Back
2019 Supreme(SC) 790
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, DINESH MAHESHWARI, JJ.
Krishna Kumar Rawat & Ors – Appellants
Versus
Union of India & Ors – Respondents
CIVIL APPEAL Nos.9800-9801 of 2010
WITH
Union of India & Anr – Appellants
Versus
Mithlesh Kumari & Ors – Respondents
CIVIL APPEAL No.9901 of 2010
Decided On : 29-07-2019
For the Appellant(s) :Mr. T. Mahipal, Mukesh Kumar Maroria, Advocates
For the Respondent(s):Rana Mukherjee, Arijit Prasad, T.M.Singh, Anil Katiyar, Shobha Gupta, Joyshree Barman, T. Mahipal, Advocates
IMPORTANT POINTS
Writ Court does not act as an appellate court to examine the legality and correctness of the impugned order.
When the issues were raised and rejected at four stages, de novo enquiry cannot be held by Supreme Court under Article 136, Constitution of India.
Headnote:
(a) Income Tax Act, 1961 - Chapter XXC, Section 269 UE(1) - Constitutional validity upheld in C.B Gautam’s case. (Para 23)
(b) Constitution of India - Article 226 - Writ Court does not act as an appellate court to examine the legality and correctness of the impugned order - The jurisdiction is confined only to examine as to whether any relevant material is ignored or any erroneous material is considered or whether the order of the appropriate authority has violated the principle of natural justice or any case is made out for infraction of any statutory provision or whether the decision taken by the appropriate authority is such that no reasonable person could ever take such decision. (Para 37)
(c) Income Tax Act, 1961 - Section 269 UE(1) - Findings of Appropriate Authority, based on factual foundation, held neither arbitrary nor illegal - In conformity of section 269UD and C.B. Gautam’s case. (Para 44)
(d) Administration of justice - Issues raised and rejected at four stages : appropriate authority, writ court, appellate court and review court - De novo enquiry cannot be held under Article 136, Constitution of India. (Para 49)
(e) Income Tax Act, 1961 - Section 269UG (4) - Issue in relation to amount of consideration - Division Bench of High Court not taking provisions of Section 269UG(4) into consideration - High Court should have left the matter to be decided by the appropriate authority as required under Section 269UG (4) of the Act. (Para 4, 6)
Facts of the case:
One-Smt. Mithilesh Kumari [respondent No. 3 herein (since deleted)] and Smt. Krishna Kumari Roongta jointly owned the suit land. The suit land then became a property of a firm called M/s Rajasthan Industrial Company, which consisted of several partners along with Smt. Mithilesh Kumari and Smt. Krishna Kumari Roongta. This partnership was later dissolved by a dissolution deed dated 31.03.1986 executed by the partners. In terms of the dissolution deed, two godowns (Nos.13 and 14) together with 1/4th undivided share in the suit land fell to the share of Smt. Mithilesh Kumari.
The appellants (prospective buyers) herein entered into an agreement with Smt. Mithilesh Kumari for purchase of the suit land for a total consideration of Rs.99,84,500/- (Rs. 1051/- per sq. yard). The appellants paid a sum of Rs.40,00,000/- to Smt. Mithilesh Kumari towards the advance for purchase of the suit land.
The appropriate authority issued a show cause notice to the appellants under Section 269 UD (1A) of the Act stating therein that the apparent sale consideration, as disclosed by the appellants in the sale agreement, was on lower side for various reasons and that, as a matter of fact, the value of the suit land was much higher than the agreed rate specified in the agreement.
The appropriate authority passed an order under Section 269UD (1) of the Act overruling the appellants’ objections and directing compulsory purchase of the suit land by the Central Government at an amount equal to the apparent consideration fixed by the parties in the agreement. The appellants herein filed a writ petition in the High Court questioning therein the legality and correctness of the order dated 30.03.1994. The respondents (Income Tax Department) contested the writ petition and defended the preemptive purchase order as being legal and proper on the reasoning stated therein.
