TMI Blog1994 (9) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 1993, made an order under section 269UD of the Act for the purchase by the Central Government of the said plot of land. It is that order which is under challenge in the present petition. The petitioner's contention is that he is an exporter and having obtained larger export orders, he was in urgent need of money and started looking for a buyer and, ultimately, agreed to se the property to Devesh Behari Saxena for the aforesaid consideration. It is alleged that Shri Saxena paid a sum of Rs. 7 lakhs as earnest money while the other persons were not willing to pay more than Rs. 2 lakhs. A copy of the agreement to sell with Shri Saxena has been annexed as annexure-1 to the writ petition. After the filing of the statement in Form No. 37-I, the petitioner received a letter from the Valuation Officer of the Income-tax Department asking for certain information. A similar letter dated February 8, 1993, was received from the appropriate authority. The petitioner, vide his letter dated February 20, 1993, informed that he had received a sum of Rs. 7 lakhs as earnest money by cheque which had been credited to his account. The petitioner also received a notice dated February 25, 1993, askin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of mind and on irrelevant considerations. It is contended that the sale consideration agreed to between the parties represented the correct fair market value of the property as there was a sewerage outlet in front of the aforesaid plot and there was a 14 feet deep huge pit on the plot which required considerable expenditure in filling up, and the location of the plots relied upon by the appropriate authority was better as compared to the plot in question. It is further contended that no case of evasion of tax was made out by the appropriate authority and, hence, the purchase by the Central Government could not be ordered. According to the petitioner, in the examples cited by the appropriate authority in two cases, there had been no sale. The appropriate authority has estimated the fair market value of the property by increasing the consideration in respect of other plots at the rate of 10 per cent. per annum. According to the petitioner, this notional increase is illegal. According to the petitioner, the fair market value of the plot did not exceed the sale consideration as agreed to between the parties by more than 15 per cent. and in view of the Government instructions, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the appropriate authority. The respondents have asserted that the fair market value of the property in question, as evidenced by other instances, was higher by more than 15 per cent. of the apparent sale consideration and, therefore, the order for the purchase of the property in question was properly passed. We have heard learned counsel for the petitioner and learned standing counsel. We first deal with the question whether the petitioner has been given a reasonable opportunity of being heard before making the impugned order of compulsory purchase of the property in question. Chapter XX-C of the Act in which the provisions for purchase by the Central Government of immovable properties in certain cases of transfer have been made did not contain any provision requiring the appropriate authority to grant an opportunity of hearing to the affected parties. The vires of the relevant provisions was challenged in a writ petition before the Delhi High Court that was transferred to the Supreme Court and was decided by a judgment in C. B. Gautam's case [1993] 199 ITR 530. The Supreme Court upheld the validity of the provisions observing that the requirement of a reasonable op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s absolutely in the dark about the material that was intended to be used against him for making the order of compulsory purchase. In order that an effective opportunity of showing cause is given to the affected parties, it was, in our view, necessary to annex with the notice all the relevant materials that the appropriate authority had collected for forming its tentative opinion and which it wanted to use in support of the order under section 269UD. In CIT v. Smt. Vimlaben Bhagwandas Patel [1979] 118 ITR 134 (Guj) in which the provisions of section 269A to section 269S relating to acquisition of immovable properties to prevent evasion of tax were the subject-matter of discussion, the Gujarat High Court spelled out the requirement of natural justice and explained the nature of the opportunity deserved by the aggrieved parties. It was observed as under : " In the perspective of this settled legal position of law, we have to examine as to what would be the contents of the principles of natural justice in the inquiry before the competent authority. By and large, it can be said that in the enquiry under Chapter XX-A of the Income-tax Act, 1961, the transferor and/or transferee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Lucknow, i.e., about 500 kms. away from Ghaziabad. The telegram reached the petitioner on March 18, 1993. These circumstances would show that the adjournment of the hearing for a very short period and the change of venue of hearing to Lucknow without giving the petitioner sufficient time to make travel arrangements and in disregard of the fact that the petitioner had applied for the earlier adjournment on the ground of illness depict a complete disregard of the principles of natural justice and the judgment of the Supreme Court in the case of C. B. Gautam [1993] 199 ITR 530 which made it mandatory for the appropriate authority to grant a reasonable opportunity of hearing to the aggrieved persons. The conduct of the appropriate authority in this case in hurrying up the proceedings and in not furnishing the relevant material to the petitioner is far from reasonable. For the above reasons, we hold that the impugned order is vitiated by the denial of an opportunity of hearing to the petitioner, who is the owner of the property proposed to be sold and the same has to be quashed. In view of the above finding, we do not think it necessary to go into the question as to whether the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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