With R/Special Civil Application v. Deputy Director Of Income Tax

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 7704 of 2021With R/SPECIAL CIVIL APPLICATION NO. 1975 of 2022With R/SPECIAL CIVIL APPLICATION NO. 4462 of 2021With R/SPECIAL CIVIL APPLICATION NO. 6809 of 2021With R/SPECIAL CIVIL APPLICATION NO. 6883 of 2021With R/SPECIAL CIVIL APPLICATION NO. 6903 of 2021With R/SPECIAL CIVIL APPLICATION NO. 6836 of 2021With R/SPECIAL CIVIL APPLICATION NO. 6808 of 2021With R/SPECIAL CIVIL APPLICATION NO. 6832 of 2021With R/SPECIAL CIVIL APPLICATION NO. 6833 of 2021With R/SPECIAL CIVIL APPLICATION NO. 7705 of 2021With R/SPECIAL CIVIL APPLICATION NO. 7473 of 2021With R/SPECIAL CIVIL APPLICATION NO. 7475 of 2021With R/SPECIAL CIVIL APPLICATION NO. 7927 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17644 of 2021With R/SPECIAL CIVIL APPLICATION NO. 16427 of 2021With R/SPECIAL CIVIL APPLICATION NO. 16601 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17649 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17653 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17648 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17652 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17654 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 17658 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17657 of 2021With R/SPECIAL CIVIL APPLICATION NO. 17646 of 2021==================================================CHHAGANBHAI BHOLIDAS PATEL Versus DEPUTY DIRECTOR OF INCOME TAX ==================================================Appearance: MR. JAINISH P SHAH(7033) for the Petitioner(s) No. 1 MS. JIGNA J SHAH(7004) for the Petitioner(s) No. 1 MR M.R. BHATT, SENIOR ADVOCATE FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1 MR DEVANG VYAS, ADDITIONAL SOLICITOR GENERAL OF INDIA for theRespondent(s) No. 2, 3 ================================================== CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMARandHONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI Date : 07/09/2022 COMMON ORAL ORDER (PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR) 1.We have heard Mr. S.N. Soparkar, learned Senior Advocate appearing on behalf of Ms. Nupur D. Shah for thepetitioner, Mr. M.R. Bhatt, learned Senior Advocate appearingfor respondent No.1 namely the Initiating Officer as definedunder Section 2(19) read with Sections 18(1), 24 of theProhibition of Benami Property Transactions Act, 1988 (forshort ‘the Act’) and Mr. Devang Vyas, learned Additional Solicitor General of India appearing for respondent Nos.2 and 3viz., Union of India and 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 order passed 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 whereunder Hon’ble Apex Court after considering thecontentions raised thereunder as well as relevant provisions of the Act pressed into service, has arrived at the followingconclusion: “18.1 In view of the above discussion, we hold asunder: under: 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 whereunder Hon’ble Apex Court after considering thecontentions raised thereunder as well as relevant provisions of the Act pressed into service, has arrived at the followingconclusion: “18.1 In view of the above discussion, we hold asunder: 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 priorcontinue criminal prosecution or confiscationproceedings for transactions entered into prior to 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 confiscationproceedings 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 be applicable 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. With aforesaid observation, Special Civil Applicationstands allowed and we make no order as to costs. (ARAVIND KUMAR,CJ) Bharat (ASHUTOSH J. SHASTRI, J)