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2022 (12) TMI 568 - TELANGANA HIGH COURTProhibition of Benami Property Transactions - provisional order of attachment - HELD THAT:- As it is evident that this Court took the view that Section 2(9)(A) and 2(9)(C) of the Benami Property Act inserted by the Amendment Act of 2016 are prospective in nature because these two provisions have significantly and substantially widened the definition of ‘benami transaction’ than as was there in the unamended Benami Property Act of 1988. Taking note of the fact that Central Government had notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016, this Court held that these two provisions cannot be applied to a transaction which took place prior to 01.11.2016. In that case, the transaction was dated 14.12.2011. Therefore, the show cause notice, provisional attachment order as well as the adjudicating order were declared null and void being without jurisdiction and consequently, quashed. In Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] which went to the Supreme Court from a decision of the Calcutta High Court, the question which was considered by the Supreme Court was whether the Benami Property Act as amended by the Amendment Act of 2016 has a prospective effect? While examining this question, Supreme Court went into the constitutionality of the original Act i.e., Benami Property Act. Supreme Court came to the conclusion that Section 3 (criminal provision), Section 2(a) (definition clause) and Section 5 (confiscation proceedings) of the Benami Property Act are overly broad, disproportionately harsh and without adequate safeguards. Though such provisions were in a dormant condition, nonetheless, Supreme Court declared Sections 3 and 5 of the Benami Property Act as unconstitutional from inception. Supreme Court has declared that the Amendment Act of 2016 is not merely procedural but prescribes substantive provisions. Therefore, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to coming into force of the 2016 Amendment Act i.e., 25.10.2016. As a consequence, all such transactions or confiscation proceedings prior to 25.10.2016 shall stand quashed. Supreme Court has also clarified that in rem forfeiture provision under Section 5 of the Amendment Act of 2016 being punitive in nature can only be applied prospectively and not retroactively. In view of the finality of the law declared by the Supreme Court, the provisional attachment order dated 27.12.2021 cannot be sustained. Accordingly, the same is hereby set aside and quashed.
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