H K RAMEGOWDA V. INITIATING OFFICER UNDER THE PBPT ACT AND DEPUTY COMMISSIONER OF INCOME TAX (BP)

WP/50061/2019

AI Insights

The case revolves around the challenge to a provisional attachment order under the Prohibition of Benami Property Transactions Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016. The petitioners argued that the amendments should be applied prospectively, not retrospectively, as assumed by the authorities in their proceedings. The High Court of Karnataka, referencing a Supreme Court decision, agreed with the petitioners, leading to the quashing of the attachment orders and the show cause notice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 693836 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-12-2022
• 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: K V ARAVIND; H BHUSHAN
• Assessee Lawyers: VANI
• Keywords: Benami property; Prospective effect; Provisional attachment; Retrospective effect
• Section: 24(3)

Judgement Text

" - 1 - WP No. 50061 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF DECEMBER, 2022 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 50061 OF 2019 (GM-RES) BETWEEN: 1. SRI. H.K. RAMGEGOWDA S/O SRI. KEMPEGOWDA, AGED ABOUT 47 YEARS, RESIDING AT HULLENAHALLI VILLAGE, DHUDHA HOBLI, HASSAN TALUK, HASSAN DISTRICT. 2. SRI. H.K. SURESH S/O SRI. KEMPEGOWDA, AGED ABOUT 45 YEARS, RESIDING AT NO.13, 1ST MAIN ROAD, TEMPLE ROAD, CHANDRA LAYOUT, VIJAYA NAGAR, BANGALORE-560040 …PETITIONERS (BY SMT. VANI H, ADVOCATE) AND: 1. INITIATING OFFICER UNDER THE PBPT ACT AND DEPUTY COMMISSIONER OF INCOME TAX (BP) NO.208, 2ND FLOOR, C.R. BUILDING, QUEENS ROAD, BENGALURU-560001. 2. THE ADJUDICATING AUTHORITY UNDER THE PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988 ROOM NO.26, 4TH FLOOR, Digitally signed by PADMAVATHI B K Location: HIGH COURT OF KARNATAKA - 2 - WP No. 50061 of 2019 JEEVAN DEEP BUILDING, PARLIAMENT STREET, NEW DELHI-110001 3. UNION OF INDIA MINISTRY OF FINANCE THROUGH ITS SECRETARY (REVENUE) DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DLEHI-110001. …RESPONDENTS (BY SRI. K.V.ARAVIND, ADVOCATE FOR R1 AND R2 SRI H. SHANTHI BHUSHAN, DSG. FOR R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THE COMMENCEMENT OF OPERATION OF THE PROVISIONS OF BENAMI AMENDMENT ACT, 2016 DATED 11.08.2016 IN RESPECT OF PROVISIONS VIDE SECTION 1 AND SECTIONS 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) OF THE PBPT ACT, 1988 (VIDE ANNEXURE-A) AS PROSPECTIVE WITH EFFECT FROM 01.11.2016 AS NOTIFIED BY THE CENTRAL GOVERNMENT BY ISSUE OF NOTIFICATION NO.DL(N).04/0007/2003-16 DATED 25.10.2016 AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: - 3 - WP No. 50061 of 2019 ORDER The petitioners are before this Court calling in question the provisional attachment order made under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016. 2. Learned counsel appearing for the petitioners 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 petitioners would further take this Court through an order passed following judgment of the Hon'ble Apex Court in Union of India's case (supra) in W.P. No.27322/2019 and connected matters, wherein a coordinate Bench of this Court has held as follows: - 4 - WP No. 50061 of 2019 \"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 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 - 5 - WP No. 50061 of 2019 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 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.\" 5. 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: - 6 - WP No. 50061 of 2019 ORDER (i). The writ petition is allowed. (ii). The show cause notice dated 18.03.2019 issued by respondent No.1 against the petitioner invoking the provisions of the Prohibition of Benami Property Transactions Act, 1988 stands quashed. (iii). The consequent attachment orders passed by the authorities also stand quashed. (iv). Petitioners would be entitled to all consequential benefits that would flow from the quashment of the attachment orders. Sd/- JUDGE SMA List No.: 1 Sl No.: 43 "