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TMI Blog1979 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... egal would continue until 7th December, 1970, when the elder of the said two minors, namely, the petitioner, would attain majority. It appears that the said guardian, Prannath Shegal, never filed an account of the properties of the deceased, Ganga Singh, in terms of s. 53 or s. 56 of the E.D. Act, 1953, with the estate duty authorities. After attaining majority on the 7th December, 1970, the petitioner also did not file any such account of Properties with the E.D. authorities relating to the properties left by the said deceased, Ganga Singh, as he was unaware that such an account was required to be filed under the Act within six months from the date of death of his father. Thereafter, the petitioner filed an application for grant of a succession certificate in the City Civil Court at Calcutta. On 25th July, 1972, the learned Chief Judge by his order directed the petitioner to produce a certificate as required under s. 56(2) of the E.D. Act and without which no grant of the said succession certificate could be made. Accordingly, the petitioner was advised to file an account with the E.D. authorities regarding the estate of the said deceased, Ganga Singh, and in August, 1957, the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b further contended that the only order which the respondent No. 1 could have passed was that, in view of the provisions of s. 73A(a) of the E.D. Act, 1953, no proceeding under the said Act could be commenced in respect of the estate of late Ganga Singh and, as such, no estate duty was payable by the petitioner. According to Mr. Deb, the said notice issued under s. 58(2) of the Act was illegal, invalid and without jurisdiction and should be quashed. Mr. Sen appearing on behalf of the revenue raised two points. In the first place, he contended that in the present case no proceeding for the levy of estate duty was commenced by the Assistant Controller but the petitioner for the purpose of obtaining a certificate under s. 56(2) of the Act, voluntarily submitted a statement of account. Although the said account submitted by Mr. Sen was not filed within the time specified in sub-s. (3) of s. 53 of the Act, none the less it should be regarded as a valid statement and the Assistant Controller has got jurisdiction to issue a notice under s. 58 of the Act. How could the existence of a statement, Mr. Sen remarked, once it had been filed, be ignored; it was not a mere scrap of paper. In sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty under this Act shall be commenced--(a) in the case of a first assessment, after the expiration of five years from the date of death of the deceased in respect of whose property estate duty became payable ", then, under what provisions of law that " voluntary account " filed by the petitioner could be determined by the Controller when the very initiation of the proceeding is barred under the statute ? It is well settled that there cannot be any estoppel against the statute. If the Assistant Controller has got no inherent jurisdiction to initiate a proceeding for the levy of any estate duty after the expiration of five years from the date of death of the deceased, simply because a statement of account has been filed by a person accountable to pay estate duty under the Act, for the purpose of a certificate under s. 56(2), it does not confer any jurisdiction upon the Assistant Controller to start or initiate a proceeding under the Act by issuing a notice under s. 58, when the statute imposes a complete bar on the very initiation of any proceeding. In a fiscal statute, as observed by Lord Russel of Killowen : " The subject is not taxable by inference or analogy, but only by the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner before the Assistant Controller and that point could not be agitated in a writ proceeding. In Chhotalal Haridas v. M . D. Karnik [1961] 43 ITR 387 (SC) the validity of a notice under s. 34(3) of Indian I.T. Act, 1922, was challenged on the ground that the assessment proceeding was barred by limitation. The Supreme Court observed that the question of limitation can and ought to be raised before the ITO ; that was not a point which could be legitimately agitated in writ proceeding. The above view was again re-affirmed by the Supreme Court in Lalji Haridas v. R. H. Bhatt [1965] 55 ITR 415 (SC), wherein the Supreme Court observed that the jurisdiction conferred on the High Court under art. 226 of the Constitution is not intended to supersede the jurisdiction and authority of the ITO to deal with the merits of all the contentions that the assessees may raise before him, and so it would be entirely inappropriate to permit an assessee to move the High Court under art. 226 and contended that a notice issued against him is barred by time. That was a matter which the I.T. authorities must consider on the merits and in the light of the relevant evidence. The said decision of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay any duty. In a proceeding under art. 226 of the Constitution which is similar to a proceeding under art. 32, this court is competent to grant such a declaration. In support of his contentions, Mr. Deb relied upon the observations of the Supreme Court in the case of K. K. Kochunni v. State of Madras, AIR 1959 SC 725. In Kochunni's case, the Supreme Court observed that the powers of the Supreme Court under art. 32 are wide enough to make even a declaratory order where that is the proper relief to be given to the aggrieved party, if the impugned Act has taken away the petitioner's fundamental right. In that particular case, the Supreme Court made a declaratory order to grant relief to a party in an exceptional circumstance. The Supreme Court did not hold that the court could make a mere declaration, for such a view would be opposed to the plain terms of art. 32 which confers upon the Supreme Court the power " to issue directions, orders or writs " and a mere declaration cannot be said to constitute the issue of a direction, order or writ. The Supreme Court in that case considered a declaration and an injunction to be the proper relief to which the petitioner would be entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. Let a writ in the nature of mandamus be issued. There will be no order as to costs. JUDGMENT OF DIVISION BENCH R. N. PYNE J.