1980 Supreme(Cal) 418

High Court Of Calcutta
SABYASACHI MUKHERJI, SUDHINDRA MOHAN GUHA
CONTROLLER OF ESTATE DUTY - Appellant
Versus
SMT.ILA DAS - Respondent
Matter 220  Of  1972
Decided On : 11/26/1980

The new power under Section 59 was not a variant of the old power under Section 62 of the amended Act.

Headnote:

Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the reassessment made under Section 58 (3) read with Section 59 of the Estate Duty Act of 1953 on the ground that the provisions of Section 59 of the said Act (which came into force on 1st July, 1960) could not be invoked for reopening the estate duty assessment originally completed on 29th January, 1960?

Fact of the Case:

The deceased during his lifetime was the owner of several premises including, inter alia, premises Nos. 95 and 96, Ultadanga Main Road, and the said premises had been acquired by acquisition proceedings by the Collector on the 27th September, 1957. The compensation amounting to Rs. 5,76,119 awarded by the Collector had been received by the deceased during his lifetime and formed part of the balance in the bank account which was considered in the assessment proceedings under the E. D. Act. It is stated in the order of the Deputy Controller of Estate Duty dated 31st of July, 1962, that after completion of the assessment, information was received to the effect that certain further amounts forming part of the estate of the deceased which had been left out from the assessment, required to be included in the estate and charged to duty. A notice under Section 59 of the E. D. Act as amended by the E. D. (Amendment) Act, 1958, was accordingly issued on the 16th of December, 1961, calling upon the accountable person to deliver an account of all the properties including which the Deputy Controller described in his order, "further assets ascertained after completion of the original assessment ". The accountable person filed an account in Form E. D.-I on 18th July, 1962, declaring the value of the various assets at the amount originally assessed but not including the further amounts which had accrued to the estate since the date of the original assessment. The Deputy Controller in his order stated, inter alia, as follows : "rs. 1,31,778. 17 awarded by the President, Calcutta Improvement Tribunal, over and above the compensation of Rs. 5,76,119 in respect of the property at Nos. 95 and 96, Ultadanga Main Road. This property was acquired under the Land Acquisition Act, 1894, and possession was taken by the Collector on 27th September, 1957. Compensation amounting to Rs. 5,76,119 awarded by the Collector was received by the deceased during his lifetime and this formed part of the balance in the bank included in the original assessment. A reference case was filed against the said award before the Improvement Tribunal, Calcutta. The President, Improvement Tribunal, Calcutta, by his order No. 28, dated 19th January, 1960, awarded the following further amounts in respect of this property : Statutory allowance under section 23 (2) 86,684. 77 " Compensation u/s. 48a 26,081. 00 " Interest at 6% per annum from 27-9-57 to 11-1-60 15,749. 94 " Costs 1,460. 22 " . 1,31,778. 17 np. ( 3 ) HE went on to observe that as the right to receive compensation rightly due under the Land Acquisition Act, including the enhancement in the sum which might be awarded by the higher judicial authorities, accrued to the deceased during his lifetime, the further amount subsequently awarded by the President of the Tribunal formed part of the estate. His attention was drawn by the learned advocate on behalf of the accountable person to Section 34 (5) of the E. D. Act. According to the Deputy Controller, the section provided that no property should be aggregated more than once nor should estate duty in respect thereof be levied more than once on the same property. The Deputy Controller expressed his inability to understand the relevancy of the section in the context of the facts of the case. The compensation of Rs. 5,76,119 received by the deceased during his lifetime had no doubt been included in the estate and had already been assessed. Subsequent enhancement by the President, Improvement Tribunal, the Deputy Controller observed, could not be treated as the same property as the original compensation of Rs. 5,76,119. ( 4 ) IT was urged before the Deputy Controller on behalf of the accountable person that the sum of Rs. 5,76,119 related to the property of premises Nos. 95 and 96, Ultadanga Main Road. The Deputy Controller found the argument not to be tenable. The property, according to him, the premises Nos. 95 and 96, Ultadanga Main Road, did not form part of the estate of the deceased at the time of his death. It had already vested in the State Govt. Even apart from this if it was found that the value of a property was under-estimated in the original assessment, according to the Deputy Controller, Section 59 authorised the reopening of the assessment in order to include the proper value of the property and to subject the same to duty. Any further amount that was added to the value originally assessed in order to offset the under-valuation could not, therefore, according to the Deputy Controller, be obviously considered as the same property as the amount already assessed. Thereafter, therefore, the Deputy Controller after deducting certain interest and costs added to the estate a sum of Rs. 1,16,241. We need not detain ourselves with the propriety and validity or the correctness of the deletion of the amounts from the total compensation. The accountable person had stated in his letter dated 7th June, 1960, that a further appeal against the decision of the President, Improvement Tribunal, had been filed in the High Court. In case any further amount was awarded to the estate as a result of the High Court decision, the same could be included in the estate by rectification of the order, directed the Deputy Controller. The Deputy Controller further observed that the accountable person deliberately had failed to include this amount in the account filed by him even though he was informed specifically that the assessment was reopened in order to include this amount. The Deputy Controller was of the view that the accountable person had rendered himself liable to penalty under Section 60 (1) (c) and proceeded in respect of the same. We are not concerned with this aspect of the order made by the Deputy Controller. We may mention the two items that were included in the reassessment order passed, namely, a sum of Rs. 15,654 which was held by the Deputy Controller to be the enhancement in the market value of property at No. 93, Ultadanga Main Road, or alternatively the statutory allowance awarded in respect of this property, another item of Rs. 1,16,214 as mentioned hereinbefore included, which related to the further amount awarded by the President, Improvement Tribunal, in respect of properties at Nos. 95 and 96, Ultadanga Main Road. For the present purpose, we are only concerned with the question of compensation of Rs. 1,16,214.

Finding of the Court:

The Tribunal was right in holding that the reopening of the estate duty assessment was barred.

Issues: Whether the Tribunal was right in cancelling the reassessment made under Section 58 (3) read with Section 59 of the Estate Duty Act of 1953 on the ground that the provisions of Section 59 of the said Act (which came into force on 1st July, 1960) could not be invoked for reopening the estate duty assessment originally completed on 29th January, 1960?

Ratio Decidendi: The new power under Section 59 was not a variant of the old power under Section 62 of the amended Act. Section 59 cannot be treated as virtually a continuation of the remedy prescribed by the old Section 62. The Tribunal was right in holding that the reopening of the estate duty assessment was barred.

Final Decision: Question answered in the affirmative and in favour of the accountable person.