1989 (5) TMI 49 - SC - Indian Laws

Whether the newly enacted section 59 of the Estate Duty Act is retrospective in operation so as to affect assessments already completed on accountable persons? Held that - The new section 59 came into force from July 1, 1960. Much earlier, on February 26, 1960, the assessment on the accountable person had already been completed. There is a well-settled principle against interference with vested rights by subsequent legislation unless the legislation has been made retrospective expressly or by necessary implication. If an assessment has already been made and completed, the assessee cannot be subjected to reassessment unless the statute permits that to be done. Thus we hold that section 59 of the Estate Duty Act is not retrospective in operation and that the reopening of the assessment under section 59 of the Act is bad in law. Appeal dismissed.

Issues:
1. Interpretation of the retrospective operation of section 59 of the Estate Duty Act, 1953.
2. Reopening of assessment under section 59 of the Act.
3. Comparison between the old section 62 and the new section 59.
4. Legal principles regarding retrospective legislation and vested rights.

Analysis:
The judgment in question revolves around the interpretation of the retrospective operation of section 59 of the Estate Duty Act, 1953. The case involved the death of an individual in 1959, with an assessment completed in 1960. Subsequently, a notice was issued under the new section 59 in 1962 for reopening the assessment due to property allegedly escaping the levy of estate duty. The accountable persons objected to the reassessment under section 59, leading to a series of appeals and references to higher authorities.

The crux of the issue lay in determining whether the newly enacted section 59 was retrospective in operation and whether it could affect assessments already completed on accountable persons. The court analyzed the provisions of the old section 62 and the new section 59 introduced by the Amendment Act of 1958. It was observed that the new section 59 primarily dealt with property escaping assessment, distinct from the rectification of mistakes provision in the old section 62. The court, concurring with the High Court's analysis, held that the power of reassessment under the new section 59 differed significantly from that under the old section 62, rejecting the contention that the new provision should be regarded as retrospective due to alleged similarities.

Furthermore, the judgment emphasized the absence of specific words conferring retrospective effect on section 59. The court highlighted the principle against interfering with vested rights by subsequent legislation unless expressly or necessarily implied. Referring to precedent cases, the court concluded that since the assessment had already been completed before the enactment of section 59, reopening the assessment under this section was deemed unlawful. The court held that section 59 of the Estate Duty Act was not retrospective in operation, leading to the dismissal of the appeals with costs.

In summary, the judgment clarified the non-retrospective nature of section 59 of the Estate Duty Act, emphasizing the importance of protecting vested rights and highlighting the distinctions between the old section 62 and the new section 59 in terms of reassessment powers. The decision provided clarity on the application of the law in similar cases and upheld the principle of legal certainty in tax assessments.

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