1. The petitioner, an accountable person, seeks this court to quash the order of the Central Board of Direct Taxes, New Delhi, in its F.No. 313/12/73-Ed dated February 6, 1974, and to direct the Central Board of Direct Taxes to accept his offer to transfer agricultural lands detailed in his petition dated February 17, 1973, in accordance with the provisions of Section 52 of the Estate Duty Act, 1953.
2. The facts, which are not only not in dispute but lie in a short compass, may be stated : The petitioner's father, one Challa Venkatarami Reddy, died on November 2, 1969, leaving behind him a considerable estate consisting of movable and immovable properties, which is liable to estate duty as per the provisions of the Estate Duty Act, 1953 (hereinafter called 'the Act'). The petitioner, who is the accountable person under the Act, filed a statement of account declaring the value of the estate of his deceased father. The Assistant Controller of Estate Duty, after due and proper enquiry, passed an order of assessment on January 27, 1973, assessing the total value of the estate of late Venkatarami Reddy at Rs. 7,77,569 which included the value of agricultural lands worth Rs. 4,17,695 and other immovable properties valued at Rs. 1,03,250 and levied an estate duty of Rs. 1,54,971.18 After adding interest payable under Section 70(2) of the Act read with rule 42 of the Estate Duty Rules, 1953 (hereinafter called 'the rules'), a total demand of Rs. 1,53,362.25 has been raised by the Assistant Controller of Estate Duty. After deducting an amount of Rs. 67,298.50 paid towards provisional estate duty, the balance demand outstanding amounted to Rs. 96,067.25 On February 17, 1973, the petitioner submitted an application under Section 52 of the Act to the Secretary, Ministry of Finance, Government of India, New Delhi, offering Ac. 76-44 cents of agricultural lands situate in different villages in the districts of Kurnool and Mahboobnagar and whose value has been adopted in the estate duty assessment at Rs. 99,132 for acceptance towards the balance of estate duty due and payable by him. In the meanwhile, the total value of the deceased's estate was reduced by the appellate authority from Rs. 7,77,569 to Rs. 7,35,504 on the basis of which a fresh demand for the estate duty payable along with interest has been raised. We need not specifically indicate the actual arrears of duty as it is not material for the purpose of this application. The Central Board of Direct Taxes, the 1st respondent herein, on a consideration of the facts and circumstances, regretted their inability to accept the offer of the petitioner under Section 52(1) of the Act and informed him accordingly by its communication dated February 6, 1974. Hence, this writ petition.
3. The sum and substance of the contentions of the learned counsel Sri P.A. Chowdari for the petitioner is three-fold :
(1) Section 52 of the Act which empowers the Central Government to accept the offer of any property passing on the death of the deceased, towards the whole or any part of the estate duty, is mandatory as the Central Government is bound and obliged to accept the offer but has no discretion to reject the same.
(2) The impugned order is not a speaking order and the reasons assigned in the counter-affidavit for rejection of the petitioner's application under Section 52 of the Act cannot be looked into for testing the validity of the order.
(3) The provisions of Section 52 have been enacted to alleviate the difficulty or hardship caused or created to accountable persons who are unable to dispose of property, by providing for an additional mode of payment of estate duty besides the modes of payment enumerated in Rule 18 of the Rules, and, therefore, the reasons assigned in the counter-affidavit in support of the Government's conclusion are untenable and unjustified. This claim of the petitioner is resisted by the learned standing counsel for income-tax department, Sri P. Rama Rao, contending, inter alia, that Section 52 is not only not mandatory but clothes the Central Government with absolute power and discretion either to accept or reject the offer made by an accountable person and the exercise of that power in one way or the other is not justiciable and in any event the respondents are justified in rejecting the offer made by the petitioner herein and his very title to the agricultural lands offered in the application is in a nebulous state in view of the statutory provisions of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, whereunder the State of Andhra Pradesh is declared to be the owner of all agricultural lands in excess of the ceiling limit and the prohibition imposed on alienations of agricultural lands by landholders like the petitioner herein, and the absence of any Governmental establishment or machinery to maintain and manage agricultural lands in this State. The petitioner's counsel replied that there is nothing like unbridled absolute discretion not reviewable by courts in a socialistic democratic country like ours.
4. Upon the respective contentions advanced on behalf of the contending parties, the following two questions arise for decision.
'(1) Whether the provisions of Section 52 of the Act are mandatory and no discretion to reject the offer made by an accountable person is left to the Central Government as contended by the petitioner, or the Central Government is clothed or invested with absolute power and discretion either to accept or reject the offer as urged by the respondents?
(2) Whether or not, on the facts and in the circumstances of this case, the Central Board of Direct Taxes is justified in refusing to accept the offer made by the petitioner-accountable person under Section 52 of the Act,, or the impugned order is liable to be quashed?'
5. We shall first take up the question relating to the scope, meaning and application of the provisions of Sub-section (1) of Section 52 of the Act, which reads as follows :
'52. (1) The Central Government may, on an application of the person accountable for estate duty, accept in satisfaction of the whole or any part of such duty any property passing on the death of the deceased at such price as may be agreed upon between the Central Government and that person, and thereupon such person shall deliver possession of the property to such authority as may be specified by that Government in this behalf.'
