In August 2022, the Supreme Court had held that Benami Transactions (Prohibition) Amendment Act, 2016, does not have retrospective application and the authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the legislation.
Earlier this month, Nationalist Congress Party’s Ajit Pawar, the leader of opposition in the Maharashtra assembly, won a relief from the adjudicating authority under PBPTA, which revoked the provisional attachment order passed by the I-T department concerning a sugar factory in Satara district of Maharashtra.
In its review petition, the CBDT has prayed that the apex court has erred and dealt with the provisions of the Act for which no particular relief was sought by the aggrieved party, Ganpati Dealcom Private Limited. “In the said matter, no question was raised challenging the constitutional validity of section 3(2) and section 5 of the Act. However, the court held them to be unconstitutional. The Board has argued that despite no such specific relief sought by the petitioner, no representation made by the said firm on this point nor was any say filed by the Revenue department during the course of the hearing, the apex court has struck down the two sections holding them unconstitutional, This is a question of law which has been challenged in the review,” said a legal expert privy to the filing by the Board.
While section 3 deals with the prohibition of benami transactions; section 5 deals with property held benami liable to prosecution. The SC held that “the provisions under section 3 and section 5 were merely a shell, lacking the substance that a criminal legislation requires for being sustained…. Theproceedings contemplated under section 5 of the unamended 1988 Act, the earlier Act were in rem proceedings against benami property”.
Sources added that the Board has ascertained that the law isn’t violative of provision of section 20 (1) as held by the apex court. “Legislation has taken due care that the provisions of the Act do not violate the said Article,” the department has argued. Article 20 (1) states that no person shall be convicted of any offence except for violation of a law in force.