TaxTMI 
TaxTMI 
2024 (10) TMI 390
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....g Act, 2002 (hereinafter referred to as "the 2002 Act")?" 2. Submissions put forth the Learned Counsel Representing the Parties 2.1 The learned counsel representing the parties have been heard at the stage of admission of the writ petition. On the one hand, the petitioner's counsel submits that there is fundamental flaw in the attachment order as the petitioner has no concern with the proceeds of crime on account of demerger of the companies. Moreover, the Enforcement Directorate (ED) has wrongly held the property to be the proceeds of crime and attachment of the property of equivalent value. Further the methodology for calculating the proceeds of crime allegedly generated from ante dating six collaboration agreements is fundamentally flawed. Reliance is placed upon the judgments passed in Radha Krishan Industries v. State of Himachal Pradesh and Others (2021) 6 SCC 771 and Godrej Sara Lee Limited v. Excise and Taxation Officer-cum-Assessing Authority and Others 2023 SCC OnLine SC 95. 2.2 Per contra, the ED's counsel contest the entertainability of this writ petition. 3. Analysis of the Submissions 3.1 The availability of the statutory alternative remedy under Section 5 (5)....
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.... statutory period of 30 days had not come to an end. 3.5 The Supreme Court, in Vijay Madanlal Choudhary & Others v. Union of India & Others (2002) SCC Online SC 929, while examining the constitutional validity of various provisions of the 2002 Act, has also examined the validity of Section 5. It has been found that the adequate safeguards have been provided in the 2002 Act in order to give an opportunity to the aggrieved person to file his response/objections before the Adjudicating Authority. The 2002 Act has also ensured that the PAO will be passed either by the Director or any other officer not below the rank of Deputy Director authorized by the Director for the purpose of this Section while giving reasons to believe on the basis of material in his possession. Para Nos. 57, 61 and 70 read as under:- "57. Be that as it may, as aforesaid, sub-section (1) delineates sufficient safeguards to be adhered to by the authorised officer before issuing provisional attachment order in respect of proceeds of crime. It is only upon recording satisfaction regarding the twin requirements referred to in sub-section (1), the authorised officer can proceed to issue order of provisional attachm....
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.... provisional attachment are effective measures to protect the interest of the person concerned who is being proceeded with under the 2002 Act, in the following manner as rightly indicated by the Union of India: i) For invoking the second proviso, the Director or any officer not below the rank of Deputy Director will have to first apply his mind to the materials on record before recording in writing his reasons to believe is certainly a sufficient safeguard to the invocation of the powers under the second proviso to Section 5 (1) of the 2002 Act. ii) There has to be a satisfaction that if the property involved in money-laundering or 'proceeds of crime' are not attached "immediately", such non-attachment might frustrate the confiscation proceedings under the 2002 Act. iii) The order passed under Section 5 (1) of the 2002 Act is only provisional in nature. The life of this provisional attachment order passed under Section 5 (1) of the 2002 Act is only for 180 days, subject to confirmation by an independent Adjudicating Authority. iv) Under Section 5 (2) officer passing provisional attachment order has to immediately forward a copy of this order to the Adjudicating Authorit....
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....b) Adjudicating Authority may disagree and not confirm the provisional attachment, in which case attachment over the property ceases. xi) Under Section 8 (4) of the 2002 Act, upon confirmation of the order of provisional attachment, the Director or other officer authorized by him shall take the possession of property attached. xii) Under Section 8 (5) of the 2002 Act, on the conclusion of a trial for an offence under the 2002 Act if the Special Court finds that the offence of money-laundering has been committed it will order that the property involved in money-laundering or the property which has been involved in the commission of the offence of money-laundering shall stand confiscated to the Central Government. xiii) However, under Section 8 (6) if the Special Court on the conclusion of the trial finds that no offence of money-laundering has taken place or the property is not involved in money-laundering it will release the property which has been attached to the person entitled to receive it. xiv) Under Section 8 (7), if the trial before the Special Court cannot be conducted because of the death of the accused or because the accused is declared proclaimed offender, th....