Marg Realities Limited Vs DCIT (Madras High Court)
The Madras High Court dismissed fourteen Writ Petitions concerning properties alleged to be benami assets of Mrs. V.K. Sasikala (VKS). The petitions were clubbed into three batches concerning Spectrum Mall, Marg Square/equity shares in Digital Accelerator Limited, and the Ocean Spray resort. The petitioners contended, among other things, that the transactions were commercial in nature, consideration was only partly paid, demonetized currency was involved, and the Department had not discharged the burden necessary to invoke the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act). They also challenged the sufficiency of material and alleged denial of procedural safeguards.
The Court held that the PBPT Act does not create a distinction between commercial and other transactions for purposes of determining whether a transaction is benami. It held that the enquiry under Section 24 is preliminary and based on prima facie satisfaction. A detailed examination of evidence concerning whether transactions were benami must be undertaken during adjudication. The Court also held that the challenge concerning full versus part consideration and the effect of demonetized currency raised factual and legal issues that were to be decided during adjudication. The challenge to the Section 24(4) orders therefore failed. The respondents were directed to proceed under Sections 25 and 26, issue notices under Section 26 within 30 days accompanied by the relied-upon material, and afford the petitioners full opportunity to present their contentions.
