Karnataka High Court
Union Of India And Others vs Smt. Vidya R. Bijur And Others on 7 February, 1994
Equivalent citations: ILR1994KAR593, [1994]209ITR803(KAR), [1994]209ITR803(KARN)
Author: S.B. Majmudar
Bench: S.B. Majmudar
ORDER SET ASIDE BY COURT--Fresh opportunity to revenue based on Gautam's case. Held : Impugned purchase order had been set aside by Single Judge for reasons other than mentioned in Gautam's case. Division Bench sustaining order of Single Judge on the basis of Gautam's case for the first time. Therefore, to be deemed that Form 37-I was filed on the date of signing the judgment by Division Bench. Held : (i) The Single Judge when he passed the order on 15-12-1992 did not declare the purchase order as null and void on the ground that reasonable opportunity of being heard was not given to the concerned parties, meaning thereby the single judge had not applied the ratio of the decision in Gautam's case for quashing the impugned order. Therefore, there was no occasion for the revenue to start further proceedings under Chapter XX-C within a period of two months from the date of judgment, i.e., 15-12-1992. That stage would be reached for the revenue only on the date on which the present judgment is signed holding that the impugned order Annexure-D dt. 17-12-1987 is null and void on the ground of non-compliance with the law declared by the Supreme Court in C. B. Gautam's case. The Form No. 37-I submitted by the original writ petitioners herein has to be treated as if it were submitted on the date of signing of the present judgment and not on 15-12-1992. (ii) The Supreme Court while issuing such directions at pages 561 and 564 of ITR had contemplated a period of two months referred to in s. 269UD(1) as it stood then. Such directions are being issued only today. As on date, the period of two months as earlier mentioned in s. 269UD(1) has undergone a legislative amendment. Sec. 269UD(1) has been amended by insertion of additional proviso by Finance Act, 1993. The revenue in the present case will, therefore, be entitled to a period of 3 months as referred to in the second proviso to s. 269UD(1) to complete the exercise if at all it chooses to do so. --C. B. Gautam v. Union of India & Ors. (1993) 199 ITR 530 (SC) followed. Application : Also to current assessment years. Citation : Income Tax Act 1961 s.269UD(1) JUDGMENT S.B. Majmudar, C.J.
1. These four writ appeals moved by the Union of India, appropriate authority under the Income-tax Department and the Income-tax Officer (Public Relations), seek to challenge a common order passed by the learned single judge (see page 805 supra) in the four writ petitions, which were disposed of by the learned single judge on December 15, 1992.
2. In order to appreciate the grievance of the Revenue, it is necessary to note a few introductory facts in the background of which the controversy posed for our consideration is to be resolved.
3. Introductory facts : The first three respondents in these writ appeals have entered into an agreement under a deed dated July 9, 1987, for selling their immovable properties bearing survey No. 12, 14 and 16 situated at Longford Gardens, Bangalore, to the fourth respondent for a consideration of Rs. 30 lakhs. Thus, the first three respondent are the prospective transferors and the fourth respondent is the prospective transferee. After entering into this agreement, both the transferors and the transferred filed an application before the appropriate authority as per the provisions of Chapter XX-C of the Income-tax Act, 1961. That application was filed in Form No. 37-I on October 27, 1987. The said Chapter was inserted by the Finance Act, 1986, being 23 of 1986 with effect from October 1, 1986. As per the said Chapter, section 269U to 269UO were inserted in the Income-tax Act. That Chapter deals with purchase by the Central Government of immovable properties in certain cases of transfer. The appropriate authority, considering the application filed by the concerned respondents, held that the value of the property quoted by the respondents in their agreement was far below the market value of the property. Consequently, the appropriate authority, purporting to exercise power under section 269UD(1) of the aforesaid Chapter made an order for purchase by the Central Government of the said immovable properties of respondents Nos. 1 to 3 at an amount equal to the amount of the apparent consideration. The said order was passed by the appropriate authority on December 17, 1987.