Sub-section (2) to Section 52 is not material for the present controversy as it comes into play on the delivery of possession of the property to the concerned authority under Sub-section (1) thereof. Hence, it has no relevance or application for determining the scope and meaning of the provisions of Section 52(1). Nor have the provisions of Sub-section (3) to Section 52 any bearing to provide a clue for the decision of the point at issue as it deals with a case where the price referred to in Sub-section (1) exceeds the aggregate of the amounts due under the Act in respect of the estate of the deceased and indicates the mode of application of the excess amount towards the payment of any tax, penalty, interest or other amount. Hence, Sub-sections (2) and (3) need not detain us any longer. Reverting to Section 52(1), it must be said that it is in Part VII of the Act, which provides for the collection of duty. Section 51 says that estate duty may be collected by such means and in such manner as the Central Board of Direct Taxes may prescribe. The Central Board of Direct Taxes has promulgated certain rules providing for the method and manner of collection of estate duty. Those rules are not only statutory but provide guidelines for the departmental authorities in the collection of estate duty.
Section 52(1) may conveniently be divided into two parts. The first part relates to the factum of application by an accountable person to the Central Government offering any property passing on the death of the deceased for acceptance towards the whole or any part of estate duty due and payable by him and the exercise of the power vested thereunder by the Central Government either to accept or reject the offer so made by the concerned accountable person. It is pertinent to notice that the accountable person is obliged to offer under this provision only such 'property passing on the death of the deceased' but not any other property possessed or owned by him. The offer also must emanate from the accountable person who is due and liable to pay estate duty to the Government and such offer must be towards the arrears of estate duty. The Central Government is not invested with suo motu power to accept any property in satisfaction of the whole or any part of the estate duty due and payable by an accountable person but it has to step in and move in the matter only on the accountable person initiating the proposal in writing offering any property passing on the death of the deceased towards the estate duty due and payable by him. On the filing of an application by the accountable person, the Central Government 'may ... accept in satisfaction of the whole or any part of such duty', the property so offered, provided the price of the same has been agreed upon between both the sides. The sovereign Parliament invested the power to accept the offer of an accountable person on an application made under Section 52(1), only with the Central Government and none else. The condition precedent for acceptance by the Central Government of the property so offered towards the whole or any part of the estate duty is an agreement between the parties with regard to its price. Where there is no agreement between the Central Government and the accountable person in the fixation of the proper price of the property, the deal must be held to have failed. In case of an agreement between the parties relating to the price of the property and the acceptance by the Central Government of the offer made by the accountable person, the latter part of that sub-section which provides for the delivery of possession of such property shall come into play. The use of the words 'and thereupon' in Section 52(1) supports the aforesaid view. After the agreement with regard to the price and the acceptance of the offer by the Central Government a statutory duty and obligation is cast on the accountable person to deliver possession of the property to such authority as may be specified by the Central Government in that behalf. The second part of Section 52(1) would come into operation only after a successful agreement with regard to the price of the property offered and the acceptance of the offer by the Central Government, but not otherwise. Hence, the second part of Sub-section (1) of Section 52 does not throw much light to construe the nature and character of the power vested in the Central Government under the first part thereof, except for the use of the word 'shall' pertaining to delivery of possession, the impact of which we shall advert to a little latter.
6. Reverting to the first part of Sub-section (1) of Section 52, we shall consider the nature and character of the power vested in the Central Government. Much stress is laid by either side on the use of the word 'may' therein. According to Sri P.A. Chowdary, the word 'may' must be read as 'shall and must' and a statutory duty and obligation is cast on the Central Government to invariably accept the offer made by an accountable person. Sri P. Rama Rao asserted that the word 'may' must be meant as permissive and thereby investing the Central Government with an absolute and unbridled power and discretion either to accept or reject the offer so made by the accountable person. In order to appreciate the scope of the respective contentions of the parties, we may notice a few passages in the text books of learned authors, which elucidate the expressions 'may', 'must' and 'shall'. Maxwell on the Interpretation of Statutes (12th edition, page 234) says :
'In ordinary usage, 'may' is permissive and 'must' is imperative, and, in accordance with such usage, the word 'may' in a statute will not generally be held to be mandatory. In some cases, however, it has been held that expressions such as ' may ' or 'shall have power' or 'shall be lawful' have--to say the least--a compulsory force, and so their meaning has been modified by judicial exposition.'
7. Crawford on Statutory Construction and Interpretation of Laws (1940 edition, pages 519 to 522) states :
'Mandatory and directory are permissive words.
Ordinarily, the words 'shall' and 'must' are mandatory, and the word 'may ' is directory, although they are often used interchangeably in legislation. This use without regard to their literal meaning generally makes it necessary for the courts to resort to construction in order to discover the real intention of the legislature. Nevertheless, it will always be presumed by the court that the legislature intended to use the words in their usual and natural meaning. If such a meaning, however, leads to absurdity, or great inconvenience or for some other reason is clearly contrary to the obvious intention of the legislature, then words which ordinarily are mandatory in their nature will be construed as directory or vice versa. In other words, if the language of the statute, considered as a whole and with due regard to its nature and object, reveals that the legislature intended the words ' shall' and 'must' to be directory, they should be given that meaning. Similarly, under the same circumstances, the word ' may ' should be given a mandatory meaning, especially where the statute concerns the rights and interests of the public, or where third persons have claim de jure that a power shall be exercised or whenever something is directed to be done for the sake of justice or the public good, or is necessary to sustain the statute's constitutionality.........
