42. Purchase of capital asset by Government.----
The manner to be followed in connection with purchase of a capital asset by the Government under section 32(4) of the Ordinance, shall be as follows :-
(1) Where the Deputy Commissioner of Taxes has reason to believe that any immovable property is being transferred by a person (hereinafter referred to as the transferor) to another person (person hereinafter referred to as the transferee) and the fair market value of such property exceeds the declared value by more than twenty-five per cent. and the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of facilitating the reduction or evasion of the liability of the transferor to pay the tax under the Ordinance in respect of any income arising from the transfer or any other taxes or duties, he may, subject to the provisions of this rule, initiate proceedings for the acquisition of such property by the Government.
(2) The Deputy Commissioner of Taxes shall initiate proceedings for acquisition of immovable property under this rule by giving a notice to that effect in the official Gazette and a copy of such notice shall also be published in the two leading newspapers of wide circulation where such property is located; a copy of such notice shall also be served on the transferor, the transferee and the person in occupation of the property, if the transferee is not in occupation thereof :
Provided that no such proceedings shall be initiated after the expiry of a period of two years from the end of the month in which the instrument of transfer in respect of such property is registered under the Registration Act, 1908.
(3) Objection against the acquisition of the immovable property in respect of which a notice has been published in the official Gazette and the newspapers may be made in writing by the transferor or the transferee to the Deputy Commissioner of Taxes within sixty days of the publication of the notice in the official Gazette or newspapers.
(4) The Deputy Commissioner of Taxes shall fix a date and place for the hearing of the objections against the acquisition and shall give notice of the same to every person who has made such objection :
Provided that notice shall also be given to the transferee of such property even if he has not made any such objection.
(5) After hearing the objections, if any, after taking into account all the relevant materials on record, if the Deputy Commissioner of Taxes is satisfied that-
(a) the fair market value of such property exceeds the consideration paid therefor by
more than twenty-five per cent. of such consideration, and
(b) the consideration for such transfer as agreed to between the parties has not been
truly stated in the instrument of transfer with such object as is referred to in
clause (1), he may make an order for the acquisition of the property under this
(6) Any person aggrieved by an order made under clause (5) may prefer an appeal under the Ordinance to the Appellate Joint Commissioner.
(7) As soon as may be after the order of acquisition of any immovable property has been made under clause (5) and after the disposal of appeal, if any, the Deputy Commissioner of Taxes may by notice in writing, order any person who may be in possession of the immovable property to surrender or deliver possession thereof to him or any other person duly authorized by him in writing in these behalf within thirty days of the service of the notice.
(8) If any person refuses or fails to comply with a notice under clause (7), the Deputy Commissioner of Taxes or any other person duly authorized by him under that clause may take possession of the immovable property and may, for that purpose, requisition the services of any police officer to assist him and it shall be the duty of such officer to comply with such requisition and may use such force as may be necessary.
(9) When the possession of the immovable property is surrendered or delivered under clause (7), the Deputy Commissioner of Taxes or the person duly authorised by him in that behalf or, as the case may be, when the possession thereof is taken under clause (8), the Government shall tender as consideration a sum equal to the aggregate of the amount of the declared value for its transfer plus ten per cent. of the said amount to the transferor and the property shall vest absolutely in the Government free from all encumbrances:
Provided that nothing in this clause shall operate to discharge the transferor or the transferee or any other person (not being the Government) from any liability in respect of such encumbrances, and notwithstanding anything contained in any other law, such liability may be enforced against the transferor or the transferee or such other person by a suit for damages.
(10) Notwithstanding anything contained in clause (9), if any dispute arises as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto, the Government shall deposit in the principal civil court of original jurisdiction the amount required to be tendered under clause (9) and refer such dispute for decision of the court and the decision of the court thereon shall be final.
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