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Assessment of estate duty, payment in instalments under section 70(2) of the Estate Duty Act, challenge of appellate order by Revenue, liability for interest during the period of modified assessment, application of the principle from ITO v. A. V. Thomas and Co., modification of interest demanded. Analysis: The judgment revolves around the assessment of estate duty following the death of the petitioner's father. The initial assessment by the Assistant Controller of Estate Duty determined a principal value of the estate, leading to a demand for payment. The petitioner paid a portion and requested to pay the balance in instalments under section 70(2) of the Act, which was allowed. Subsequently, the assessment was partially modified in appeal, reducing the duty payable. The Revenue challenged this modification, leading to further adjustments in the principal value and duty payable by the petitioner. The key issue raised in the judgment pertains to the liability for interest during the period when the assessment was modified in appeal. The petitioner contended that interest should not accrue during this period as the duty was being discharged as per the modified assessment. Reference was made to the case of ITO v. A. V. Thomas and Co., where it was held that interest does not run when the liability ceases to exist during the operation of the appellate order. The court analyzed the petitioner's compliance with the demands and concluded that no interest should be charged during the period when the Appellate Controller's order was in force. In light of the above analysis, the court allowed the petition in part, directing the modification of the interest demanded. The court instructed the first respondent to delete the interest relating to the period when the Appellate Controller's order was in force, confining it only to the subsequent period. The judgment emphasizes the application of legal principles to determine the liability for interest in cases of modified assessments and payment in instalments under the Estate Duty Act. In conclusion, the judgment provides clarity on the issue of interest liability during the period of modified assessment and underscores the importance of compliance with appellate orders in determining the accrual of interest under the relevant provisions of the Act.
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