Court holds that challenge to retrospectivity of provisions cannot be entertained at a belated stage after petitioner's prior participation in proceedings; directs respondents to file reply within four weeks
In a significant judgment dated August 20, 2026, the Delhi High Court (Division Bench comprising Justices Dinesh Mehta and Rajneesh Kumar Gupta) refused to grant an interim stay against prosecution proceedings initiated under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ("the Act of 2015"). The petitioner, Mr. Samir Thapar, had challenged the vires and retrospective effect of Sections 50, 51, and 72(c) of the Act, contending that the retrospective application of these provisions violated his rights.
The petitioner's challenge centered on the retrospective operation of the Black Money Act's provisions, which were invoked against him for assets allegedly acquired prior to the enactment of the law in 2015. Mr. Thapar had earlier received a notice under Section 10 of the Act on June 27, 2022, and actively participated in subsequent proceedings, including an assessment order dated March 29, 2025, against which he filed an appeal. Despite this, he raised objections to the retrospective application only at this advanced stage, after summons for prosecution were issued on August 5, 2026.
The Court emphasized the principle that challenges to the retrospective operation of a statute must be raised at the earliest opportunity. Since the petitioner had earlier participated in proceedings without objecting to the retrospective effect, the Court held that such belated objections cannot be entertained to stall prosecution proceedings. It was noted that the prosecution is a subsequent step following the assessment process, and therefore, the petitioner's delay in raising this legal issue disentitles him from obtaining an ex-parte interim stay.
While the Court refrained from pronouncing on the substantive legality of the retrospective provisions at this stage, it allowed the respondents to file their reply to the writ petition and stay application within four weeks. The matter was listed for further hearing on October 28, 2026. Importantly, the petitioner was not barred from pursuing all permissible legal remedies at the appropriate stage in accordance with the law.
Senior Advocate Deepak Chopra represented the petitioner, while the respondents were represented by Ms. Hemlata Rawat, Joint Solicitor of the Central Government, along with other counsel.
This judgment underscores the Delhi High Court's stringent stance on procedural compliance and timely raising of objections in tax and prosecution matters under the Black Money Act. It also highlights the judicial reluctance to grant interim relief merely on the basis of retrospective application challenges when the petitioner has already engaged in the statutory proceedings without objection.
Bottom Line:
The challenge to the retrospective application of provisions under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, cannot be entertained at a delayed stage if the petitioner had previously participated in the proceedings without raising objections.
Statutory provision(s):
Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - Sections 10, 50, 51, 72(c)
Samir Thapar v. Principal Director of Income Tax (Inv.), (Delhi)(DB) : Law Finder Doc Id # 2970426
