AI Structured Summary
Not yet generated for this judgment
Judgment
Ramesh Ranganathan, J.—Exercise of the right of pre-emptive purchase by the Central Government, u/s 269UD(1) of the Income Tax Act, of "Rustom Villa", a residential building, and the order issued in this regard on 30.3.1998, are the subject matter of challenge in this writ petition.
"Rustom Villa" at Sardar Patel Road, Secunderabad, belonged to Mrs.Zenobia Rustom Ranji who passed away on 29.10.1988. She had earlier executed a will on 22.5.1987 appointing the petitioners as executors in respect of her properties including "Rustom Villa". Under the will, the said residential building was to be sold and the sale proceeds was to be donated to nine charitable institutions. Petitioners claim to have got the property valued by two valuers according to whom it was worth Rs. 15.32 lakhs and Rs. 15.60 lakhs respectively. The petitioners entered into an agreement of sale with Mrs. Sanbar N. Markar on 14.12.1989 for a total consideration of Rs. 15.60 lakhs. They filed the statement in Form 37-1, together with the agreement of sale, before the 1st respondent on 27.12.1989. Another set of Form 37-1 was also submitted on 9.2.1990. The 1st respondent, without giving the petitioners an opportunity of being heard, passed orders on 16.2.1990 purchasing the property, on behalf of the Central Government, for Rs. 15,31,640/-.
Questioning the said order dated 16.2.1990, the petitioners filed W.P. No. 2978 of 1990 and this Court by its order dated 03.12.1997, while setting aside the impugned order dated 16.02.1990, observed that a fresh order shall be made keeping in view the ratio and the directions given in the judgment of the Supreme Court in C.B. Gautam Vs. Union of India and Others, . Petitioners were, therefore, issued notice dated 25.3.1998 enclosing thereto a copy of the proceedings of 6.2.1990, (which proceedings were the subject matter of challenge in W.P. No. 2978/90), calling upon them to show cause why pre-emptive purchase, u/s 269UD(1), should not be made. The petitioners were further informed that their case stood posted to 30.3.1998. The petitioners sent a telegram seeking further time. Despite such a request, final orders were passed on 30.3.1998 as, according to the 1st respondent, the last date for passing the final order was 31.3.1998.
Since the entire controversy revolves around Section 269UD(1) of the Income Tax Act and the two provisos thereunder, the Judgment of the Supreme Court in C.B. Gautam Vs. Union of India and Others, and the clarificatory order passed on 27.11.1992, it is necessary to make a brief reference thereto before the rival contentions are examined.
Section 269UD(1)
Order by appropriate authority for purchase by Central Government of immovable property:
269UD(1): Subject to the provisions of sub-sections (1A) and (1B), the appropriate authority, after the receipt of the statement under Sub-section (3) of Section 269UC in respect of any immovable property, may, notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force, make an order for the purchase by the Central Government of such immovable property at an amount equal to the amount of apparent consideration:
Provided that no such order shall be made in respect of any immovable property after the expiration of a period of two months from the end of the month in which the statement referred to in Section 269UC in respect of such property is received by the appropriate authority:
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 1st day of June, 1993, the provisions of the first proviso shall have effect as if for the words "two months", the words "three months" has been substituted"
The second proviso was inserted by Finance Act, 1993 with effect from 1.6.1993.
In C.B. Gautam Vs. Union of India and Others, , the Supreme Court held that the requirement of providing an opportunity to show cause must be read into Section 269UD(1) as it is a minimal requirement of the rules of natural justice. On the question of relief the Supreme Court observed:
...This brings us to the question of relief. We find that the order for compulsory purchase u/s 269UD(1) of the Income Tax Act which was served on the petitioner in the night of December 15, 1986, has been made without any show-cause notice being served on the petitioner and without the petitioner or other affected parties having been given any opportunity to show cause against an order for compulsory purchase nor were the reasons for the said order set out in the order or communicated to the petitioner or other concerned parties with the order. In view of what we have stated earlier the order is clearly bad in law and it is set aside.
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 a 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 u/s 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 37-1 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 u/s 269UD(1). The appropriate authority will have to decide whether an inquiry is called for in the facts and circumstances of the case after the show-cause notice is issued....
