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Assistant Controller of Estate Duty Vs. Sitarama Udupa and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberCivil Revision Petition No. 173 of 1964
Judge
Reported in[1965]58ITR38(KAR); [1965]58ITR38(Karn)
ActsEstate Duty Act, 1953 - Sections 80; Income Tax Act, 1961 - Sections 137 and 280; Finance Act, 1964 - Sections 80
AppellantAssistant Controller of Estate Duty
RespondentSitarama Udupa and ors.
Appellant AdvocateS.R. Rajasekhara Murthy, Adv.
Respondent AdvocatePadubidri Raghavendra Rao, Adv.
Excerpt:
.....the deceased original plaintiff within the said period of 12 years, the courts below were right in holding that the suit of plaintiff is barred by limitation. regular second appeal is dismissed. - the policy was altered in connection with the disclosure of information regarding proceedings under the income-tax act, and corresponding amendments were made in the estate duty act by the substitution of a new section -section 80 -and the introduction of section 80a by the finance act of 1964. the new section provides that the controller may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this shall be final and shall not be called in question in any court of law......80 of the estate duty act, 1953, are applicable to the case or the provision of section 80 of the estate duty act which has been replaced by the finance act, 1964. 2. the learned advocate for the respondent argued that though the finance act, 1964, has come into force on the 1st of april, 1964, and the order in revision had been made prior to that date, nevertheless, the subsequent event should be taken into consideration when interfering with the order of the lower court, even if the case of the petitioner falls within the purview of the repealed section 80 of the estate duty act. whereas it has been contended by the learned counsel for the petitioner that retrospective effect cannot be given to the finance act. that being so, the case is governed by the old section 80 of the estate.....
Judgment:

1. The main question for decision in this petition is whether the provisions of section 80 of the Estate Duty Act, 1953, are applicable to the case or the provision of section 80 of the Estate Duty Act which has been replaced by the Finance Act, 1964.

2. The learned advocate for the respondent argued that though the Finance Act, 1964, has come into force on the 1st of April, 1964, and the order in revision had been made prior to that date, nevertheless, the subsequent event should be taken into consideration when interfering with the order of the lower court, even if the case of the petitioner falls within the purview of the repealed section 80 of the Estate Duty Act. Whereas it has been contended by the learned counsel for the petitioner that retrospective effect cannot be given to the Finance Act. That being so, the case is governed by the old section 80 of the Estate Duty Act, and, if it is governed by the provisions of the said section, the order of the lower court is unsustainable.

3. The facts which are necessary to appreciate the arguments advanced on behalf of the parties briefly stated ar : That a suit was filed by one Sitarama Udupa (O. S. No. 141 of 1962 on the file of the District Munsiff of Karkala, S. K.) against the defendants in respect of the debt due from one Gopalacharya, the father of the defendants. In the suit, the plaintiff alleged that the defendants have admitted the suit loan and they have also executed a 'Krayapatti' on April 23, 1959, in favour of the plaintiff. Therein, the plaintiff further stated that the suit loan has been shown as a debt in the statement submitted by the defendants to the Controller, Estate Duty-cum-Income-tax, Madurai. The defendants denied the allegation made by the plaintiff in his plaint. In that suit, plaintiff filed an application in the court for the issue of a certificate to enable him to obtain copies of the documents from the Controller of Estate Duty, Madurai. It may be mentioned here that that application was not opposed by the defendants. Allowing the application the court issued summons to the Assistant Controller, Estate Duty, Madurai, directing him to produce the documents mentioned in the application, i.e., items Nos. 1 - 4. It is not necessary to refer to item No. 1, because it has been conceded by the parties that the said document cannot be summoned. Items Nos. 2 to 4 ar : Item No. 2 - the order passed by the Assistant Controller, Estate Duty, Madurai, item No. 3 - notice of the assessment order dated December 28, 1958, served upon the 1st defendant in the suit and item No. 4 - entries contained in the file (F) No. G. 14 of the year 1958 of the office of the Assistant Controller, Estate Duty-cum-Income-Tax Circle, Madurai, relating to the estate of Sri T. G. Gopala Rao. It appears that the officer concerned produced the documents in the court. He, however, on the same day requested the court to return the documents to him on the ground that they were required for his reference. But the undertook to produce the same whenever called for on a later date. On that under taking the documents were returned to the officer by the court. Subsequently, the said officer claimed privilege under section 80 of the Estate Duty Act of 1953. The learned munsiff, by the order in revision, held that the privilege claimed by the other (Assistant Controller, Estate Duty) does not extend to documents, items Nos. 2 to 4, and since the parties had conceded that item No. 1 is covered by section 80 of the Estate Duty Act, the learned munsiff directed the Assistant Controller, Estate Duty, Madurai, to produce the documants, items No. 2 to 4, excluding item No. 1. In the concluding paragraph of his order, the learned munsiff held that documents, items Nos. 2 to 4, do not come within the meaning of the words 'accounts' or 'statements' or 'documents' or 'evidence' or 'affidavits' given, produced or obtained in connection with, or in the course of, proceedings under the Estate Duty Act. He was of the view that he said documents may form part of the record relating to the Estate Duty Act, but section 80, in terms, does not refer to such a record and therefore the privilege claimed is not available so far as these documents are concerned.

