HC notice to IT department on AAP minister Jain's plea

Justice Vibhu Bakhru sought the department's response on Jain's plea by October 11.

Jain, who holds the portfolios of Industry, Power, Health and Public Works Department in the Aam Aadmi Party (AAP) government, had moved the court challenging attachment order.

The assets attached under the Benami Act include more than 100 bighas of land with investment value of Rs 17 crore and shares amounting to Rs 16 crore.

Earlier, the court had said that prima facie there is nothing wrong with the order and also declined to stay proceedings before the department's adjudicating authority, as sought by Jain.

Jain has also sought directions to set aside February 27 and May 24 orders under the Prohibition of Benami Property Transaction Act, 1988, and to quash the proceedings initiated under it.

He has also challenged the retrospective application of the penal provisions of the Benami Act in his case.

"Admittedly, all the alleged transactions were prior to the period when the said provision came into existence. The period of alleged transaction is 2011 to 31st March 2016, whereas the provisions of the (new) Act came into force only on November 1, 2016," said his plea, noting that the purchase of assets from the proceeds of benami transactions, as contended by the IT Department, would not be benami as per the previous Benami Act.

"Such transactions have been held not to be covered under the unamended Act and therefore, the said Act is being retrospectively being applied, which is clearly in violation of Article 20(1) of the Constitution of India," the petition said.

The IT Department had opposed the plea saying currently, the initiating officer had only passed a provisional attachment order and forwarded it to the adjudicating authority, which was yet to even issue a show-cause notice.

The assets were initially provisionally attached on February 27 and the order was extended on May 24 by the IT Department till the time the adjudicating authority took a final decision.

According to the IT Department, Jain was allegedly holding four companies, in which he routed cash through shell companies during the March 2011-March 2016 period in the form of cheques through investment in share capital.

The department said Jain had funded four companies in which he used to be a director prior to his election, and they, in turn, had bought land from those proceeds.

Under the unamended Act, only transfer of property was an offence. The amended Act, however, declared a number of other acts as offences under the category of benami transactions, said the plea.

Jain, challenging the proceedings as being actuated with "mala fide", said it had been done solely due to his "present political position".

"It may be pertinent to note here that the alleged role of the petitioner in the transaction is non-existent, and he is neither a director nor a shareholder in any of the companies under scrutiny as on date," he added.