(emphasis supplied)
After the judgment in C.B. Gautam Vs. Union of India and Others, was pronounced on 17.11.1992, the Union of India moved an application seeking certain clarifications with a view to obviate certain difficulties envisaged in applying the principles laid down therein. Since the clarification issued by the Supreme Court on 27.11.1992 has a bearing on the questions which fall for consideration, it is but appropriate that it be reproduced hereunder:
...Our attention was drawn to two aspects: one in relation to the large number of similar petitions pending before this Court and the various High Courts where, in view of the subsisting orders of stay operating therein, it would not be possible immediately to take steps and implement the directions contained in the judgment within the time frame stipulated therein. The second aspect relates to pending matters before the authorities, which, though not pending before courts, do not also admit of application of the principles consistent with the statutory limit. After hearing the learned Solicitor General, we are satisfied that the problems and difficulties envisaged, in practical terms, are real and require to be provided for.
The first aspect arises out of the limited retrospectivity imported by the judgment. The judgment provides that:
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 37-1 submitted by the petitioner as set out earlier shall be treated as if it were submitted on the date of signing of this judgment.
Learned Solicitor General points out that in the cases where petitions are yet pending in this Court as well as in the various High Courts, the above direction becomes unworkable inasmuch as the interim orders subsisting in those petitions disable the authorities to carry out the directions contained in the judgment within the stipulated time-frame and that, therefore, the directions as given in the judgment become impossible of implementation. Learned Solicitor General suggests that, in order that the principles laid down in the judgment become workable in all other pending cases before the courts, a clarification be made to the effect that in respect of all such cases pending before this Court and the various High Courts, the time frame for affording of opportunity of being heard shall be reckoned from the date of the actual disposal of those matters by this Court or the High Court, as the case may be.
We think that this clarification in the form of a further direction is necessary for a proper implementation of the principles laid down in the judgment.
We, accordingly, clarify by this supplemental direction to be read as part of the judgment that in respect of 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 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....
(emphasis supplied).
Sri M.V.S. Suresh Kumar, Learned Counsel for the petitioners, would contend that the period of two months prescribed in C.B. Gautam Vs. Union of India and Others, , to pass a fresh order, expired on 28.2.1998 and, since the show cause notice was issued thereafter on 25.3.1998 and the final orders passed on 30.3.1998, both these orders were barred by limitation and are liable to be quashed. Learned Counsel would submit that the second proviso to Section 269UD(1), whereby the period for filing the statement in Form 37-1 was extended from two months to three months, came into force with effect from 1.6.1993 and, as the petitioners had submitted their Statement in Form No. 37-1 nearly 3 years prior thereto, the said amendment had no application to their case.
Sri S.R. Ashok, Learned Senior Counsel appearing on behalf of respondents, would submit that when it pronounced its judgment, in C.B. Gautam Vs. Union of India and Others, , on 17.11.1992 the Supreme Court was conscious of the statutory prescription, for submission of the statement in Form 37-1, under the proviso to Section 296-UD(1) and had, therefore, prescribed the time limit of two months. Learned Senior Counsel would submit that as this period of two months was later enlarged to three months, by insertion of the second proviso with effect from 1.6.1993, the period of two months in C.B. Gautam Vs. Union of India and Others, must be held to have been enlarged to three months with respect to all matters which were pending before Courts/Tribunals/other authorities on the date from which the amendment came into force. Learned Senior Counsel would submit that, since this Court had pronounced judgment, in W.P. No. 2978 of 1990 on 3.12.1997, much after the amendment came into force with effect from 01.06.1993, the period for completion of proceedings, as stipulated in C.B. Gautam Vs. Union of India and Others, , must necessarily be read as three months.
