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Asst. Controller of Estate Duty, a Ward, and Others Vs. Ashok Singh. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberAppeal No. 348 of 1973 from order of single judge in Matter No. 417 of 1972, dated September 24, 197
Reported in[1980]124ITR587(Cal)
AppellantAsst. Controller of Estate Duty, "a" Ward, and Others
RespondentAshok Singh.
Cases ReferredConstitution. In Chiranjilal Chaudhari v. Union of India
Excerpt:
- .....of the deceased, ganga singh, in terms of s. 53 or s. 56 of the e.d. act, 1953, with the estate duty authorities. after attaining majority on the december 7, 1970, the petitioner also did not file any such account of properties with the e.d. authorities relating to the properties left by the said deceased, ganga singh, as he was unaware that such an account was required to be filed under the act within six months from the date of death of his father. thereafter, the petitioner filed an applicatiop for grant of a succession certificate in the city civil court at calcutta. on july 25, 1972, the learned chief judge by his order directed the petitioner to produce a certificate as required under s. 56(2) of the e.d. act and without which no grant of the said succession certificate.....
Judgment:

OF SINGLE JUDGE

AMIYA KUMAR MOOKERJI J. (24-9-73) - The petitioner is the karta of a joint Mitakshara Hindu family, consisting of himself and his brother. On February 6, 1957, the father of the petitioner, Ganga Singh, died intestate. At the time of death of his father, both the petitioner and his brother were minors. One Prannath Shegal, a maternal uncle of the petitioner, and his brother moved an application in the City Civil Court at Calcutta some time in March, 1967, for appointment of guardian of the minors and the said maternal uncle was appointed as guardian in August, 1968. Jamuna Singh, a paternal uncle of the minors, preferred an appeal in this court being appeal from Original Order No. 642 of 1968. A Division Bench of this court by its order dated September 7, 1970, disposed of the said appeal, holding, inter alia, that in the interest of the minors concerned, the appointment of Prannath Shegal would continue until December 9, 1970, when the elder of the said two minors, namely, the petitioner, would attain majority. It appears that the said guardian, Prannath Shegal, never filed an account of the properties of the deceased, Ganga Singh, in terms of s. 53 or s. 56 of the E.D. Act, 1953, with the estate duty authorities. After attaining majority on the December 7, 1970, the petitioner also did not file any such account of properties with the E.D. authorities relating to the properties left by the said deceased, Ganga Singh, as he was unaware that such an account was required to be filed under the Act within six months from the date of death of his father. Thereafter, the petitioner filed an applicatiop for grant of a succession certificate in the City Civil Court at Calcutta. On July 25, 1972, the learned Chief Judge by his order directed the petitioner to produce a certificate as required under s. 56(2) of the E.D. Act and without which no grant of the said succession certificate could be made. Accordingly, the petitioner was advised to file an account with the E.D. authorities regarding the estate of the said deceased. Ganga Singh, and in August, 1957, the petitioner filed an account of the properties left by the said deceased with the Asst. CED, showing therein the value of the estate approximately at Rs. 52,000. Thereupon, the petitioner received a notice issued under s. 58(2) of the E.D. Act, 1953, dated September 4, 1972, along with the questionnaire, by the respondent No. 1, the Asst. CED, A-Ward, whereby the said respondent No. 1 fixed the date of hearing of the matter on the September 19, 1972. On September 19, 1972, the petitioner appeared before the respondent No. 1 and contended that no proceeding could be initiated in view of s. 73A of the Act, inasmuch as five years had already expired from the date of death of the deceased and as such the respondent No. 1 had no power, authority and jurisdiction to initiate any proceeding under the E.D. Act, 1953, or to issue notice under s. 58(2) of the said Act or to issue any questionnaire thereunder and by doing the same the respondent No. 1 was proceeding entirely without jurisdiction. In spite of the said objections, the respondent No. 1 fixed the next date of hearing on the December 15, 1972. The petitioner being aggrieved by the said notice dated September 4, 1972, issued under s. 58(2) of the Act and the proceeding taken thereunder moved this court in an application under art. 226 of the Constitution and obtained the present rule and also an ad interim injunction restraining the respondent No. 1 from proceeding for the levy of any estate duty under the E.D. Act, 1953, until disposal of the rule.