While the words 'shall', 'must' and 'may' are the ones generally involved in determining whether a statute is mandatory or merely permissive, there are other words and expressions which create the same problem, and to which the same principles are equally applicable.' The aforesaid principles laid down by the learned authors, Maxwell and Crawford, indicate that the words 'may', 'shall' and 'must' in any statute must be interpreted in the context and the setting in which they are used and they should be construed so as to advance the purpose and object of the statutory provision but not to defeat the same. The words 'may', 'shall' and 'must' need not be given their literal meaning notwithstanding the context and the setting in which they are used and the purpose and object of the statutory provision wherein they are used. As stated by Crawford (at pages 529 and 531): 'Statutes pertaining to official action.--As a general rule, a statute which regulates the manner in which public officials shall exercise the power vested in them, will be construed as directory rather than mandatory, especially where such regulation pertains to uniformity, order, and convenience and neither public nor private rights will be injured or impaired thereby...... Whether a statutory requirement which relates to official action shall be considered mandatory or permissive, depends upon the effect the suggested construction has upon public and private rights. If the requirements of the statute must be regarded as mandatory in order to promote justice, it should be so construed, and if a mandatory construction operates mischievously, then the statute should be given a permissible construction, for in construing a statute it is not reasonable to presume that the legislature intended to violate a settled principle of natural justice or to destroy a vested right or to enact a mischievous law.'
8. In the application of the principles laid down by the learned authors, we have no hesitation to hold that the word 'may' used in Sub-section (1) of Section 52 cannot be interpreted or construed as 'shall and must' and, consequently, the power vested in the Central Government thereunder is only directory but not mandatory. It cannot be said that Parliament has used the word 'may' without adequate reason or sufficient justification. The sovereign Parliament, in its wisdom, has advisedly used the expression 'may' thereby empowering the Central Government in appropriate cases to exercise its discretion and accept the offer of property by an accountable person in satisfaction of the whole or any part of the estate duty due and payable by him. We must, therefore, construe the word 'may' as permissive and directory but not as 'shall and must' and mandatory. If the sovereign Parliament really intended ro make it invariably obligatory on the part of the Central Government to accept the offer by every accountable person irrespective of the facts and circumstances, nothing prevented it from using the word 'shall' or 'must' instead of 'may'. That apart, such intendment cannot be attributed to Parliament nor can it be inferred from the provisions of Section 52 and the scheme of the Act for reasons more than one. If every accountable person resorts to the provisions of Section 52(1) compelling the Central Government to accept offers of various kinds of properties situate in different parts of the country, anomalous unworkable and difficult situations and problems would be created for the Government and the administration. The Central Government, in such an event, has to prescribe the procedure and appoint and maintain adequate staff for the maintenance and management of such properties in various parts of the country. It is also pertinent to notice the use of the word 'shall' in the second part of this provision pertaining to the delivery of possession of the property whereas the legislature thought fit and proper to use the word 'may' in the first part. As pointed out earlier, it is not only obligatory but imperative on the part of the accountable person to deliver possession of the property which has been accepted by the Central Government towards payment of estate duty and there is no choice or discretion left in that person to refuse to hand over possession of the property to the person or authority specified or indicated by the Central Government. That is not so in the case of the exercise of power by the Central Government under the first part of this provision. As ruled by the Judicial Committee in Montreal Street Railway Company v. Normandin  AC 170 for the determination of the question whether a particular provision in a statute is directory or imperative 'no general rule can be laid down, and that in every case the object of the statute must be looked at...... When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done.' It is profitable to refer to a very salutary test laid down by the learned judge, Ray C.J., in In re Presidential Election, AIR 1974 SC 1682 for the purpose of determining the question whether a particular provision is mandatory or directory :
'In determining the question whether a provision is mandatory or directory, the subject-matter, the importance of the provision, the relation of that provision to the general object intended to be secured by the Act will decide whether the provision is directory or mandatory. It is the duty of the courts to get at the real intention of the legislature by carefully attending to the whole scope of the provision to be construed. 'The key to the opening of every law is the reason and spirit of the law, it is the animus imponentis, the intention of the law maker expressed in the law itself, taken as a whole.' (See Brett v. Brett  3 Addams 210).' Applying the aforesaid guideline enunciated by the Supreme Court, we have to see the necessity and importance of Section 52 and its relation to the general purpose and object intended to be secured and the real intention of the sovereign Parliament as well the reason and spirit of the law, in order to arrive at a correct conclusion. Section 52, prior to its amendment, empowered the Government to accept only Government securities towards the payment of estate duty. The present section was enacted by Act No. 31 of 1964, enlarging the power of the Central Government to accept all kinds of property including the Government securities towards the duty due and payable by accountable persons. In other words, the amended section provides for the payment of estate duty by an accountable person by transfer of any kind of property passing on the death of the deceased. The Statement of Objects and Reasons to the Bill which introduced the amended Section 52 reads: 'The object of this bill is to amend the Income-tax Act, 1961, the Estate Duty Act, 1953, and the Expenditure-tax Act, 1957, with a view to remove unintended hardship and providing relief to assessess in certain cases.'
