TMI Blog1995 (9) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... A) to show cause why the order under section 269UD(1) should not be made for purchasing the property by the Central Government. The notice (exhibit 3) was issued on April 21, 1995, fixing the date of appearance to be on or before April 26, 1995. According to the provisions of section 269UD, the limitation for making the order under it was to expire on April 30, 1995. According to the averments made in the petition and which have not been denied by the respondents, the notice was served on the petitioner on April 28, 1995, that is to say, two days after the date fixed for appearance in the show-cause notice exhibit C. The petitioner promptly submitted a reply dated April 28, 1995, on April 29, 1995, raising objections as to the insufficiency of notice as well as on the merits of the case for the purchase. However, the authority did not accept the same and the petitioner, therefore, sent the reply by speed post. Respondent No. 2 has pointed out the late receipt of the notice and requested for another date for submitting the reply. However, the fact was this that the appropriate authority had already passed the order on April 28, 1995 (annexure-M), which is under challenge in this pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not otherwise sustainable ; even assuming that the notice was served in time and the petitioner did not submit his reply before time and the authority was left to pass an order in absentia the petitioner cannot be placed in the situation worse than that. The undisputed facts before the court are that on receiving Form No. 37-I, the appropriate authority by referring the matter for ascertaining the fair market value of the property under consideration to the valuation officer of the Income-tax Department, Baroda. The Valuation Officer had issued notice to the parties to appear in pursuance of that notice to the petitioner as well as the vendor. In response to that it was pointed out to the Valuation Officer that the property is situated on plot No. 32 in the Amarkunj Co-operative Housing Society, which society's byelaws are applicable, according to which a party cannot construct any commercial floor on the plot in the society. That also goes to show that the property is not freehold land. It was pointed out that the property is in bad shape and it needs heavy repairs and renovation for reuse by any intending buyer and in view of the family circumstances it was decided to be sold as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exercise of the powers under section 269UD(1) are that firstly, the appropriate authority must arrive at a decision that there is significant undervaluation of the property by 15 per cent. or more and, secondly, such undervaluation is an attempt at tax evasion. It is only on the existence of the second indicia and not merely in the case of undervaluation that the authority has been empowered to resort to the power of pre-emptive purchase. It is true that in a case of significant undervaluation of the property to the extent of 15 per cent., the appropriate authority may draw a presumption about undervaluation having been done with a view to evading tax, a presumption which is rebuttable. However, such presumption is not an obligation under the statutory provision. It is for the appropriate authority to raise presumption or not on the basis of the estimated valuation. Whether such presumption has in fact been resorted to and has not been rebutted must in our opinion be reflected in the order which is finally passed by the appropriate authority disclosing application of mind to all available material on record. From the very fact that the presumption is rebuttable, the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al presumption in a given set of facts does not admit of any rigid rule. In the present case, on undisputed facts we find that in order to arrive at the finding of the fair market price of the property, in question, the matter was referred to by the appropriate authority to the Department's own valuer and according to the valuer's report, the very premise of raising a presumption of evasion was not there inasmuch as according to undisputed pleadings, the apparent consideration disclosed in the agreement was equal to the fair market value of the property determined by the official valuer. In the face of a fair market value of the property under consideration itself having been determined, what weighed with the appropriate authority to discard the fair market value of the property under consideration and to fall back on the consideration of SIP and to substitute the consideration of SIP ipso facto without noticing all other material facts as to the fair market value of PUC is not discernible. Thus, it is not only a case of not merely not giving an opportunity of hearing to the affected parties, but it is also a case of non-application of mind on existing material before the appropr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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