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1993 Supreme(Cal) 191
High Court Of Calcutta
Ruma Pal
ASSOCIATED CEMENT COMPANIES LTD. - Appellant
Versus
APPROPRIATE AUTHORITY - Respondent
Suit 538 Of 1993
Decided On : 04/20/1993
The appropriate authority has acted on material which has a rational nexus with the conclusion reached.
Headnote:
INCOME TAX - ACQUISITION OF PROPERTY - UNDERVALUATION - ORDER FOR COMPULSORY PURCHASE - OPPORTUNITY OF HEARING - SUFFICIENCY - DELAY IN FILING WRIT PETITION - MAINTAINABILITY OF WRIT PETITION BY TRANSFEREE - SECTION 269UD - SECTION 269UC - SECTION 54 OF TRANSFER OF PROPERTY ACT.
Fact of the Case:
The petitioner entered into an agreement to purchase a flat at premises No. 70D, Hindustan Park, Calcutta, for Rs. 28.50 lakhs. Form No. 37-I was filed before the appropriate authority under Section 269UC of the Income-tax Act, 1961. The appropriate authority issued a show-cause notice to the petitioner alleging undervaluation of the flat. The petitioner appeared and submitted its objections. The appropriate authority passed an order under Section 269UD ordering the flat to be purchased by the Central Government at Rs. 27,99,706. The petitioner challenged the order and the reasons in support of the order by way of a writ petition.
Finding of the Court:
The court held that the appropriate authority had considered all aspects of the matter and the reasoning of the appropriate authority was not perverse. The court also held that the petitioner had been given a sufficient opportunity of hearing and that the delay in filing the writ petition was fatal.
Issues: 1. Whether the appropriate authority had improperly rejected instances of sale of properties at Dover Road given by the petitioners and had failed to consider the difference between the localities of the two instances relied upon by it and that of the flat, in the impugned order? 2. Whether there was a denial of natural justice?
Ratio Decidendi: 1. The court held that it is not for the court in exercise of its jurisdiction under Article 226 to either weigh the evidence before the appropriate authority or interfere with any finding of fact unless the appropriate authority had taken into account irrelevant factors or ignored relevant factors or had acted so unreasonably that no authority properly instructed in the law could have reached such a conclusion. 2. The court held that the Supreme Court in C. B. Gautam's case has laid down that the appropriate authority may issue a show-cause notice calling upon the petitioner and other concerned parties to show cause why an order for compulsory purchase of the property in question should not be made under the provisions of Sub-section (1) of Section 269UD and give a reasonable opportunity to the petitioner and such other concerned parties to show cause against such an order being made. In this case, eight days' notice was given. The matter was heard on three days. Copies of all material sought to be relied upon were made available. The court held that this was a sufficient opportunity of hearing.
Final Decision: The writ petition was dismissed with costs.
( 1 ) THE petitioner-company entered into an agreement to purchase a flat at premises No. 70d, Hindustan Park, Calcutta (referred to as "the flat") on September 22, 1992. The total consideration price was stated to be Rs. 28. 50 lakhs. On September 29, 1992, the petitioner-company and the owner of the flat being respondent No. 5 herein filed Form No. 37-I before the appropriate authority under Section 269uc of the Income-tax Act, 1961 (referred to as "the Act" ). On October 13, 1992, an inspection was held and detailed scrutiny made in respect of the transaction in question. The particulars together with instances of five other properties, their description, locality and values were submitted to the appropriate authority on November 4, 1992, along with a report of the executive engineer. The executive engineer was of the view that the consideration for the sale of the flat in question had been understated.
( 2 ) ON November 20, 1992, notice was issued to the petitioner-company requesting it to show cause why the flat in question should not be purchased under Chapter XX-C of the Act as the apparent consideration shown by the petitioner appeared to be understated as compared to the fair market value of the flat in question. According to the petitioners, this notice was received on November 23, 1992. On November 25, 1992, the petitioner appeared and also submitted a letter asking for a copy of the valuation report prepared or obtained by the Department so that it could make submissions as to whether the apparent consideration as stated in the agreement for sale was less than the fair market value by 15 per cent. At the hearing on November 25, 1992, the petitioner was told that the appropriate authority was basing its finding as to undervaluation on two transactions : one relating to sale of a flat at Ballygunge Circular Road, Calcutta, and the other at Southern Avenue, Calcutta. The petitioner-company was also asked to make available details of any transactions done in respect of any flats sold in the vicinity. By a letter dated November 27, 1992, the petitioner submitted that the transactions on the basis of which the appropriate authority was holding that the transaction in question was being made at undervalue were not in respect of comparable properties. The petitioners also gave details of a transaction at Dover Road where two flats had been sold at Rs. 326 per sq. ft. in September, 1992, At the hearing held on November 27, 1992, the petitioners were handed over a xerox copy of a valuation note dated November 27, 1992, which showed that the market value of the flat in question was Rs. 35,17,910 (i. e. , 25,4 per cent, more than the apparent consideration), xerox copy of the detailed scrutiny dated November 3, 1992, and xerox copy of the valuation done by the executive engineer on November 4, 1992. The petitioners asked for time in order to consider these documents. On November 30, 1992, a hearing was held and written comments were also submitted by the petitioners before the appropriate authority. On the same date, the appropriate authority passed an order under Section 2g9ud of the Act by which the appropriate authority ordered the flat in question to be purchased by the Central Government at Rs. 27,99,706 being the amount equal to the amount of effective apparent consideration. The appropriate authority gave detailed reasons for the order dealing with the points raised by the petitioners in the letter dated November 30, 1992.
( 3 ) BOTH the orders under Section 269ud (1) as well as the reasons in support of such order are the subject-matter of challenge in this writ petition.
( 4 ) THE impugned order and the reasons were, according to the petitioner, received by them on December 15, 1992.
( 5 ) ON December 31, 1992, the Central Government paid a sum oi' Rs. 27,99,706 to respondent No. 5 in respect of the flat under the provisions of Section 269ug after receiving possession from the owner under Section 269