4. The aforesaid order was brought in challenge by respondents Nos. 1, 2 and 3, the prospective transferors and also by the fourth respondent, the prospective transferee. They filed four separate writ petitions for that purpose and in all those petitions, the impugned order under section 269UD dated December 17, 1987, was annexed to the writ petitions as annexure-D. As all those four petitions challenged the very same order, they were heard together by the learned single judge and were disposed of by a common order dated December 15, 1992, as mentioned hereinabove.
5. It is necessary to note at this stage that the vires of Chapter XX-C were brought in challenge before the Supreme Court in the case of C. B. Gautam v. Union of India . A Constitution Bench of the Supreme Court presided over by M. H. Kania C. J., by its order dated November 17, 1992, upheld the provisions of Chapter XX-C. However, while sustaining the said provisions, the Constitution Bench of the Supreme Court, speaking through Kania C. J., read into the said provision the requirements of reasonable opportunity being given to the concerned parties, particularly the intending purchaser and the intending seller. In that case, in this connection, the Constitution Bench laid down as under (headnote) :
"Before an order for compulsory purchase is made under section 269UD, the intending purchaser and the intending seller must be given a reasonable opportunity of showing cause against an order for compulsory purchase being made by the appropriate authority concerned. The provisions of Chapter XX-C can be resorted to only where there is a significant undervaluation of the property to the extent of 15 per cent. or more in the agreement of sale, as evidenced by the apparent consideration being lower than the fair market value by 15 per cent. or more. Although a presumption of an attempt to evade tax may be raised by the appropriate authority concerned in a case where the aforesaid circumstances are established, such a presumption is rebuttable and this would necessarily imply that the concerned parties must have an opportunity to show cause as to why such a presumption should not be drawn. Moreover, in a given transaction of an agreement to sell, there might be several bona fide considerations which might induce a seller to sell his immovable property at less than what might be considered to be its fair market value. For example, he might be in immediate need of money and unable to wait till a buyer is found who is willing to pay the fair market value for the property. There might be some dispute as to the title to the immovable property as a result of which it might have to be sold at a price lower than the fair market value or there might be a subsisting lease in favour of the intending purchaser. There might similarly be other genuine reasons which might have led the seller to agree to sell the property to a particular purchaser at less than the market value even in cases where the purchaser might not be his relative. Unless an intending purchaser or intending seller is given an opportunity to show cause against the proposed order for compulsory purchase, he would not be in a position to rebut the presumption of tax evasion and to give an interpretation to the provisions which would lead to such a result would be utterly unwarranted. The very fact that an imputation of tax evasion arises where an order of compulsory purchase is made and such an imputation casts a slur on the parties to the agreement to sell leads to the conclusion that, before such an imputation can be made against them, they must be given an opportunity to show cause that the undervaluation in the agreement for sale was not with a view to evading tax.
The provision that when an order for purchase is made under section 269UD reasons must be recorded in writing is no substituted for a provision requiring a reasonable opportunity of being heard before such an order is made. The recording of reasons which lead to the passing of the order is basically intended to serve a two-fold purpose : (i) that the 'party aggrieved' in the proceeding before the appropriate authority acquires knowledge of the reason and, in a proceeding before the High Court or the Supreme Court (since there is no right of appeal of revision), has an opportunity to demonstrate that the reasons which persuaded the authority to pass an order adverse to his interest were erroneous, irrational or irrelevant, and (ii) that the obligation to record reasons and convey the same to the party concerned operates as deterrent against possible arbitrary action by the quasi-judicial or the executive authority invested with judicial powers.
The courts have generally read into the provisions of the relevant sections a requirement of giving a reasonable opportunity of being heard before an order is made which would have adverse civil consequences for the parties affected. This would be particularly so in a case where the validity of the section would be open to serious challenge for want of such an opportunity."
