2001 (7) TMI 3 - SC - Income Tax

No copy of any document relating to the sale instance was furnished by the Appropriate Authority to the appellant along with the notice - gross breach of the principles of natural justice because adequate opportunity to meet the case was not given to the appellant- Having regard to the statutory limit within which the Appropriate Authority has to act and his failure to act in conformity with the principles of natural justice - impugned order of preemptive purchase is set aside

Summary

Issues:
1. Adequacy of notice period and opportunity to respond.
2. Allegation of low apparent consideration without providing necessary documents.
3. Breach of principles of natural justice.
4. Setting aside the order of compulsory purchase.

Detailed Analysis:
1. The judgment revolves around the appellant, a transferee of immovable property, who received a notice from the Appropriate Authority regarding a hearing for a transfer of property. The appellant contended that they were not given a reasonable opportunity to respond adequately to the case made out in the notice. The High Court upheld the order of compulsory purchase, which is now challenged.

2. The notice alleged that the apparent consideration of the transaction was low based on a sale instance, but the Appropriate Authority failed to provide the appellant with any documents related to the sale instance. This lack of information hindered the appellant's ability to respond effectively to the allegation, leading to a breach of natural justice principles.

3. The Supreme Court found that the notice period provided by the Appropriate Authority was inadequate, giving the appellant only three days to respond effectively. The Court emphasized that the two days over the weekend should also be considered, making the notice period even shorter. Additionally, the failure to provide essential documents related to the sale instance further compounded the breach of natural justice principles.

4. Due to the statutory limit within which the Appropriate Authority was required to act and the failure to adhere to principles of natural justice, the Supreme Court decided to set aside the order of compulsory purchase. The Court allowed the appeal, quashed the order of the Appropriate Authority dated May 31, 1993, and directed the respondents to pay the costs of the appeal to the appellant.