It is contended by Mr. Deb, appearing on behalf of the petitioner, that in so far as the estate of late Ganga Singh is concerned, admittedly, no proceeding for estate duty has been commenced within the period of five years from the date of his death and no order for assessment has been made under s. 58 of the E.D. Act. In view of the provisions in s. 73A(a) of the said Act, no proceeding can be initiated in respect of the properties and estate of Ganga Singh, since deceased, under the said Act. The Asst. CED, respondent No. 1, is proceeding entirely without jurisdiction and in excess of jurisdiction and illegally assumed jurisdiction under the said Act by issuing the said notice under s. 58(2) of the Act and a questionnaire thereunder and threatening to pass an order under s. 58 of the said Act on the account submitted by the petitioner. Mr. Deb further contended that the only order which the respondent No. 1 could have passed was that, in view of the provisions of s. 73A(a) of the E.D. Act, 1953, no proceeding under the said Act could be commenced in respect of the estate of late Ganga Singh and, as such, no estate duty was payable by the petitioner. According to Mr. Deb, the said notice issued under s. 58(2) of the Act was illegal, invalid and without jurisdiction and should be quashed.

Mr. Sen appearing on behalf of the revenue raised two points. In the first place, he contended that in the present case no proceeding for the levy of estate duty was commenced by the Assistant Controller but the petitioner for the purpose of obtaining a certificate under s. 56(2) of the Act, voluntarily submitted a statement of account. Although the said account submitted by Mr. Sen was not filed within the time specified sub-s. (3) of s. 53 of the Act, none the less it should be as a valid statement and the Assistant Controller has got jurisdiction to issue a notice under s. 58 of the Act. How could the existence of a statement, Mr. Sen remarked, once it had been filed, be ignored; it was not a mere scrap of paper. In support of his contentions, Mr. Sen relied upon two decisions of the Supreme Court in CIT v. Ranchhoddas Karsondas and CIT v. Kulu Valley Transport Co. P. Ltd. [1970] ITR 518.

In CIT v. Ranchhoddas Karsondas , a return showing income below the taxable limit was submitted voluntarily in answer to the general notice under s. 22(1) of the Indian I.T. Act, 1922. It was held to be a valid return upon the view that a return in answer to the general notice under s. 22(1) and under s. 22(3) of the Indian I.T. Act could be filed at any time before assessment and for that there was no limit of time.

In Kulu Valley Transports case reported in , the assessee filed voluntary returns disclosing loss for the relevant assessment years. But the said returns were not filed within the same time specified in the general notice under s. 22(1) of the Act and the time had not been extended by the ITO and no notice had been served on the assessee under s. 22(2) of the Indian I.T. Act. The question arose whether the assessee could claim the benefits under s. 22(2A) of the Act as he did not comply with the provisions of that section. The Supreme Court held that s. 22(3) is merely a proviso to s. 22(1). Thus, a return submitted at any time before the assessment is made is a valid return.

In my opinion, none of the above decisions referred to by Mr. Sen would be of any assistance to solve the present point involved in the instant case. If the above principles are applied to the present case, let me examine what would be the result.

Under the E.D. Act, there is no provision for issuing a general notice as provided under the I.T. Act. The estate duty is payable on the value of the property which passes or is deemed to pass on the death of a person dying after October 15, 1953. Persons accountable have been enumerated in s. 53 of the Act. So, estate duty is payable on the incidence of a death. Assessments of income-tax under the provisions of the I.T. Act are quite different. Assuming that the voluntary return filed by the petitioner is not a mere scrap of paper, it is an appropriate account of the property in respect of which estate duty is payable upon the death of the deceased, but where the statute puts a total bar under cl. (a) of s. 73A of the Act, which reads as follows : 'No proceeding for the levy of any estate duty under this Act shall be commenced-(a) in the case of a first assessment, after the expiration of five years from the date of death of the deceased in respect of whose property estate duty became payable,' then, under what provisions of law that 'voluntary account' filed by the petitioner could be determined by the Controller when the very initiation of the proceeding is barred under the statute It is well settled that there cannot be any estoppel against the statute. If the Assistant Controller has got no inherent jurisdiction to initiate a proceeding for the levy of any estate duty after the expiration of five years from the date of death of the deceased, simply because a statement of account has been filed by a person accountable to pay estate duty under the Act, for the purpose of a certificate under s. 56(2), it does not confer any jurisdiction upon the Assistant Controller to start or initiate a proceeding under the Act by issuing a notice under s. 58, when the statute imposes a complete bar on the very initiation of any proceeding. In a fiscal statute, as observed by Lord Russel of Killowen :

