Delhi High Court Rejects Challenge To Black Money Act Provisions With ₹60K Costs, Says It Was Filed To Avoid Prosecution
Delhi High Court has dismissed challenge to the constitutional validity of the proviso to Section 3(1) and Clause (c) of Section 72 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.A Division Bench comprising Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta said that the challenge was a “subterfuge to obviate prosecution” and dismissed three...
Delhi High Court has dismissed challenge to the constitutional validity of the proviso to Section 3(1) and Clause (c) of Section 72 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
A Division Bench comprising Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta said that the challenge was a “subterfuge to obviate prosecution” and dismissed three writ petitions against the provisions with Rs. 20,000 costs each.
The petitions were filed by Rajendra Prasad Nargis, Sudha Nargis and Deepak Nargis. They had challenged the proviso to Section 3(1) and Clause (c) of Section 72 of the 2015 Act, contending that the provisions were arbitrary and violated Articles 14, 300A and 265 of the Constitution of India as they operated retrospectively.
The petitioners argued that the properties in the cases were acquired prior to the enactment of the 2015 Act and therefore the said enactment cannot levy tax and bring within its sweep any property which was acquired or purchased prior to promulgation of the said legislation.
The Court was also informed that the petitioners had earlier filed writ petitions challenging the assessment order, which were subsequently withdrawn with liberty to pursue appropriate remedies. They had also filed separate petitions challenging penalty proceedings which were pending before the High Court.
On the other hand, the Central Government opposed the pleas arguing that the same amounted to an abuse of the process of law since the petitioners had raised the plea of retrospectivity only at a belated stage.
It was pointed out that when the petitioners had earlier challenged the penalty proceedings, they had questioned only Sections 41 and 43 of the Act and had not challenged the proviso to Section 3(1), Clause (c) of Section 72 or the retrospective operation of the legislation.
Dismissing the pleas, the Court said that the petitions could not be maintained and that if the petitioners were aggrieved of the retrospectivity of the impugned provisions, such grounds were available to them even at the first stage, when writ petitions qua penalty proceedings were filed.
“We are not inclined to entertain the present writ petitions, because according to us, the challenge to Proviso to Section 3(1) and Clause (c) of Section 72 of the Act of 2015 is a subterfuge to obviate prosecution or to somehow maintain the writ petition before this Court,” the Court ruled.
The Bench observed that the retrospective operation of the provisions of the Act of 2015 is the first and most obvious question or ground that could have occurred to a litigant.
“Section 72 of the Act of 2015 is clearly barred by the principles of Order II Rule 2 of the Code of Civil Procedure, 1908, – as all the pleas which were available to the petitioners at the first instance ought to have been taken,” the Court said.
It ordered that the costs of Rs. 20,000 each will be deposited by the petitioners with the Delhi State Legal Services Authority within two weeks.
However, the Court clarified that it had neither recorded any finding about validity or vires of the Proviso to Section 3(1) and Clause (c) of Section 72 of the Act of 2015 nor made any observation about the legality of the prosecution so launched against the petitioners.
It said that the petitioners will be free to raise all their pleas before the concerned authorities or to take appropriate legal recourse available to them.
Title: RAJENDRA PRASAD NARGIS v. UNION OF INDIA & ORS and Other Connected Matters