1983 (6) TMI 11 - HC - Wealth-tax

Summary

Issues Involved:

1. Whether the Valuation Officer acted judicially and fairly in passing the provisional and final valuation reports.
2. Whether the Valuation Officer applied his mind to the matters in issue and adhered to the principles of natural justice and fair play.
3. Whether the initiation of proceedings by the Wealth Tax Officer (WTO) to refer the valuation of the petitioner's assets to the Valuation Officer was justified and based on relevant material.

Issue-wise Detailed Analysis:

1. Judicial and Fair Action by the Valuation Officer:

The petitioner contended that the Valuation Officer failed to act judicially and fairly in passing the provisional and final valuation reports (Exts. P-4, P-4A, R-2(A), and R-2(B)). The court examined the procedure followed by the Valuation Officer and found that he acted arbitrarily and not "fairly." The Valuation Officer did not conform to the principles of natural justice, as evidenced by the failure to communicate the "long list of sale instances," "statistical data," and "rates with the specification followed for the buildings" to the petitioner before finalizing the valuation reports. This omission violated the principles of natural justice, rendering the final valuation reports void and infirm.

2. Application of Mind and Adherence to Natural Justice:

The court observed that the Valuation Officer did not apply his mind to the vital aspects of the case. The objections raised by the petitioner, including details of five sales near the properties to be valued, were dismissed without proper consideration. The Valuation Officer's conclusion that the sale instances provided by the petitioner were not reflective of the market value was deemed a non-application of mind. The court emphasized that the Valuation Officer, while exercising quasi-judicial functions, must act judicially, fairly, and bona fide. The failure to communicate relevant materials to the petitioner and the arbitrary dismissal of objections demonstrated a lack of adherence to the principles of natural justice.

3. Justification for Initiation of Proceedings by WTO:

The petitioner argued that there was no basis or material to invoke section 16A(1)(b)(i) & (ii) of the Wealth-tax Act for referring the valuation to the Valuation Officer. The court noted that the initiation of proceedings by the WTO must be based on relevant material and not on arbitrary decisions. The court did not delve deeply into this issue, as the matter was disposed of on the second point regarding the fairness and judicial conduct of the Valuation Officer. However, the court left this point open for further consideration.

Conclusion:

The court declared that the final valuation reports (Exts. R-2(A) and R-2(B)) were null and void due to the violation of principles of natural justice. The Valuation Officer was directed to make a fresh final valuation report "de novo" in accordance with the law, providing the petitioner with a reasonable opportunity to present objections and materials. The petitioner was also granted the opportunity to be heard. The court emphasized the need for the Valuation Officer to act fairly, bona fide, and with due care and caution, as required for quasi-judicial authorities. The other points raised by the petitioner were left open for further adjudication. The Original Petition was disposed of with no order as to costs.