According to the Learned Senior Counsel, the clarificatory order in C.B. Gautam Vs. Union of India and Others, cannot be read as creating two different classes of cases and that the latter class of cases mentioned in Para 50 must be held to have the same consequences as the former class of cases mentioned in para 47 of the order. Learned Senior Counsel would submit that, if both the paragraphs of the clarificatory order were read together, it was evident that the Supreme Court had directed that the time limit prescribed u/s 269UD(1) should be reckoned from the date of the judgment of High Courts for the purposes of completion of proceedings and passing of final orders. According to the Learned Senior Counsel the judgment in C.B. Gautam Vs. Union of India and Others, is a piece of judicial legislation and the Supreme Court had resorted to legal fiction requiring the Statement in Form 37-1 submitted earlier to be treated as if it had been submitted on the date of the judgment thereby giving the department time to pass final orders. According to the Learned Senior Counsel, the words "as if, in paragraph 47 of the judgment in C.B. Gautam Vs. Union of India and Others, , is a deeming provision and must be understood to include all consequences which would logically follow therefrom. He would submit that since the legislature, by an amendment which came into force with effect from 1.6.1993, had enlarged the period in Section 269UD(1) from two months to three months, and as this Court had passed judgment thereafter on 3.12.1997, it is the period prescribed pursuant to the amendment which would apply, and the department had three and odd months to pass final orders. Learned Senior counsel would submit that a purposive construction must be placed on the amendment and the word "received", in the second proviso thereto, must be so read as to include the words "deemed to be received". He would rely on State of Andhra Pradesh Vs. Vallabhapuram Ravi, and S. Appukuttan Vs. Thundiyil Janaki Amma and Another, .
As is evident from the judgment in C.B. Gautam Vs. Union of India and Others, , as extracted hereinabove, it is with a view to avoid a situation, where if the original time frame prescribed in Chapter XX-C of the Income Tax Act, was rigidly applied it would not have been possible for the appropriate authority concerned to pass an order u/s 269UD(1) in respect of the property in question, and also to ensure that no injustice was caused to the petitioner, that the Supreme Court ordered that "the statement in Form 37-1 submitted earlier by the petitioner should be treated as if it were submitted on the date of signing of the judgment."
These directions were issued by the Supreme Court in exercise of its powers under Article 142 of the Constitution of India. This power has been conferred only on the Supreme Court and its exercise is not dependent or conditioned by any statutory provision. (Mohd. Anis v. Union of India 1994 Supp (1) SCC 145; Chandrakant Patil Vs. State through CBI, ). The plenary powers under Article 142 of the Constitution inheres in the Supreme Court and exist independent of the statutes with a view to do complete justice between the parties. ( Kalyan Chandra Sarkar Vs. Rajesh Ranjan @ Pappu Yadav and Another, ). The phrase "complete justice" in Article 142 is a word of width couched with elasticity to meet myriad situations created by human ingenuity or cause or result of operation of statute law or law declared under Articles 32, 136 and 141 of the Constitution. ( Ashok Kumar Gupta and Another Vs. State of U.P. and Others, ).
The question which must be examined first is whether legal fiction, as applicable to Statutes, can also be extended to judgments of the Supreme Court and the High Courts. Among the synonyms for the words "treated as if would also include "deemed as if. The word ''deemed'' is used a great deal in modern legislation. When a statute enacts that something shall be deemed to have been done, which in fact and in truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to. After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion and to that end it would be proper and even necessary to assume all those facts on which alone the fiction can operate, (Levy, Re, ex p Walton (1881) 17 Ch.D 746 Hill v. East and West India Dock Co. (1884) 9 AC 448 ; State of Travancore-cochin and Others Vs. Shanmugha Vilas Cashew Nut Factory and Others, ; American Home Products Corporation Vs. Mac Laboratories Pvt. Ltd. and Another, ; S. Appukuttan Vs. Thundiyil Janaki Amma and Another, ; S. Appukuttan Vs. Thundiyil Janaki Amma and Another, , Smt. Parayankandiyal Eravath Kanapravan Kalliani Amma and others Vs. K. Devi and others, and Ali M.K. and Others Vs. State of Kerala and Others, , for if you are bidden to treat an imaginary state of affairs as real you must surely, unless prohibited from doing so, also imagine as real the consequence and incidents which, if the putative state of affairs had, in fact, existed must inevitably have flowed from or accompanied it and having done so, you must not cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. (East End Dwellings Co. Ltd. v. Finsbury Borough Council (1951) 2 ALL ER 587).
The legal fiction, treating something not done as done, requires legislative authority and can neither be indulged in by Courts without it, ( Sheikh Ghulam Maula Vs. State of U.P. and Another, (DB), nor can it be created by an administrative order. ( V.C., Banaras Hindu University and Others Vs. Shrikant, ).