6. The Constitution Bench, on the basis of the aforesaid conclusion which it reached, set aside the impugned purchase order in C. B. Gautam's case by holding that it was passed without giving reasonable opportunity of hearing to the prospective purchaser and the prospective seller. It is pertinent to note at this stage that C. B. Gautam's case was decided by the Supreme Court on November 17, 1992. The four writ petitions in the present case came to be decided by the learned single judge on December 15, 1992. It is not in dispute between the parties that the learned single judge was apprised of the Supreme Court judgment in C. B. Gautam's case by the time he decided the four writ petitions of the respondents. However, the learned single judge has set aside the impugned order, annexure "D" under section 269UD on the ground that it involved non-application of mind by the appropriate authority. The learned judge noted the contentions advanced on behalf of the petitioners that there was a single agreement under which the properties were sought to be sold to respondent No. 4 being the prospective purchaser. But the shares of the three petitioners, the prospective transferors, were not equal in value. The value of the first petitioner's share was 44 per cent., the value of the second petitioner's shares was 27 per cent. It was contended that the value of the properties of the second an third petitioners would fall short of the limit fixed under rule 48L of the Rules framed under the Act. The learned judge also noted the contention of the appellant-Revenue that when the value of each co-owner's share falls short of Rs. 10 lakhs, it may be permissible for the parties to sell the properties without application of Chapter XX-C of the Act but in cases where the value of one of the co-owner's shares exceeds Rs. 10 lakhs, the entire property would be covered by Chapter XX-C of the Act.
7. The learned judge held, following a Division Bench judgment of this court in Appropriate Authority v. J. S. A. Raghava Reddy , that the value of the share of each co-owner should be taken into account when computing the value thereof for the purpose of the said rule and, therefore, the appropriate authority ought to have seen whether the shares payable to any of the co-prospective transferors exceeds Rs. 10 lakhs and if the consideration payable to the other two prospective co-transferors was below Rs. 10 lakhs each, it was not clear whether the authority would have proceeded to exercise its power under section 269UD at all. It was held that there was hardly any application of mind by the authorities concerned while making the order, annexure "D", and in that connection it was observed that when the value of the shares of two co-sharers falls short of the limit fixed, unless the Department independently comes to the conclusion that the provisions of Chapter XX-C of the Act need to be applied to all the shares taken as one unit and such an exercise is done, the order in question cannot be sustained. As such an exercise was not done in the present case, the order, annexure "D", was quashed. It is this common order allowing all the four writ petitions on the aforesaid reasoning adopted by the learned judge that is the subject-matter of the present four writ appeals by the Revenue as noted earlier.
8. Rival contentions : Mr. Dattu, learned standing counsel for the appellants, vehemently submitted that the entire approach adopted by the learned single judge is misconceived inasmuch as the Division Bench judgment of this court in Appropriate Authority v. J. S. A. Raghava Reddy [1993] 199 ITR 508, applied in cases of sale of property by co-owners having undivided shares in the consideration to a prospective transferee. In the present case, three independent owner of three separate properties sought to convey by one and the same document their properties for a composite consideration to one and the same prospective transferee and, therefore, Chapter XX-C would apply to such a transaction and that there was no clear demarcation of separate consideration in the agreement. Therefore, the Department was entitled to take the agreement as a whole and proceed under Chapter XX-C. However, Mr. Dattu fairly conceded that even if the court finds some substance in this contention of his, the impugned order, annexure "D", cannot be sustained by the Revenue for the simple reason that as laid down by the Supreme Court in C. B. Gautam's case , the requisite procedure before passing such an order of giving reasonable opportunity to the concerned parties is admittedly not followed by the Department as by the time the impugned purchase order was passed on December 17, 1987, the guidelines given by the Supreme Court in C. B. Gautam's case were not available for the Department and, therefore, as on date, even if on the first point, the Revenue is in a position to make headway, the consideration on that point by this court would be academic as the purchase order, annexure "D", will remain a still-born order in the light of the Constitution Bench decision of the Supreme Court in C. B. Gautam's case , and, therefore, appeals of the Revenue will have to be dismissed on that ground. He, therefore, submitted that without pressing the appeals on the first point, he would request this court to pass an appropriate order while confirming the