9. As pointed out earlier, the power and competency in accepting Government securities alone towards estate duty has now been enlarged so as to take in all kinds of property. The sovereign Parliament, in its wisdom and experience, must have visualised cases where a deceased might have left only property other than cash and the accountable person finds it difficult to raise funds to meet the estate duty demand in the event of his inability to dispose of such property for proper and adequate price. In other words, there may be genuine cases where accountable persons would find it very difficult or practically impossible to raise sufficient money for payment of the whole or balance of the estate duty in any way except by offering the property under Section 52(1) to the Cental Government for its acceptance towards estate duty. This hardship was an unintended one and to provide relief to accountable persons in appropriate cases, this provision has been enacted. The prime intendment and object of the sovereign Parliament in enacting the amended Section 52 in its present from appears to be only to provide in appropriate cases for the transfer at the instance of the accountable person, of any property passing on the death of the deceased to the Central Government towards the estate duty due and payable, as one of the modes of recovery which was but for this provision not permissible. To put it differently, the scope of Section 52 which was limited to Government securities alone has now been enlarged to all kinds of property passing on the death of the deceased. The modes of collection provided in Rule 18 of the rules as well as those indicated in Sections 70, 71 and 73 when read with the relevant provisions of the Indian Income-tax Act and the Revenue Recovery Act applicable for the recovery of estate duty and penalty due and payable, do not include the one indicated in Section 52(1). It is well-settled that the modes of recovery or collection of public revenue provided for by the legislature in a taxing statute are only supplementary and complementary to each other but not in conflict with or contrary to each other. The provisions pertaining to the modes of recovery of public revenue under a taxing statute must be interpreted and construed invariably in a manner consistent with the object and purpose of the very statute but not in any way defeating its object and intendment.
10. A careful consideration of the totality or the cumulative effect of the facts such as the subject-matter, the importance of this amended section and its nexus with, or relation to, the general object and purpose sought to be secured leaves no doubt in our minds that the prime intendment and object of the sovereign Parliament in enacting this provision is to provide for a mode of recovery by transfer of a portion of the estate of the deceased to the Central Government in proper and appropriate cases and the expression 'may' used in Section 52(1) cannot be construed or read as 'shall' or 'must' and this provision is not mandatory but only directory. The Central Government cannot be compelled in each and every case to accept the offer of property made by an accountable person irrespective of the merits and, therefore, the Central Government cannot be invariably compelled to exercise the power vested in it under this provision which, in our opinion, is discretionary. That apart, even on a plain reading of the language of this section and on the application of the first principles, we have no hesitation to hold that the Central Government is invested only with discretionary power either to accept or reject the offer so made by an accountable person in a given case.
11. Before adverting to the submission of Sri P. Rama Rao, the learned standing counsel for the income-tax department, that Section 52(1) vests in the Central Government absolute discretion either to accept or reject the offer made by an accountable person irrespective of the facts of the case and the mode or manner of exercise of its discretion is not justiciable and the discretion has to be exercised on subjective satisfaction of the concerned authority, it is not only profitable but necessary to examine the scope and meaning of the expression 'discretion'. As observed by Lord Halsbury L.C., speaking for the Judicial Committee, in Susannah Sharp v. Wakefield  AC 173:
' ......when it is said that something is to be done within the discretion of the authorities that that something is to be done according to the rules of reason and justice, not according to private opinion;......according to law, and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man competent to the discharge of his office ought to confine himself.'
12. The discretion conferred by a statute or a statutory rule must invariably be exercised by the authority who is called upon to exercise it. The use of the word 'may' in Section 52(1) of the Act would not only not absolve the Central Government of, but, on the other hand, charges it with, a duty in every case where an offer has been made to apply its mind and examine the merits and thereby exercise the statutory discretion vested in it reasonably and fairly in one way or the other notwithstanding the fact that this provision does not indicate the manner and method of the exercise of the discretion vested in the Central Government. To put it differently, the decision of the authority on whom the discretionary power is conferred must be based upon a weighing of considerations and factors material and pertinent to the object of administration. In Roberts v. Hopwood  AC 578 Lord Wrenbury ruled :
'A discretion does not empower a man to do what he likes merely because he is minded to do so......he must in the exercise of his discretion do not what he likes but what he ought. In other words, he must, by use of this reason, ascertain and follow the course which reason directs. He must act reasonably.'
13. To the same effect is the following observation of Lord Macnaghten in Mayor &c.; of Westminster v. London and North Western Railway Co.  AC 426
'It is well-settled that a public body invested with statutory powers ......must take care not to exceed or abuse its powers. It must keep within the limits of the authority committed to it. It must act in good faith. And it must act reasonably.'
