INTRODUCTION
Supreme Court of India has refused to accept a Public Interest Litigation (PIL) which had wanted delineation of appellate jurisdiction for any case under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act) from PMLA Appellate Tribunal to Income Tax Appellate Tribunal (ITAT). The Court recognised the difficulty meted out by the Petitioner but refused to come in the way as this is a legislative sphere and afforded freedom to the Petitioner to submit an ongoing representation before the Union Government.
BACKGROUND
The PIL had been filed by PGMRYT member and ITAT former Vice President Parveen Kumar Bansal. Now, under the law, there is a special Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) to hear appeals filed under the PBPT Act. This Tribunal works under a single bench in New Delhi and has jurisdiction over a host of complex statutes.
The petitioner noted that the Petition proceedings under the PBPT Act are found to revolve mostly around complex matters like examination of financial records, accounting entries, transaction structures, etc.; all these are matters arising before the courts during income tax proceedings. Hence, the petitioner argued that the ITAT, a specialized body to deal with tax and accounting related grievances, has much better vantage to adjudicate benami appeals.
The petition, on the other hand, advocated the creation of regional benches in various parts of the country for conducting tribunals, which is currently held in New Delhi, noting that such a move will alleviate the huge logistical, financial and time constraints on litigants, small businesses and professionals who practice outside of the capital, thus enabling them to access the forum.
KEY POINTS
- A Supreme Court bench headed by Justice Vipul M. Pancholi, along with Justice Joymalya Bagchi and Chief Justice of India Surya Kant presided over the PIL.
- The Supreme Court did not consider the petition, pointing out that this relief would amount to changing the law – something for parliament to do.
- The Chief Justice of the High Court, Surya Kant, agreed with the petitioner’s “protest” while commenting, “You have a real issue, I understand, but you are asking us to change the law.
- The bench has said that Parliament might have had several policy-related motives for giving the existing PMLA tribunal the appellate powers under the PBPT Act.
- The petitioner’s counsel argued that the current institutional arrangement is not balanced and synergistic to the financial character of benami adjudication, which leads to the inefficiency in the procedure and denial of justice to the petitioner.
- On an application made by the petitioner, the Court had set aside the liberty to consider the ongoing representation carried out by the petitioner on the competent authority on a time bound basis instead of dealing with the case afresh.
ANALYSIS
The otherwise high Supreme Court was very much a separation-of-powers kinder, gentler institution. The Court explicitly accepted the logistical and institutional concerns of petitioners as a “genuine issue,” making them cred.
The Court accepted the logistical and institutional concerns of petitioners as “genuine issues,” recognising the problems faced by litigants such as appointment complexity in the single appellate bench in New Delhi for complex financial issues that impact a nationwide nature.
The Court, however, had correctly found that a reorganisation of the appellate institutions, creation of regional benches or transfer of statutory jurisdiction are matters of policy which lie well within the powers of the legislature.
The direction to proceed with a representation formally creates momentum at the executive/governmental and legislative level. Now it’s the turn of the Union Government to decide whether to tap into the specialized financial acumen of the ITAT or set up regional benches of PMLA to achieve the intent of the Benami act and availability of justice.
CONCLUSION
Supreme Court has upheld the status quo on the appellate remedy for benami transactions as the validity of such transactions was directly before the appellate court, making no reference of transferring the jurisdiction to ITAT. The structural and access to justice issues arising from the highly centralised tribunal resonated with developmental sentiments of the bench but they adamantly made it clear that systemic changes and overhauls can be made only through parliament. It now becomes the duty of the Union Government to consider the petitioner’s submissions and give a nod to the need to modernize the appellate structure in the PBPT Act to improve the procedure of such a petition.
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WRITTEN BY: SHEEN
