Pre-emptive purchase under Chapter XX-C fails where apparent consideration is not timely tendered, causing revesting of property.

Under Chapter XX-C of the Income-tax Act, a pre-emptive purchase order cannot survive unless the apparent consideration is tendered to the transferors within the statutory framework. As no apparent consideration was tendered to the petitioners or deposited in the Central Government account, the mandatory consequence under section 269UH followed and the Government's right to purchase stood abrogated. The Bombay HC therefore held that the impugned purchase orders could not be sustained and the properties revested in the petitioners.

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Issues: Whether the Central Government's pre-emptive purchase order under Chapter XX-C could survive when the apparent consideration was not tendered to the transferors within the statutory framework, and whether the properties consequently revested in the petitioners.

Analysis: The statutory scheme required tender of the apparent consideration under section 269UF read with section 269UG of the Income-tax Act, 1961. On the admitted facts, no amount of apparent consideration had been tendered to the petitioners or deposited in the Central Government account. In such circumstances, the consequence mandated by section 269UH followed, and the right of the Central Government to purchase stood abrogated. The impugned purchase orders therefore could not be sustained.

Conclusion: The pre-emptive purchase orders were invalid and the properties revested in the petitioners.

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