SUPREME COURT'S RECALL OF BENAMI LAW VERDICT – POLITY

Supreme Court's Recall of Benami Law Verdict – polity

NEWS: The Supreme Court recalled its August 2022 judgment on October 18, 2023, reviving 4,800 benami transaction cases.

·         These cases involve properties worth ₹12,000 crore across India, previously put on hold by the Income Tax (I-T) Department.

WHAT’S IN THE NEWS?

Historical Context of the Law

·         The Benami Transactions (Prohibition) Act was originally enacted in 1988.

·         However, it remained dormant due to the absence of an implementation framework.

·         The 2016 Amendment introduced stringent measures, including imprisonment and fines for benami transactions dating back to 1988.

Supreme Court’s 2022 Verdict

·         Declared the retrospective application of the 2016 Amendment unconstitutional.

·         Stopped the I-T Department from pursuing cases related to pre-2016 transactions.

·         Halted criminal prosecution and confiscation for these transactions.

Impact of the October 2023 Recall Verdict

·         Allows the I-T Department to resume investigations and proceedings.

·         Revival of legal proceedings underlines the importance of pending Supreme Court judgments for final direction.

Current Benami Probes

  • Ongoing Investigations (2016-2024)

·         3,850 cases under probe involving benami assets worth ₹8,000 crore.

·         Cases relate to post-2016 transactions, unaffected by the 2022 Supreme Court ruling.

  • Challenges in Resuming Investigations

·         Difficulties in tracking entities involved in benami transactions due to liquidation, dissolution, or removal from corporate registries.

·         Time-lapse of over eight years complicates recovery of assets and financial trails.

Regional Distribution of Cases

  • Central Region (Madhya Pradesh, Chhattisgarh)

·         1,500 cases under investigation, the highest among all regions.

  • Southern Region (Tamil Nadu, Karnataka, Andhra Pradesh, Telangana)

·         1,200 cases pending, highlighting significant benami activities in southern states.

  • Northern Region (Delhi, Punjab, Haryana, Uttar Pradesh, Rajasthan)

·         900 cases pending, demonstrating widespread use of benami transactions in the northern belt.

  • Western Region (Maharashtra, Gujarat)

·         800 cases involve substantial assets and transactions.

  • Eastern Region (West Bengal, Bihar, North-East)

·         400 cases pending, marking lower benami activities compared to other regions.Implications and Way Forward

  • Legal and Administrative Repercussions

·         Final judgment from the Supreme Court is critical for resumption of enforcement.

·         The I-T Department’s capacity to act hinges on legal clarity.

  • Potential Obstacles

·         Legal complexities due to retrospective action.

·         Administrative challenges in identifying and attaching properties.

  • Significance of the Recall Verdict

·         Reinforces the legal foundation of the Benami Transactions (Prohibition) Amendment Act.

·         Emphasizes the judiciary’s role in balancing enforcement with constitutional principles.