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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the petitioners were entitled to discharge on the ground that the amended scope of Section 3 of the Prevention of Money Laundering Act, 2002 could not be applied retrospectively to cash allegedly derived from the scheduled offence and whether a prima facie case of money-laundering was made out.
Analysis: The pre-amended and amended forms of Section 3 were read in light of the Supreme Court's construction that the provision has a wide reach and covers every process or activity connected with proceeds of crime, including possession, acquisition, concealment, use, and projecting or claiming such property as untainted. The Court held that the offence of money-laundering is not confined to the final act of integration into the formal economy and that the relevant question is whether the accused was involved in dealing with proceeds of crime. It further held that the petitioners' reliance on retrospectivity was untenable because the alleged receipt and handling of bribe money itself brought the case within the ambit of the provision as understood even before the 2019 explanation. The trial court's refusal to discharge was found to be consistent with the governing legal principles.
Conclusion: The challenge to discharge was rejected and the finding that the complaint disclosed a prima facie offence under the Prevention of Money Laundering Act, 2002 was upheld.
Ratio Decidendi: Section 3 of the Prevention of Money Laundering Act, 2002 covers possession and other dealings with proceeds of crime as part of the offence, and a discharge is unwarranted where the complaint discloses prima facie involvement in such activity.
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