namelythe Initiating Officer as defined under Section 2(19) read withSections 18(1), 24 of the Prohibition of Benami PropertyTransactions Act, 1988 (for short ‘the Act’) and Mr. DevangVyas, learned Additional Solicitor General of India appearing forrespondent Nos.2 Adjudicating Authority as defined underSection 2(1) read with Sections 18(1)(d) and 24(3) of the Act. Perused the records. 2.Petitioner has prayed for quashing of the attachment orderpassed under Section 24(3) of the Benami Transactions(Prohibition) Amendment Act, 2016 and the all consequentialproceedings initiated pursuant thereto. 3.In this petition, essentially petitioner is seeking for writ ofcertiorari to declare the provisions of Benami Transactions(Prohibition) Amendment Act, 2016 being prospective andconsequently the notices issued to the petitioner and quashingof the orders passed pursuant to the same. 4.Having heard the learned advocates appearing for theparties, we are of the considered view that aforesaid issue is nomore res integra in view of the judgment of the Hon’ble ApexCourt rendered in Civil Appeal No.5783 of 2022 dated23.8.2022 where-under Hon’ble Apex Court after consideringthe contentions raised thereunder as well as relevant provisionsof the Act pressed into service, has arrived at the followingconclusion: “18.1 In view of the above discussion, we hold as under: a) Section 3(2) of the unamended 1988 Act isdeclared as unconstitutional for beingmanifestly arbitrary. Accordingly, Section 3(2)of the 2016 Act is also unconstitutional as it isviolative of Article 20(1) of the Constitution.declared as unconstitutional for beingmanifestly arbitrary. Accordingly, Section 3(2)of the 2016 Act is also unconstitutional as it isviolative of Article 20(1) of the Constitution. b) In rem forfeiture provision under Section 5 ofthe unamended Act of 1988, prior to the 2016Amendment Act, was unconstitutional for beingmanifestly arbitrary.the unamended Act of 1988, prior to the 2016Amendment Act, was unconstitutional for beingmanifestly arbitrary. c) The 2016 Amendment Act was not merelyprocedural, rather, prescribed substantiveprovisions.procedural, rather, prescribed substantiveprovisions. d) In rem forfeiture provision under Section 5 ofthe 2016 Act, being punitive in nature, can onlybe applied prospectively and not retroactively.the 2016 Act, being punitive in nature, can onlybe applied prospectively and not retroactively. e) Concerned authorities cannot initiate orcontinue criminal prosecution or confiscationproceedings for transactions entered into priorto the coming into force of the 2016 Act, viz.,25.10.2016. As a consequence of the abovedeclaration, all such prosecutions orconfiscation proceedings shall stand quashed.continue criminal prosecution or confiscationproceedings for transactions entered into priorto the coming into force of the 2016 Act, viz.,25.10.2016. As a consequence of the abovedeclaration, all such prosecutions orconfiscation proceedings shall stand quashed. e) Concerned authorities cannot initiate orcontinue criminal prosecution or confiscationproceedings for transactions entered into priorto the coming into force of the 2016 Act, viz.,25.10.2016. As a consequence of the abovedeclaration, all such prosecutions orconfiscation proceedings shall stand quashed.continue criminal prosecution or confiscationproceedings for transactions entered into priorto the coming into force of the 2016 Act, viz.,25.10.2016. As a consequence of the abovedeclaration, all such prosecutions orconfiscation proceedings shall stand quashed. f) As this Court is not concerned with theconstitutionality of such independent forfeitureproceedings contemplated under the 2016Amendment Act on the other grounds, theaforesaid questions are left open to beadjudicated in appropriate proceedings.”constitutionality of such independent forfeitureproceedings contemplated under the 2016Amendment Act on the other grounds, theaforesaid questions are left open to beadjudicated in appropriate proceedings.” 5.As could be seen from the aforesaid judgment, it has beenclearly held by the Hon’ble Apex Court that authorities cannotinitiate or continue criminal prosecution or confiscationclearly held by the Hon’ble Apex Court that authorities cannotinitiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the cominginto force of the 2016 Act, viz., 25.10.2016 and as aconsequence thereof, all such prosecutions and confiscationproceedings which had been initiated came to be quashed. 6.In that view of the matter, we are of the considered viewprosecution and initiation of proceedings in the instant casebeing pursuant to the Amendment Act the declaration made bythe Hon’ble Apex Court in paragraph 18(e) would squarely beapplicable and as such, impugned attachment order standsquashed and all consequential proceedings initiated thereto.We also make it clear that question which has been kept openby the Hon’ble Apex Court in paragraph 18.1(f), would squarelybe applicable to the facts on hand also. 7.With aforesaid observation, Special Civil Applicationstands allowed and we make no order as to costs. (ARAVIND KUMAR,CJ) phalguni (ASHUTOSH J. SHASTRI, J)