2001 (12) TMI 28 - HC - Income Tax

Summary

Issues Involved:
1. Legality of the pre-emptive purchase order under section 269UD(1) of the Income-tax Act, 1961.
2. Determination of the nature and valuation of the subject property.
3. Compliance with principles of natural justice.
4. Jurisdiction and scope of judicial review under Article 226 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Legality of the Pre-emptive Purchase Order:
The writ petition challenges an order dated March 22, 1995, by the Deputy Commissioner of Income-tax under section 269UD(1) of the Income-tax Act, 1961, directing the purchase of certain agricultural property by the Central Government. The petitioner contends that the property in question is agricultural land and disputes the valuation and the basis for the pre-emptive purchase order.

2. Determination of the Nature and Valuation of the Subject Property:
The subject property, described as agricultural land with specific features, was agreed to be sold for Rs.68 lakhs. The respondents argued that the property, situated in Malibu Township, Gurgaon, had been declared residential and was undervalued. The appropriate authority compared the property with nearby residential plots, estimating its value at Rs.2,47,90,500, significantly higher than the declared value. The petitioner argued that the property remained agricultural and that the valuation was incorrect, citing various factors including development charges and comparable sales.

3. Compliance with Principles of Natural Justice:
The petitioner contended that the opportunity for a hearing was not reasonable, as required by section 269UD(1A) and the Supreme Court's ruling in C.B. Gautam v. Union of India. They argued that relevant data and reasons for the proposed action were not furnished. The appropriate authority, however, considered the land to be residential and rejected the submissions, valuing the land at Rs.2,500 per sq. meter.

4. Jurisdiction and Scope of Judicial Review:
The court's jurisdiction in such matters is limited. The court noted that the appropriate authority had arrived at a finding of fact regarding the land's value, complying with principles of natural justice. The court referenced Brindco Sales Ltd. v. Appropriate Authority, emphasizing that section 269UD grants a pre-emptive right to the Central Government, which must be exercised within a limited time span and with recorded reasons. The court's power under Articles 226 and 227 includes reviewing erroneous assumptions of jurisdiction, errors of law, violations of natural justice, and arbitrary actions.

The court found that none of these factors applied in this case. Even considering the petitioner's arguments, the land's value exceeded Rs.68,00,000. Therefore, no case for interference with the impugned order was made out.

Separate Judgments:
The judgment was delivered by S.B. Sinha C.J., with no separate judgments by other judges.

Conclusion:
The petition was disposed of with no interference in the impugned order. The court also declined to grant relief regarding interest and enhancement in land value, suggesting respondents Nos. 3 and 4 seek other legal remedies.