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 The Delhi High Court had stayed proceedings on the basis of a petition filed by Mr. Khaitan challenging a government notification which gave retrospective effect to the Black Money law from July 2015.

The Supreme Court on May 21 stayed a Delhi High Court decision to freeze proceedings against AgustaWestland VVIP chopper scam accused Gautam Khaitan under the Black Money Act of 2016.

A vacation bench sought a formal response from Mr. Khaitan, a lawyer, in six weeks on the appeal filed by the Centre against the recent High Court order.

The High Court had stayed the proceedings on the basis of a petition filed by Mr. Khaitan challenging a government notification which gave retrospective effect to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act from July 2015. The law was enacted in April 2016.

A vacation bench of Justices Indira Banerjee and Sanjiv Khanna on May 20 posted the government appeal for hearing on May 21.

The Delhi High Court had restrained the Income Tax Department from taking any action against Mr. Khaitan, saying he had made out a “good prima facie” case of grave prejudice if the proceedings were allowed to continue.

“At this stage we are prima facie of the considered view that, the official respondents could not have exercised powers granted to it under the provisions of sections 85 and 86 of the said Act, prior to the enactment itself coming into force, in terms of the provisions of sub-section (3) of section 1 of the Act,” the High Court had observed.

“The respondents [I-T department and Finance Ministry] are, therefore, restrained from taking and/ or continuing any action against the petitioner [Khaitan], pursuant to the impugned order dated January 22, passed by the respondent No 2 [I-T department], till the next date of hearing. Renotify on July 4,” the High Court had ordered.