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4. The learned counsel for the petitioners submitted that the impugned order suffers from total non-application of mind because the SIP is not comparable with the PUC. The SIP is in commercial zone whereas the PUC is in residential zone. Out of 4000 sq. mts. of the land in question 3000 sq. mts. land was the subject matter of the proceedings under the Urban Land (Ceiling & Regulation) Act, 1976 (hereinafter referred to as the ULC Act). The learned counsel for the petitioners further pointed out that the Authority under the ULC Act had granted exemption in respect of the aforesaid 3000 sq. mts. of land subject to the condition that petitioner No. 1 was required to construct 51 tenements for sale to weaker section and 4 tenements were required to be sold to the Government of Maharashtra. The learned counsel, therefore, contended that the PUC could never be expected to fetch as much price as the SIP. It was, therefore, strenuously contended on behalf of the petitioners that the Appropriate Authority had not determined the fair market value of the land in question and, therefore, there was no question of any undervaluation.

5. The learned counsel for the petitioners then submitted that the impugned order under s. 269UD(1A) was even otherwise bad inasmuch as the Appropriate Authority had not given any finding to the effect that there was any attempt to evade tax which is sine qua non for the exercise of power of pre-emptive purchase under s. 269UD(1A) of the Act as held by the Supreme Court in the case of C. B. Gautam vs. Union of India & Ors. (1993) 199 ITR 530 (SC).

6. On the other hand Mr. Thakore, learned Standing Counsel for the Revenue, relied upon the affidavit-in-reply filed on behalf of the Appropriate Authority and contended that since the agreement filed with Form No. 37-I of the Act, was in violation of the provisions of the ULC Act, this Court should not entertain the present petition as petitioner No. 1 was intending to transfer the property under consideration in favour of petitioner No. 2 in defiance of the express condition incorporated in the exemption order passed by the Govt. in favour of petitioner No. 1 and without obtaining the permission of the authority under the ULC Act. Mr. Thakore further submitted that the very fact that the Appropriate Authority has found that the rate of PUC mentioned in the agreement dt. 2nd Sept., 1994 was less than the rate of consideration mentioned in the agreement dt. 11th June, 1992 (SIP), it was apparent that there was an attempt to evade tax.

7. As far as the preliminary contention of Mr. Thakore regarding the alleged violation of the ULC Act is concerned, it is true that the agreement in question is for sale of property a substantial portion of which was otherwise liable to be declared as surplus vacant land being in excess of the limit stipulated under the ULC Act and that granting any relief in favour of the petitioner in connection with the said agreement may prima facie amount to assisting the petitioners, who are about to commit breach of the provisions of the ULC Act, when in the exemption order under the ULC Act shown to this Court, there is an express condition prohibiting transfer of the exempted land in favour of any other person and it is not pointed out that petitioner No. 1 has obtained any modification of the said condition or permission of the authority under the ULC Act for such transfer. However, Mr. Soparkar, learned counsel for the petitioners has invited our attention to the judgment of the Delhi High Court in the case of Tanvi Trading & Credit P. Ltd. vs. Appropriate Authority (1991) 188 ITR 623 (Del).

In the aforesaid case of Tanvi Traving & Credits P. Ltd. (hereinafter referred to as Tanvi Trading) respondents Nos. 3 to 10 therein had purchased 5000 sq. yds. of land in Delhi. The competent authority under the ULC Act had passed eight separate orders holding that there was a total excess vacant land of 680.26 sq. mts. in the said property owned by respondents Nos. 3 to 10. By agreement dt. 10th May, 1989, respondents Nos. 3 to 10 had agreed to sell the said land to the petitioner for a sum of Rs. 4,15,00,000. In accordance with the provisions of s. 269UC, the petitioner and respondents Nos. 3 to 10 jointly filed statement in Form No. 37-I with the Appropriate Authority for the grant of a certificate. The Appropriate Authority passed order dt. 19th July, 1989 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 having been passed under the ULC Act declaring 680.26 sq. mts. of land as being surplus and that the agreement to sell was a contingent contract depending upon the orders of the competent authority under the ULC Act and, therefore. No-objection certificate could not be issued by the Appropriate Authority under the IT Act. The Appropriate Authority had concluded that the statement in Form No. 37-I was premature and invalid and the same was ordered to be filed. In view of this development respondents Nos. 3 to 10 took necessary steps for specifying and demarcating the excess vacant land and filed a fresh statement in Form No. 37-I on 24th Nov., 1989, informing the Appropriate Authority about the demarcation of the excess vacant land and about the surrender thereof. The Appropriate Authority passed another order on 22nd Jan., 1990 and refused to grant no-objection certificate on the ground that the agreement between the parties was not a proper agreement as already held by the previous order dt. 19th July, 1989. In the background of the aforesaid facts, Tanvi Trading filed a writ petition before Delhi High Court and challenged the orders of the Appropriate Authority. The learned counsel appearing for the Appropriate Authority defended the orders on the ground that it was open to the Appropriate Authority to determine the legality of the proposed sale transaction and if the Appropriate Authority comes to the conclusion that the sale transaction was being effected against the provisions of any law then it could decline to give the certificate asked for.