HOTEL MARDIAS PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) HEARD learned counsel for the parties. On 13th Aug., 1994 an order under S. 269UD (was passed) for purchase of property in question which was the subject matter of an agreement to sale between the petitioner and the vendors. The purchase price was fixed to be Rs. 52 lakhs. The entire purchase money was paid by the transferor to the transferees. Under the order itself it was directed by the Appropriate Authority to keep the aforesaid amount payable by Central Government in personal deposit account of Appropriate Authority until leasehold rights.

(2.) THE aforesaid order is under challenge in this petition on two grounds. Firstly the order by the Appropriate Authority neither records a finding about the fair market value of the property sought to be purchased as on the date of agreement to sell without which no determination about undervaluation of consideration stated in the agreement could have been made, nor the order records a finding that the apparent consideration has been undervalued with a view to avoid tax. The satisfaction about the two facts are conditions precedent before power under S. 269UD could be exercised. Secondly it has been urged that even if the order of purchase is otherwise valid it stands abrogated under S. 269UH inasmuch as the purchase price has not been tendered to the person entitled to receive within one month from the end of month in which the property became vested in the Central Government on making of the order under S. 269UD(1) by the Appropriate Authority. The order directing deposit of the amount with the Appropriate Authority on the face of it is contrary to the provisions of S. 269UG and the same cannot be said to be a ground for saving the money (many) consequences of non payment provided in S. 269UH.

(3.) SINCE the decision of Supreme Court in C.B. Gautam vs. Union of India and Ors. (1992) 108 CTR (SC) 304 r/w (1993) 110 CTR (SC) 179 : (1993) 199 ITR 530 (SC) : TC 3PS.87, it is settled that before an Appropriate Authority makes an order for purchase of the property which is the subject matter of an agreement to sell, under S. 269UD, it must reach a satisfaction about undervaluation of apparent consideration stated in the agreement and that such understatement has been made with a view to evade the tax. The Appropriate Authority is enjoined with an obligation to make a speaking order under S. 269UD(1) specifying the grounds on which the purchase order is made. This inheres that the order on the face of it must disclose about the satisfaction on the two aspects reached by the Appropriate Authority and reasons thereof. This Court has also expressed the same opinion in the case of Barwarben Tomas Khambata & Ors. vs. Appropriate Authority 1995(2) GLH 636.