MS BARKHA MAHTANI V. THE UNION OF INDIA

WP/3786/2022

AI Insights

The case revolves around a challenge to the provisional attachment order made under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988, as amended by the 2016 Amendment Act. The petitioner, Ms. Barkha Mahtani, contested the retrospective application of certain provisions of the Amendment Act, which were used to initiate proceedings against her. The High Court of Karnataka, referencing a Supreme Court decision, found that the provisions in question were intended to be applied prospectively. Consequently, the court quashed the show cause notice and the attachment orders, thereby ruling in favor of the petitioner.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 678139 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 08-12-2022
• Assessment Year: misc
• Other Referred Cases: Union of India and Another v. Ganpati Dealcom Pvt. Ltd.
• Laws Referred To: Prohibition of Benami Property Transactions Act, 1988, Benami Transactions (Prohibition) Amendment Act, 2016
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: H SHANTI BHUSHAN; K V ARAVIND
• Assessee Lawyers: K SHASHIKIRAN SHETTY; NAGARAJA
• Keywords: Benami property; Provisional attachment; Retrospective operation; Unconstitutional
• Section: 24(1)

Judgement Text

" - 1 - WP No. 3786 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF DECEMBER, 2022 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 3786 OF 2022 (GM-RES) BETWEEN: 1. MS. BARKHA MAHTANI AGE 48 YEARS, NO.213 EMBASSY WOODS, 6A, CUNNINGHAM ROAD, BANGALORE-560 052. …PETITIONER (BY SRI. K.SHASHIKIRAN SHETTY, SENIOR COUNSEL ALONG WITH SRI. NAGARAJA NAIDU.A.,ADVOCATE) AND: 1. THE UNION OF INDIA THROUGH FINANCE SECRETARY - MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110 001. 2. DEPUTY COMMISSIONER OF INCOME TAX INITIATING OFFICER (BENAMI PROHIBITION) CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU-560 001 3. THE ADJUDICATING AUTHORITY (BENAMI PROHIBITION) Digitally signed by PADMAVATHI B K Location: HIGH COURT OF KARNATAKA - 2 - WP No. 3786 of 2022 \"UTSAV\" 64/1, G N CHETTY ROAD, T NAGAR, CHENNAI-600 017. …RESPONDENTS (BY SRI. H.SHANTI BHUSHAN, DSG FOR R-1 SRI. K.V.ARAVIND, ADVOCATE FOR R-2 AND R-3) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO i)DECLARE INTERPRETATION OF RESPONDENTS TO THE RETROSPECTIVE OPERATION PROVIDED OF THE AMENDING ACT OF 2016 IN RESPECT OF THE PROVISIONS VIDE SECTIONS 1, 2(8), 2(9)(A), 2(26), 19(1)(b), 21(1), 24(1), 24(3), 24(4)(a)(i), 24(5), 26(1) AND 26(3), 53, 54 VIDE ANNEXURE-A AS UNCONSTITUTIONAL AND THEREFORE, TO BE NULL AND VOID AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner is before this Court calling in question the provisional attachment order made under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016. - 3 - WP No. 3786 of 2022 2. Learned counsel appearing for the petitioner would submit that the issue in the lis stands covered by the judgment rendered by the Hon’ble Apex Court in the case of Union of India and Another v. Ganpati Dealcom Pvt. Ltd. reported in 2022 SCC OnLine SC 1064. 3. Learned counsel for the respondents would not dispute the position. 4. Learned counsel for the petitioner would further take this Court through an order passed by this Court in W.P.No.27322/2019 and connected matters, disposed on 05.09.2022, following the judgment of the Hon'ble Apex Court rendered in the case of UNION OF INDIA (supra), wherein, this Court has held as follows: \"Petitioners are knocking at the doors of Writ Court in effect, seeking a declaration that certain provisions of the Prohibition of Benami Property Transaction Act, 1988 as amended by Amendment Act, 2016 are prospective in operation and therefore, the impugned proceedings taken up with an assumption of - 4 - WP No. 3786 of 2022 the said provisions being retrospective in effect are liable to be voided. Some of the petitioners have the grievance against the interdiction of registration of conveyances issued by the official respondents. 2. Learned ASG Mr. Nargund appearing for the answering respondents fairly agrees that the subject provisions of the Amendment Act have been held to be prospective in effect by the Apex Court in UNION OF INDIA Vs. GANAPATHI DEALCOM PVT. LTD Civil Appeal No.5703/2022 disposed off on 23.08.2022, which decision learned advocates appearing for the petitioners heavily banked upon in support of their cases. However, he seeks a short accommodation contending “a decision is being taken at the highest level”. 3. Having heard the learned counsel appearing for the parties and having perused the petition papers, this Court is of a considered opinion that there is no reason to keep the matter pending any longer in view Apex Court decision supra. The impugned proceedings having been taken up with a wrong assumption of the subject provisions of the Amendment Act being retrospective in - 5 - WP No. 3786 of 2022 operation, have a demonstrable error apparent on their face and therefore, are liable to be voided. Further, the interdiction of execution & registration of the conveyances is also liable to be set at naught. When highest Court of the Country has clarified the legal position, the contention that “a decision is being taken at the highest level and therefore, matter be kept pending for a short while” does not merit acceptance. Ordered accordingly and all the petitions stand disposed off, costs having been made easy.\" In the light of the issue standing covered by the judgment of the Apex Court and that of the coordinate Bench of this Court on all its fours, I deem it appropriate to pass the following: ORDER (i) The writ petition is allowed. (ii) The show cause notice dated 06.09.2021 issued by respondent No.1 against the petitioner invoking the provisions of the - 6 - WP No. 3786 of 2022 Prohibition of Benami Property Transactions Act, 1988 stands quashed. (iii) The consequent attachment orders passed by the authorities also stand quashed. (iv) Petitioner would be entitled to all consequential benefits that would flow from the quashment of the attachment orders. Sd/- JUDGE JY List No.: 1 Sl No.: 69 "