Time-barred pre-emptive purchase, religious trust property, and non-computable lease consideration defeat Chapter XX-C application.

Chapter XX-C pre-emptive purchase power is described as mandatory and time-bound: once the prescribed period under s. 269UD(1) expired, the purchase order could not be sustained. The note also states that Chapter XX-C was inapplicable to a religious denomination where the property transaction had judicial sanction under the Indian Charitable and Religious Trusts Act, 1920 and served religious objects. It further explains that a proposed lease involving future construction and other in-specie obligations could not be reduced to a workable present monetary value, so the computation machinery failed.

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Issues: (i) Whether the order for pre-emptive purchase could be sustained when the statutory period under Chapter XX-C had expired; (ii) whether Chapter XX-C could be invoked against a religious denomination whose property dealings were already sanctioned under the Indian Charitable and Religious Trusts Act, 1920 and where the transaction served religious objects; (iii) whether the proposed lease, involving future construction and other in-specie obligations, yielded a computable consideration capable of valuation under Chapter XX-C.

Issue (i): Whether the order for pre-emptive purchase could be sustained when the statutory period under Chapter XX-C had expired.

Analysis: The limitation for an order under section 269UD(1) was mandatory and rigid. The statement in Form No. 37-I was filed on 18 February 1988 and the prescribed period expired on 29 April 1988. The earlier action of the appropriate authority did not amount to a valid order preserving or extending the time. The interim direction of the High Court required a fresh decision in accordance with law and on the circumstances then obtaining, but it did not abrogate the statutory limit or revive an already lapsed power.

Conclusion: The pre-emptive purchase order was unsustainable and the decision was against the Revenue.

Issue (ii): Whether Chapter XX-C could be invoked against a religious denomination whose property dealings were already sanctioned under the Indian Charitable and Religious Trusts Act, 1920 and where the transaction served religious objects.

Analysis: The petitioner was a religious denomination engaged in propagation of Buddhism, and the proposed lease had already received judicial approval under section 7 of the Indian Charitable and Religious Trusts Act, 1920. In that setting, the exercise of power under Chapter XX-C would trench upon the freedom to profess, practise and propagate religion and interfere with the denomination's right to manage its own affairs and property. The measure was also viewed as inappropriate where no tax-evasion motive could realistically be attributed to the transaction.

Conclusion: Chapter XX-C was held inapplicable on these facts, in favour of the Assessee.

Issue (iii): Whether the proposed lease, involving future construction and other in-specie obligations, yielded a computable consideration capable of valuation under Chapter XX-C.

Analysis: The lease consideration was not a simple monetary price but included construction of a substantial building, monthly payments, and other future obligations. The Court held that where the consideration cannot be reduced to a workable present monetary value, the computation machinery fails, and the scheme of pre-emptive purchase cannot operate. The impugned valuation approach was also found unsatisfactory.

Conclusion: The consideration was not computable for Chapter XX-C purposes, in favour of the Assessee.

Final Conclusion: The impugned purchase order was set aside and the petitioners were entitled to the statutory clearance and consequential reliefs.

Ratio Decidendi: A mandatory statutory power of pre-emptive purchase cannot be exercised after the prescribed period has expired, and Chapter XX-C cannot operate where the proposed transfer consideration is incapable of present monetary computation.

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