New Delhi: In a significant development, a Special Bench of the Supreme Court has recalled its August 23, 2022, judgment that declared provisions and amendments made in the Benami Property Transactions Act "unconstitutional and manifestly arbitrary." The decision was led by Chief Justice of India D.Y. Chandrachud.
The Bench referred the case for fresh adjudication, allowing the parties to argue on the constitutionality of the benami law provisions before the appropriate Bench. The court emphasized that the arguments which led to the 2022 verdict had not squarely addressed the issue of the constitutional validity of Sections 3(2) and 5 of the Act.
The amendments introduced in 2016 had applied retrospectively and could have resulted in imprisonment for up to three years for those involved in benami transactions. The government's decision to recall the 2022 judgment was based on review petitions filed by the Union government and the Deputy Commissioner of Income Tax (Benami Prohibition).
Solicitor-General Tushar Mehta represented the government and argued that the short legal question raised was whether the 2016 amendments had a prospective effect. The court's decision to recall the judgment indicates that the earlier verdict may not have fully considered the constitutional validity of the amendments.
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