- (1.) THIS is a petition under Art. 227 of the Constitution against an order passed by the Asstt. CED- cum-Income- tax Circle, Calcutta, dt. the 24th Jan., 1960, wherein he informed the petitioner that the proposed assessment of estate duty would be completed taking valuation as stated therein.
(2.) ONE Nagendra Nath Banerjee died on the 3rd Nov., 1930, leaving a will. By the said will Sudhir Bala, the widow of the testator, was appointed executrix to the said will and probate was taken. By the said will, with regard to items 4, 6 and 7 of the said will, a life estate was created in favour of his widow, Sudhir Bala Devi, and an absolute bequest thereafter to the petitioner and his brothers. Sudhir Bala thereafter died on the 5th Sept., 1960. The question is whether the petitioner is liable to pay estate duty with reference to the properties which vested absolutely in them by the will of Nagendra Nath Banerjee who died on 3rd Nov., 1930. It is urged by Mr. Mukherjee on behalf of the petitioner that no estate duty can be charged so far as the petitioner is concerned. Mr. Mukherjee has referred to ss. 4, 5, 6 and 7 of the ED Act of 1953. Sec. 5 is as follows : "In the case of every person dying after the commencement of this Act, there shall, save as hereinafter expressly provided, be levied and paid upon the principal value ascertained as hereinafter provided of all property, settled or not settled . . . . . which passes on the death of such person, a duty called ` estate duty' . . . . .".
(3.) ACCORDING to Mr. Mukherjee, s. 5 has no application for the reason that the property vested in the petitioner on the death of Nagendra Nath which event occurred in 1930 long before the ED Act came into force and the property passed to the petitioner on the death of Nagendra Nath and nothing passed by the death of Sudhir Bala. Sudhir Bala had merely a life estate which ended with her death. Therefore, the property could not have "passed" by the death of Sudhir Bala. Mr. Mukherjee has referred to the definition of the word "property" which includes an interest in the property and, therefore, not land or any immovable property apart from the rights thereto. As the title passed in 1930, for purposes of s. 5, the property must be deemed to have passed in 1930 on the death of Nagendra Nath. Therefore, s. 5 would not apply. With regard to s. 6, it is said that Sudhir Bala was not competent to dispose of the property nor did she dispose of the property. Therefore, s. 6 has no application. With regard to s. 7, Mr. Mukherjee says that, as the title to the property passed by the death of Nagendra Nath, there is no question of any interest being deemed to pass on the death of Sudhir Bala. According to Mr. Mukherjee, nothing passed and nothing could pass because of the death of Sudhir Bala and, therefore, nothing can be deemed to have passed on the death of Sudhir Bala. The result, therefore, is that no estate duty is payable with regard to this property. Mr. Mukherjee has referred to a decision in In re Thomas Townsend (1901) 2 KB 331 : 1 EDC 336. Mr. Mukherjee says that there is absolutely no doubt that title passed on the death of Nagendra Nath. At worst it may be said that only possession passed after the death of Sudhir Bala. Therefore, the property that passed may at worst be considered to be the value of possession apart from the value of title and, as no value can be levied with regard to possession apart from title, he was not liable to pay any duty whatsoever. This argument is based on the aforesaid decision. Mr. Mukherjee further referred to a case in Earl Cowley vs. IRCs (1899) AC 198 : 1 EDC 193. In that case the property was mortgaged and further there was an annuity in favour of the father and the son had the remainder over. It was held that the settled property, which passed to the son on the father's death, was only equity of redemption, and that estate duty was, therefore, payable only on the equity of redemption and not on the value of the property. It is urged therefore that, as title passed on the death of Nagendra Nath and as mere possession at most passed at the death of Sudhir Bala, nothing more than the value of possession should be the value of the property which passed on the death. But as that value cannot be determined, nothing could possibly pass.;