'The subject is not taxable by inference or analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case.' [Duke of Westminster v. IRC [1935] 19 TC 490, 524 (HL)].

In Ram Narain v. State of Uttar Pradesh reported in , the Supreme Court made a note of caution against construing expressions used in one Act with references to their use in another Act. The Supreme Court observed that it is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act. The meanings of words and expressions used in an Act must take their colour from the context in which they appear. In the I.T. Act there are provisions of limitations for assessment and reassessment but there is no such provision similar to that of s. 73A(a) of the E.D. Act, which takes away the operation and application of the entire provisions of the said Act in the case of assessment of estate duty, after the expiration of five years from the date of death of the deceased in respect of whose property estate duty became payable.

The words 'assessment' and 'procedure for assessment' in the I.T. Act had been interpreted by the Supreme Court having regard to the context in which the expressions were used and the interpretation given by the Supreme Court does not hold good for interpreting the same or similar words occurring in a different statute. The same words or phrases used in different Acts need not, therefore, necessarily carry the same meaning. The meaning that has to be given depends upon the context in which it is referred to.

So, in my opinion, the decisions of the two cases referred to by Mr. Sen have got no bearing upon the point that is required to be decided under s. 73A(a) of the E.D. Act.

Mr. Sen next contended that the notice issued under s. 58 of the Act by which the petitioner was only asked to appear before the Assistant Controller, the respondent No. 1, and no duty has yet been imposed upon the petitioner. The Assistant Controller could come to the decision as to the applicability of the bar under s. 73A of the Act. If the Assistant Controller held against the petitioner, then he would be entitled to come to this court and ask for relief either restraining the respondent No. 1 from proceeding or to make any further order under the E.D. Act. In other words, Mr. Sen contended that the question of limitation ought to have been raised by the petitioner before the Assistant Controller and that point could not be agitated in a writ proceeding.

In Chhotalal Haridas v. M. D. Karnik the validity of a notice under s. 34(3) of Indian I.T. Act, 1922, was challenged on the ground that the assessment proceeding was barred by limitation. The Supreme Court observed that the question of limitation can and ought to be raised before the ITO; that was not a point which could be legitimately agitated in writ proceeding. The above view was again re-affirmed by the Supreme Court in Lalji Haridas v. R. H. Bhatt , wherein the Supreme Court observed that the jurisdiction conferred on the High court under art. 226 of the Constitution is not intended to supersede the jurisdiction and authority of the ITO to deal with the merits of all the contentions that the assessee may raise before him, and so it would be entirely inappropriate to permit an assessee to move the High Court under art. 226 and contended that a notice issued against him is barred by time. That was a matter which the I.T. authorities must consider on the merits and in the light of the relevant evidence. The said decision of the Supreme Court has been followed by the Kerala High Court in ITO v. R. M. Subramania Iyer reported in and this court in Pilani Investment Corporation Ltd. v. ITO reported in .

In Pilani Investment Corporations case reported in , B. C. Mitra J. observed (p. 857) : 'The two decisions of the Supreme Court... have set at rest any controversy on the question whether an Income-tax Officer has jurisdiction to deal with the question of limitation raised by an assessee. The statute had created a bar of limitation regarding assessment orders in certain cases. The statute has also given the income-tax authorities the power to make such assessment order in cases where the bar of limitation did not apply. It was for the income-tax authorities, therefore, to decide whether an assess order could be made having regard to the contentions raised on behalf of the petitioner. It is not, in my view, a case of inherent lack of jurisdiction.'

