NATVARLAL DAYARJIBHAI PATEL Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition is filed by the petitioner for and appropriate writ, direction and/or order quashing and setting aside the order dated October 27, 1994 (annexure -A), to the petition passed by the appropriate authority, respondent No. 2 herein by which an order was passed in exercise of the power under section 269UD(1) of Income -tax Act, 1961 (hereinafter referred to as 'the Act').

(2.) IT is the case of the petitioner that respondent No. 3 owned a plot of land admeasuring 675 sq. yds situate at Maninagar, Ahmedabad, on which seven shops were constructed. All the shops were let out to different tenants and they were in possession since many years. The petitioner was also one of the tenants. Since respondent No. 3 was willing to sell the property and the petitioner was one of the sitting tenants, the petitioner was interested in buying the property. An agreement to sell was, therefore, entered into between the petitioner and respondent No. 3 on July 21, 1994, for an amount of Rs. 13.13 lakhs. The agreement is annexed to the petition. As the total sale consideration exceeded Rs. 10 lakhs, it was necessary to fill in Form No. 37 -I as required under section 269UC(3) of the Act. The appropriate authority issued show -cause notice on October 14, 1994, calling upon the transferor and the transferee as to why the property should not be compulsorily purchased, inter alia, alleging that considering the two sale instances referred to in the notice, 'apparent and discounted' consideration of property under consideration was underestimated by more than 15 per cent. The petitioner as well as respondent No. 3, were, therefore, called upon to show cause why an order under section 269UD(1) of the Act should not be passed. The petitioner as well as respondent No. 3 replied to the said show -cause notice on October 21, 1994. In the reply, it was contended that the main road frontage of the property under consideration was occupied by seven tenants since the last more than 30 years. It was not the liability of the vendor to get those tenants evicted. It was also stated that since the purchaser was one of the tenants he had purchased the property. So far as SIP 1 was concerned, it was submitted that there was a very small room on the back side of the plot which did not affect development. Regarding SIP 2, it was mentioned that it was not in a commercial zone but it was wrongly mentioned in the show -cause notice that it was in a commercial zone. In view of the above reasons, it was contended by the petitioner as well as respondent No. 3 that it was not a case to acquire property under section 269UD(1) of the Act and the notice was liable to be revoked.

(3.) MR . S. N. Soparkar, learned counsel for the petitioner, raised various contentions. He submitted that there is an error apparent on the face of the record committed by the appropriate authority in not considering the relevant and material fact that neither SIP 1 nor SIP 2 could be said to be comparable to the property under consideration. The order, therefore, suffers from non -application of mind and requires to be quashed. He also submitted that SIP 1 could not have been taken into account inasmuch as the property under consideration was having seven sitting tenants. Considering that vital fact, the authority was not right in coming to the conclusion and in recording a finding that the discounted rate per sq. mt. of property under consideration would be Rs. 2,236 and SIP 1 Rs. 2,788 and SIP 2 Rs. 3,772.