Supreme Court To Hear Centre’s Plea On Applicability Of Black Money Law
A man counts notes. (Photographer: Anindito Mukherjee/Bloomberg)

Supreme Court To Hear Centre’s Plea On Applicability Of Black Money Law


The Supreme Court agreed to hear on Tuesday the Centre’s plea challenging a Delhi High Court order staying its notification to allow the 2016 black money law to operate with retrospective effect from July 2015 to book and probe offenders.

The Centre is also aggrieved by the interim order of the high court that restrained the Income Tax department from taking any action against VVIP chopper scam accused Gautam Khaitan, against whom a black money case has been lodged.

The high court, in its order, said the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, which was enacted in April 2016, could not be allowed to operate with retrospective effect from July 2015.

A vacation bench of Justices Indira Banerjee and Sanjiv Khanna took note of the submissions of Solicitor General Tushar Mehta, appearing for the government, that the high court erred in staying the Centre’s notification to invoke the black money law with retrospective effect.

“It will be listed tomorrow,” the bench said when Mehta said Central Bureau of Investigation inquires were launched on the basis of the law’s applicability.

The bench refused to entertain the plea of senior advocate NK Kaul, appearing for Khaitan, that the matter be listed for hearing after a week as Khaitan’s advocate-on-record was not available during the week.

“You (Kaul) mention this (non-availability of lawyer) before the bench tomorrow,” it said.

On May 16, the high court had restrained the income tax department from taking any action against Khaitan.

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On invoking the black money law with retrospective effect, it had said the Parliament in its wisdom had enacted the Act which was to come into force from April 1, 2016 and as the date was expressly decided by them, it could not be made applicable with retrospective effect by way of a notification.

The high court has now posted the matter for hearing in July.

Khaitan is one of the accused in the Rs 3,600-crore AgustaWestland VVIP chopper scam. He has challenged the legality of various provisions of the black money law.

Khaitan has also challenged the income tax department’s Jan. 22 order granting sanction to lodge a criminal complaint against him under section 51 of the Act, which provides for a jail term between three and 10 years if found guilty of wilfully attempting to evade tax.

The high court had earlier asked the Centre as to how it gave retrospective effect —from July 2015—to the black money law, which was enacted in April, 2016 to deal with undisclosed foreign income and assets.

Khaitan has contended in the plea that action is being taken against him under the Act for assets which ceased to exist before the law came into force.

He has sought a declaration that under the black money law, the assessing officer is “not entitled to charge tax on a foreign undisclosed asset, which ceased to exist prior to the Act coming into force, only on the ground that such asset came to the notice of the assessing officer after the Act came into force”.

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