Benami transaction Prohibition Act

Benami transaction Prohibition Act

Subject :Economy

Context: The Income Tax Department has attached assets worth over ₹18,400 crore till July 21, 2022, under the Benami Transaction Prohibition Act. However, it does not have segregated data for transaction made before and after October 24, 2016, when the amended Act came into force and the cut-off date set by the Supreme Court for a bar on criminal/confiscation proceedings.

Retrospective use

The law, originally enacted in 1988, was amended in 2016 and prescribed retrospective application of provisions such as jail term beside others.

On August 23, 2022, the Supreme Court held the retrospective use of Benami law unconstitutional. It  debarred authorities from initiating or continuing criminal prosecutionorconfiscationproceedingsfor transactions entered into prior to the coming into force of the 2016 Act, viz, October 25, 2016.

Specific provision

Almost for 28 years after enactment, the Benami Law could not be made operational as it did not contain any specific provision for vesting of confiscated property with Centre, did not provide for an appellate mechanism, while barring the jurisdiction of a civil court, did not confer the powers of the civil court upon the authorities for its implementation and did not provide for adequate enabling rule-making powers. All these achieved, as the government claimed through the amendment.