Uttarakhand High Court
Unknown vs State Of Uttarakhand And Others on 16 June, 2025
Author: Rakesh Thapliyal
Bench: Rakesh Thapliyal
HIGH COURT OF UTTARAKHAND AT NAINITAL
Hon'ble Justice Sri Rakesh Thapliyal
16th June 2025
Criminal Writ Petition No. 376 of 2024
Om Prakash Tewari
............... Petitioner
Vs.
State of Uttarakhand and others
............Respondents
. Nikhil Bhatt, learned counsel
Counsel for the Petitioner: Mr. Dushyant Mainali and Mr. Nikhil
Bhatt, learned counsel
Counsel for the State: Mr. Amit Bhatt, learned G.A. and
Mr. Kuldeep Singh Rawal, learned
A.G.A.
Counsel for the C.B.I. Mr. Piyush Garg, learned counsel
(Mr. Rakesh Thapliyal, J.)
1. The Hon'ble Apex Court in the case of
Correspondence Rbanms Educational Institution vs. B.
Gunashekar, i.e., Civil Appeal No. 5200 of 2025 (arising
out of SLP (C) No. 13679 of 2022) decided on 16.04.2025
in which in para 18.1 the following directions have been
issued:-
18.1. Further, through the averments made in the
plaint and in the agreement, the respondents/plaintiffs
have claimed to have paid huge sum towards
consideration by cash. It is pertinent to recall
that Section 269ST of the Income Tax Act, was
introduced to curb black money by digitalising the
transactions above Rs.2,00,000/- and contemplating
equal amount of penalty under Section 271DA of the
Act. As per the said provisions, action is to be taken on
the recipient. However, there is also an onus on the
plaintiffs to disclose their source for such huge cash. The
Central Government thought it fit to cap the cash
transactions and move forwards towards digital
economy to curb the dark economy which has a drastic
effect on the economy of the country. It will be useful to
refer to the Budget Speech during the introduction of
the Finance Bill, 2017 and the extract of the memo
presented with the Finance Bill, 2017, which lay down
the object:
Budget Speech:
"VII. DIGITAL ECONOMY
111. Promotion of a digital economy is an integral part of
Government's strategy to clean the system and weed out
corruption and black money. It has a transformative
2
impact in terms of greater formalisation of the economy
and mainstreaming of financial savings into the banking
system. This, in turn, is expected to energise private
investment in the country through lower cost of credit.
India is now on the cusp of a massive digital revolution.
.....
Promoting Digital Economy
162. The Special Investigation Team (SIT) set up by the
Government for black money has suggested that no
transaction above Rs.3 lakh should be permitted in cash.
The Government has decided to accept this proposal.
Suitable amendment to the Income-tax Act is proposed in
the Finance Bill for enforcing this decision."
Extract from Memo of Finance Bill, 2017
"Restriction on cash transactions
In India, the quantum of domestic black money is huge
which adversely affects the revenue of the Government
creating are source crunch for its various welfare
programmes. Black money is generally transacted in cash
and large amount of unaccounted wealth is stored and
used in form of cash.
In order to achieve the mission of the Government to
move towards a less cash economy to reduce generation
and circulation of black money, it is proposed to insert
section 269ST in the Act to provide that no person shall
receive an amount of three lakh rupees or more,--
(a) in aggregate from a person in a day;
(b) in respect of a single transaction; or
(c) in respect of transactions relating to one event or
occasion from a person, otherwise than by an account
payee cheque or account payee bank draft or use of
electronic clearing system through a bank account.
It is further proposed to provide that the said restriction
shall not apply to Government, any banking company,
post office, savings bank or co-operative bank. Further, it
is proposed that such other persons or class of persons or
receipts may be notified by the Central Government, for
reasons to be recorded in writing, on whom the proposed
restriction on cash transactions shall not apply.
Transactions of the nature referred to in section 269SS are
proposed to be excluded from the scope of the said
section.
It is also proposed to insert new section 271DA in the Act
to provide for levy of penalty on a person who receives a
sum in contravention of the provisions of the proposed
section 269ST. The penalty is proposed to be a sum equal
to the amount of such receipt. The said penalty shall
however not be levied if the person proves that there were
good and sufficient reasons for such contravention. It is
also proposed that any such penalty shall be levied by the
Joint Commissioner.
It is also proposed to consequentially amend the
provisions of section 206C to omit the provision relating to
tax collection at source at the rate of one per cent. of sale
consideration on cash sale of jewellery exceeding five lakh
rupees.
