H M JAFFAR Vs. ASSISTANT CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) IN this petition, the order of the Asstt. CED, Mangalore, dt. 17th Feb., 1975 (Ex. E), purporting to be under s. 61 r/w s. 70 of the ED Act, 1953, is challenged. The petitioner is the accountable person who filed the return in respect of the estate consequent on the death of one Habibullah on 9th Jan., 1963. An assessment order was made on 25th Dec., 1961, a copy of which has been filed as Ex. A. The principal value of the estate of the deceased was valued at Rs. 14,28,450. The total tax payable was calculated at Rs. 2,58,840.41 and after giving deduction to the amount that had been paid under s. 57, the balance payable was Rs. 2,18,600.48. This was directed to be paid on or before 31st Jan., 1967, and demand notice and challan were also sent along with the copy of the order. This order did not contain any direction in regard to the payment of interest. There was an appeal against this assessment to the Appellate CED. On the ground that the duty bad been allowed to be in arrears, he caused notices to be issued under s.46(5A) of the INdian IT Act. The petitioner filed a writ petition, W. P. No. 1736 of 1967 challenging the notices issued. An interim order against the enforcement of the notices was made and, ultimately, the writ petition was disposed of by consent of parties on 6th June, 1969. The parties were agreed that the payment of the outstanding amount was to be made in five equal instalments. It was spread over a period of 2-1/2 years from the date of the order. The first instalment had to be paid on 6th July, 1967, the next instalment on 12th Dec., 1969, and the remaining three instalments within the interval of six months from that day. It would appear that except for a short delay, the tax due was paid up. The Appellate CED disposed of the appeal on 22nd March, 1971, and the Asst. CED made a consequential order giving effect to the order of the Appellate CED on 18th May, 1971. There was a reduction in the tax payable by about Rs. 2,000. After giving effect to the amount paid up, it transpired that there was a balance of Rs. 37,751.60 due by way of tax on 18th May, 1971. It transpired that the Asst. CED made an order for imposing interest on 28th March, 1972. This was challenged before this Court in W.P. No. 1679 of 1972. It had been contended that the proceedings taken to levy interest under s. 70(2) was untenable and the order had been made without affording an opportunity to be heard. This Court by its order dt. 1st Feb., 1974 set aside that order with liberty reserved to the Asst. CED to make a fresh order after affording a reasonable opportunity to the petitioner. Thereafter, the order was made on 17th Feb., 1975, which is challenged in this writ petition. The petitioner had preferred a further appeal to the Tribunal against the order of the Appellate CED. The Tribunal decided the appeal on 21st Dec., 1974. Some reliefs had been allowed to the accountable person. The order made on 17th Feb., 1975, and impugned in this writ petition, was one made without taking into account the relief that had been granted by the Tribunal. The order, Ex. E, shows that the tax payable after giving deduction to the amount paid under s. 57 was Rs. 2,16,101.22 and the amount paid up amounted to Rs. 2,16,100.48. It was shown that the balance of estate duty payable was Rs. 0.74. A calculation of interest due was made and it was stated to be Rs. 20,812.20. Thereafter, the Asst. CED made an order giving effect to the Tribunal's order, a copy of which has been filed as Ex. G. That shows that the estate duty payable after giving deduction to the amount paid under s. 57 was Rs. 2,14,551.67. Therefore, it is clear that if the order of the Tribunal had been given effect to at the time the order, Ex. E, was made, there would have been no balance of amount due by way of estate duty and in fact the amount paid would to some extent be an over-payment, as in the computation made under Ex. G after appropriating the payments made towards the interest calculated, also the net amount payable is shown as Rs. 18,868.40. I may also mention here that after the filing of this writ petition, the enforcement of this demand was stayed subject to the petitioner depositing 50per cent of the amount and the petitioner deposited 50per cent of that amount. It is further relevant to mention here that the accountable person sought for a reference of certain questions to this Court and there were references which were numbered as Tax Revision Case No. 133/75 and Tax Revision Case No. 80/77 (H.M. Jaffer vs. CED (1980) 123 ITR 586 (Kar). These references were answered by the judgment of this Court dt. 12th June, 1979. The effect of this judgment is that certain properties which were treated as properties passing on death were to be excluded. Thus, by giving effect to the judgment of this Court in those references, the estate duty liability would get reduced considerably and, according to the rough calculation made by the learned counsel for the petitioner, the estate duty would be only about Rs. 1,25,610 or something less than that if certain rebates are properly calculated. It is contended by Sri Sarangan, learned counsel for the petitioner, that the proceedings taken by the respondent are without jurisdiction. His argument is that there was no mistake apparent on record which could be rectified by taking recourse to s. 61. There was no mistake on record as such and the ED Act does not prescribe an automatic imposition of interest on the duty payable. The only provision for imposing interest is to be found in s. 70 which consists of two clauses. It is as follows :