1994 (10) TMI 1 - HC - Income Tax

Summary

Issues:
1. Legality of pre-emptive purchase orders under section 269UE(2) of the Income-tax Act, 1961.
2. Requirement of principles of natural justice before passing pre-emptive purchase orders.
3. Entitlement of tenants and transferees to notice and hearing before passing orders under section 269UD(1) of the Income-tax Act.
4. Effect of completed transactions on the rights of tenants and transferees.
5. Resolution of the pending writ petitions and directions regarding the consideration amount.

Detailed Analysis:
1. The judgment of the court addressed the legality of two pre-emptive purchase orders issued by the Appropriate Authority under section 269UE(2) of the Income-tax Act, 1961, regarding specific premises in Hyderabad. The orders were issued without notice or opportunity for the concerned parties to be heard, raising questions about the validity of the orders.

2. The petitioner argued that while section 269UD of the Income-tax Act does not explicitly include principles of natural justice, it is essential for the Appropriate Authority to hear the vendor, vendee, and other interested parties before passing a pre-emptive purchase order. The Supreme Court's decision in C. B. Gautam v. Union of India was cited to support the necessity of providing an opportunity to be heard before such orders are made.

3. The judgment highlighted the entitlement of tenants and transferees to notice before the Appropriate Authority passes orders under section 269UD(1) of the Income-tax Act. It emphasized the importance of affording these parties the opportunity to present their objections and be heard in the process of pre-emptive purchase decisions.

4. The court distinguished the observations in C. B. Gautam's case regarding completed transactions from the pending cases under consideration. It clarified that the rights of tenants and transferees to representation and hearing should not be affected by the actions or acceptance of compensation by the property owner, emphasizing the separate rights of all interested parties.

5. In resolving the writ petitions, the court set aside the impugned orders, directing the Appropriate Authority to issue notices to the petitioners and allow them to submit objections. For the pending cases filed by the owner of the premises, specific directions were provided regarding the consideration amount deposited in the Unit Trust of India, outlining the conditions for transfer or reimbursement based on the Authority's decision.

This comprehensive analysis of the judgment addresses the legal issues, principles of natural justice, parties' entitlement to notice, and the resolution of the pending writ petitions with specific directions regarding the consideration amount involved in the pre-emptive purchase orders under the Income-tax Act.