order of the learned single judge quashing the purchase order, annexure "D", directing the Department to follow the procedure laid down by the Supreme Court in C. B. Gautam's case , giving an opportunity to the Department, if so advised, to proceed further under Chapter XX-C after giving reasonable opportunity to the prospective purchaser and prospective sellers as indicated in C. B. Gautam's case by the Supreme Court and, for that purpose, the date on which we sign the present judgment confirming the order of the learned single judge on a separate reasoning following C. B. Gautam's case and not on the reasons given by the learned judge, should be treated to be the date on which the respondents can be said to have filed the application under rule 48L in Form No. 37-I. That the said consequence would follow in the light of the directions contained in the decision of C. B. Gautam's case [1993] 199 ITR 530, at page 561 of the report. In this connection, it was submitted by Mr. Dattu that in C. B. Gautam's case , the Constitution Bench of the Supreme Court having held that the purchase order was clearly bad in law and was required to be set aside as it did not give reasonable opportunity to the prospective purchaser and the prospective seller of being heard before such an order was passed, the Supreme Court ruled as to what consequence would follow from such an order and what course is to be adopted and what relief can be given to the concerned parties. The relevant observations in this connection found at page 561 of the report read as under :
"The next question is as to the consequence to follow. In view of the fact that the object of the provisions of Chapter XX-C is a laudable object, namely, to counter evasion of tax in transactions of sale of immovable property, we consider it necessary to limit the retrospective operation of our judgment in such a manner as not to defeat the acquisitions altogether. We find 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. In order to avoid that situation and, yet to ensure that no injustice is caused to the petitioner, we order, in the facts and circumstances of the case, that the statement in Form No. 37-I submitted by the petitioner as set out earlier shall be treated as if it were submitted on the date of the signing of this judgment. Thereafter, if the appropriate authority considers it fit, it may issue a show-cause notice calling upon the petitioner and other concerned parties to show cause why an order for compulsory purchase of the property in question should not be made under the provisions of sub-section (1) of section 269UD and give a reasonable opportunity to the petitioner and such other concerned parties to show cause against such an order being made. In view of the limited time-frame, this will have to be done with a sense of urgency. If, after such an opportunity is given, the appropriate authority so considers it fit, it may hold an inquiry, even though summary in nature, and may pass an order for compulsory purchase by the Central Government of the property in question under section 269UD(1). The appropriate authority will have to decided whether an inquiry is called for in the facts and circumstances of the case after the show-cause notice is issued....."
9. Mr. Dattu, the learned Government advocate, submitted that, therefore, this court while confirming the decision of the learned single judge quashing the impugned order, annexure "D", may be pleased to give similar directions as contained in the Supreme Court decision in C. B. Gautam's case , of the report as quoted above.
10. Repelling these contention canvassed by Mr. Dattu, learned counsel for the respondents vehemently contended that on the date on which the learned single judge decided those writ petitions, C. B. Gautam's case was very much known not only to learned counsel for the parties, but also to the learned single judge. In fact, on that very day, the learned judge has disposed of many other matters following the decision in C. B. Gautam's case . But so far as the present four cases are concerned, the Revenue in its wisdom did not invite the learned judge to pass an order in terms of C. B. Gautam's case . But on the contrary, the Revenue chose to argue the matter on the merits and attempted to sustain the purchase order, annexure "D" dated December 17, 1987, on the ground that because there were more than one prospective seller and they were selling the property by a single agreement to the common prospective purchaser, Chapter XX-C was attracted and having invited the learned judge's decision on this point, they have to face the consequence as the learned judge has found that the order was passed without application of mind. Therefore, now at this stage, in appeal, the Revenue cannot be permitted to make out an entirely new case and cannot insist on our issuing directions similar to the ones contained in C. B. Gautam's case . It was further made clear by learned counsel for respondent No. 4, prospective transferee that he does not given up his contention that the impugned order, annexure "D", is liable to fail also on the ground of failure of the principals of natural justice as admittedly the Department had not followed the procedure laid down in C. B. Gautam's case of giving an opportunity to the prospective purchaser to have his say in the matter.
