Retrospective Applicability of Black Money Act: SC Stays Delhi HC Order

The vacation bench of Justices Arun Mishra and M. R. Shah also vacated the stay on the IT authorities and the ED from pursuing the probe against lawyer Gautam Khaitan accused in the AgustaWestland scam, giving the Centre the go-ahead to proceed in accordance with the law.

Noting Solicitor General Tushar Mehta's submission that the impugned order would hamper the progress in other similar cases, notice was issued to Khaitan, the bench requiring him to respond in 6 weeks.

Before the High Court, Khaitan had contended that the amendment to section 1(3) of the Act bringing it into force from July 1, 2015 instead of April 1, 2016 was made by the Centre under section 86 of the Act and that since section 86 was yet to come into operation, the power under it could not have been exercised.

In its impugned order, the High Court had in May observed,

"Parliament in its wisdom enacted the said Act and expressly provided therein that save as otherwise provided in the said Act, it shall come into force on the 1st day of April, 2016. There is, therefore, no gainsaying the legal position that, the power to make Rules or remove difficulties under the provisions of Sections 85 and 86 of the said Act, could only be exercised by the Central Government, once the said Act came into force on the 1st April, 2016, the date expressly stipulated by Parliament in this behalf, and not prior thereto."

The Court had also held,

"In the case at hand, consequently at this stage we are prima facie of the considered view that, the official respondents could not have exercised powers granted to it under the provisions of Sections 85 and 86 of the said Act, prior to the enactment itself coming into force, in terms of the provisions of sub-Section (3) of Section 1 of the said Act."