The liability to pay taxes arises on the valuation date, and the amount of the taxes is ascertainable by reference to the relevant data.

Gurdev Singh, J.

1. Colonel His Highness Raja Sir Harinder Singh Brar Bans Bahadur, Ruler of the former Faridkot State, Petitioner in these four writ petitions (Civil Writs Nos. 1841 to 1843 of 1962) under Articles 226 and 227 of the Constitution is an assessee under the Wealth Tax Act 27 of 1957. He has been assessed by the Wealth Tax Officer, A--Ward, Bhatinda for the various years 1957-58, 1958-59, 1959-60 and 1960-61. The petitioner was not satisfied with the assessment orders, and he applied for rectification under Section 35 of the Act claiming that the amount of Wealth Tax and other taxes such as Expenditure Tax and Gift Tax, for which he had incurred liability in a particular year, should have been deducted from his assets in determining the net wealth as defined in Section 2 (m) for assessment of the Wealth Tax. This plea has, however, been rejected by the Wealth Tax Officer (respondent No. 1) whose orders have been upheld by the Commissioner of Wealth Tax and the Central Board of Revenue (Respondents 2 and 3). The petitioner DOW challenges the correctness of those orders on the plea that the Wealth Tax authorities had wrongly interpreted the provisions contained in Section 2 (m) of the Act.

2. Under Section 3 or the Act, which is the charging section, wealth tax is to be paid by every individual, Hindu undivided family and company at the rate or rates specified in the schedule to the Act. The expression "net wealth" has been thus defined in Clause (m) of Section 2 of the Act:-

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"(m) "Net Wealth" means the amount by which the aggregate value computed in accordance with the provision of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than:-

- (i) debts which under Section 6 are not to be taken into account;

(ii) debts which are secured on, or which have been incurred in relation to, any asset in respect of which wealth-tax is not payable under this Act; and

(iii) the amount of the tax, penalty or interest payable in consequence of any order passed under or in pursuance of this Act or any law relating to taxation of income or profits, or the Estate Duty Act, 1953 (34 of 1953), the Expenditure Tax Act, 1957 (29 of 1957), or the Gift Tax Act, 1958 (18 of 1958), (a) which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceedings as not being payable by him, or

(b) which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a. period of more than twelve months on the valuation date".

3. The petitioners contention before the Wealth Tax Authorities was that the wealth tax, to which he was liable for the particular year under assessment, constituted a debt which he owed, and he was entitled to its deduction from the total value of his assets in computing the net wealth on which tax was payable by him tor that year despite the fact that the tax had not till then been assessed and no demand notice for its payment issued to him. Similarly, for some of the years he claimed deduction of Expenditure Tax and Gift Tax which he was liable to pay for those years. In rejecting his contention, the Commissioner Wealth Tax, to whom revision against the impugned orders of the Wealth Tax Officer were taken, in his order, dated 28th April, 1962, observed:-

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"The important thing to be considered is whether the tax demands, which have not yet beent determined, can be held to be debts owed by the assessee. A debt is owed only when it has actually been determined. It is only after the order of assessment has actually been passed and the officer has issued a notice of demand calling upon the assessee to make the payment by a particular date that it can be said that the assessee owes the amount of tax as a deb