Natural justice in compulsory purchase proceedings requires disclosure of relied-on material and a meaningful chance to respond.

Before making a compulsory purchase order under Chapter XX-C, the appropriate authority must afford a real and effective opportunity of hearing by disclosing the material relied upon, including the exemplars, and allowing sufficient time to respond. A notice that failed to disclose the basis of the undervaluation, omitted the supporting material, and provided only a short adjournment with a changed venue did not satisfy natural justice. The compulsory purchase order was therefore vitiated and liable to be quashed.

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Issues: Whether the order for compulsory purchase under Chapter XX-C was invalid for denial of a reasonable opportunity of hearing, including non-supply of the material relied upon and inadequate time and venue for response.

Analysis: The statutory scheme under Chapter XX-C did not expressly provide for a hearing, but a reasonable opportunity had to be read into the provisions before an order under section 269UD could be made. For an effective opportunity, the affected parties had to be informed of the basis of the proposed action and furnished the relevant material, including the exemplars relied upon, so that they could controvert it meaningfully. The notice issued in this case did not disclose that the authority considered the property undervalued by 15 per cent. or more, did not annex the supporting material, and the hearing was adjourned for only a short period with a change of venue that did not allow adequate time to attend. These features showed non-compliance with natural justice.

Conclusion: The compulsory purchase order was vitiated by denial of a reasonable opportunity of hearing and was liable to be quashed.

Ratio Decidendi: Before making a compulsory purchase order under Chapter XX-C of the Income-tax Act, 1961, the appropriate authority must give the affected parties a real and effective opportunity of hearing by disclosing the material relied upon and allowing sufficient time to meet it.

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