--A short, but none the less interesting, point of first impression relating to the construction and interpretation of s. 73A of the E.D. Act, 1953, arises for consideration in this appeal which is directed against a judgment and order of Amiya Kumar Mookerji J., dated September 24, 1973. For a proper appreciation of the point involved in this appeal it is necessary to refer to some of the relevant facts of this case. The respondent, Ashok Singh (who was the petitioner in the court of the first instance) was at the relevant time the karta of a joint Mitakshara Hindu family consisting of himself and his brother. The respondent's father, one Ganga Singh, died intestate on February 6, 1957, when the respondent and his brother were minors. The respondent's maternal uncle, one Prannath Shegal, and his brother moved an application in the City Civil Court at Calcutta some time in March, 1967, for the appointment of a guardian of the minors and in August, 1968, the said maternal uncle was appointed as the guardian of the said minors. One, Jamuna Singh, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the said Act in view of s. 73A thereof and, therefore, the said officer had no power, authority and jurisdiction to initiate any proceeding under s. 73A of the Act or to issue any notice under s. 58(2) of the said Act or to put any questionnaire thereunder and by doing the same the said officer was proceeding entirely without jurisdiction. In spite of the aforesaid objections of the respondent the said officer fixed the date of hearing on December 15, 1972. In the above circumstances, being aggrieved by the said notice dated 4th September, 1972, issued under s. 58(2) of the Act and the proceeding taken thereunder, the respondent moved an application under art. 226 of the Constitution challenging the validity of the said notice and the said act of the said officer and obtained a rule nisi and an ad interim injunction restraining the said officer from proceeding with the levy of estate duty under the Act until the disposal of the rule. Various contentions were advanced on behalf of the parties before Amiya Kumar Mookerji J., who heard the said application. It was mainly contended on behalf of the petitioner in the said application, i.e., the respondent in this appeal, that in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used, that is to say, instead of " no proceedings for the levy of any estate duty " the expression " no proceedings under the Act " or " no proceedings for assessment under the Act " would have been used. The expression " no proceedings for the levy of any estate duty " really point out the limited scope of the section and, therefore, proceedings under s. 56 are not covered. The expression " first assessment " occurring in cl. (a) of s. 73A, according to counsel, refers to the assessment under s. 59 where originally there is no assessment of estate duty at all and, therefore, estate duty has escaped assessment. Counsel has further submitted that the proceeding under s. 56 is not a proceeding for the levy of duty but a proceeding for grant of representation which follows after filing of accounts. According to counsel when an assessment is made as a result of the proceedings taken under s. 56 that cannot be said to be a proceeding for the levy of duty. Here proceedings are taken for the benefit of the applicant. Proceedings under s. 56 include proceedings for assessment and such proceedings are for the benefit of the applicant. It is also the submission of the counsel that the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the statute. Next step is the computation of tax for which liability has already accrued. Provisions relating to assessment are machinery and any irregularity therein may be either waived by the party or regularised subsequently. Any error in the procedure would not affect the validity of the assessment save and except in cases where there is positive limitation against the completion of the assessment. It is further submitted that there is no bar to the assessment after 5 years. Therefore, if there is any bar regarding the machinery section the assessee can waive the same. It is the submission of the counsel that like s. 153 of the I.T. Act there is no corresponding provision in the E.D. Act providing for an absolute bar to an assessment after the time limit. According to counsel as there is no bar for completing the assessment there is also no bar for a person to come under s. 56 or s. 57 for obtaining a certificate. Further, the legislature thought that as there was no specific bar regarding the assessment, an assessee can at any time approach the revenue authorities for getting the certificate. So long as the assessment, counsel has submitted, is not barred, it