G.B. Patnaik, C.J.
1. The order passed by the Appropriate Authority dated January 25, 1990, under Section 269UD(1) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), is the subject-matter of challenge in C.W.J.C. No. 879 of 1990, and the petitioner therein is the
transferee. The petitioner challenged the constitutional validity of Chapter XX-C of the Act as well as the impugned order passed by the appropriate authority, inter alia, on the ground that the said order had been passed without affording an opportunity of hearing to the affected parties. The further stand of the petitioner is that the consideration money not having been tendered to the transferor, as required under Section 269UG of the Act, the property in question must be held to have been revested and, consequently, possession of the Central Government is without jurisdiction.
2. When this writ application was listed before this court, on February 9, 1990, this court had passed an interim order to the effect that (i) the operation of the order of the appropriate authority under Section 269UD of the Act shall remain stayed, (ii) the income-tax authorities shall not be required to pay either to the seller or to the purchaser the amount of the purchase price of the property until further orders or to deposit with the prescribed authority ; (iii) the provisions regarding limitation, as contained in Sections 269UG and 269UE, shall not operate against the Income-tax Department, and (iv) respondent No. 4 shall be at liberty to proceed with the construction of the project in question. At that point of time, the application filed by C. B. Gautam challenging the very same provisions of the Act was pending before the apex court. On December 3, 1990, this court modified its earlier order dated February 9, 1990, and on the prayer of the petitioner the said interim order was vacated, but, it was made clear that any action taken in the meantime shall be subject to the result of the said writ application.
3. The said transferee filed yet another writ application in this court, which was registered as C.W.J.C. No. 51 of 1991 contending, inter alia, that the property which vested under the Central Government, pursuant to the order under Section 269UD(1) dated January 25, 1990, has revested under Section 269UH(1) of the Act, since the Central Government did not comply with the requirement of Section 269UG(1) of the Act. In the meantime, Gautam's case had been disposed of by the apex court, since reported in : [1993]199ITR530(SC) . Their Lordships of the Supreme Court have held the provisions contained in Chapter XX-C of the Act to be valid, but it has been laid down that the requirement of reasonable opportunity being given to the concerned parties, particularly, the intending purchaser and the intending seller must be read into the provisions of Chapter XX-C and before an order for compulsory purchase is made under Section 269UD, the intending purchaser and the intending seller must be given reasonable opportunity of showing cause against an order for compulsory purchase being made by the appropriate authority concerned. Admittedly, no such opportunity has been afforded in the
case in hand, and, therefore, the impugned order dated January 25, 1990, must be held to be vitiated.
4. Mr. Rastogi, learned senior standing counsel for the Revenue, fairly conceded that an opportunity not having been afforded to the affected parties, the matter should be remitted back to the appropriate authority for reconsideration and for re-disposal in accordance with law.
5. Mr. P. K. Shahi, learned counsel appearing for the transferee, and Mr. Pawan Kumar, learned senior counsel appearing for the transferor, however, argued with vehemence that no action having been taken by the appropriate authority within two months from the date of vacation of the stay order by this court, or, at least within two months from the judgment of the Supreme Court in Gautam's case : [1993]199ITR530(SC) , the embargo contained under the proviso to Sub-section (1) of Section 269UD of the Act, would be attracted and, therefore, it is not open for the appropriate authority to pass a fresh order under Section 269UD(1) of the Act. According to learned counsel, this is apparent from the clarification issued by the apex court in Gautam's case : [1993]199ITR530(SC) by the very order dated November 27, 1992. Mr. Shahi further urged that it is the transferee, who has the right to receive the consideration money in terms of Section 269UG and no money having been tendered or paid to the transferee, consequently the effect, contemplated under Section 269UH of the Act, must apply and, therefore, it must be held that the property has stood revested.
6. I will first dispose of the contentions of Mr. Shahi on the question of revesting. Under Section 269UF of the Act, where an order for the purchase of any immovable property by the Central Government is made under Sub-section (1) of Section 269UD, the Central Government is required to pay by way of consideration for such purchase, an amount equal to the amount of the apparent consideration. Under Sub-section (1) of Section 269UG this consideration is required to be tendered to the person or persons entitled thereto, within a period of one month from the end of the month in which the immovable property concerned becomes vested in the Central Government under Sub-section (1), or, as the case may be, Sub-section (6) of Section 269UE. Where there is failure on the part of the Central Government to comply with the provisions of Sub-section (1) of Section 269UG or Sub-section (2) or Sub-section (3) thereof, then the order made under Sub-section (1) of Section 269UD would stand abrogated and the immovable property would stand revested in the transferor after the expiry of the said period. On a plain reading of the aforesaid provisions it is crystal clear that the consideration money, as provided under Section 269UF of the Act, is payable to the transferor. In the case in hand by an interim order of this court dated February 9,
1990, it had been directed that the income-tax authorities shall not be required to pay either to the seller or to the purchaser the amount of purchase price of the property. The said stay order stood vacated on December 3, 1990. The Department has paid a sum of Rs. 15,37,260 to the transferor and, therefore, it is difficult for us to accept the contention of Mr. Shahi that there has been any infraction of the provisions of Subsection (1) of Section 269UG. In this view of the matter, the question of revesting of the property under Section 269UH does not arise. The submission of Mr. Shahi on this score is, accordingly, rejected.