While legal fiction is widely used in plenary and subordinate legislation, the said principles cannot be extended to judgments of Courts for it is well settled that a decision of a Court is only an authority for what it decides and not what can logically be deduced therefrom. It cannot be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical Code whereas, it must be acknowledged that, the law is not always logical. It is not a profitable task to extract a sentence here and there from a judgment and to build upon it. (Quinn v. Leathem 1901 AC 495; The State of Orissa Vs. Sudhansu Sekhar Misra and Others, ; Delhi Administration (Now N.C.T. of Delhi) Vs. Manohar Lal, ; Dr. Nalini Mahajan, Ram Lal Mahajan Charitable Trust, Shri Rakesh Mahajan, Pan Foods Ltd. and Others and Mahajan Industries Pvt. Ltd. and Others Vs. Director of Income Tax (Inv.) and Others, ; and Bhavnagar University Vs. Palitana Sugar Mill Pvt. Ltd. and Others, ).
In Haryana Financial Corporation and Another Vs. Jagdamba Oil Mills and Another, , the Supreme Court observed:
...Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are not to be read as Euclid''s theorems nor as provisions of the statute. These observations must be read in the context in which they appear. Judgments of courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark upon lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes, their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton (1951) 2 ALL ER 1
The matter cannot, of course, be settled merely by treating the ipsissima verba of Willes, J., as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished Judge.
In Home Office v. Dorset Yacht Co. (1970) 2 ALL ER 294 Lord Reid said (at All ER p. 297 g-h), "Lord Atkin''s speech...is not to be treated as if it were a statutory definition. It will require qualification in new circumstances". Megarry, J. in (1971) 1 WLR 1062 observed: "One must not, of course, construe even a reserved judgment of even Russell, L.J. as if it were an Act of Parliament." And, in Herrington v. British Railways Board (1972) 2 WLR 537 Lord Morris said:
There is always peril in treating the words of a speech or a judgment as though they were words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case....
(emphasis supplied)
These observations have been reiterated by the Supreme Court in Ashwani Kumar Singh Vs. U.P. Public Service Commission and Others, ; Union of India (UOI) Vs. Amrit Lal Manchanda and Another, ; Collector of Central Excise, Calcutta Vs. Alnoori Tobacco Products and Another, ; Escorts Ltd. Vs. Commissioner of Central Excise, Delhi-II, ; Bharat Petroleum Corporation Ltd. and Another Vs. N.R. Vairamani and Another, ; Union of India (UOI) and Another Vs. Major Bahadur Singh, ).
Judgments of Courts are not to be construed as statutes. Judges interprets statutes and not judgments. The words, used in their opinions, are not be interpreted as statutes. The principles governing statutory fiction, and the consequences arising therefrom, cannot be extended to judgments of Courts. It is not for this Court to decide by an interpretative process whether the Supreme Court in C.B. Gautam Vs. Union of India and Others, intended to create two categories of persons and whether it would have prescribed three months in the light of a subsequent legislative amendment. The time limit specified in C.B. Gautam Vs. Union of India and Others, of two months cannot, by application of the principles governing statutory fiction, be construed as having been extended to three months.
This question can also be examined from another angle. As noted above, the time limit prescribed earlier u/s 269UD(1), for passing an order in respect of any immovable property, was two months from the end of the month in which the statement in Form 37-1 was received by the authority. It is only by virtue of the second proviso that, in cases where the statement in Form 37-1 was received by the appropriate authority on or after the 1st day of June, 1993, that the words "two months" stood substituted by "three months". Admittedly, in case on hand, the statement in Form 37-1 was submitted as early as on 27.12.1989 and another set thereof was submitted on 09.02.1990 much prior to 01.06.1993.
