Natural justice in pre-emptive purchase does not reopen a completed acquisition and auction sale under tax law.

The hearing requirement read into section 269UD(1) of the Income-tax Act as a matter of natural justice was confined to pending or incomplete pre-emptive purchase proceedings. Where the purchase order had already been implemented, possession delivered to the Department, consideration accepted without protest, and the property later sold by auction to a third party, the completed transaction was not reopened by the later clarification in C.B. Gautam. Applying the principle that completed transactions should not be unsettled and that no party should suffer from an act of court, the concluded acquisition and auction were treated as final, and the challenge to the pre-emptive purchase could not succeed.

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Issues: Whether the requirement of notice and hearing before pre-emptive purchase under section 269UD(1) of the Income-tax Act, 1961 applied to a transaction that had already been completed, where possession had been taken, compensation had been paid and accepted without protest, and the property had thereafter been sold in public auction.

Analysis: The hearing requirement read into section 269UD(1) as a matter of natural justice was intended to govern pending or incomplete pre-emptive purchase proceedings. On the facts, the initial purchase order had been implemented, possession had been delivered to the Department, the sale consideration had been accepted by the vendor, and the property had been auctioned to a third party before the later clarification in C.B. Gautam. The vendor had also sought refund of the advance, showing acquiescence in the auction sale. Applying the principles that no party should suffer by an act of court and that completed transactions are not to be unsettled, the earlier interim arrangement did not preserve a right in the appellants to reopen the concluded acquisition and auction.

Conclusion: The requirement of fresh hearing did not apply to the completed transaction, and the challenge to the pre-emptive purchase could not succeed.

Final Conclusion: The acquisition and subsequent auction sale having attained finality, the appeals were liable to be rejected.

Ratio Decidendi: The opportunity of hearing read into section 269UD(1) does not unsettle a compulsory purchase that has already been completed and followed by an auction sale to a third party with acceptance of consideration by the vendor without protest.

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