14. The statutory discretion, therefore, must be invariably and truly exercised and it is not open to the concerned authority to reject outright to consider the case without applying its mind to the merits of the case. The exercise of statutory discretion must be fair, reasonable, proper, objective and in accord with the rules of natural justice. Where the rights of the citizens are involved, the statutory discretion must be exercised objectively, in other words, the satisfaction of the concerned authority is not subjective. Nor can it be said that it is open to such authority to arbitrarily or capriciously refuse to exercise its discretion. The exercise of the discretion should be real and honest but should not be illusory, dishonest or for corrupt, mala fide or ulterior purpose or object. The Central Government, therefore, is charged with a duty to consider and decide the application under Section 52 on merits, on a fair and proper appraisal of the facts and circumstances. It must form an objective, bona fide and honest opinion in each case in the exercise of its statutory discretion. It is open to the Central Government to refuse to accept the offer made by an accountable person if it is not in the interests of revenue, or not practicable or workable and involves considerable difficulty and hardship to administer and maintain the property sought to be offered. There is no rule of thumb having universal application to all the cases in determining this question but each case must be decided on its facts. To the extent of requiring the Central Government to examine each application and decide the desirability to accept or reject the application, there is no option or discretion left to the Central Government. However, it is within the discretion of the Central Government to reject the offer made under this provision for valid and justifiable reasons. This refusal also cannot be made arbitrarily or according to the whim, and fancy of the Central Government. The Central Government would be within its limits if it does not accept the offer of an accountable person under Section 52 where it honestly and bona fide thinks that by resorting to another mode of recovery permissible to the State the arrears of estate duty could be easily recovered or realised. It cannot be said that this provision is enacted only to benefit the accountable persons and to alleviate their hardships only and the Central Government must invariably accept the offer of every accountable person irrespective of the consequences or the circumstances of each case. We do not find any basis or warrant for such an assumption from the very provisions of Section 52 when read with the scheme of the Act and the setting in which that section has been placed.
15. Reverting to the plea of absolute and unfettered discretion being conferred on the Central Government advanced by Sri P. Rama Rao, the standing counsel for the income-tax department, we must express our inability to accept the same. In our considered opinion, it is not open to the Central Government to plead that in the exercise of this power, it has absolute and uncontrolled discretion exercisable according to its whims and fancies and the decision arrived at by it is not reviewable by a court of law. On a close reading of the provisions of Section 52(1), which is a self-contained code, we cannot say that absolute and unfettered discretion immune from judicial reviewability is vested in the Central Government. We may, in this context, notice that the learned judge, Rand J., in Roncarelli v. Duplessis  SCR 121 said while dealing with the scope of the discretionary power of the Quebec Liquor Commissioner to cancel a liquor licence:
'In public regulation of this sort there is no such thing as absolute and untramelled 'discretion', that is, that action can be taken on any ground or for any reason that can be suggested to the mind of the administrator ; no legislative Act can, without express language, be taken to contemplate an unlimited arbitrary power exercisable for any purpose, however capricious or irrelevant, regardless of the nature or purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied as exceptions. 'Discretion' necessarily implies good faith in discharging public duty; there is always a perspective within which a statute is intended to operate; and any clear departure from its line or objects is just as objectionable as fraud or corruption.'
16. Though there is a catena of cases on this aspect, suffice it to refer to a recent decision of the Supreme Court in Khudiram Das v. State of West Bengal : 2SCR832 , wherein the scope and application of the provisions of Section 3 of the Maintenance of Internal Security Act, 1971, fell for consideration. The learned judge, Bhagwati J., speaking for the court, while rejecting the plea advanced on behalf of the State that the subjective satisfaction of the detaining authority is wholly immune from judicial review, ruled thus :
'......there is nothing like unfettered discretion immune from judicial reviewability. The truth is that in a Government under law, there can be no such thing as unreviewable discretion. 'Law has reached its finest moments', said Justice Douglas, ' when it has freed man from the unlimited discretion of some ruler, some...... official, some bureaucrat......
Absolute discretion is a ruthless master. It is more destructive of freedom than any of man's other inventions'. United States v. Wunderlich  342 US 98That is why the courts have devised various methods of judicial control so that power in the hands of an individual officer or authority is not misused or abused or exercised arbitrarily or without any justifiable grounds.'
17. The aforesaid pronouncements are authorities for the proposition that there is nothing like absolute, untrammelled and unfettered discretion being conferred on an authority functioning under a statute or a statutory rule, which is immune from judicial reviewability, and statutory discretion invariably and necessarily implies good faith in the discharge of public duties and it must be exercised properly and objectively but not capriciously, arbitrarily or maliciously. We are, therefore, unable to agree with Sri P.A. Chowdary when he contends that Section 52(1) is mandatory and imperative and it does not leave any discretion with the Central Government to refuse the offer made by an accountable person. Nor are we prepared to accede to the extreme stand of Sri P. Rama Rao that the Central Government is having an absolute and unfettered discretion exer-cisable as it likes, which is immune from judicial reviewability. We prefer to accept the golden mean of the two extreme propositions.
