1994 (7) TMI 30 - HC - Income Tax

Appropriate Authority, Immovable Property By Central Government, Movable Property, Writ Petition

Summary

Issues:
Interpretation of Supreme Court's clarificatory observation in C. B. Gautam v. Union of India [1993] 199 ITR 530; Application of clarificatory observation to the case; Validity of order directing pre-emptive purchase under section 269UD(1) of the Income-tax Act; Consideration of possession delivery and temporary injunction in the case; Compliance with court order for payment of consideration; Comparison with a previous judgment in Writ Appeals Nos. 215 and 216 of 1992; Setting aside of the single judge's order and appropriate authority's decision; Remittance of permission applications to the appropriate authority; Requirement of bank guarantee for consideration amount; Consequences of granting permission or compulsory purchase by the appropriate authority; Timeline for proceedings before the appropriate authority.

Analysis:
The High Court of Madras heard a writ appeal against an order passed by a single judge in Writ Petition No. 15039 of 1988. The single judge had applied a clarificatory observation made by the Supreme Court in C. B. Gautam v. Union of India [1993] 199 ITR 530 to the case, resulting in the dismissal of the writ petition. The case involved an agreement of sale for an immovable property, where the appropriate authority directed pre-emptive purchase under section 269UD(1) of the Income-tax Act. Despite possession delivery and a temporary injunction obtained by the petitioner, the transaction was not completed when the writ petition was filed. The court referred to a previous judgment in Writ Appeals Nos. 215 and 216 of 1992 to support its decision.

The High Court allowed the writ appeal, setting aside the single judge's order and the appropriate authority's decision. It remitted the permission applications to the appropriate authority for reconsideration in light of the Supreme Court's clarificatory observation. The petitioner was directed to furnish a bank guarantee for the consideration amount within four weeks. Consequences were outlined for both granting permission or ordering compulsory purchase by the appropriate authority, including interest payment and bank guarantee cancellation. The parties were scheduled to appear before the appropriate authority, with a timeline set for the completion of proceedings. No costs were awarded in the judgment.