is open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that after the filing of the account it is inevitable for the Asst. Controller to issue a notice under s. 58(2) of the Act. In support of the above submissions, counsel has referred to the following cases, to wit : CIT v. Sodra Devi [1957] 32 ITR 615 (SC), Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC), Chatturam v. CIT [1947] 15 ITR 302 (FC), CIT v. Smt. Minabati Agarwalla [1971] 79 ITR 278 (Cal), Anandji Haridas and Co. (P.) Ltd. v. Kushare (S.P.) [1968] 21 STC 32A (SC), Murarilal Mahabir Prasad v. Vad (B.R.) [1976] 37 STC 77 (SC), P.C. Saxena v. State [1976] 104 ITR 106 (Delhi), Lalji Haridas v. R.H. Bhatt [1965] 55 ITR 415 (SC), Essex Count Council v. Essex Incorporated Congregational Church Union [1963] AC 808 (HL), Giusti Patents and Engineering Works Ltd. v. Maggs [1923] 1 Ch 515 (Ch.D), Kifayatullah Khan v. Registrar of Co-operative Societies [1956] AIR 1956 Hyd 129, Pannalal Binjraj v. Union of India [1957] 31 ITR 565 (SC) and Mahabir Prasad Poddar v. ITO [1976] 102 ITR 478 (Cal). Counsel for the respondent has submitted that the application of s. 73A is not limited to proceedings initiated under s. 59 only because the language of s. 73A is " l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs is provided for. It is further submitted that in cases where proceedings are barred under s. 73A if a certificate is required under s. 56 for obtaining a grant of representation then the Controller will issue a certificate to the effect that proceedings are barred and, therefore, no duty is payable. It is further submitted that s. 73A is a bar to the commencement of proceedings and not a bar of limitation like the provision in other Acts and, therefore, it cannot be said to be procedural. Counsel has also submitted that no intention is expressed in s. 73A that it is limited in its application only to s. 59. It is further submitted that only in case of ambiguity the legislative history of the statute may be gone into. Referring to cl. 27 of the Estate Duty Bill counsel has submitted that the clear intention of the section is to fetter the commencement of the proceedings for all kinds of assessment. Counsel in support of his above contentions has referred to the following cases, to wit : Janapada Sabha, Chhindwara v. Central Provinces Syndicate Ltd., AIR 1971 SC 57, Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax [1963] 14 STC 976 (SC), Commr. of Agrl. LT. v. Sultan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the account delivered under section 56 the Controller may then 'at any time' proceed to make a provisional assessment of the estate duty. The two provisions of law have been inserted at the same time by the amending Act and they must be reconciled and, in my opinion, on the construction I am accepting, they are consistent with each other. If a party does not want to obtain any representation or any succession certificate and does not move the civil court, the estate duty authorities have to govern themselves by section 73A and other provisions of law applicable for levy of estate duty. But, should a party approach the court for grant of succession certificate and should the application be within time and otherwise in order, a mandatory duty has been cast on the party to furnish a copy of the accounts in cases governed by clauses (a) and (b) of sub-section (1) and a copy of the application under sub-section (2) of section 56 to the Controller. In either case, whether governed by sub-section (1) or sub-section (2), the party is bound to produce a certificate from the Controller to the effect that estate duty has been or will be paid or that none is due. The civil court does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The said observations, however, appear to be obiter dicta as contended on behalf of the department. In this appeal we are really concerned with the question as to whether the period of limitation mentioned in s. 73A of the E.D. Act, 1953, applies to cases coming under s. 56. In other words, we are concerned with the scope and application of s. 73A. The main controversy as stated earlier, is whether by s. 73A only the initiation of the proceedings by the Controller for levy of the estate duty under s. 59 of the Act is barred after the expiry of the periods mentioned in cls. (a) and (b) of s. 73A or whether proceedings for levy of estate duty initiated pursuant to the application made for grant of representation or succession certificate as provided in s. 56 of the Act are also barred after five years from the date of death of the deceased. In other words, whether s. 73A would also apply to and govern the cases coming under s. 56. It is, therefore, necessary to consider the ambit and scope of s. 73A and the effect of its application to cases coming under s. 56. For that purpose, it is necessary to refer to the scheme of the Act. Section 73A is to be read and understood in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of his knowledge and belief, specify in n appropriate account annexed to the affidavit of valuation filed in court under section 19-I of the Court-Fees Act, I870, all the property in respect of which estate duty is payable upon the death of the deceased and shall deliver a copy of the affidavit with the account to the Controller, and (b) no order entitling the applicant to the grant of representation shall be made upon his application until he has delivered the account prescribed in clause (a) and has produced a certificate from the Controller under sub-section (2) of section 57 or section 67 that the