11. It was next contended by learned counsel for the respondents that even if the impugned order, annexure "D", is treated to be null and void on the reasoning of the Constitution Bench decision of the Supreme Court in C. B. Gautam's case , even then the appellant-Revenue has missed the bus as the Attorney-General on behalf of the Department had moved the Constitution Bench for further directions on November 27, 1992, pointing out that many petitions were pending in the Supreme Court as well as various High Courts wherein the purchase orders were challenged and if the principles in the judgment of C. B. Gautam's case , had to be followed in such cases, the result would be unworkable as the time permitted for affording an opportunity of being heard to the prospective purchaser and the concerned prospective sellers would not be available in such pending matters and on the basis of the aforesaid submission of the Attorney-General for the Union of India, the Constitution Bench by its order dated November 27, 1992, issued supplementary directions which are at page 564 of the report in C. B. Gautam's case . Those directions read as under (at page 563) :
"We, accordingly, clarify by this supplemental direction to be read as part of the judgment that, in respect of cases other than that of the 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 matters either before this court or before the High Courts, as the case may be. Where, however, the stay orders inhibiting the authorities from taking further proceedings are vacated, the period referred to in the said section 269UD(1) shall be reckoned with reference to the date of such vacating of the stay orders. This clarification and further direction shall be supplemental to and be treated as parts of the main judgment."
12. Relying on this clarification, it is submitted by learned counsel for the respondents that the Supreme Court has in terms held in that clarificatory order that the period of two months mentioned in section 269UD(1) shall be reckoned with reference to the date of disposal of such pending matters before the High Court. That, in the present case, all those writ petitions were pending when C. B. Gautam's case , was decided on November 17, 1992. Therefore, on December 15, 1992, when the pending petitions were disposed of by the learned single judge, the two months' time permitted under section 269UD(1) for the Revenue has to be reckoned from the date of disposal of those petitions, namely, December 15, 1992, and thus the two months' period would expire on February 15, 1993, or latest by February 28, 1993. Therefore, as on date now there will be no occasion for the Revenue to claim on the basis of C. B. Gautam's Case , that they should be given further time to decided whether to proceed under Chapter XX-C and for that purpose to issue fresh notice to the respondents. In short, it was submitted that the Revenue has missed the bus. That on December 15, 1992, when the learned single judge set aside the impugned purchase order, annexure "D", the Revenue being in the know of the clarificatory order dated November 27, 1992, as passed by the Constitution Bench after the learned Solicitor-General for the Union of India moved in the matter, should have, if at all, proceeded to do the needful under Chapter XX-C latest till February 28, 1993, and beyond which date, the Revenue will have no jurisdiction to proceed with the enquiry in the present case. That insistence of the Revenue to proceed with the enquiry at this belated stage would be flying in the face of the clarificatory directions issued by the Supreme Court at page 564 of the report as quoted above and such a course would amount to going behind the express directions issued by the Constitution Bench in the aforesaid clarificatory order. And, therefore, according to learned counsel for the respondents, the only course open to this court is to confirm the final order passed by the learned single judge quashing the impugned order, annexure "D", and no further directions or observations can be made in favour of the Revenue as sought to be got done by the Revenue relying on the directions issued by the Constitution Bench of the Supreme Court at page 564 of the report in C. B. Gautam's case .
13. In view of the aforesaid rival contentions, the following points arise for our determination :
(1) Whether the order under appeal can be sustained on a different ground, namely, that it is rendered contrary to the procedure laid down by the Supreme Court in C. B. Gautam's case .
(2) If so, what further orders can be passed in the present proceedings ?