18. The power vested in the Central Government under Section 52(1) is of quasi-judicial nature and, therefore, it must pass speaking orders assigning reasons for its conclusions while disposing of applications made thereunder. Even assuming that the Central Government acts as an administrative tribunal under this provision, it has to give valid and justifiable grounds for its decision as it involves the rights of a citizen, vide M/s. Travancore Rayons Ltd. v. Union of India : 1978(2)ELT378(SC) and Mahabir Prasad v. State of U.P. : 1SCR201 . As ruled by the learned judge, Hegde J., in A.K. Kraipak v. Union of India : 1SCR457 , 'the dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated'. The learned judge proceeded to observe ;
'Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rales of natural justice. The validity of that limitation is not questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time, are now being considered as quasi-judicial in-character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far-reaching effect than a decision in a quasi-judicial enquiry.'
19. We shall presently examine the decision of a Division Bench of the Allahabad High Court in Prayag Dass Agarwal v. Asst. Controller of Estate Duty : 91ITR160(All) on which strong reliance has been placed by Shri P.A. Chowdary in support of his contention that Section 52(1) is mandatory. True, as submitted by the counsel, the learned judges of the Allahabad High Court were of the view that the word ' may ' used in Section 52(1) must be read as 'shall' and 'the Government is bound to accept the property in satisfaction of estate duty provided there is an agreement between the Government and the assessee with regard to its price', rejecting the contention advanced on behalf of the department that Section 52 only enables the Central Government to accept property in satisfaction of the demand for estate duty and it does not cast any statutory duty or obligation to invariably accept the property as and when offered. The learned judges opined that this provision was introduced to alleviate the hardship caused or created to accountable persons who are unable to dispose of property or may not obtain adequate price and is intended to benefit them and such benefit cannot be taken away by the Government by arbitrarily refusing to accept offers of property. Another reason which found favour with the learned judges is that Section 52 occurring in Chapter VII, which deals with collection of estate duty, provides an additional mode of payment of estate duty besides those enumerated in Rule 18. With great respect to the learned judges we are not persuaded to agree with the contrary view expressed by them for the reasons indicated by us earlier. The Estate Duty Act is a self-contained code. As pointed out earlier, Rule 18 enumerates four methods of payment of estate duty, viz., (i) by delivery of cheque on a scheduled bank, (ii) by delivery of bank draft issued by scheduled bank, (iii) by depositing the amount of the duty to the credit of the Central Government in a Government treasury, and (iv) by adjustment of any refund of income-tax, excess profits tax, etc. Section 70 authorises the Controller of Estate Duty to allow any postponement of payment of estate duty whereas the Central Board of Direct Taxes is competent under Section 71 to remit any estate duty and interest outstanding after 20 years from the death of the person. Section 73 provides for the issuance of demand notices and recovery of the estate duty and penalty. Sub-section (5) of Section 73 makes certain provisions of the Income-tax Act relevant for the recovery of the arrears of income-tax, applicable for recovery of estate duty and penalty under the Act (i.e., Estate Duty Act). The provisions of the Revenue Recovery Act also can be resorted to. Section 74 creates a statutory first charge on the estate passing on the death of the deceased and safeguards the interests of revenue pertaining to the estate duty. A certificate can be granted by the Controller under Section 77 or by the Central Board of Direct Taxes under Section 69 as proof of discharge from estate duty in certain cases. Hence, it cannot be said that the modes of payment specified in Rule 18 are full and complete and it is only Rule 18 that deals with the recovery of estate duty and penalty. The four methods of recovery indicated in Rule 18 are in addition to the various modes of recovery provided under the Income-tax Act and made applicable for recovery of estate duty under the Act by virtue of the provisions of Section 73(5) and other provisions of the Act. Hence, we express our respectful dissent to the contrary view taken by the Allahabad High Court in construing the scope and impact of the provisions of Section 52.
20. We may add that a Division Bench of this court in W.P. No. 2041/71 dated 14-11-1972 [Smt. R.D. Chand v. Central Government : 108ITR717(AP) ] opined that Section 52 of the Act confers a discretion upon the Central Government to take a property in lieu of arrears of estate duty, though, as stated by Mr. Chowdary, no reasons have been assigned in support of their opinion.
21. For all the reasons stated, our answer to question No. 1 is that the provisions of Section 52(1) are not mandatory but only directory, that the Central Government is not clothed or invested with absolute power and discretion either to accept or reject the offer of property by an accountable person which is immune from judicial reviewability, but the discretion vested in the Central Government either to accept or reject the offer of property by an accountable person is only a statutory discretion and it has to exercise the same objectively, properly, honestly, fairly and in accord with the rules of natural justice and decide every application on its merits and on a fair and proper appraisal of the facts and circumstances.
