MARGARET KATHLEEN GANDHI Vs. UNION OF INDIA

JUDGEMENT

(1.) PROPERTY bearing No. 197, Block 'A', Defence Colony, New Delhi belonged to Mrs. Raj Laxmi Narain and Mrs. Bhuvanam Ramaswamy, respondents No.7 and 8. The peti- tioner, herein, entered into agreement for the purchase of the property from the owners. Pursuant to the said agreement to sell, the petitioner and the owners submitted form 37 (1) to the Appropriate Authorities under Section 269 UC of the Income Tax Act. By order dated 14.3.1988, the appropriate authority exercising power under sub-Section (i) of Section 269 UD of the Income Tax Act, ordered the purchase of the property by the Central Government at an amount equal to the apparent consideration for the transfer of the property. The challenge in this writ petition is to the order dated 14.3.1988 passed by the appropriate authority. The order of the appropriate authority is challenged on the ground that it does not state the reasons purported to have been recorded nor does it disclose the grounds on which the impugned order is made. No opportunity to show cause was afforded to the petitioner before passing the impugned order.

(2.) THE question with regard to the validity of Chapter XX-C of the Income TaxAct and the interpretation of various sections in the said Act, came up for consideration before the Supreme Court in the case of C.B. Gautam Vs. Union of India and Others reported as 1993(1) SCC page 71. While upholding the vires of the said Chapter, the Supreme Court held that before an order for compulsory purchase is made under Section 269 UD, the intending purchaser and the intending seller must be given a re.asonable opportunity of showing cause against an order for compulsory purchase being made by the appropriate authority concerned. It was further held that it is inconceiveable that the order which is required to be served by the appropriate authority under sub-section (2) would be the one which does not contain the reasons for the passing of the orders or is not accompanied by the reasons recorded in writing. It may be permissible to record the reasons separately but the order would be incomplete order unless it incorporates in it the reasons or the reasons are separately served upon the affected parties. Reasons for the order must be communicated to the affected party. In C.B. Gautam's case, the order passed by the appropriate authority under section 269 UD was held to be bad in law and was set aside for the reason that the same had been made without any show cause notice being served on the petitioner and without the petitioner or other affected parties having been given any opportunity to show cause against the order for compulsory purchase nor were the reasons for the said order set out in the order, or communicated to the petitioner or other concerned party with the order. In our opinion the Judgment of the Supreme Court in C.B. Gautam's case is applicable to the facts of this case on all fours. Following the aforesaid decision of the Supreme Court in C.B. Gautam's case we set aside the order dated 18.3.1988 passed by the appropriate authority under Section 269 UD (1). THE effect of this order would be that the respondent would be at liberty to take further action in accordance with law. THE interim order shall stand vacated.