Banerjee, J. - (1.) The petitioner challenges an order passed by the Assistant Collector, "A" Ward, Estate Duty-cum-Income-tax Circle, whereby the petitioner was asked to pay an interest under Section 70 at the rate of 4%, amounting to Rs. 10,457.48 on the provisional duty of Rs. 42,387.56.
(2.) The petitioner's case is that one Sri N. Khandelwal died intestate on February 15, 1954, surviving his widow Smt. Mohini Debi. The said Mohini Debi submitted account under Section 52 of the Estate Duty Act and by an order dated 11th March, 1955, a provisional assessment for a sum of Rs. 42,387 on account of estate duty was made. The payment was required to be made on 25th March, 1955. By a letter dated 25th March, 1955, Smt. Mohini Debi prayed for extension of the time to pay such demand. No reply it is alleged of the said letter was given by the revenue authority. On 23rd March, 1956, the Deputy Controller of Estate Duty demanded payment of the estate duty by 28th March, 1956, and by the said letter it was stated that unless the payment is made by March 28, 1956, interest and penalty may be imposed for the default. Thereafter, various letters were written by the revenue authorities to the said Mohini Debi for payment and it was also stated in the said letters that unless payment is made, interest and penalty will be imposed. In the meantime it is alleged that the payments were being made by different instalments. The said Mohini Debi died on May 30, 1963, and by a deed of settlement the present petitioner was appointed a trustee and beneficiary in respect of the property. It appears on 31st December, 1964, the Assistant Controller assessed estate duty to the tune of Rs. 99,313.38 and after giving a credit by a sum of Rs. 22,294 which was paid by the petitioner, the petitioner was asked to pay Rs. 7,718.70 Against the said order of assessment the petitioner preferred an appeal which was partially allowed by the Appellate Controller by his order dated September 29, 1965. Against the said appellate order the petitioner preferred an appeal to the Income-tax Appellate Tribunal and the Appellate Tribunal by order, dated August 12, 1968, allowed the appeal, and due to the appellate order the assessed duty payable was fixed at Rs. 53,076.42. While those proceedings were pending, the petitioner made a payment of about Rs. 77,619 68 by different instalments. In that view of the matter the petitioner was entitled to refund of Rs. 24,000 and odd and in fact the refund was made by the department. On 17th February, 1969, however, the petitioner was served with copy of an order dated 17th of February, 1965, showing the calculation of interest on the provisional assessment for the period between 26th March, 1955, and the 30th December, 1964, alleging that interest under Section 70 of the Estate Duty Act is payable by the petitioner and a recovery certificate No. 1637 was issued against the petitioner. The petitioner objected to the said demand and moved this court and obtained the rule.
(3.) Mr. D. K. De appearing for the petitioner contended that unless an order is made under Section 70 of the Estate Duty Act, 1953, imposing interest, no interest can be demanded by the revenue authority and as such the demand of Rs. 10,000 and odd being the interest payable on the provisional assessment is without jurisdiction and illegal. Mr. De argued that no order was made imposing the demand of interest. In fact the revenue authorities only threatened the petitioner that interest and penalty will be levied unless payment is made by a particular date. Mr. De argued that in order to attract Section 70 of the Estate Duty Act which is the only provision for realisation of interest it is necessary to have the satisfaction of the Controller that the estate duty leviable in respect of any property cannot, without excessive sacrifice, be raised at once, he may allow payment to be postponed for such period to such extent, and on payment of such interest not exceeding 4%. Mr. De argued that the Section 70 presupposes an order after the Controller's satisfaction about the condition imposed by the said Section.;