14. As points Nos. 1 and 2 are inter-connected, we shall deal with them together.
15. Points Nos. 1 and 2 : Having given our anxious consideration to the rival contentions, we have reached the conclusion that the final order passed by the learned judge quashing the impugned purchase order annexure "D", has to be confirmed as it is ex facie violative of the principles laid down by the Constitution Bench of the Supreme Court in C. B. Gautam's case , as admittedly it has been passed without giving reasonable opportunity of being heard to the concerned prospective transferors and prospective transferee. We pointedly asked learned counsel for the respondents as to whether for deciding the present case, they are in a position to state that they are waiving their right of being heard in connection with the impugned order, annexure "D", and if they were so willing then the only question that would be left for our scrutiny would be whether annexure "D" was invalid for any other reason and thaw would lead us to enquire whether the reasoning of the learned judge adopted on the merits of the matter was correct or not and we would be required to examine the same de hors the principles and guidelines laid down in C. B. Gautam's case by the Supreme Court. But learned counsel for respondent No. 4 was not ready to give up that contention. On the contrary, he submitted that the impugned order is also liable to be quashed on the ground that it had not given reasonable opportunity of hearing to the prospective purchaser. Even learned counsel for the prospective sellers, namely, respondents Nos. 1 to 3, submitted that even if we hold on the merits that the learned judge's order was not right and that the order, annexure "D", is not liable to be quashed on the reasons given by the learned judge even then it will be open to them to contend that the said order should be confirmed on the basis of the decision of the Supreme Court in C. B. Gautam's case , meaning thereby that they insisted and did not give up their contention that the order would remain still-born on account of non-granting of reasonable opportunity of being heard to the concerned parties. Once this stand is made clear by the respondents, it becomes obvious that our deciding the legality of the impugned order, annexure "D", on any other ground would be only of academic nature as the order, annexure "D", in any case will have to be set aside on account of failure of the principles of natural justice and non-granting of reasonable opportunity of being heard to the concerned parties by the appropriate authority while passing the impugned order, in the light of the decision in C. B. Gautam's case . Under these circumstances, therefore, it is not possible for us to agree with the contentions of learned counsel for the respondents that we should not permit the Revenue to submit that the appeals of the Revenue may be dismissed and the impugned order, annexure "D" may be quashed following the decision of the Constitution Bench of the Supreme Court in C. B. Gautam's case . When the Constitution Bench Judgment of the Supreme Court is thus pressed into service by both the sides, it would be too much for the respondents to submit that we should keep that judgment aside and decide the first point and if the first point is held in favour of the Revenue then only we can fall back upon the decision in C. B. Gautam's case and sustain the order of the learned single judge. The application of the Constitution Bench decision of the Supreme Court on the admitted facts on record, cannot be avoided on the specious plea by the learned counsel for the respondents that the Revenue did not seek an appropriate order on the basis of C. B. Gautam's case before the learned single judge. Mr. Dattu, learned standing counsel, submitted that he did point out to the learned single judge that annexure "D" was liable to fail in the light of C. B. Gautam's case, , but in the view of the learned single judge, the matter could be decided on another point and that is how the impugned decision was rendered. Be that as it may, in our view, when the decision of the Constitution Bench of the Supreme Court clearly applies to the facts of the present case and when the facts are not in dispute between the parties in so far as non-granting of reasonable opportunity of being heard to the concerned respondents before passing the impugned order is concerned, we cannot refuse to apply the ratio of the decision of the Supreme Court in C. B. Gautam's case . The parties concerned have got to be governed in this case by the law declared by the Supreme Court in C. B. Gautam's case . Once that conclusion is reached, the result becomes obvious. The impugned order, annexure "D", dated December 17, 1987, is liable to be declared as null and void in the light of the ratio of the decision of the Supreme Court in C. B. Gautam's case . Therefore, the final order passed by the learned single judge quashing the impugned order, annexure "D", will have to be confirmed not on the reasons given by the learned single judge, but on an entirely different reason that the said order was passed in violation of the mandatory procedure laid down by the Supreme Court in C. B. Gautam's case for passing such an order. The appeals filed by the Revenue in so far as they seek to challenge the final order of the learned single judge in connection with order, annexure "D", therefore, will be liable to fail.