These amendments will take effect from 1st April 2017."
However, when the Bill was passed, the permissible limit
was capped under Rupees Two Lakhs, instead of the
proposed Rupees Three Lakhs. When a suit is filed
claiming Rs.75,00,000/- paid by cash, not only does is
create a suspicion on the transaction, but also displays, a
violation of law. Though the amendment has come into
effect from 01.04.2017, we find from the present litigation
that the same has not brought the desired change. When
there is a law in place, the same has to be enforced. Most
times, such transactions go unnoticed or not brought to
the knowledge of the income tax authorities. It is settled
position that ignorance in fact is excusable but not the
ignorance in law. Therefore, we deem it necessary to issue
the following directions:
(A) Whenever, a suit is filed with a claim that Rs.
2,00,000/- and above is paid by cash towards any
transaction, the courts must intimate the same to the
jurisdictional Income Tax Department to verify the
transaction and the violation of Section 269ST of the
Income Tax Act, if any,
(B) Whenever, any such information is received either
from the court or otherwise, the Jurisdictional Income Tax
authority shall take appropriate steps by following the due
process in law,
(C) Whenever, a sum of Rs. 2,00,000/- and above is
claimed to be paid by cash towards consideration for
conveyance of any immovable property in a document
presented for registration, the jurisdictional Sub-Registrar
shall intimate the same to the jurisdictional Income Tax
Authority who shall follow the due process in law before
taking any action,
(D) Whenever, it comes to the knowledge of any Income
Tax Authority that a sum of Rs. 2,00,000/- or above has
been paid by way of consideration in any transaction
relating to any immovable property from any other source
or during the course of search or assessment proceedings,
the failure of the registering authority shall be brought to
the knowledge of the Chief Secretary of the State/UT for
initiating appropriate disciplinary action against such
officer who failed to intimate the transactions.
2. In the light of the directions as above, the Hon'ble
Apex Court further in concluding paragraph i.e. para
20(v) observed as under:
"(v) The directions given by us in paragraph 18.01 of this
judgment shall be intimated by the Registrars of the High
Courts, the Chief Secretaries of the States/ Union
Territories and the Principal Chief Commissioner of
Income Tax Department to the District Judiciary, the
officials of the registration department and the
jurisdictional officers under the Income Tax Department
respectively, so as to facilitate the conduct of periodical
audit."
3. In this case, the respondent no. 3 was holding a
key post in the Mining Department, i.e, Director and
taking into consideration the serious allegation against
him, this Court on 29.04.2024, observed that prima
facie allegations against respondent no. 3 appears to be
glaring example of corruption, consequently, the State
was directed to file counter affidavit.
4. On 29.08.2024, the learned Advocate General
apprised this Court that the Government will constitute
S.I.T. and the S.I.T. will examine the entire issue and
submits a report in a sealed envelope after one month.
5. On 27.11.2024, Mr. Amit Bhatt, learned
Government Advocate submitted the report of SIT by
way of an affidavit, and this Court perused the SIT
report on that day. It is also apprised to this Court that
against the order dated 29.04.2024 and 29.08.2024,
respondent no. 3 approached the Hon'ble Apex Court by
way of Special Leave Petition but the same was
dismissed as withdrawn on 27.09.2024. On that day the
counsel for CBI also placed before this Court the letter
of the Head of Branch, CBI/ACB/Dehradun dated
28.05.2024 and the same was placed on record.
Subsequently, counsel for respondent no. 3 sought time
to examine the SIT report and also undertakes that he
will file the details of movable and immovable assets of
respondent no. 3 and his family members including
details of the lockers and in compliance thereto an
affidavit was filed by respondent no. 3, however, further
three weeks' time was sought to enclose all the sale
deeds and other documents relating to the assets and in
compliance thereto the sale deeds have been placed on
record.
6. On 09.01.2025, respondent no. 3 has filed the
fresh affidavit giving details of 15 immovable properties
and on perusal of which it reveals that the properties
shown in paragraph nos. 3,4,7,8,9,10,11,12 and 13
were purchased by paying consideration in cash. On
such an affidavit counsel for respondent no. 3 was
directed to place on record the prior information and
sanction of the department concerned for purchasing
immovable properties. In the last compliance affidavit of
respondent no. 3 dated 21.04.2025, two letters have
been enclosed dated 03.05.2001 and 13.06.2002
addressed to the Officer In-charge, Geology and Mining
Department wherein it has been stated that he has
purchased the immovable properties.
