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TMI Blog1969 (2) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ch passed on the death of Gummanna Shetty. He was of the opinion that there was also a cesser of interest in respect of the third share in the property which Gummanna Shetty would have got at a partition if one had been made immediately before his death. In support of this view, he placed dependence on section 7(1) of the Estate Duty Act with which section 39 of that Act had to be read for the determination of the value of the interest to which sub-section (2) of that section refers for the computation of the estate duty payable. Now section 5 of the Estate Duty Act is the charging section which says that, on the death of a person, estate duty shall be payable in respect of property which passes on such death. Section 6 says that property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death. Section 7(1) on whose provisions the Assistant Controller depended reads : "7. (1) Subject to the provisions of this section, property in which the deceased or any other person had an interest ceasing on the death of the deceased shall be deemed to pass on the deceased's death to the extent to which a benefit accrues or arises by the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hindu law or custom or usage which was in force immediately before the Hindu Succession Act came into force, ceased to have any effect with respect to matters which stood regulated by the Hindu Succession Act, and similarly the provisions of every other law, to the extent to which they were inconsistent with the provisions of the Hindu Succession Act, stood abrogated and repealed. Under the Madras Aliyasantana Act as it stood before the Hindu Succession Act came into force, one of the important incidents with respect to the property owned by a kutumba of an Aliyasantana family was the right of survivorship, and so on Gummanna Shetty's death in the year 1959, the other members of the kutumba would have become entitled to the whole of the property of the kutumba by survivorship, unless the right of survivorship created by the Aliyasantana Act was inconsistent with the provisions of the Hindu Succession Act. Section 7(2) of the Hindu Succession Act, which provides for the devolution of the interest in the property of an Aliyasantana family on the death of a person belonging to such family, reads : "7. (2) When a Hindu to whom the Aliyasantana law would have applied if this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ummanna Shetty's wife and children and Ratnamala was not liable to pay any estate duty since she was not the accountable person within the meaning of the Act. Not unnaturally, Mr. Holla placed dependence upon section 6 of the Estate Duty Act which reads : "Property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death." It is common ground that the only property which Gummanna Shetty was competent to dispose of within the meaning of this section was a sixth share. That that is so is clear from tye Explanation to section 7(2) which says that the interest of a Hindu in the kutumba or kavaru which devolves by testamentary or intestate succession under sub-section (2) of that section is the share in the property which would have been allotted to the deceased if a partition of that property per capita had been made immediately before his or her death among all the members of the kutumba or kavaru, as the case may be and not the share which could have been claimed under the Aliyasantana law. The argument constructed on its provision was that since what passes under section 6 of the Estate Duty Act is the property which Gumma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u Succession Act. It was asserted that, for the purposes of section 7(1), the infallible basis for the determination of the value of the property, on which estate duty should be paid is a partition which was possible under the Aliyasanta Act and that that partition would have secured for Gummanna Shetty a third share and not a sixth share of which the Explanation to section 7(2) of the Hindu Succession Act speaks. The first question which we should investigate in the context of this argument placed before us is whether this is a case to which the provisions of section 7(1) of the Estate Duty Act are applicable, and it is only if we could say that they are, that we can proceed to investigate the sustainability of the impugned order under the provisions of section 39(2). Mr. Rajasekhara Murthy did not dispute the correctness of the postulate that section 39 can apply only if section 7(1) of the Estate Duty Act applies, and, that being so the question which we should first investigate is whether section 7(1) has any relevance to the case before us. The two ingredients which should exist before sub-section (1) of section 7 of the Estate Duty Act which we have already extracted can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evolved a formula which the Explanation to that sub-section incorporated. That Explanation enjoined an imaginary partition per capita which should be deemed to have been made immediately before Gummanna Shetty's death, and the property which would have fallen to his share at that partition is the property which devolves by testamentary or intestate succession. The importance of this provision in the Hindu Succession Act consists of the fact that it extinguished the right of survivorship created by the Aliyasantana Act, and by that process the cesser of interest which was possible under that Act became no longer possible under the Hindu Succession Act. The cesser of interest, to which section 7(1) of the Estate Duty Act refers, is not consistent with the devolution of Gummanna Shetty's interest on his heirs under section 7(2) of the Hindu Succession Act, whatever may be the measure of the property which so devolved. Since section 7(1) of the Estate Duty Act has application only to property in respect of which there is a cesser of interest on the death of the deceased, and there can be no such cesser of interest after the Hindu Succession Act can into force in a case like the one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty which the deceased would have got at a partition, if one had been made immediately before his death under the Aliyasantana Act, there could be no cesser of interest, the provisions of section 7(1) can have no application. The cesser must extend to the whole of the property and not merely to a portion of it. It is only then that an appeal could be made to section 7(1) of the Estate Duty Act. In the view that we take, it is not necessary for us to discuss the sustainability of the postulate placed before us by Mr. Holla that the partition to which section 39(2) of the Estate Duty Act refers is a partition which should be made in accordance with the Explanation to section 7(2) of the Hindu Succession Act and that that partition should be a partition per capita and not half per stirpes and half per capita to which the Aliyasantana Act refers. On that question, it is not necessary for us to express any opinion. Even on the assumption that section 7(1) of the Estate Duty Act governs the present case and so the assessment could be made on the basis of section 39(2) of the Estate Duty Act, and the determination of the interest which ceased could be made under section 39(2), it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reached the conclusion that the value of the interest is either the value of a third share or even a sixth share in the property. It is plain that it was not. In the view that we take, this is not a case in which it could be said that the property should be deemed to have passed under section 7(1) in which event alone the petitioner would have become liable to pay estate duty and would have become a legal representative within the meaning of section 53 of the Estate Duty Act or is an accountable person within the meaning of that Act. If section 7(1) did not apply, the only other section which would have materiality is section 6 which, while creating a liability in Gummanna Shetty's wife and children, would create none in the petitioner or her children. We do not accede to the argument that the only remedy which the petitioner had was to prefer an appeal under the provisions of the Act. It is not in every case that we are forbidden from exercising our jurisdiction under article 226 of the Constitution. In a proper case like the one in which the assessment made by the Assistant Controller is fundamentally defective, we would not be right in thinking that the petitioner cannot app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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