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Issues Involved:
1. Whether the sum of Rs. 20,85,649 representing the value of 1/3rd share of the trust corpus was correctly included in the principal value of the estate of the deceased for estate duty purposes. 2. Applicability of Section 11 of the Estate Duty Act, 1953. 3. Applicability of Section 24 of the Estate Duty Act, 1953. 4. Applicability of Section 7 of the Estate Duty Act, 1953. Issue-wise Detailed Analysis: 1. Inclusion of Rs. 20,85,649 in the Principal Value of the Estate: The primary issue was whether the sum of Rs. 20,85,649, representing the 1/3rd share of the trust corpus, was correctly included in the principal value of the estate of the deceased for estate duty purposes. The deceased, Her late Highness Maharani Chimnabai Gaekwar of Baroda, had an interest in a trust created by His late Highness Sir Sayaji Rao Gaekwar, Maharaja of Baroda. The Deputy Controller of Estate Duty included this amount in the principal value of the estate, citing Sections 11 and 7 of the Estate Duty Act. 2. Applicability of Section 11 of the Estate Duty Act, 1953: Section 11(1) of the Estate Duty Act deals with limited interests disposed of within a certain period before death. The court examined whether the deceased's life interest, which ceased on March 31, 1957, due to the Bombay Act, fell under this provision. The court held that the determination of the life interest by the Bombay Act constituted a disposition or determination "in any other manner" as per Section 11(1). The court rejected the argument that Section 11(1) applies only to voluntary acts by the life tenant, noting that the terms "divesting" and "forfeiture" include involuntary acts. Thus, the value of the 1/3rd share of the trust property was correctly brought to charge under Section 11. 3. Applicability of Section 24 of the Estate Duty Act, 1953: Section 24(1) deals with property reverting to the disponer. The official trustee argued that after the cesser of the deceased's life interest, the corpus reverted to Fatehsingh Gaekwar, the ruler of the gadi. The court rejected this argument, stating that the "disponer" refers to the settlor who created the trust. Since the reverter must occur during the lifetime of the disponer, and the settlor had died in 1939, Section 24(1) was not applicable. 4. Applicability of Section 7 of the Estate Duty Act, 1953: Section 7 deals with the cesser of life interest. The Deputy Controller and the Board had alternatively held that the deceased's continued receipt of income from the trust fund until her death attracted estate duty under Section 7. The court disagreed, stating that legally, the deceased had no interest in the income after March 31, 1957, as per the Bombay Act. Any income received post this date was considered a bounty. Therefore, Section 7 was inapplicable. Conclusion: The court concluded that the charge of estate duty was correctly attracted under Section 11 of the Estate Duty Act. The question referred was answered in the affirmative, against the official trustee and in favor of the revenue. The official trustee was ordered to pay the costs of the reference to the revenue.
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