Ahmedabad: 50 years on, Centre yet to attach property

AHMEDABAD: Even after half a century has gone by, the central government is still struggling to act in a case of alleged tax evasion and purchase of properties through black money.



The central government has recently filed an appeal in Gujarat high court to attach the properties allegedly brought with black money, which was not shown in the income tax returns filed by the elder brother of the respondents during 1965 and 1969.

The case involves one Abbas Mulla Fazle Abbas from Valsad and his brother Ismail Mulla. The central government wants their properties to be attached for alleged tax evasion and appropriation of black money by their brother fifty years ago. The accused used to run an angadiya firm and he was detained under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA).

The central government also initiated proceedings against the two Abbas brothers claiming that the properties they had purchased were made from the black money, for which the IT returns were not filed till 1969. Show-cause notices were issued to them as to why their properties should not be attached. When the authorities did not get any response, in June 1999, the government passed an order to attach their properties except ornaments.

The Abbas brothers filed an appeal against the attachment order, where the government said that when the brothers did not keep books of accounts, they did not have any basis to support their argument that they were carrying out angadiya business and had adequate income to purchase the properties.

In 2009, the appellate tribunal for forfeited property quashed the show-cause notice and the order of forfeiture. It said that the government could not establish that the properties were purchased from black money. The government did not take into consideration the IT returns and wealth returns filed by the two brothers. The tribunal also said that the IT returns concerned pertained to 1965 and 1969 and SAFEMA was not even in existence then. The money invested in the properties were independent of alleged black money belonging to their brother.

After the tribunal quashed the attachment order, the government rushed to the HC, where the question of proof arose as to whether the properties were purchased from black money. The government cited special legislations like TADA and NDPS Act to argue that it is difficult to find direct evidence to control such grave offence and hence it is the accused persons’ burden to prove their innocence. The HC rejected this argument.

The high court was surprised when the central government termed an order by the Supreme Court’s constitution bench as wrong interpretation of law to deal with such cases. After a single-judge bench rejected the Centre’s petition earlier this year, the government has filed an appeal demanding a nod to attach properties.