estate duty payable in respect of the property included in the account has been or will be paid, or that none is due, as the case may be. (2) In all cases in which a grant of a succession certificate is applied for, a copy of the application shall be furnished by the applicant to the Controller and no order entitling the applicant to the grant of such a certificate shall be made upon his application until he has produced a certificate from the Controller under sub-section (2) of section 57 or section 67 that the estate duty payable in respect of the property mentioned in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is referred to in clause (a) that any property chargeable to estate duty has escaped assessment, whether by reason of under-valuation of the property included in the account or of omission to include therein any property which ought to have been included, or of assessment at too low a rate or otherwise, he may at any time, subject to the provisions of section 73A, require the person accountable to submit an account as required under section 53 and may proceed to assess or reassess such property as if the provisions of section 58 applied thereto. " Section 67 provides for the grant of certificate of payment of estate duty and it provides as follows : " Where the amount of estate duty determined by the Controller as payable on an assessment made under section 58 has been paid by the person accountable, the Controller shall, on application by that person, grant to him a certificate to that effect. " Section 72 provides that affidavits, accounts, certificates, statements and forms used for the purposes of Part VII of the Act shall be in such form and contain such particulars as may be prescribed by the Board. Section 73A of the Act, with which we are mainly concerned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re referred to Date : Assistant / Deputy (Controller of Estate Duty.) Place : Relevant sections of the Act before the 1958 amendment were as follows : Old section 57 " In all cases in which a grant of representation is applied for within six months of the death of the deceased-- (a) the executor of the deceased shall, to the best of his knowledge and belief, specify in an appropriate account annexed to the affidavit of valuation filed in court under s. 19-I of the Court Fees Act, 1870 (VII of 1870), all the property in respect of which estate duty is payable upon the death of the deceased and shall deliver a copy of the affidavit with the account to the Controller, and (b) no order entitling the applicant to the grant of representation shall be made upon his application until he has delivered the account prescribed in clause (a) and has produced a certificate from the Controller under section 60 or section 67 that the estate duty payable in respect of the property included in the account has been or will be paid, or that none is due, as the case may be. " Old section 59 " No proceeding for the levy of any estate duty under this Act shall be commenced afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of six months was specifically mentioned in the old section and the section had no application to cases of grant of succession certificates. The conditions of s. 56 required to be complied with when an application for the grant of representation or succession certificate is made are mandatory and do not admit of any exception. It is incumbent upon a party who wants a grant of representation or succession certificate to comply with the conditions as laid down in s. 56. After receipt of the account delivered under s. 56 the Controller may proceed to make a provisional assessment under s. 57. Under that section estate duty shall be due from the date of death of the deceased and the Controller may at any time after the receipt of the account proceed to make in a summary manner a provisional assessment, of estate duty. Thereafter, when the person so assessed pays to the Controller or furnishes security to the satisfaction of the Controller for the payment of estate duty, if any, payable on the provisional assessment, the Controller shall grant a certificate to the effect that such duty has been or will be paid or that none is due, as the case may be, in respect of the property menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the assessment and depending upon the result thereof. The prescribed forms of certificate are E.D. 4 and E.D. 6 which have been set out earlier. Form E.D. 6 cannot apply to cases like the instant one because here it cannot be said that there is no claim for estate duty under the Act. The claim remains but cannot be enforced. Section 73A does not do away with the liability of the accountable person for payment of duty, it only bars the initiation of proceedings for levy of duty. Therefore, if the liability remains but proceedings cannot be initiated there is no question of full payment of duty. In such cases it cannot also be stated in the certificate by the Controller that there is ' no claim ' of estate duty from the accountable person. Therefore, if s. 73A is so construed as to apply to and govern a case coming under s. 56 then the latter section would become inapplicable in certain cases as mentioned above. Not only that, such a construction of s. 73A would also be in conflict with the provisions of the Indian Succession Act whereunder no time-limit is fixed for making an application for the grant of representation or succession certificate. Therefore, in removing the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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