22. We shall now take up question No. 2. Sri P.A. Chowdary's contention that the impugned order is liable to be quashed is based on two grounds, i.e., (1) that it has not been passed by the Central Government as required by Section 52(1) of the Act; and (2) that it is laconic and does not contain any reasons for the refusal to accept the petitioner's offer of property. True, as submitted by the counsel, the impugned order has been made by the Under Secretary to Central Board of Direct Taxes. Section 52(1), no doubt, empowers only the Central Government but not the Under Secretary of the Central Board of Direct Taxes to dispose of the application made by an accountable person offering property. The Central Board of Direct Taxes has been specified under Section 4(1) of the Act as the highest authority for purposes of the Act. Under Section 4(2), the Central Government is competent to appoint as many Controllers of Estate Duty as it thinks fit and they shall be subject to the control of the Central Board of Direct Taxes and perform their functions as assigned to them by the Board. The Central Board of Direct Taxes is empowered under the 1st proviso to Section 4 to make rules for the functioning of the various officers under the Act. The Central Board of Direct Taxes is only a department and part and parcel of the Central Government. The very impugned order indicates that it emanated from the 'Government of India, Central Board of Direct Taxes'. On a consideration of the provisions of the Act providing for the functioning of the authorities and on a perusal of the impugned order, we are satisfied that it has been passed by the Government of India through the the Central Board of Direct Taxes and it is not incompetent.
23. We shall now advert to the submission of Sri P.A. Chowdary that the impugned order is laconic and it does not indicate any reasons for the conclusion arrived at by the Central Board of Direct Taxes. No doubt, the impugned order does not indicate the reasons or grounds for the rejection of the application of the petitioner under Section 52(1) of the Act. However, the learned standing counsel for the income-tax department, Sri P. Rama Rao, draws our attention to the reasons and grounds assigned in the counter-affidavit filed on behalf of the respondents and those contained in the original file. Pursuant to the rule nisi issued by this court, the respondents have placed before this court the original file containing the application of the petitioner-accountable person, the office note and the final order passed by the Central Board of Direct Taxes. The counter-affidavit discloses that the offer of agricultural lands of Ac. 74-04 cents in lieu of balance of estate duty was not accepted as the. Government of Andhra Pradesh prohibited alienation of agricultural lands in excess of prescribed limits with effect from May 2,1972. and later, the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, was also passed and the case of the accountable person is hit by, and his excess holdings vest in the State under the provisions of the latter Act, and, therefore, the applicant has no right to insist upon the acceptance of his offer, good, bad or indifferent. On a perusal of the original file, we cannot but hold that the agricultural lands sought to be offered by the petitioner might in all probability or would have vested in the State Government by virtue of the provisions of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, and the petitioner is also prohibited from either offering or transferring those lands to the Central Government. The Central Government did not reject the petitioner's application without considering it on merits. Objective and dispassionate enquiry has been made by the Central Government in this regard. In fact, a report has been called for from the Controller of Estate Duty, Hyderabad. In the remarks submitted by the Controller of Estate Duty, Hyderabad, to the Central Board of Direct Taxes, it has been specifically stated that the lands in question are hit by the provisions of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973. and hence it is not possible to accept them in lieu of the estate duty. Further, it was also pointed out that there is no machinery provided by the Central Government as yet to administer such properties. The fact that the lands in question are hit by the Land Reforms Act referred to above is not in dispute as evidenced from the following allegations of the petitioner himself in his writ petition:
'Because of the A. P. Land Reforms Act, 1972, the petitioner has been unable to raise any loans for discharging the aforesaid duty liability. The petitioner could not effect the sales of the agricultural properties as the same are forbidden under the Land Reforms Act.'
24. In view of the admitted facts and circumstances, we are in entire agreement with the view taken by the Central Government that it is not possi-able to accept the offer made by the petitioner due to the Government of Andhra Pradesh prohibiting alienation of agricultural lands, besides there being no machinery provided as yet for administering such properties in this State. Both these reasons which are also found in the office note as well as the report of the Controller of Estate Duty are valid and justified. The final order communicated by the Central Government to the petitioner cannot and should not be considered or examined in isolation. The crux of the matter is that the concerned authority while passing a quasi-judicial order or an administrative order involving the rights of a citizen, must be found to have applied its mind to the relevant facts and circumstances and exercised the discretion vested in it. On the facts and in the circumstances, we find that the authority which passed the impugned order has applied its mind to all the relevant facts and circumstances and exercised its discretion to refuse to accept the offer of property made by the petitioner herein. In our considered opinion, the grounds indicated in the counter-affidavit as well as the reasons assigned by the concerned authorities in the original file maintained in due course of business can be looked into in order to ascertain whether the concerned statutory authority has or has not applied its mind to determine the question and if those reasons are proper and valid, a quasi-judicial order, though not speaking but only laconic, should not be struck down in a writ proceeding merely because formal reasons are not recorded in the very order itself. This view of ours gains support from the decision of the Calcutta High Court in Hari Prasad Singh v. Commissioner of Income-tax : AIR1972Cal27 , wherein it fell for consideration whether an order of removal of an Income-tax Officer, which did not indicate the reasons, was or was not liable to be quashed in a writ proceeding. The court, after stating that the quasi-judicial authorities should indicate in the orders the reasons for making the same, observed thus :
'...if the reasons can be found out either from the order itself or from other documents it would not be proper to strike down the order merely because the formal reasons had not been recorded in the order itself.'