4. Section 80 of the Estate Duty Act, as it stood prior to its amendment by the Finance Act of 1964, provided for reference to section 54 of the Indian Income-tax Act, 1922, corresponding with sections 137 and 280 of the Indian Income-tax Act, 1961, for the protection of the assessees against the disclosure of their own financial matters and public servants were prohibited from disclosing particulars contained in any accounts or statements filed by accountable persons or any document, evidence or affidavits given, produced or obtained in connection with, or in the course of, proceedings under the Estate Duty Act. The policy was altered in connection with the disclosure of information regarding proceedings under the Income-tax Act, and corresponding amendments were made in the Estate Duty Act by the substitution of a new section - section 80 - and the introduction of section 80A by the Finance Act of 1964. The new section provides that the Controller may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this shall be final and shall not be called in question in any court of law. Section 80A provides tha :

'(1) If the Central Government is of opinion that it is necessary or expedient in the public interest to publish the names of any accountable persons and any other particulars relating to any proceedings under this Act in respect of such persons, it may cause to be published such names and particulars in such manner as it thinks fit.

(2) No publication under this section shall be made in relation to any penalty imposed under this Act until the time for presenting an appeal to the Appellate Controller has expired without an appeal having been presented or the appeal, if presented, has been disposed of.'

5. We are not concerned here with section 80A. It is the contention of the petitioner that the provision of Finance Act, 1964, cannot be given retrospective effect. There appears to be considerable force in the contention. Moreover, this point has not been seriously contested on behalf of the respondent. The Finance Act does it contain any express provision giving it retrospective effect, nor from the provision of the Act it can be said that retrospective effect can be given by necessary implication to the said Act. But, the learned counsel for the respondent submitted that by the amendment of section 80 of the Estate Duty Act of 1953 and section 49 of the Finance Act of 1964, the embargo or the prohibition contained in the old section had been removed by the new section 80 of the Estate Duty Act. He argued that this subsequent event should be taken into consideration in this case. Even if it is concluded that he documents which are sought to be summoned falls within the purview of the old section 80 of the Estate Duty Act, this court will not be justified in interfering with the order of the lower court because the new section 80 of the Estate Duty Act does not prohibit the court from summoning the said documents. The learned munsiff held that the documents, items Nos. 2 to 4, are not covered by the prohibition contained in the old section 80 of the Estate Duty Act, but he has not given any reason in his order for his conclusion. He only referred to the language employed in section 54 of the Indian Income-tax Act, 1922, and section 137 of the Income-tax Act, 1961, and was of the opinion that the language of the old section 80 of the Estate Duty Act is much restricted and not as wide as that contained in the Income-tax Act. But he has not given any define finding as to how as not what grounds he has come to the conclusion, that items Nos. 2 to 4 do not come within the purview of old section 80 of the Estate Duty Act. Section 80 of the Act read :

'The provisions of section 54 of the Indian Income-tax Act, 1922 (XI of 1922), shall apply to all accounts, statements, documents, evidence or affidavits, given, produced or obtained in connection with or in the course of the proceedings under this Act.' (underlining is mine).

6. Proviso to that section is not relevant for our purpose. As mentioned above, item No. 2 is an order passed by the Assistant Controller, Estate Duty, Madurai, item No. 3 is notice of the assessment order dated December 28, 1958, served by the defendant in the suit and item No. 4 are the entries contained in the file (F.) No. G. 14 of the year 1958 of the office of the Assistant Controller, Estate Duty-cum-Income-tax Circle, Madurai, relating to the estate of Sri T. G. Gopala Rao. It seems to me that all these documents come under the word 'documents' mentioned in the section. The word 'all' before the words 'accounts, statements, documents, evidence or affidavits given', gives comprehensive meaning to these words, and the marginal words of the section - 'Disclosure of information by a public servant' - are indicative of the fact that the information by a public servant relating to proceedings under the Act is prohibited. It is the prohibition of the publication for the protection of the assesses against their financial matters. Therefore, if it is concluded that documents, items Nos. 2 to 4, are not covered by section 80 of the Estate Duty Act, the very purport and intent of the section will be frustrated, because, it would amount to disclosure of the financial matters of the assessee, which is intended to be safeguarded by the provisions of section 80 of the Estate Duty Act,. Therefore, I think items Nos. 2 to 4 are covered by section 80 of the Estate Duty Act. There were some arguments at the bar to the effect that the provisions of the old section 80 of the Estate Duty Act are illustrative and not exhaustive. But having come to the conclusion that the documents, items Nos. 2 to 4, covered by section 80 of the Estate Duty Act, it is not necessary to determine or to consider that contention and I have not considered the same. Before concluding this order, I should mention here that there appears to be considerable strength in the argument of the learned advocate for the respondent that the Finance Act of 1964 is a piece of policy legislation, and therefore the contents in the replaced section may be taken into consideration, and, since the provision contained in the old section 80 of the Estate Duty Act has been removed by the new section, the court may resort to the provision of the new section. It is not disputed that the embargo contained in the old section 80 of the Estate Duty Act has been removed by the new section. That being so, there is no prohibition on the part of the court to summon the document, under the replaced section. The respondent is entitled to make an application if he chooses to do so in that regard in the court below.

7. In the result, the order of the lower court is set aside and the petition is allowed. I give no order as to costs.

8. Petition allowed.


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