The Supreme Court Tuesday quashed the Delhi High Court's interim order restraining the Income Tax (IT) department from taking any action against VVIP chopper scam accused Gautam Khaitan, against whom a separate black money laundering case has been lodged, saying it was "not sustainable in law".
The apex court set aside the May 16 order of the high court which had also said that the black money law cannot be allowed to operate with retrospective effect from July 1, 2015.
A three-judge bench headed by Justice Arun Mishra asked the high court to decide the petition pending before it on its own merits and uninfluenced by the observations of the top court.
The bench, also comprising justices M R Shah and B R Gavai, said that the scheme of the Black Money Act is to "provide stringent measures for curbing the menace of black money" and various offences have been defined and stringent punishments have been provided under the law.
"It would further be relevant to note that sub-section (3) of section 1 of the Black Money Act, itself provides that save as otherwise provided in this Act, it shall come into force on 1st day of July, 2015. A conjoint reading of the various provisions would reveal that the assessing officer can charge the taxes only from the assessment year commencing on or after April 1, 2016. However, the value of the said asset has to be
as per its valuation in the previous year," the bench noted in its 13-page verdict.
"As such, we find that the high court was not right in holding that, by the notification/order impugned before it, the penal provisions were made retrospectively applicable," the bench said.
It noted that the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was passed by the Parliament on May 11, 2015 and it had
received Presidential assent on May 26, 2015.
It noted that by an order notified on July 1, 2015, which was challenged before the high court, it was provided that the Black Money Act shall come into force on July 1, 2015.
Referring to section 59 of the Act, the bench said it gives an opportunity to the assessees, who have acquired an asset located outside India from income chargeable to tax under the Income Tax Act, to declare such asset and pay tax and penalty thereon.
"The penal provisions under sections 50 and 51 of the Black Money Act would come into play only when an assessee has failed to take benefit of section 59 and neither disclosed assets covered by the Black Money Act nor paid the tax and penalty thereon," it said.
"In that view of the matter, we find that the interim order passed by the high court is not sustainable in law, the same is quashed and set aside," the bench said.
The apex court passed the verdict on an appeal filed by the Centre against the high court's May 16 interim order.
The top court had in May this year stayed the operation of high court's May 16 interim order and had said it would hear the matter.
The high court, in its interim order, had stayed the Centre's notification to make operational the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, with effect form July 1, 2015.
Khaitan is one of the accused in the Rs 3,600-crore AgustaWestland VVIP chopper scam. In the high court, he has challenged the legality of various provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act.
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