Black Money Act 2016 cannot have a retrospective effect: SC

The Supreme Court set aside the decision of the Delhi High Court that had stayed proceedings against Gautam Khaitan who is an accused in the AgustaWestland VVIP chopper scam. Khaitan was booked under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Black Money Act). Khaitan, one of the accused in the Rs.3,600-crore AgustaWestland VVIP chopper scam, had challenged the legality of various provisions of the Black Money Act.

The High Court had restrained the Centre and the Income Tax Department from taking any action against Khaitan under the Black Money Act. The Centre had filed petition in the SC challenging the decision of the High Court.

The question before the Supreme Court was whether the High Court was right in observing that while exercise of the powers under the provisions of Sections 85 and 86 of the Black Money Act, the Central Government has made the Black Money Act retrospectively applicable from 1st July, 2015 and passed a restraint order.

The Black Money Act came into force on 1st April, 2016. The Apex Court ruled that a conjoint reading of the various provisions of the Black Money Act would reveal, that the Assessing Officer can charge the taxes only from the assessment year commencing on or after 1st April, 2016. In the present case, the assessment year in consideration was 2019-2020 and the previous year relevant to the assessment year was the year ending on 31st March 2019.

Therefore the Supreme Court held that the interim order passed by the High Court is not sustainable in law, and was thus quashed and set aside.

A bench of Justices Arun Mishra, M. R. Shah and B.R. Gavai presided over the case.

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