Summary
The Union challenged an interim restraint against action under the Black Money Act founded on the view that advancing its commencement date made penal provisions retrospective. The Court rejected that basis, explaining the relationship between the charging provision and the one-time declaration window. It set aside the interim order while expressly leaving the writ petition for independent determination on merits.
Issues
- Whether the change of commencement date justified the High Court’s interim restraint on the ground of retrospective penal operation.
Provisions considered
- Section 3, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015The charging scheme operated for assessment years commencing on or after 1 April 2016 and valued the undisclosed asset by reference to the relevant previous year. (¶¶ 7, 8, 11, 12, 20)
- Section 72(c), Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015The deeming rule concerned assets acquired before commencement for which no declaration was made. (¶¶ 14, 15)
Held
- For examining the interim order, the Court read the charging provision with the relevant previous-year definition and concluded that advancing commencement did not alter the commencement of assessment-year taxation specified in section 3. (¶¶ 7, 9, 10, 11, 12, 20)
- The change to 1 July 2015 removed an anomaly so that assessees could use the declaration deadline of 30 September 2015 and payment deadline of 31 December 2015. The High Court’s view that the notification thereby made the penal provisions retrospective was incorrect for purposes of the interim decision. (¶¶ 13, 14, 15, 19, 20)
- The assessment year in question was 2019–20. The restraint was unsustainable, but the Court’s observations were confined to interim-order review and were not to prejudice independent determination of the pending writ petition. (¶¶ 21, 22, 23)
Result
The appeal was allowed and the High Court’s interim order quashed. The High Court was requested to decide the writ petition on its own merits, uninfluenced by observations made solely to assess that interim order.