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Issues: (i) Whether, in a land acquisition proceeding where no award under Section 11 of the Land Acquisition Act, 1894 had been made before commencement of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the award prepared thereafter must be treated as an award under the 2013 Act and the remedy of challenge lies under Section 64(1) of the 2013 Act and not under Section 18 of the 1894 Act; (ii) whether deduction of income tax from the compensation award is permissible under the 2013 Act.
Issue (i): Whether, in a land acquisition proceeding where no award under Section 11 of the Land Acquisition Act, 1894 had been made before commencement of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the award prepared thereafter must be treated as an award under the 2013 Act and the remedy of challenge lies under Section 64(1) of the 2013 Act and not under Section 18 of the 1894 Act.
Analysis: Section 24(1)(a) of the 2013 Act applies where no award under Section 11 of the 1894 Act had been made, and in that situation the provisions of the 2013 Act relating to determination of compensation govern the matter. Section 24(1)(b) preserves the old Act only where an award under Section 11 of the 1894 Act had already been made. On the record, the award was prepared after commencement of the 2013 Act and was therefore to be treated as one under the 2013 Act. The statutory remedy for a person not accepting such award is a reference under Section 64(1) of the 2013 Act, which covers objections to compensation and related matters under the new regime. The reference mechanism under Section 18 of the 1894 Act was therefore inapplicable.
Conclusion: The award was held to be an award under the 2013 Act, and the appellant was entitled to pursue a reference under Section 64(1) of the 2013 Act rather than under Section 18 of the 1894 Act.
Issue (ii): Whether deduction of income tax from the compensation award is permissible under the 2013 Act.
Analysis: Section 96 of the 2013 Act expressly provides that no income-tax shall be levied on any award or agreement made under the Act except under Section 46. Since the award in question was treated as one under the 2013 Act, the statutory bar against income-tax deduction applied. The respondents did not dispute the position under Section 96.
Conclusion: Deduction of income tax from the compensation was held impermissible.
Final Conclusion: The writ appeal was allowed in part by treating the award as one under the 2013 Act, directing payment of compensation without income-tax deduction, and preserving the appellant's right to seek a reference under the new statutory mechanism.
Ratio Decidendi: Where no award under the 1894 Act has been made before commencement of the 2013 Act, the compensation determination is governed by the 2013 Act, the reference remedy lies under Section 64 of that Act, and awards under that regime are exempt from income-tax except as specifically provided by the statute.
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