Court held that Section 1 of the Benami Transactions (Prohibition) Amendment Act says that the Amendment Act of 2016 shall come into force on such date as the Central Government may, by notification in the Official Gazette appoint and different dates may be appointed for different provisions and any reference in any such provision to the commencement of the Amendment Act of 2016 shall be construed as a reference to coming into force of that provision. The Central Government, in exercise of the powers conferred by sub-section (2) of section 1, issued notification dated October 25, 2016 ([2017] 390 ITR (St.) 120) appointing the first day of November, 2016 as the date on which provisions of the Amendment Act of 2016 shall come into force. There is no notification of the Central Government to the effect that provisions of section 2(9) of the Amendment Act of 2016 shall have effect from an anterior date.

Section 2(9)(A) and (C) are substantive provisions creating the offence of benami transaction. These two provisions are significantly and substantially wider than the definition of benami transaction under section 2(a) of the unamended 1988 Act. Therefore, section 2(9)(A) and (C) can only have effect prospectively. The Central Government has notified the date of coming into force of the Amendment Act of 2016 as November 1, 2016. Therefore, these two provisions cannot be applied to a transaction which took place prior to November 1, 2016. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. Substantive law is that part of the law that creates, defines and regulates the rights, duties and powers of parties. On the other hand, procedural law would cover the rules and prescribe the steps for having a right or duty judicially enforced, as opposed to the law that defines the specific rights or duties. Every litigant has a vested right in substantive law, but no such right exists in procedural law.