KAILASH KUMAR AND OTHERS vs. DEPUTY COMMISSIONER OF INCOME TAX

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CWP/25899/2021HC Punjab & HaryanaPHHC01119934202111 October 2023Bench: MS. JUSTICE RITU BAHRI,MRS. JUSTICE MANISHA BATRA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, quashing the notices dated September 25, 2020 (Annexures P-1, P-2), September 23, 2020 (Annexures P-3, P-7, P-8), September 24, 2020 (Annexure P-4), September 28, 2020 (Annexure P-5), and September 18, 2020 (Annexure P-6). The court's decision was based on the Supreme Court's judgment in Union of India and Another vs. Ganpati Dealcom Pvt. Ltd., which held that Section 5 of the Benami Transaction (Prohibition) Amendment Act, 2016, being punitive, could only be applied prospectively. The High Court found the present petition squarely covered by this precedent. However, the court clarified that the respondent (revenue) would be entitled to seek revival of the petition if the review petition filed by the respondent in the Ganpati Dealcom Pvt. Ltd. case is allowed by the Supreme Court.

What were the facts?

The petitioners, Kailash Kumar and others, filed a writ petition before the High Court of Punjab and Haryana challenging the vires of the Prohibition of Benami Transaction Act, 1988, as amended in 2016. They contended that the amendments could not be applied retrospectively. The petitioners sought a writ of mandamus to declare the retrospective operation of the 2016 amendment void and a writ of certiorari to quash several notices issued to them by the Deputy Commissioner of Income Tax, dated between September 18, 2020, and September 28, 2020. The case was heard by a Division Bench of the High Court.

What were the issues?

1. Whether the provisions of the Prohibition of Benami Transaction Act, 1988, as amended by the 2016 Amendment Act, can be applied retrospectively, particularly concerning Section 5 of the Act. (Question of law) The petitioners argued that the 2016 amendment to the Benami Act, specifically Section 5, is punitive in nature and therefore cannot be applied retrospectively. They relied on the Supreme Court's judgment in Union of India and Another vs. Ganpati Dealcom Pvt. Ltd., 2022 SCC Online SC 1064, which declared certain provisions of the un-amended Benami Act unconstitutional and held that Section 5 of the amended Act could only be applied prospectively. The revenue (respondent) did not record any specific arguments in the judgment. However, the judgment notes that a review petition was filed by the respondents in the Ganpati Dealcom Pvt. Ltd. case before the Supreme Court.

Which sections of the Income-tax Act were involved?

Section 5

AI-generated summary — verify with the full judgment below

Neutral Cita on No. 2023:PHHC:140658-DB IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 255-2 CWP No.25899 of 2021 (O&M) Date of decision: 11.10.2023 KAILASH KUMAR AND ORS.

…. Petitioners Versus DEPUTY COMMISSIONER OF INCOME TAX

…. Respondent CORAM: HON’BLE MS. JUSTICE RITU BAHRI HON’BLE MRS. JUSTICE MANISHA BATRA Present : Mr. Divya Suri, Advocate Ms. Sameeksha Gupta, Advocate for the petitioners. Ms. Gauri Neo Rampal Opal, Sr. Standing Counsel for the respondent. **** RITU BAHRI, J. (Oral) 1. This writ petition has been taken up for final disposal with the consent of the counsel for the parties. 2. The petitioners challenge the vires of Prohibition of Benami Transaction Act, 1998 (For short-“Benami Act”) as amended by way of 2016 Amendment Act, on the ground that the provisions of the amending Act could not be operated retrospectively and therefore, he prayed for issuing a writ in the nature of mandamus and certiorari thereby declaring the retrospective operation and effect of the POOJA SAINI 2023.11.06 10:51 I attest to the accuracy and integrity of this order/judgment

CWP No.25899 of 2021 (O&M) -2- amendment made in the Benami Act in the year 2016, and also prayed for issuing a writ in the nature of certiorari for quashing the notices dated 25.09.2020 (Annexure P-1), dated 25.09.2020 (Annexure P-2), dated 23.09.2020 (Annexure P-3), dated 24.09.2020 (Annexure P-4), dated 28.09.2020 (Annexure P-5), dated 18.09.2020 (Annexure P-6), dated 23.09.2020 (Annexure P-7) and dated 23.09.2020 (Annexure P- 8). 3. Learned counsel for the petitioners has referred to a judgment passed by Hon'ble the Supreme Court in Union of India and Another vs. Ganpati Dealcom Pvt. Ltd., 2022 SCC Online SC 1064 wherein the provisions of Section 3(2) of the un-amended Benami Act, 1988 and Section 5 of the Act, 1988 had been declared unconstitutional and it was directed that the provisions of Section 5 of the Benami Transaction (Prohibition) Amendment Act, 2016 (for short-the Act, 2016) being punitive in nature could be applied only prospectively and not retroactively. 4. Learned counsel for the petitioners also placed on record a copy of order dated 02.05.2023 passed by Hon'ble the Supreme Court in SLP (Civil) No. 7978 of 2023 titled as Union of India and others vs. M/S Nutrient Marine Foods Ltd. and another, showing that the Union of India had not been granted leave to file appeal in view of judgment in case of Ganpati Dealcom Pvt. Ltd.'s case (supra), with liberty to it to approach the Apex Court by filing afresh petition in case, the review petition was allowed. POOJA SAINI 2023.11.06 10:51 I attest to the accuracy and integrity of this order/judgment

CWP No.25899 of 2021 (O&M) -3- 5. Though, a review petition as filed by the respondents in Ganpati Dealcom Pvt. Ltd.’s case (supra), is stated to be pending before Hon’ble Supreme Court, however, in case titled as Union of India and others vs. M/S Nutrient Marine Foods Ltd., no leave has been granted to file appeal. 6. Since the present petition is squarely covered by the judgment passed by the Supreme Court in Ganpati Dealcom Pvt. Ltd.’s case (supra), therefore, this writ petition allowed and notices dated 25.09.2020 (Annexure P-1), dated 25.09.2020 (Annexure P-2), dated 23.09.2020 (Annexure P-3), dated 24.09.2020 (Annexure P-4), dated 28.09.2020 (Annexure P-5), dated 18.09.2020 (Annexure P-6), dated 23.09.2020 (Annexure P-7) and dated 23.09.2020 (Annexure P- 8) are being quashed. However, it is clarified that the respondent shall be entitled to seek revival of the petition in case the review petition filed by the respondent in Ganpati Dealcom Pvt. Ltd. is allowed. 7. Pending application, if any, also stands disposed of. (RITU BAHRI) JUDGE (MANISHA BATRA) 11.10.2023 JUDGE pooja saini Whether speaking/reasoned: Yes/No. Whether reportable : Yes/No POOJA SAINI 2023.11.06 10:51 I attest to the accuracy and integrity of this order/judgment

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