The learned judge has considered the above two decisions of the Supreme Court and his conclusion is that those principles will apply in cases where there is no inherent lack of jurisdiction. But, in the present case, in view of s. 73A(a) of the Act no proceeding for the levy of any estate duty under the said Act could be commenced. Therefore, in a case where s. 73A(a) is attracted there is lack of inherent jurisdiction of the Assistant Controller to commence or initiate any proceeding whatsoever under the E.D. Act. It is true that if there is any controversy or there is a denial about the date of death of Ganga Singh, in that case, the provisions of cl. (a) of s. 73A would not be applicable and, certainly, the Assistant Controller shall have the jurisdiction to issue a notice under s. 58 of the Act but in the instant case, there is no such denial. Therefore, there is no scope for further enquiry or taking further evidence about the date of death of Ganga Singh. It must necessarily follow that the instant case comes within the purview of cl. (a) of s. 73A of the Act and, as such, the Assistant Controller has got no jurisdiction to issue the impugned notice dated September 4, 1972, under s. 58(2) of the Act. Therefore, I hold that the said notice must be cancelled by a writ of mandamus.

Mr. Deb further contended that the petitioner should get a declaration that he was not liable to pay any duty. In a proceeding under art. 226 of the Constitution which is similar to a proceeding under art. 32, this court is competent to grant such a declaration. In support of his contentions, Mr. Deb relied the observations of the Supreme Court in the case of K.K. Kochunni v. State of Madras, AIR 1959 SC 725.

In Kochunnis case, the Supreme Court observed that the powers of the Supreme Court under art. 32 are wide enough to make even a declaratory order where that is the proper relief to be given to the aggrieved party, if the impugned Act has taken away the petitioners fundamental right. In that particular case, the Supreme Court made a declaratory order to grant relief to party in an exceptional circumstance.

The Supreme Court did not hold that the court could make a mere declaration, for such a view would be opposed to the plain terms of art. 32 which confers upon the Supreme Court the power 'to issue directions, orders or writs' and a mere declaration cannot be said to constitute the issue of a direction, order or writ. The Supreme Court in that case considered a declaration and an injunction to be the proper relief to which the petitioner would be entitled in a suit against respondents Nos. 2 to 17 who were private parties and not the State. The objection was that fundamental rights could not be asserted against private persons and that objection was met by saying that the dispute was between the petitioner on the one hand and the State which, under art. 12, included the Legislature and the respondents Nos. 2 to 17, who claimed rights under the law enacted by the Legislature (State). So, it could not be said that the dispute was between private parties only. The impugned Act was declared void by the Supreme Court and a writ of mandamus was issued restraining the State of Kerala from enforcing its provisions against the petitioner. Therefore, the declaration was ancillary in giving the main relief, namely, a mandamus. It would appear from the language of art. 32 of the Constitution that the sole object of the article is enforcement of fundamental rights guaranteed by the Constitution. In Chiranjilal Chaudhari v. Union of India reported in , Mukherjea J. (as he then was), observed : 'A proceeding under this article (article 32) cannot really have any affinity to what is known as a declaratory suit.'

If a particular persons fundamental right is infringed, he can also move an application under art. 226 of the Constitution before the High court. If it is found that such persons fundamental right has been infringed by a particular provision of an Act which is void, in that case, a direction is to be made declaring that the impugned law will not be applicable to that aggrieved person. In the instant case, there is no infringement of fundamental right and no part of an Act is sought to be declared as void. Article 226 is not to be construed so as to replace the remedy available in a declaratory suit. It is not intended to provide to the litigants an easy method of getting redress avoiding the normal procedure in an action brought in the usual course under the general law of the land. Considering the facts and circumstances of the present case, in my view, the petitioner is not entitled to any such declaration as asked for. I find that there is no substance in this point.

In the result, this rule is made absolute, the impugned notice under s. 58(2) of E.D. Act, 1953, dated September 4, 1972, which is annex. 'D' to the petition is cancelled by a writ of mandamus. Let a writ in the nature of mandamus be issued.

There will be no order as to costs.


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