25. We may add that a Division Bench of this court, in Writ Petition No. 2041/ 71, dated 14-11-1972 [Stnt. R.D. Chand v. Central Government : 108ITR717(AP) ], refused to quash a similar order passed under Section 52 on the ground that reasons were given in the counter as to why the Central Government did not consider it advisable to take the land in lieu of arrears of estate duty. In a writ proceeding, this court would certainly be justified in refusing to interdict and exercise its extraordinary original civil jurisdiction unless real prejudice has been caused resulting in grave injustice or hardship to the citizen by the impugned order.
26. We shall now advert to the decision cited by the petitioner's counsel. The decision of the Supreme Court in Bhagat Raja v. Union of India : 3SCR302 is an authority for the proposition that the Central Government in the exercise of its powers of revision under Rule 55 of the Mineral Concession Rules, 1960, discharge functions which are quasi-judicial but not administrative. Strong reliance has been placed by Sri P.A. Chowdary on the following observations of the learned judge, Bose J., in Commissioner of Police, Bombay v. Gordhandas Bhanji : 1SCR135 :
'...public orders, publicly made, in exercise of a statutory authority, cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.'
27. Therein it fell for decision whether a particular communication sent by the Commissioner of Police, Bombay, could be construed as an order of cancellation of the permission to erect a cinema on a particular site. On the facts, it was held that it was not an order of cancellation by the Commissioner but only an intimation by him of an order passed and made by another authority, namely, the Government of Bombay. When an attempt was made before the court to show that that was really an order of cancellation made by the Commissioner on the basis of the affidavit sworn to by the Commissioner and filed into the court, the aforesaid observations have been made by the learned judge. Hence, that decision is distinguishable and the principle enunciated therein cannot be applied to the facts of the present case. The decision of the United States Supreme Court in Federal Trade Commission v. Sperry and Hutckinson Company US SCR 31 L Ed 2d 170 is cited for the proposition that the courts or counsel cannot substitute their discretion for that of an administrative agency and such attitude would be incompatible with the orderly functioning of the judicial review and the courts must not enter into the domain which the 'Congress has set aside exclusively for the administrative agency '. In Burlington Truck Lines v. United States US SCR 9 L Ed 2d 207 the court had to consider the scope of the power of the concerned authority while granting to a motor carrier a certificate of public convenience and necessity. At page 215, it was observed:
'Expert discretion is the life-blood of the administrative process, but 'unless we make the requirements for administrative action strict and demanding, expertise, the strength of modern government, can become a monster which rules with no practical limits on its discretion'.,....... The commission must exercise its discretion under Section 207(a) within the bounds expressed by the standard of 'public convenience and necessity'. And for the courts to determine whether the agency has done so, it must 'disclose the basis of its order' and 'give clear indication that it has exercised the discretion with which Congress has empowered it'.'
28. The decision of the Privy Council in Rex v. Nat Bell Liquors Ltd.  2 AC 128 relates to the procedure to be adopted in a writ of certiorari in the case of summary conviction by a magistrate for a non-indictable offence. Hence, the decisions relied upon by the counsel for the petitioner are not exactly in point but they only indicate that quasi-judicial authorities must indicate the grounds for their decision in the very orders made by them. We have already indicated that we agree with Sri P.A. Chowdary and that view has been settled by the highest court of our country and we have also expressed the view that the Central Government, while exercising its powers under Section 52 of the Act, must give proper and adequate reasons in support of its conclusion and the discretion vested in it is not absolute or unfettered. Hence, these cases need not detain us any longer.
29. We shall now consider the submission of the petitioner's counsel, Sri P.A. Chowdary, that the provisions of the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, would not bind the Central Government and under Article 246(3) of the Constitution, the Central law will prevail over the State law in case of conflict and the provisions of Section 52(1) and (2) of the Act can be given effect to, in spite of the said ceiling Act. No provision in the ceiling Act or any authoritative pronouncement has been brought to our notice in support of this plea. There is no question of any conflict between the Central law and the State law that requires a decision in the present case. The provisions of Article 246(3) of the Constitution do not come into play. It is not even the case of the respondents that Section 52 cannot be invoked in any case where agricultural lands are offered by an accountable person belonging to this State.
30. The reasons and grounds that weighed with the Central Government in not accepting the petitioner's offer of agricultural lands belonging to him towards the whole or any part of the estate duty due and payable by him, cannot be considered to be either extraneous or unreasonable but, in our considered view, they are not only practical, pragmatic, realistic and permissible but just, proper and valid. We do not find any illegal or perverse exercise of the jurisdiction vested in the Central Government. Nor can it be said that the Central Government has acted mala fide or in accordance with its whim and fancy or arbitrarily. Judged from any angle we are satisfied that there is no error of jurisdiction or illegality nor any principles of natural justice have been violated, justifying this court to interfere in this writ proceeding and quash the impugned order. We do not see any merit in this writ petition. For all the reasons stated, the question No. 2 is answered in the affirmative and against the petitioner.
31. In the result, the writ petition fails and is dismissed but without costs. Advocate's fee Rs. 250.
32. Before parting with the case, we must express our thanks to both the learned counsel for their able assistance to the court and record our appreciation of their lucid presentation of their respective view-points.