COMMISSIONER OF INCOME TAX Vs. SHILABEN KANCHANLAL RANA
LAWS(GJH)-1979-11-12
HIGH COURT OF GUJARAT
Decided on November 08,1979

COMMISSIONER OF INCOME TAX Appellant
VERSUS
SHILABEN KANCHANLAL RANA And ANR. Respondents

JUDGEMENT

B.K.MEHTA, J. - (1.) IN this group of two appeals at the instance of the CIT, Gujarat III, the common order of the Tribunal dt. 30th June, 1976, invalidating the acquisition of immovable property being shops, bearing Nos. 1 to 5 on the ground floor of the building known as Yashkamal standing on land of S. No. 91 92 (part) on Ring Road, Surat, within Town Planning Scheme No. 8 of the Surat Municipal Corporation, which were sought to be acquired by the order of the Competent Authority, Acquisition Range II, Ahmedabad, dt. 12th March, 1976, has been challenged. In order to appreciate the contentions raised in these appeals it would be necessary to advert to a few facts which led to these two appeals.
(2.) THE owners of the shops in question were Bhagwandas R. Reshamwala and others who happen to be partners of M/s Reshamwala Market in which the shops were situated. By a deed of conveyance dt. 26th Nov., 1973 they conveyed the right, title and interest in the shops together with the land to one Smt. Shilaben Kanchanlal Rana of Surat for a consideration of Rs. 1,05,500. Since in the opinion of the Competent Authority the apparent consideration stated in the deed of conveyance was less than the fair market value, he initiated the acquisition proceedings by a notice on 18th May, 1974, which was published in the Central Government Gazette on 31st Aug., 1974. Individual notices on the transferor and transferee, as required under S. 269D(2)(a) of the IT Act, 1961 (hereinafter referred to as "the Act"), were served on 1st June, 1974 while it was served on the occupier of the said shops (A branch of Dena Bank at Surat) on 13th Dec., 1974. The locality notice, as required under S. 269D(2)(b) of the Act, was published by affixation as well as by beat of "thali" on 13th Dec., 1974. The transferee filed objections before the Competent Authority who on consideration of all the materials before him reached the conclusion that the apparent consideration as stated in the instrument of transfer was substantially less than the fair market value and, therefore, the property in question should be acquired. He accordingly made an order of acquisition under S. 269F of the Act which was challenged by the transferor and transferee by two separate appeals before the Tribunal.. A number of contentions were urged on behalf of the transferor and transferee before the Tribunal, but two contentions impressed the Tribunal which held that the acquisition proceedings were vitiated because the conditions precedent for initiation of acquisition proceedings were not complied with, inasmuch as the public notice in the Government Gazette, as required to be published within nine months of the last day of the month in which the instrument of transfer in respect of the property in question was registered under the Registration Act, 1908, as provided under the proviso to S. 269D(1) of the Act was not published in the Government Gazette within time and also because the locality notice was admittedly published beyond the period of limitation of 45 days of the public notice during which the transferor and the transferee are entitled to file their objections under S. 269E of the Act. The Tribunal in holding that the Gazette notice was not published within nine months, followed the decision of the Allahabad High Court in U.S. Awasthi & Anr. vs. IAC & Anr. 1975 CTR (All) 273 : (1977) 107 ITR 796 (All) : TC3R.493. The Tribunal, therefore, by its common order of 13th June, 1976 allowed the appeals and set aside the acquisition order. This common order is the subject matter of two appeals before us. At the outset, we must say that as far as the second ground of the Tribunal for invalidating the acquisition proceedings in question is concerned, the point is already covered by the decision of this Court in CIT vs. Smt. Vimlaben Bhagwandas Patel & Anr. (1979) 13 CTR (Guj) 27 : (1979) 118 ITR 134 (Guj) : TC3R.273. A few dates are recapitulated for purpose of appreciating the objections of the learned Government Pleader on behalf of the CIT, Gujarat III, that the Tribunal was clearly in error in reaching the conclusion that the conditions precedent for valid initiation of the acquisition proceedings were not satisfied because the locality notice, under S. 269D(2)(b) of the Act, was published admittedly after about 3 1/2 months of the publication of the gazetted notice. It should be recalled that the Competent Authority started initiation of acquisition proceedings by a public notice of 18th May, 1974. The individual notices, however, to the transferor and transferee preceded the public notice. However, individual notice to the occupier viz., the branch of Dena Bank at Surat, and the locality notice were served and published respectively on 13th Dec., 1974, i.e., 3 1/2 months from date of the public notice. The Tribunal, therefore, was of the view that since the service of the individual notices on the occupier as well as the publication of the locality notice were admittedly beyond the period of limitation of 45 days prescribed under S. 269E of the Act for the purpose of filing objections by the interested and/or affected persons, the condition precedent for initiation of acquisition proceedings was not satisfied, for the obvious reason that the late publication of the aforesaid two notices would inevitably result in depriving the interested or affected persons of the right to file objections within the prescribed period of limitation. This view of the Tribunal is now no more good in view of the decision of this very Division Bench in CIT vs. Smt. Vimlaben B. Patel (supra). This Court has held that the service of the individual notice or publication of the