16. However, there remains the moot question as to what has to be done in the matter and whether the Revenue can at least partially succeed in requesting us to give similar directions as are given by the Supreme Court in C. B. Gautam's case , of the report as extracted hereinabove. Now, it is true that in C. B. Gautam's case , it has been in terms observed by the Supreme Court that looking to the laudable object of Chapter XX-C, Form No. 37-I submitted by the petitioner shall be treated as if it were submitted on the date of signing the judgment and thereafter if the appropriate authority considers it fit, it may issue show-cause notice calling upon the petitioner and other concerned parties to show cause why an order for compulsory purchase of the property should not be made under the provisions of sub-section (1) of section 269UD. However, in the clarificatory order at page 654, it has also been laid down that the two month's period in section 269UD shall be reckoned with reference to the date of disposal of each of such pending matters before the High Courts and that this clarification shall be supplemental to the main judgment. Now the short question is whether the Revenue in the present case has missed the bus and the two months' period as laid down by the Supreme Court should be counted from December 15, 1992, when the learned single judge disposed of the writ petitions as contended by the respondents or whether the requisite period has to be counted from the date on which we sign the present judgment. In our view, on a conjoint reading of the directions and observations made by the Supreme Court at page 561, and in the clarificatory direction at page 564, it must be held that what the Supreme Court wanted to convey was that in cases where the High Courts decided the pending petitions on the ground that the impugned purchase orders ought to be treated as void for non-compliance with the requirement of reasonable opportunity of being heard, the period of limitation would start from the date of disposal of such pending matters in the High Court. Therefore, the disposal contemplated is disposal of pending matter in the light of C. B. Gautam's case and not on any other ground. It is obvious that if in a pending petition in the High Court, the purchase order is set aside on some other ground, it cannot be said to be disposal of such pending matter in the light of C. B. Gautam's case . It is obvious that if the disposal of the petition is on any other point and the impugned order of purchase is set aside on any order point, such matter could be taken up in appeal before the appellate Bench and in such contingency, the Supreme Court would never have contemplated that the disposal would be only the disposal, in the first instance by the learned single judge and not disposal by the appellate court when such appeals were permitted in the High Court, and when in appeal the order of purchase is set aside following C. B. Gautam's case . In the supplemental directions of the Supreme Court, it was clearly contemplated that once the High Court disposes of the pending writ petitions following the law laid down in C. B. Gautam's case , the matter would come to an end and there would be no occasion to prefer any appeal against such an order as the High Court would be following the law declared by the Supreme Court, which would be binding on the High Court under article 141 of the Constitution. It is also easy to visualise that when it is in terms mentioned in the last sentence of the clarificatory order at page 564 of the report that this clarification and further direction shall be supplemental to and be treated as parts of the main judgment, such direction would get telescoped into the observations as found in the main judgment at page 561 and that would mean that wen the impugned order of purchase is declared bad in law on account of non-granting of reasonable opportunity to the concerned parties by the appropriate authority, the question of further time being available to the Revenue would arise and once the supplemental direction is so read, the main directions contained at page 561 would operate to the effect that the statement in Form No. 37-I submitted by the petitioners as set out earlier shall be treated as if it were submitted on the date of signing of this judgment. It is not possible to agree with the submission of the learned advocates for the respondents that the directions at page 564 of C. B. Gautam's case would apply to any type of disposal of pending writ petitions in the High Court. We may take an example to show how this contention, if accepted, would lead to an impermissible situation. If a pending writ petition is allowed by the learned single judge of the High Court on the ground that Chapter XX-C does not apply to a given transaction, can it be said that still the Revenue will get two months' time from the High court's decision to invoke Chapter XX-C as per the Supreme Court's directions at page 564 ? The answer must be obviously in the negative. In such a case if the Revenue goes in appeal and the appellate Bench holds that Chapter XX-C is attracted, but still the order is liable to fail on account of non-compliance with the directions in C. B. Gautam's case , obviously the Revenue can get requisite time to invoke Chapter XX-C, from the date of judgment of the appellate court in the writ petition and not from the date of the learned single judge's decision.
