In Brief
A company purchased property in 2011 for Rs.9.44 crores using its capital. After a shareholding change in 2012, tax authorities issued a notice in 2017 claiming the property was "benami" (held in another's name) under the amended Benami Transactions Act, 2016. The Supreme Court held that the 2016 Amendment Act is prospective only, not retrospective. Sections of the 1988 Act creating criminal liability and property confiscation were unconstitutional for lacking safeguards and being manifestly arbitrary. Since confiscation is punitive in nature, it cannot apply retroactively to pre-2016 transactions under Article 20(1) of the Constitution. All prosecutions and confiscation proceedings for transactions before 25 October 2016 are quashed.
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