The Single Judge dismissed the writ petition and upheld the order dated 30.03.1994 as being legal and proper. The appellants filed appeal before the Division Bench of the High Court. The vendor (respondent No.3) also filed appeal against the order of the Single Judge. The appellants’ appeal was dismissed and the vendor’s appeal was partly allowed with the direction that upon department taking over possession of the suit land, prospective buyers would be entitled to claim refund of the amount paid to the vendor together with interest @ 6% p.a., out of the maturity amount of the FDR (created by the department) and the remaining amount shall be paid to the vendor.
The Review Court dismissed the review petition.
Finding of the Court:
There is no infirmity in the impugned order.
Result: C.A. Nos.9800-9801/2010 dismissed. C.A. No.9901 of 2010 partly allowed.
JUDGMENT :
ABHAY MANOHAR SAPRE, J.
C.A. Nos.9800-9801/2010
1. These appeals are directed against the final judgment and order dated 31.05.2007 passed by the High Court of Judicature for Rajasthan Bench at Jaipur in D.B. Special Appeal No.744 of 1994 whereby the Division Bench of the High Court dismissed the special appeal filed by the appellants herein and the final judgment and order dated 24.07.2007 in D.B. Civil Review Petition No.80 of 2007 by which the review petition arising out of SA 744/94 was also dismissed.
2. In order to appreciate the controversy involved in these appeals, it is necessary to set out the relevant facts infra.
3. The appellants are the writ petitioners whereas the respondents are the respondents of the writ petition out of which these appeal arise.
4. The dispute relates to a land measuring around 9500 sq. yards/7945 sq. meters along with two Godowns (Nos.13 and 14) and certain other structures standing thereon, which are part of Khasra No. 126 situated in village Durgapur, Tahsil Sanganeer, Jaipur (hereinafter referred to as the "suit land”).
5. One-Smt. Mithilesh Kumari [respondent No. 3 herein (since deleted)] and Smt. Krishna Kumari Roongta jointly owned the suit land. The suit land then became a property of a firm called M/s Rajasthan Industrial Company, which consisted of several partners along with Smt. Mithilesh Kumari and Smt. Krishna Kumari Roongta. This partnership was later dissolved by a dissolution deed dated 31.03.1986 executed by the partners. In terms of the dissolution deed, two godowns (Nos.13 and 14) together with 1/4th undivided share in the suit land fell to the share of Smt. Mithilesh Kumari.
6. On 11.11.1993, the appellants (prospective buyers) herein entered into an agreement with Smt. Mithilesh Kumari for purchase of the suit land for a total consideration of Rs.99,84,500/- (Rs. 1051/- per sq. yard). The appellants paid a sum of Rs.40,00,000/- to Smt. Mithilesh Kumari towards the advance for purchase of the suit land. According to the appellants, they were placed in possession of the two godowns and other structures standing on the suit land. So far as 1/4th land was concerned, the appellants were given symbolical possession of the suit land.
7. The appellants then furnished the information about the purchase of the suit land in accordance with the requirements of Section 269UC of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) to the appropriate authority in Form No. 37 and submitted the copy of the agreement dated 11.11.1993.
8. The valuation officer of the Income Tax Department vide his letter dated 18.01.1994 informed the appellants that he would inspect the suit land on 21.01.1994. He also sought certain information from the appellants in relation to the suit land. The valuation officer then made an inspection of the suit land and submitted his report to the appropriate authority.
9. The appropriate authority, on receipt of the report, issued a show cause notice on 08.03.1994 to the appellants under Section 269 UD (1A) of the Act stating therein that the apparent sale consideration, as disclosed by the appellants in the sale agreement, was on lower side for various reasons and that, as a matter of fact, the value of the suit land was much higher than the agreed rate specified in the agreement.
10. It was mentioned in the show cause notice dated 08.03.1994 that the Jaipur Development Authority on 07.11.1992 had sold a plot of land at A-90 Triveni Nagar, Near Durga Pura Railway Station in auction at the rate of Rs.1781/- per sq. meter. It was pointed out that if an adjustment of 5% is made towards less development whereas 10% is allowed on account of large size of the suit land and further 12% is allowed on account of time gap, the rate of the suit land would work out to Rs.1692/- per sq. meter, i.e., Rs.1,34,39,556/- as against the agreed value of Rs.99,84,568/-. It was further pointed out that the value determined by the appropriate authority at Rs.1,34,39,556/- doe