17. In the present case, the learned single judge when he passed the order on December 15, 1992, did not declare the purchase order, annexure "D", null and void on the ground that reasonable opportunity of being heard was not given to the concerned parties, meaning thereby the learned judge had not applied the ratio of the decision in C. B. Gautam's case for quashing the impugned order, annexure "D". Therefore, there was no occasion for the Revenue to start further proceedings under Chapter XX-C within a period of two months from the date of judgment, i.e., December 15, 1992. That stage would be reached for the Revenue only on the date on which we sign the present judgment holding that the impugned order, annexure "D" dated December 17, 1987, is null and void on the ground of non-compliance with the law declared by the Supreme Court in C. B. Gautam's case as that is being done by us for the first time while deciding these matters. On a conjoint reading of the directions contained in C. B. Gautam's case [1993] 199 ITR 530, at pages 561 and 564, it must be held that Form No. 37-I submitted by the original writ petitioners-respondents herein has to be treated as if it were submitted on the date of signing of the present judgment and not on December 15, 1992, as submitted by learned counsel for the respondents. In that light, the further directions contained in C. B. Gautam's case will have to be made available to the Revenue in the present case also, namely, that if the appropriate authority considers if fit, it may issue show-cause notice calling upon the respondents, the original writ petitioners, and other concerned parties to show cause why an order of compulsory purchase of the property in question should not be made under the provisions of section 269UD and give reasonable opportunity to the original writ petitioners and other concerned parties to show cause against such an order being made. We, accordingly, issue similar directions in the present cases.
18. However, in connection with these directions which are issued in consonance with the Constitution Bench decision of the Supreme Court in C. B. Gautam's case , one aspect needs clarification. The Supreme Court while issuing such directions at pages 561 and 564 had contemplated a period of two months referred to in section 269UD(1) as it stood then. We are issuing such directions only today. As on date, the period of two months as earlier mentioned in section 269UD(1) has undergone a legislative amendment. Section 269UD(1) has been amended by the insertion of an additional proviso by the Finance Act, 1993, to the following effect :
"Provided further that where the statement referred to in section 269UC in respect of any immovable property is received by the appropriate authority on or after the first day of June, 1993, the provisions of the first proviso shall have effect as if for the words 'two months', the words 'three months' had been substituted."
19. As per our direction, following C. B. Gautam's case Form No. 37-I filed by the petitioners will have to be found to have been submitted on the date of signing the present judgment, and as the present judgment is being signed obviously after June 1, 1993, the Revenue in the present case will be entitled to a period of three months as referred to in the section proviso to section 269UD(1) to complete the exercise if at all it chooses to do so. Three months will be available to the Revenue from the end of the month in which the present judgment is signed. Point No. 1 is, therefore, answered in the affirmative. Point No. 2 is answered by issuing the directions as aforesaid.
20. Before parting, we may mention that as we have confirmed the order of the learned single judge quashing the purchase order, annexure "D", only on the ground that the procedure laid down by the Supreme Court in C. B. Gautam's case was not followed by the Department, we leave open the question on the merits, whether for the proposed transaction in question as reflected by the agreement, Chapter XX-C can be applied or not and whether all the conditions required for passing a fresh order under section 269UD are satisfied or not. That question will have to be decided by the Revenue in accordance with law after hearing the concerned parties.
21. In the result, all these four appeals are dismissed to the extent to which they seek to challenge the final order of the learned single judge quashing the impugned order, annexure "D" dated December 17, 1987. The said order is considered to be null and void and will remain quashed only on the reasons given in this judgment. However, these appeals will stand partly allowed to the extent we have issued directions in favour of the Revenue following the ratio of the decision of the Supreme Court in C. B. Gautam's case to treat Form No. 37-I filed by the concerned respondents as being filed on the date of signing of this judgment and to make available as aforesaid a period of three months from that date of the Revenue, if so advised, to proceed in accordance with law under Chapter XX-C of the Income-tax Act.
22. The appeals are accordingly partly allowed. There will be no order as to costs throughout.