Summary
A pre-emptive purchase under the former Chapter XX-C income-tax regime was upheld because the valuation findings were supported by evidence and disclosed no perversity, illegality or statutory breach. The Court declined a fresh valuation inquiry after repeated scrutiny below and rejected a new notice/report objection on the particular procedural record. Separately, the Union’s appeal succeeded in removing judicial directions distributing the deposited consideration, leaving that question to the statutory appropriate authority.
Issues
- Whether the evidentiary valuation findings justified interference with the pre-emptive purchase.
- Who should determine investment proceeds and distribution of deposited consideration.
Provisions considered
- Section 269UG(4), Income-tax Act, 1961Required the appropriate authority, rather than the High Court’s substituted distribution order, to decide how investment proceeds and deposited consideration should benefit interested parties. (¶ Union appeal: 4–8)
Held
- Judicial review examined procedural and legal defects, consideration of relevant material and rationality, rather than acting as a valuation appeal. The supported findings of undervaluation met the applicable statutory requirements and C.B. Gautam principles. (¶ Buyers’ appeals: 25–45)
- The valuation considered location, commercial potential, existing godowns and an alternative calculation allowing for development deductions. Those factual matters had been examined at successive stages; Article 136 did not warrant another de novo inquiry on this record. (¶¶ Buyers’ appeals: 26–45, Buyers’ appeals: 48–49)
- The objection concerning the godown valuation report and notice was not raised earlier. The Court also found no prejudice because relevant documents were supplied during writ proceedings and the buyers had addressed them and argued the merits. (¶ Buyers’ appeals: 46–47)
- The High Court’s direction refunding the buyers with six per cent interest from the fixed deposit and paying the balance to the vendor overlooked section 269UG(4). Distribution was therefore left for the appropriate authority under that provision. (¶ Union appeal: 1–8)
Result
Buyers’ appeals dismissed, sustaining the pre-emptive purchase. Union’s appeal partly allowed: High Court’s final distribution directions set aside and the question left open for decision by the appropriate authority under section 269UG(4), according to law.