locality notice are not the conditions precedent for the initiation of acquisition proceedings and the question of limitation for filing objections by the interested or affected persons cannot have a bearing on the question of jurisdiction, since the persons interested or affected can file their objections within 45 days from the date of the actual or constructive notice of the initiation of the acquisition proceedings. In that view of the matter, therefore, we must not detain ourselves on this point and we agree with the learned Government Pleader that the view of the Tribunal that since the individual notice to the occupier and the locality notice were not made within the period of limitation prescribed for filing objections, there is non compliance with the conditions precedent for the initiation of the acquisition proceedings, which are, therefore, bad in law and void, is not correct.
(3.) THIS takes us to the first ground on which the Tribunal invalidated the acquisition proceedings. The Tribunal was of the view that the Competent Authority had not validly initiated the acquisition proceedings because the notice for the acquisition of the property in question dt. 18th May, 1974, though published in the Central Government Gazette of 31st Aug., 1974, could not have been in the very nature of things be immediately available to the interested or affected persons and, therefore, there was no valid publication of the notice as required under S. 269D(1) of the Act. The Tribunal on that short ground invalidated the acquisition proceedings. In doing so the Tribunal followed the decision of the Allahabad High Court in U.S. Awasthi's case (supra). This view of the Tribunal has been seriously challenged by the learned Government Pleader on the ground that the Tribunal committed an error of law in reaching the conclusion as it did because it read more than what is prescribed under S. 269D(1) for the initiation of the acquisition proceedings. In the submission of the learned Government Pleader for the CIT, Gujarat III, who is appellant before us, the only requirement for the initiation of the acquisition proceedings is, inter alia, publication of a notice by the Competent Authority in the Government Gazette and it is no more requirement of law that such a notice in the Gazette should have been brought to the notice of the interested or affected persons and for that matter the Government Gazette should be made immediately available to them. The learned Government Pleader also pointed out that the Division Bench of the Allahabad High Court, which decided the case of U.S. Awasthi (supra) has conceded this position that it is publication of the public notice in the Official Gazette within a period of nine months from the end of the month in which the sale deed was registered which confers jurisdiction upon the Competent Authority to initiate the proceedings. The ultimate view of the Division Bench that if the Gazette in which the notice for initiation of acquisition proceedings is published, is not available to the interested or affected persons it would result in loss of jurisdiction and no acquisition proceedings can be validly initiated, was contrary to the view of this Division Bench in Vimlaben's case (supra). In any case, there is no requirement of the law that the Gazette in which the notice in question is published should be made known to or for that matter, should be made available to the interested or affected persons. In support of this contention he relied upon the decision of the Supreme Court in State of Maharashtra vs. Mayer Hans George AIR 1965 SC 722. He also urged that this decision of the Supreme Court had not been brought to the notice of the Division Bench of the Allahabad High Court which decided the case of U.S. Awasthi (supra) and, therefore, the Tribunal was not justified in invalidating the acquisition proceedings in question. We are of the opinion that there is a great force in the submission of the learned Government Pleader. It is no doubt true that proviso to S. 269D(1) enjoins that no acquisition proceedings shall be initiated in respect of an immovable property after the expiration of a period of nine months from the end of the month in which the instrument of transfer in respect of a property is registered under the Registration Act, 1908. The property in question was transferred, in the case before us, on 26th Nov., 1973 and the notice of the Competent Authority for the initiation of the acquisition proceedings dt. 18th May, 1974, was published in the Central Government Gazette on 31st Aug., 1974. In other words, the notice for initiation of acquisition proceedings was published exactly on the last day of the period of nine months prescribed under the proviso to S. 269D(1) of the Act, beyond which acquisition proceedings cannot be initiated. On behalf of the transferor and transferee it is contended, and which contention has found favour with the Tribunal, that in the very nature of things, even if the notice in question was published in the Official Gazette on 31st Aug., 1974, it could not have been available on that very day, and, therefore, the notice for the initiation of acquisition proceedings could not have been known to the interested or affected persons within the period of nine months and the publication of the notice, which is the gist of the initiation of the acquisition proceedings, is not an empty formality which can be complied with by merely printing it in the Government Gazette and dating it. In fact, the requirement of publication of the notice is meant for making it known to the persons who are affected ultimately by the action which is proposed to be taken in the said notice and if this purpose is defeated by the same being not available, it should be held, as has been held rightly by the Tribunal, that there was no valid publication. ;


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