42. Purchase of capital asset by Government

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
         rule.

(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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