It is not for courts to supply words to Section 269UD(1) of the Income Tax Act and read the words "received" in the second proviso thereto to include the words "deemed to be received". It is a cardinal principle of interpretation of statutes that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning. ( Gurudevdatta VKSSS Maryadit and Others Vs. State of Maharashtra and Others, ). The legislature may be safely presumed to have intended what the words plainly say. ( Bhaiji Vs. Sub Divisional Officer, Thandla and Others, ). What is to be borne in mind is what has been said in the statute and what has, not been said. A construction which requires, for its support, addition or substitution of words or which results in rejection of words, has to be avoided. ( Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. Vs. Custodian of Vested Forests, Palghat and another, , Smt. Shyam Kishori Devi Vs. Patna Municipal Corporation and Another, , A.R. Antulay Vs. Ramdas Sriniwas Nayak and Another, , Dental Council of India and Another Vs. Hari Parkash and Others, , J.P. Bansal Vs. State of Rajasthan and Another, and State of Jharkhand v. Govind Singh ).
The primary rule of construction is that the intention of the Legislation must be found in the words used by the Legislature itself. The question is not what may be supposed and has been intended but what has been said. ( AIR 2003 SC 2103 ). Courts should not, ordinarily, add words to a statute or read words into it which are not there, especially when a literal reading thereof produces an intelligible result. ( Delhi Fin. Corpn. and Another Vs. Rajiv Anand and Others, ). There is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased. Courts expound the law, they do not legislate. ( State of Kerala Vs. Mathai Verghese and Others, , Union of India v. Deoki Nandan Aggarwal AIR 1992 SC 96). A Judge is not entitled to add something more than what is there in the Statute by way of a supposed intention of the legislature. ( Union of India Vs. Elphinstone Spinning and Weaving Co. Ltd. and Others etc., ). The legislative casus omissus cannot be supplied by judicial interpretative process. ( Maruti Wire Industries Pvt. Ltd. Vs. S.T.O., Ist Circle, Mattancherry and Others, , State of Jharkhand v. Govind Singh ). The second proviso to Section 269UD(1), which came into force w.e.f. 1-6-1993, has, therefore, no application. The outer limit for passing the order, u/s 269UD(1), thus expired by 28.02.1998. Consequently both the show-cause notice dated 25.03.1998, and the final order dated 30.03.1998, are barred by limitation.
While this would suffice to quash both the show-cause notice dated 25.03.1998, and the impugned order dated 30.03.1998, Sri M.V.S. Suresh Kumar would urge us to adjudicate on his other grounds of challenge also. Learned Counsel would submit that the show cause notice was issued on 25.3.1998 informing the petitioners that their case stood posted to 30.3.1998 and, though the petitioners had requested that further time be given to them to submit their reply to the show cause notice, they were denied the opportunity to do so. According to the Learned Counsel, it is evident from a mere reading of the show cause notice dated 25.3.1998, along with its annexures, that the 1st respondent had already pre-determined the issue. He would contend that, on the impugned order dated 30.3.1998 being set aside and since the original period of two months for completion of proceedings as laid down in C.B. Gautam Vs. Union of India and Others, expired by 28.2.1998, the respondents were not entitled to commence proceedings, or pass final orders, afresh since the statutory period of limitation cannot be extended. Learned Counsel would place reliance on Sona Builders v. Union of India (2001) 10 SCC 280.
On the other hand, Sri S.R. Ashok, Learned Senior Counsel, would submit that, since the period of limitation of three months was to expire on 31.3.1998, the 1st respondent had, necessarily, to pass final orders prior thereto and it was in such compelling circumstances that the petitioners could not be given further time as requested by them. Learned Senior Counsel would contend that the impugned show cause notice must be independently read and it is only the reasons, and not the conclusions, in the order enclosed thereto, (i.e., the order dated 16.2.1990), which was required to be taken into consideration by the petitioners while furnishing their objections. According to the Learned Senior Counsel, since the earlier order dated 16.2.1990 was set aside by this Court, there is no basis to presume that the conclusions arrived at in the said order had again been taken into consideration by the 1st respondent while issuing the show cause notice dated 25.03.1998 when, in fact, it was only the reasons mentioned in the said order dated 16.02.1990 which had been borrowed. Learned Senior Counsel would submit that the mere fact that the respondents had enclosed the order dated 16.2.1990 instead of extracting the reasons, set out in the said order, again in the show cause notice dated 25.3.1998 was of no consequence and could not be characterised as a predetermined act. He would contend that, even if the order were to be quashed, the department would, nonetheless, be entitled to issue a show cause notice afresh, receive the petitioners'' objections thereto, and then pass final orders. Learned Senior Counsel would rely on ( The Director of Inspection of Income Tax (Investigation), New Delhi and Another Vs. Pooran Mal and Sons and Another, .
