Court grants interim relief preventing retroactive actions under Black Money Act

The court ruled in favor of the petitioner, granting interim relief to prevent actions under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, before its official commencement date. The court held that the Government lacked authority to exercise powers under the Act retroactively, emphasizing adherence to the statutory commencement date set by Parliament. Consequently, the respondents were restrained from taking any action against the petitioner based on the challenged order until the next hearing. Further proceedings were scheduled for 04.07.2019.

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Issues:
Challenge to the retrospective application of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Analysis:
The petitioner sought a writ to declare Section 51(1) of the Act applicable only prospectively, challenging the retrospective application of the Act. The issues raised included the nullification of Sections 10(1) and 54 of the Act, and the legality of certain notifications issued by the Government. The petitioner also challenged specific orders and notices issued by the Income Tax Department. The main contention revolved around whether the Government had the authority to exercise powers under the Act before its official commencement date.

During the hearing, the respondent, Union of India, did not file a reply and adopted the counter affidavit. The court considered the application for a stay on the order dated 22.01.2019 to prevent any action under Section 10 of the Act against the petitioner. The core issue at the interim stage was whether the Government could utilize powers under the Act before its effective date.

The petitioner's counsel argued that the Government's actions, through various notifications, were impermissible as they were issued before the Act's commencement. Conversely, the Income Tax Department contended that the Government had the authority to advance the Act's enforcement date under Section 86. However, the court disagreed with this interpretation, emphasizing that Parliament had expressly stated the Act's commencement date as 1st April 2016.

The court referenced a Supreme Court decision to support its position that the Government cannot enforce a statute before the date specified by Parliament. Consequently, the court held that the official respondents were not authorized to exercise powers under the Act before its commencement. As a result, the petitioner was granted interim relief to prevent further actions under the Act until the next hearing date.

In conclusion, the court restrained the respondents from taking any action against the petitioner based on the impugned order, highlighting the importance of adhering to the statutory commencement date set by Parliament. The case was scheduled for further proceedings on 04.07.2019.

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