On perusal of both the letters it reveals that such
an intimation was given to Officer In-charge after
purchasing the properties, though, as per Rule 22 of the
Uttaranchal Government Servants Conduct Rules, 2002
the prior information and sanction is required before
purchasing the property. Rule 22(1) of the Conduct
Rules 2022 is read as under:-
(1) No Government servant shall, except with the
previous knowledge of the appropriate authority,
acquire or dispose of any immovable property by
lease, mortgage, purchase, sale, gift or otherwise,
either in his own name or in the name of any
member of his family:
Provided that any such transaction conducted
otherwise than through a regular any reputed
dealer shall require the previous sanction of the
appropriate authority.
7. In reference to this letter, the Secretary and the
Director of the Mining Department were directed to
examine and thereafter Mr. Rajpal Legha, the present
Director of Geology and Mining Department filed his
personal affidavit on 07.05.2025 wherein it is stated
that respondent no. 3 during his service tenure, while
purchasing immovable properties, has neither submitted
any application or representation to the department
concerned for seeking permission nor any such
permission was granted to respondent no. 3 to purchase
the properties. Mr. Brijesh Sant, Secretary to the Mining
Department also filed an affidavit on 08.05.2025 and
the same statement has been given as given by the
Director that neither any such permission was sought
nor any such permission was granted.
8. Today, the Secretary Mining Department as well as
Director, Mining Department joined the proceedings
through V.C. and submits that they are not aware about
these two letters. In addition to this, the two letters of
the Director, Mining Department dated 19.05.2025 and
letter of the Addl. Secretary of the same date have also
been placed record and the relevant extract of this letter
is being extracted herein as under:
उपरो� िनद�शों के अनुपालन म� अवगत कराना है िक काया�लयी
�व�ा के अ�ग�त िवभाग के िकसी कािम�क की भूिम / स�ि� क्रय
िकये जाने से स���त पृथक से कोई पं�जका / र�ज�र रखे जाने की
�व�ा प्रािवधािनत नहीं है, यद्यिप कािम�क िवभाग द्वारा समय-समय पर
िनग�त िनयमों के अ�ग�त सरकारी सेवक द्वारा भूिम क्रय करने के स��
म� िदये जाने वाले अनुरोध / सूचना के आधार पर वांिछत अनुमित िदये
जाने का िनयम/�व�ा प्रािवधािनत है। समूह 'क' एवं 'ख' के कािम�कों
के संबंध म� औद्योिगक िवकास अनुभाग-1, उ�राख� शासन के द्वारा
िनग�त पत्र सं�ा 1236/VII-A-1/2025-09(27) / 2025 िदनांक 19 मई,
2025 (छायाप्रित संल�) के द्वारा प्रा� आ�ा तथा समूह 'ग' एवं 'घ' के
संबंध म� िनदेशालय �र पर उपल� अिभलेखों / पत्राव�लयों के आधार
पर िवगत 15 वष� म� भूत� एवं खिनकर्म िवभाग के िकसी भी कािम�क
का भूिम/स�ि� क्रय िकये जाने से स���त कोई अनुरोध पत्र/अिभलेख
उपल� नहीं है तथा न ही इस आधार पर भूिम / स�ि� क्रय िकये जाने
की कोई अनुमित िनग�त है। अतः उपरो� ��ित से मा० उ� �ायालय,
नैनीताल को सं�ािनत कराते �ए तद्नुसार प्रभावी पैरवी करने का क�
कर�।
9. On perusal of the aforesaid extract it reveals that
since last 15 years no officer of the Mining Department
has purchased any immovable property since neither
there is any such application seeking permission from
the department nor there is any sanction of the
department, however, in reference to para 2, as
extracted above, the Secretary and the Director shall file
his personal affidavit stating therein whether since last
15 years any officer of the department has purchased
any immovable property or not.
The Secretary of the department apprise this Court
that after purchasing the property the records pertaining
to purchase of property are available with the
department. Let the same be placed before this Court.
10. Mr. H.M Bhatia, learned counsel put his appearance
for Income Tax Department. Let Income Tax
Department may proceed in view of the directions
issued by the Hon'ble Apex Court in the case of
Correspondence Rbanms Educational Institution (supra).
11. List this case on 18.06.2025 at 3:00 pm.
12. In the meantime, State Counsel may get instructions
from the Director General Stamp.
13. The Secretary and the Director of the Mining
Department shall join the proceedings through V.C.
(Rakesh Thapliyal, J.)
Parul
