Orders of the Deputy Commissioner of Income Tax, Chennai, to continue with the provisional property attachment until the Adjudicating Authority determines the Benami nature of such property in accordance with the law were approved by the Madras High Court in the case of V.S.J. Dinakaran v. The Deputy Commissioner of Income Tax (Writ Appeal No. 1174 of 2022) through a Division Bench of R. Mahadevan and Sathya Narayana Prasad, JJ.
FACTS OF THE CASE
The current appeal results from a joint decision dated October 25, 2021. The case’s facts, which prompted the appellants to ask for a writ of certiorari, go back to November 2017. In response to the V.K. Sasikala case, the petitioner’s residence was searched, and numerous documents were seized. A show-cause notice was then issued to him on January 11, 2019, in accordance with section 24(1) of the Prohibition of Benami Property Transactions Act, 1988, regarding his role as the benamidar for Spectrum Mall shareholder V.K. Sasikala.
In accordance with section 24(4) of the Prohibition of Benami Property Transactions Act, 1988, the petitioner has since contested the first respondent’s order granting permission to keep the provisional attachment in place. The appellant’s attorney denied that the appellant was involved in the claimed benami transaction and argued that neither the respondent had provided all the papers it had relied upon nor had the appellant been given a chance to question the witnesses before the impugned order was made. As a result, the procedures have been conducted in flagrant breach of the norms of natural justice.
Although the Special Public Prosecutor provided supporting documentation, copies of sworn declarations referencing the appellant’s receipt of Rs. 18 crores and sales deeds were found during searches, which prompted the respondent to pursue such a course of action. Additionally, the respondent fairly followed the rules of the aforementioned Act when making the order, and the appellant received enough chances to voice his or her objections.
As the proceedings under Section 24 of the Prohibition of Benami Property Transactions Act, 1988 only required a mere prima facie opinion as to the benami nature of the transaction, which was fairly made out in the case, the Court held that there was no error in the order made by the first respondent while dismissing the writ petition.
The Court cited the case of K.L. Tripathi v. State Bank of India, (1984) where the Apex Court said that the writ petition shall not be entertained against a show cause notice. In that case, the petitioner was required to provide the appellant with all relevant documents, exercise his right to cross-examine, and have the opportunity to be heard.
Accordingly, the Court dismissed the writ appeal, leaving the appellant’s arguments for the relevant authorities to decide on the merits.
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JUDGEMENT REVIEWED BY NISHTHA GARHWAL