ARVIND N MAFATLAL Vs. T A BALAKRISHNAN DEPUTY CONTROLLER OF ESTATE DUTY BOMBAY

JUDGEMENT

(1.) WE are concerned in this petition with a notice issued under section 59 of the Estate Duty Act, 1953 (Act 34 of 1953), with a view to reopening an assessment in respect of the estate of the late Navinchandra Mafatlal. The petitioner is the person against whom the notice was issued. He is the son of the deceased and admittedly the accountable party under the Act. The circumstances under which the notice came to be issued are briefly as follows : navinchandra Mafatlal passed away on 31st of August, 1955, and in due course a return in regard to the assessment of estate duty was filed on behalf of the petitioner by a chartered accountant on 18th February, 1956. The late Navinchandra was the chairman and managing director of a private limited company known as Mafatlal Gagalbhai and Company Ltd. , having its registered office in Bombay. The subscribed and paid-up capital of the company consisted of 25,250 ordinary shares of Rs. 100 each and 75,750 preference shares of Rs. 100 each, out of which Navinchandra owned 2,150 ordinary shares and 9,050 preference shares. Navinchandra had, some time prior to his death, gifted away some part of his share capital to various persons and at the time of his death he only held 975 ordinary shares and 9,050 preference shares of the company. We are primarily concerned in this petition with the valuation of the 2,150 ordinary shares.

(2.) ON 28th March, 1956, after the return was filed, the Assistant Controller of Estate Duty asked the petitioner a number of questions which were replied to and along with the reply was also filed a valuation report dated 10th December, 1956. The replies to the questions were given on 13th February, 1959. The petitioner has also alleged that in the meanwhile a number of hearings took place at which several questions were discussed in connection with the return. On 22nd March, 1960, the then Deputy Controller of Estate Duty, Mr. Jhala, made an assessment order which is at exhibit F. In the order the Deputy Controller has stated that there were several points arising out of the return submitted by the accountable person but all except one of those points had been disposed of by discussion with the parties and agreed figures were included in the computation given in the assessment order.

(3.) IN order to complete the narration of facts resulting in the issuance of the notice under section 59 of the Act, it is necessary to state that after the assessment order was passed there came into force on 1st July, 1960, the Central Act, 33 of 1958, known as the Estate Duty (Amendment) Act, 1958, whereby substantial changes were made in the then existing Estate Duty Act. One of those changes was to bring into force the new section 59 of the Estate Duty Act as amended. It was after the section came into force on 23rd January, 1963, that the notice which is impugned in the present petition came to be issued by the Deputy Controller of Estate Duty.