UDAIPUR DISTILLERIES CO LTD Vs. O D MOHINDRA

JUDGEMENT

(1.) THE compulsory purchase order passed by the appropriate authority under Chapter XX-C of the Income-tax Act, 1961, has been challenged in this petition mainly on the following grounds. Firstly, it is contended that the order passed Under Section 269ud (1) of the Income-tax Act, 1961, without giving an opportunity of hearing to the petitioner is bad in law. Secondly, it is contended that the order passed Under Section 269uj of the Income-tax Act on February 22,1990, declining to rectify the wrongful deduction of Rs. 5,06,200 from the total consideration is bad in law. Thirdly, it is contended that in view of the failure on the part of the Central Government to pay the said consideration amount of Rs. 5,06,200 within the time stipulated under the Act, the order passed Under Section 269 UD (1) of the Act stands abrogated and the immovable property purchased Under Section 269ud (1) stands revested in the petitioner as per Section 269uh (1) of the Act. Accordingly, it is submitted that the orders passed under Chapter XX-C of the Act which are impugned in the petition are liable to be quashed and set aside.

(2.) THE petitioner is a company incorporated under the Companies Act, 1956. The petitioner inter alia, owned a plot of land admeasuring 1446 square metres together with a structure consisting of ground, first and second floor situated at Andheri-Kurla Road, Sakinaka, Bombay-400 072. By an agreement dated June 24,1989, the petitioner had agreed to sell the aforesaid property to H. Parson Private Limited (hereinafter referred to as "the purchaser"), at a total consideration of Rs. 74,00,000. On execution of the said agreement, the petitioner had received a sum of Rs. 4,00,000 from the purchaser and the balance amount of Rs. 70,00,000 was to be paid by the purchaser on completion of the sale. As per the agreement, the purchase was to be effected within one month from the date of receiving the no objection certificate from the appropriate authority. Under the said agreement pocket expenses, stamp duty and registration fees were to be borne by the petitioner and the purchaser in equal shares.

(3.) ON June 30,1989, the petitioner and the purchaser filed duly executed Form No. 37-1 before the appropriate authority. Without giving an opportunity of being heard, an order was passed by the appropriate authority Under Section 269ud (1) of the Income-tax Act on August 29, 1989, stating therein that the aforesaid property belonging to the petitioner was fit for purchase by the Central Government. Out of the total consideration of Rs. 74,00,000 payment of the sum of Rs. 70,00,000 being deferred for a period of three months from the date of the agreement, in terms of Section 269ua (b) read with rule 48-1 of the Income-tax Rules, 1962, the value discounted for three months was worked out at Rs. 1,33,700 and the same was deducted from the total consideration. Similarly, a sum of Rs. 3,72,500 being half share of stamp duty and registration charges has been deducted from the total consideration. Thus, by the said order, out of the total consideration of Rs. 74,00,000 a sum of Rs. 5,06,200 (Rs. 1,33,700 towards discounting charges plus Rs. 3,72,500 towards half share of stamp duty and registration charges) has been deducted and the balance consideration of Rs. 68,93,800 has been held to be the apparent consideration payable by the Central Government under the order passed Under Section 269ud (1) of the Income-tax Act.