7. The next question that arises for consideration is whether no opportunity of hearing having been afforded to the affected parties, in terms of Gautam's case : [1993]199ITR530(SC) , within two months from the date when the order of stay was vacated by this court, or, at least, within two months from the date of judgment of the Supreme Court in Gautam's case : [1993]199ITR530(SC) , the embargo contained in the proviso to Sub-section (1) of Section 269UD of the Act would apply. In other words, the question for consideration is as to from which date the limitation of two months, contained in the proviso to Sub-section (1) of Section 269UD of the Act, would be reckoned. According to learned counsel for the petitioner, the said period of two months has to be reckoned from the date when this court vacated the interim order of stay, or, in any event, from November 17, 1992, the date when the apex court delivered the judgment in Gautam's case : [1993]199ITR530(SC) . According to Mr. Rastogi, counsel for the Department, the period of two months has to be reckoned only after the disposal of the writ application that was pending in court and not from any earlier point of time. Their Lordships of the Supreme Court in Gautam's case : [1993]199ITR530(SC) have observed that the object of the provisions of Chapter XX-C of the Act is a laudable one, namely, to counter evasion of tax in transactions of sale of immovable property. Their Lordships have further found that if the original time-frame prescribed in Chapter XX-C is rigidly applied, it would not be possible for the appropriate authority concerned to pass an order under Section 269UD(1) at all in respect of the property in question. The aforesaid observations should be borne in mind while examining the contentions raised by learned counsel for the petitioner.
8. At this stage, I may notice that the order under 269UD(1) of the Act has been passed by the appropriate authority, though without affording an opportunity of showing cause to the affected parties, as a result of which the said order has been vitiated in terms of the judgment of the apex court in Gautam's case : [1993]199ITR530(SC) . It may be further noticed that after vacation of the stay order by this court, consideration money has been paid to the transferor who received the same under
protest and possession of the premises has been taken over by the Central Government. Further, when this court vacated the interim order of stay at the request of the petitioner, it was observed that any action would be subject to the final decision in the writ application. In Gau-tam's case : [1993]199ITR530(SC) , their Lordships of the Supreme Court had ordered that to ensure that no injustice is caused to the petitioner, statement in Form No. 37-I, submitted by the petitioner, shall be treated as if it were submitted on the date of the signing of the judgment and, thereafter the appropriate authority may take such steps by issuing a show-cause notice and pass final order, after giving reasonable opportunity to the petitioner and such other concerned parties. Later on, on an application being filed by the Union of India for clarification of the judgment, by order dated November 27, 1992, the apex court clarified, by supplementary direction to be read as a part of the judgment, to the effect that in respect of the cases other than that of petitioner, C. B. Gautam, the period of two months, referred to in Section 269UD(1), shall be reckoned with reference to the date of disposal of each of such pending matter either before this court or before the High Courts, as the case may be. In this view of the matter, it is difficult for us to accept the contention of learned counsel for the petitioner that the period of two months must be reckoned either from the date of vacation of the stay order by this court, or, at least, from the date of the judgment of the Supreme Court in Gautam's case : [1993]199ITR530(SC) . My aforesaid view gets support from the judgment of the Karnataka High Court in Appropriate Authority v. Mass Traders P. Ltd. : [1993]202ITR741(KAR) , against which special leave application had been filed before the Supreme Court and the said special leave application was dismissed, as well as from a Bench decision of the Madras High Court in the case of Shyam Investments v. Appropriate Authority : [1995]213ITR82(Mad) . I, accordingly, hold that the period of two months, engrafted in Section 269UD(1) of the Act, would be reckoned in the case in hand from the date of the judgment of this court.
9. In the circumstances, I quash the impugned order of the appropriate authority dated January 25, 1990 (annexure 4 of C.W.J.C. No. 879 of 1990), since the said order had been passed without affording reasonable opportunity to the affected parties. The statement that had been submitted in Form No. 37-I shall be treated as if it had been submitted on the date of delivery of the judgment in the present case. The appropriate authority is directed to redispose of the matter in accordance with the law, bearing in mind the observations and directions contained in the case of C. B. Gautam v. Union of India : [1993]199ITR530(SC) .
10.
Both these applications are disposed of accordingly. There will be no
order as to costs.
J.N. Dubey, J.
11. I agree.