The order of this Court in W.P. No. 2978 of 1990, setting aside the earlier impugned order dated 06.02.1990, was passed on 03.12.1997. The first respondent kept quiet for more than 3� months thereafter and issued a show-cause notice as late as on 25.03.1998, less than a week before the last date on which, according to them, a final order could be passed. Having kept quiet for so long, for which no explanation is forthcoming, the respondents justify their having passed the impugned order less than 5 days thereafter, (thereby denying an opportunity to the petitioners to submit their objections), on the specious plea that the final order was required to be passed before 31.03.1998. The respondents cannot take advantage of their own wrong in issuing the show-cause notice belatedly. They cannot be permitted to use that as an excuse for denying the petitioners a reasonable opportunity of being heard.
Further, instead of furnishing reasons in the show-cause notice dated 25.03.1998, as to why they had chosen to proceed u/s 269UD(1), the respondents enclosed thereto a copy of their earlier order dated 16.02.1990 which, as noted hereinabove, was set aside by this Court in its order in W.P. No. 2978 of 1998 dated 03.12.1997. While the submission of Sri S.R. Ashok does seem attractive, a detailed examination of the order dated 16.02.1990, as enclosed to the show-cause notice dated 25.03.1998, would reveal that the members of the appropriate authority had decided that the scheduled property be purchased by the Central Government. It cannot, therefore, be denied that the respondents had predetermined the issue. The impugned order dated 30.03.1998 is, therefore, liable to be set aside for violation of principles of natural justice also.
In Sona Builders (2001) 10 SCC 280 which, like the case on hand, also arose u/s 269UD(1) of the Income Tax Act, the appellant had submitted Form 37-1 to the Income Tax Officer on 09.03.1993. A show-cause notice was issued on 21.03.1993 calling upon them to attend the hearing on 31.05.1993, a copy of which the appellant claimed to have received only on 26.05.1993. The appellant addressed a letter to the Appropriate Authority on 29.05.1993 requesting that a copy of the deed, in respect of the sale instance, and the site plan of the property be furnished. They also sought adjournment and time to prepare their objections. The Appropriate Authority, however, did not accede to their request and passed an order on 31.05.1993. The Supreme Court held that, in effect, the notice gave five days to the appellant to respond, of which two days were Saturday and Sunday and, while u/s 269UD it had two months to act, the Appropriate Authority did not take action until one week from the alleged last available date, and then gave the appellant only three days to respond, which was inadequate. Having so observed, the Supreme Court held:
Having regard to the statutory limit within which the Appropriate Authority has to act and its failure to act in conformity with the principles of natural justice, we do not think we can remand the matter to the Appropriate Authority. We must set its order aside.
Ordinarily, on an order being quashed, for violation of principles of natural justice, the authorities concerned are given liberty to comply with the rules of natural justice and then pass an order afresh even in matters arising under the Income Tax Act. ( The Director of Inspection of Income Tax (Investigation), New Delhi and Another Vs. Pooran Mal and Sons and Another, ). We would have done the same but for the fact that the Supreme Court in Sona Builders (2001) 10 SCC 280, a case which also arose u/s 269UD(1), had held otherwise. A direction issued by the Supreme Court, in more or less identical circumstances to the case on hand, would require us to pass a similar order for it is well settled that, on the law having been declared by the Supreme Court, it is the duty of the High Court, whatever be its view, to act in accordance with Article 141 of the Constitution of India and to apply the law laid down by the Supreme Court. Judicial discipline to abide by the declaration of law, of the Supreme Court, cannot be forsaken by any Court, be it even the highest Court in a State, oblivious of Article 141 of the Constitution of India. (Chandra Prakash v. State of U.P : (2002)IILLJ841SC , State of Orissa Vs. Dhaniram Luhar, ).
Viewed from any angle, both the impugned show cause notice dated 25.03.1998, and the final order dated 30.03.1998, require to be set aside and are, accordingly, quashed. The Writ Petition is allowed. However, in the circumstances, without costs.