Natural justice in compulsory purchase proceedings requires disclosure of relied-upon valuation material before adverse orders are passed.

Compulsory purchase orders under Chapter XX-C were invalidated where the appropriate authority failed to disclose the valuation report, comparable sale instances and other materials relied upon before passing orders under section 269UD. The Delhi HC applied the principle that a meaningful hearing requires prior disclosure of adverse material so the affected party can meet the case against it. On the facts, the petitioner had specifically sought the documents, their non-supply was unrebutted, and the authority was found to have acted without affording a fair opportunity. The orders were quashed for breach of natural justice, and no remand was ordered.

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Issues: Whether the compulsory purchase orders under section 269UD of the Income-tax Act, 1961 were vitiated for violation of natural justice because the appropriate authority did not furnish the valuation report, comparable sale material and other relied-upon documents before passing the orders.

Analysis: The right to a meaningful hearing under Chapter XX-C includes disclosure of the material on which the authority proposes to rely. A hearing is effective only if the affected party knows the material used against it and can meet it. On the facts, the petitioner had sought the valuation report, the comparative instances and the relevant sale deed, but those materials were not furnished and the denial remained unrebutted. The authority therefore acted without giving a fair opportunity to meet the case against the petitioner. In the circumstances, a remand was declined and the controversy was brought to an end.

Conclusion: The compulsory purchase orders were quashed for breach of natural justice and the petition succeeded in favour of the assessee.

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