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Issues: (i) Whether the consent awards passed after the Government Order dated 14.11.2014 required reconsideration by applying that Order for re-fixation of compensation and rehabilitation benefits; (ii) Whether the compensation paid pursuant to the land acquisition awards attracted exemption from income tax under Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, with consequential refund of tax deducted at source.
Issue (i): Whether the consent awards passed after the Government Order dated 14.11.2014 required reconsideration by applying that Order for re-fixation of compensation and rehabilitation benefits.
Analysis: The Government Order was issued to ensure that land-losers received compensation, rehabilitation and resettlement benefits equal to or higher than the benefits under the 2013 Act. Its annexure stated that the compensation framework would apply where awards or agreements had not been made before 31.12.2013. Since the awards in question were made after the Government Order and the object of the Order was to align compensation with the 2013 Act, the Authority was required to reconsider the matter by applying the Government Order and afford the petitioners an opportunity of hearing.
Conclusion: The awards were directed to be reconsidered and fresh awards were to be passed after applying the Government Order dated 14.11.2014.
Issue (ii): Whether the compensation paid pursuant to the land acquisition awards attracted exemption from income tax under Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, with consequential refund of tax deducted at source.
Analysis: The awards were passed after the 2013 Act came into force, and the Court treated the compensation as falling within the statutory exemption under Section 96. On that basis, the tax deducted at source from the compensation could not be retained against the petitioners, and the Income Tax Department was directed to refund the amount deposited to their account. The Department was left at liberty to proceed against the Government in accordance with law if so entitled.
Conclusion: The compensation was held exempt from income tax and refund of the deducted tax was directed.
Final Conclusion: The writ petitions succeeded, with reconsideration of compensation ordered and consequential tax relief granted to the land-losers.
Ratio Decidendi: Where land acquisition awards are made after the 2013 Act has come into force and the governing governmental framework is intended to secure compensation at or above the 2013 Act level, the authority must apply that framework on reconsideration, and compensation protected by Section 96 of the 2013 Act is exempt from income tax.
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