1996 (5) TMI 33 - HC - Income Tax

High Court Immovable Property By Central Government Movable Property Petition Against Order Writ Jurisdiction Writ Petition

Summary

Issues:
1. Impugning the order for compulsory purchase of land under the Income-tax Act.
2. Quashing the consequential order for taking possession of the property.
3. Valuation of property for preemptive purchase under Chapter XX-C of the Income-tax Act.
4. Consideration of subsequent events in the writ jurisdiction.
5. Dismissal of the writ petition on grounds of subsequent events affecting land price.

Analysis:

The petitioners challenged the order for compulsory purchase of a 33,333 sq. ft. land in Indore under the Income-tax Act. The appropriate authority required the petitioners to justify why preemptive purchase should not be made based on undervaluation concerns. The petitioners responded, but the authority, after considering the facts, ordered the purchase of the property. The subsequent writ application aimed to challenge this order and the consequential possession order. However, no stay was granted, and the property was auctioned for Rs. 2 crores and 5 lakhs, with the highest bid accepted.

The court considered the subsequent events, including the significant increase in the auction price compared to the initial valuation. The petitioners argued that the price surge was due to a draft development plan showing commercial-cum-residential use, although the authority contended the property's versatile potential even before the plan. The court concluded that the draft plan did not directly impact the auction price, which was substantially higher than the initial offer. Consequently, the court dismissed the writ petition solely on the grounds of subsequent events affecting the land price, denying the exercise of discretionary writ jurisdiction.

In the judgment, the court emphasized that the significant price difference in the auction postulated by subsequent events barred the court from intervening through writ jurisdiction. The dismissal of the writ petition was based on the substantial increase in the auction price, indicating the impact of subsequent events on the valuation of the land. The court highlighted the lack of influence of the draft development plan on the auction price, ultimately leading to the rejection of the petitioners' claims and the imposition of costs on them.