The Commissioner Of Stamps V. Cornelis Heart Randeni

1926 Present: Schneider A. C. J. and Maartensz A. J.

THE COMMISSIONER OF STAMPS v. CORNELIS 
 HERAT RANDENI.

108-(lnty.) D. C. Chilaw, 1,473.

Estate Duty Ordinance, No. 8 of 1919, .s. 19-Joint gift in favour of children-Reservation of life-interest-Death of one of The donors Property passing on death-Liability to pay estate duty.

Where a husband and wife made a gift of property to their children, reserving to themselves the right of possession during their joint lives and the life of the survivor.

Held, that on the death of the husband the children were under no liability to pay estate duty, as no interest accrued to them on the death of their father.

ONE Isseris Appuhamy and his wife Mangohamy made a joint gift of certain' lands to their children, reserving the right of possession of the lands during their- joint lives and the life of the survivor of them. Isseris died in 1922, and in terms of the deeds to gift Mangohamy became solely entitled to the possession of the lands. At the instance of the Commissioner of Stamps, citation issued on the children to show cause why writ of execution should not issue against them for the payment of estate duty. They disclaimed liability on the ground that, although they were the donees under the deeds of gift, no interest accrued to them on the death of Isseris.

This contention was upheld by the District Judge.

J. E. M. Obeyesekere, C.C. (for Crown), appellant.

H. V. Perera (with him Ameresekere), for the respondents.

October 12, 1926. SCHNEIDER A. C. J.-

For the purpose of this appeal we were asked to accept certain facts as having been admitted. Those facts are these: Some lands were donated by one Isseris Appuhamy and his wife Mangohamy to their children who are now represented by the first, second, third, fourth, and fifth respondents to this appeal. The donors reserved a right of possession for themselves in all the property donated during the life time of both of them and of the survivor of them. Isseris died in September, 1922, leaving his widow surviving him whereby she became solely entitled to the right of possession reserved

in the deeds of gift. The Commissioner of Stamps, who is the appellant, applied to the District Court under the provision in section 82 of the Estate Duty Ordinance, No. 8 of 1919, for a citation on the respondents to show cause why execution for the amount of the estate duty owing should not issue against them. The respondents showed cause. They submitted that they were not liable to pay the estate duty under the provisions of the Ordinance. The District Judge upheld the respondents' contention. He expressed an opinion as to the liability of the widow, but her liability was not .the question before him.

The appeal was argued before us upon the footing that the assessment of estate duty made by the Commissioner, must be accepted as correct, and that we had only to consider the question of the liability of the respondents to pay the duty claimed front them. But the question of the liability of the respondents cannot be decided without reference to the provisions of the law under which the duty is leviable. Not only section 7, but wherever else in the Ordinance property is referred to it is clear that the reference is to " property passing on the death " of a person. The words " property passing on the death " are interpreted in the Ordinance (section 2). What then is the property which passed on the death of Isseris? Upon the admitted facts no property in any sense passed to the respondents. As donees in the deeds of gift they became entitled to the dominium of the lands donated immediately the deeds were executed. The possession of the lands and the right of possession remained in Isseris and his wife. The only change brought about by the death of Isseris was that his wife became entitled solely to the possession of the lands. Her previous right

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