Compulsory purchase under Chapter XX-C failed where relied-upon comparables were undisclosed and undervaluation was not properly established.

Compulsory purchase under Chapter XX-C of the Income-tax Act required disclosure of the sale instances relied upon, because non-supply of that material denied the petitioners a meaningful opportunity to meet the case and offended natural justice. The authority also had to establish undervaluation through reliable comparable transactions; reliance on sales from different buildings was weaker than a same-building sale of an identical flat. On the figures recorded, the comparison did not justify compulsory acquisition, so the acquisition order was unsustainable and was set aside.

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Issues: Whether the order of compulsory purchase under Chapter XX-C of the Income-tax Act, 1961 was sustainable when the material relied upon by the Appropriate Authority was not furnished to the petitioners and the comparable sale instances did not establish undervaluation to the requisite extent.

Analysis: The petitioners were entitled to be informed of the sale instances relied upon against them so that they could meaningfully meet the case, and non-supply of those instances offended natural justice. The authority also relied on transactions from different buildings, whereas the petitioners pointed to a sale in the same building of an identical flat, which was a more reliable comparable. On the figures recorded in the order itself, the difference in rates did not show undervaluation to the extent justifying compulsory acquisition, particularly when the comparable relied upon from the same building did not support such an inference.

Conclusion: The challenge succeeded and the order directing compulsory acquisition was unsustainable and liable to be quashed.

Final Conclusion: The petition was allowed and the impugned acquisition order was set aside.

Ratio Decidendi: For compulsory acquisition under Chapter XX-C, the authority must disclose the material relied upon and establish undervaluation on reliable comparable instances before depriving the parties of their property.

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