Subhro Kamal Mukherjee, J. - (1.) This appeal is directed against the judgment and order dated March 27, 1996--Madhusudhan Das v. Appropriate Authority of Income-tax [1997] 223 ITR 351, passed by a learned single judge of this court whereby the learned single judge disposed of an application under Article 226 of the Constitution of India (writ petition in short). The brief facts leading to the filing of the present writ petition may be summarised as under : (a) Madhusudhan Das, the owner of the property in dispute, that is, No. 18, Dent Mission Road, Calcutta-23, executed a registered deed of trust on June 4, 1988, appointing the writ petitioners as the trustees with power to transfer the property. The entire premises are under the occupation of the premises tenants. (b) On December 8, 1994, the said trustees entered into an agreement for sale with Webstar Industries Pvt. Ltd., respondent No. 4, in this appeal, at the consideration of Rs. 33,50,000 (rupees thirty three lakhs fifty thousand only) on the terms and conditions mentioned in the agreement and accepted earnest money of Rs. 50,000 (rupees fifty thousand only) from the vendees. (c) The vendors and the vendees jointly furnished statements in Form No. 37-1 to the appropriate authority under Section 269UC of the Income-tax Act, 1961. (d) On March 9, 1995, the appropriate authority issued a show-cause notice to the writ petitioners asking them to show cause as to why the subject property should not be purchased by the Central Government under the preemptive right under Section 269UD(1) of the said Act at an effective apparent consideration of Rs. 31,06,000 (rupees thirty one lakhs six thousand only). The writ petitioners and the purchaser submitted their replies to the show-cause notices. (e) However, the appropriate authority passed an order under Section 269UD(1). It was ordered that "the said property described in the schedule appearing below is hereby purchased by the Central Government at an amount of Rs. 31,06,000 (rupees thirty one lakhs six thousand only) being an amount equal to the amount of effective apparent consideration. The transferor will hand over the possession of the free property in terms of the agreement dated December 8, 1994." (f) The appropriate authority on April 25, 1995, issued a notice to the owners asking them to give vacant possession. It was stated "we require you to give vacant possession of the property in question to the appropriate authority, Calcutta, immediately on receipt of the letter." Paragraph 2 of the said notice runs as under : "2. In this context your attention is invited to the provisions of Section 269UE(1) of the Income-tax Act, as amended by the Finance Act, 1993, in terms of which the property in question has vested in the Central Government on the date when the order was passed under Section 269UD(1) of the Income-tax Act, namely, March 31, 1995. The said vesting of the property must be in terms of the agreement for transfer, that is, in terms of clauses 1 and 4 of the agreement dated December 8, 1994, and the property has vested in the Central Government free from all encumbrances on March 31, 1995." (g) The Central Government deposited the apparent consideration with the appropriate authority on April 28, 1995. (h) On or about May 12, 1995, the present writ petition was moved challenging the actions of the appropriate authority under Section 269UD(1). In a supplementary affidavit dated May 15, 1995, it was specifically stated that the appropriate authority did not tender the amount of apparent consideration to the owners in terms of the provisions of Sections 269UF and 269UG.
(2.) A learned single judge of this court by the judgment and order dated March 27, 1996 (see [1997] 223 ITR 351) disposed of the writ petition holding that the Central Government has failed to carry out the obligations imposed upon it by the Income-tax Act, 1961, and the deposit made by it was not in compliance with the said Act and, therefore, the said deposit was an invalid deposit. It was further held that the order of vesting stood abrogated in view of the specific provisions contained in Section 269UH(1) and the subject property stood revested in the original owners. The appropriate authority was directed to issue necessary declaration and to take all steps under Section 269UH(2) of the said Act. It was held that the right of the Government to get possession of the property, which has vested in it, was not dependent upon performance of any agreement by the seller.
(3.) Being aggrieved the present appeal has been filed by the respondents in the writ petition. It is submitted that as in spite of demand possession was not delivered by the owners, the amount was not tendered to the owners, but was deposited with the appropriate authority within time and as such the learned judge ought not to have held that such deposit of amount with the appropriate authority was invalid and, therefore, the subject property stood revested in the original owners. The relevant provisions of the Income-tax Act, 1961, are as under : "269UG. (1) The amount of consideration payable in accordance with the provisions of Section 269UF shall 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 : Provided that if any liability for any tax or any other sum remaining payable under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Gift-tax Act, 1958 (18 of 1958), the Estate Duty Act, 1953 (34 of 1953), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), by any person entitled to the consideration payable under Section 269UF, the appropriate authority may, in lieu of the payment of the amount of consideration, set off the amount of consideration or any part thereof against such liability or sum, after giving an intimation in this behalf to the person entitled to the consideration. (2) Notwithstanding anything contained in Sub-section (1), if any dispute arises as to the apportionment of the amount of the consideration amongst persons claiming to be entitled thereto, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under Sub-section (1) within the period specified therein. (3) Notwithstanding anything contained in Sub-section (1), if the person entitled to the amount of consideration does not consent to receive it, or if there is any dispute as to the title to receive the amount of consideration, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under Sub-section (1) within the period specified therein : Provided that nothing herein contained shall affect the liability of any person who may receive the whole or any part of the amount of consideration for any immovable property vested in the Central Government under this Chapter to pay the same to the person lawfully entitled thereto. (4) Where any amount of consideration has been deposited with the appropriate authority under this section, the appropriate authority may, either of its own motion or on an application made by or on behalf of any person interested or claiming to be interested in such amount, order the same to be invested in such Government or other securities as it may think proper, and may direct the interest or other proceeds of any such investment to be accumulated and paid in such manner as will, in its opinion, give the parties interested therein the same benefits therefrom as they might have had from the immovable property in respect whereof such amount has been deposited or as near thereto as may be." "269UH. (1) If the Central Government fails to tender under Sub-section (1) of Section 269UG or deposit under Sub-section (2) or Sub-section (3) of the said section, the whole or any part of the amount of consideration required to be tendered or deposited thereunder within the period specified therein in respect of any immovable property which has vested in the Central Government under Sub-section (1) or, as the case may be, Sub-section (6) of Section 269UE, the order to purchase the immovable property by the Central Government made under Sub-section (1) of Section 269UD shall stand abrogated and the immovable property shall stand revested in the transferor after the expiry of the aforesaid period : Provided that where any dispute referred to in Sub-section (2) or Subsection (3) of Section 269UG is pending in any court for decision, the time taken by the court to pass a final order under the said sub-sections shall be excluded in computing the said period. (2) Where an order made under Sub-section (1) of Section 269UD is abrogated and the immovable property revested in the transferor under Subsection (1), the appropriate authority shall make, as soon as may be, a declaration in writing to this effect and shall- (a) deliver a copy of the declaration to the persons mentioned in Subsection (2) of Section 269UD ; and (b) deliver or cause to be delivered possession of the immovable property back to the transferor or, as the case may be, to such other person as was in possession of the property at the time of its vesting in the Central Government under Section 269UE.";