GHAZIABAD GENERAL INDUSTRIES PRIVATE LIMITED Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) BY this petition under Article 226 of the Constitution of India, the petitioners challenge an order passed by the appropriate authority under Section 269UC of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), by which the appropriate authority has expressed its inability to act upon the statement in Form No. 37-1 submitted to it.

(2.) THE petitioner, Ghaziabad General Industries Pvt. Ltd., holds 12,399.60 sq. metres of land bearing number A-6, site-IV Industrial Area, Sahibabad, under an agreement with the U. P. Small Industries Development Corporation and had constructed certain sheds thereon which were let out to Dabur India Limited. THEre was an agreement to sell the said property to Dabur India Limited for a consideration of Rs. 1,30,00,000. THE requisite information in Form No. 37-I was submitted to the appropriate authority with a request to issue a no objection certificate. THE learned appropriate authority has passed the impugned order recording its conclusion as follows ;

(3.) THE Supreme Court in Appropriate Authority v. Tanvi Trading and Credits P. Ltd., 1991 191 ITR 307, has held that in the scheme for preemptive purchase contained in Chapter XX-C of the Act, the Union of India has only two options open to it. THE first is that it could buy the property, or (ii) in the event of its decision not to buy, it has to issue a no objection certificate leaving it open to the parties to deal with the property. In doing so, the Supreme Court affirmed the judgment of the Delhi High Court in Tanvi Trading and Credits P. Ltd. v. Appropriate Authority, 1991 188 ITR 623, in which after a detailed discussion of the various provisions contained in Chapter XX-C, the Delhi High Court had come to the aforesaid conclusion and held that where the appropriate authority does not buy the property it is obliged to issue a no objection certificate. In that case, the appropriate authority after observing that it was not certain as to which portion of the land would be surrendered to the State Government in view of the orders passed under the Urban Land Ceiling Act and that the agreement to sell was not capable of being certain and was invalid as per Section 29 of the Contract Act, concluded that the statement in Form No. 37-I was premature and invalid and the same was ordered to be filed. THE court held that it was not permissible to the appropriate authority to act in that manner and that it was obliged to issue a no objection certificate once it did not opt to buy. THErefore, a writ of mandamus was issued directing the appropriate authority to issue a no objection certificate in terms of Section 269UL(3) of the Act. It is this view that has been confirmed by the Supreme Court in the judgment referred to above. Since then several other High Courts have taken the same view.