MOHAMMAD ESSA MOOSA SAIT Vs. GIFT TAX OFFICER

JUDGEMENT

(1.) The petitioner is the legal representative of the deceased Mohammed Issac Haji Moosa Sait. He challenges Ext. P1 order in so far as it relates to a demand for payment of interest under S.32 of the Gift Tax Act, 1953 in the sum of Rs.81.981/- for the period from 17-12-1971 to 31-3-1979. He also challenges Ext. P3 order of the Commissioner of Income tax affirming Ext. P1.

(2.) The Gift Tax Officer completed the assessment on 27-7-1968 respecting the estate of the deceased and the taxable gift was determined at Rs.4,39,600/-. The gift tax payable thereon was determined at Rs.1,57,450/-. A demand notice was duly served on the assessee. The assessee was allowed to pay the amount in instalments. He paid a total sum of Rs.65,000/- in instalments. In the meantime, his appeal was allowed by the first appellate authority in part by reducing the gift tax to Rs.15,982/-. As a result of this reduction, a sum of Rs.48,580/- became refundable to the assessee. The refund was, however, withheld by the order of the Commissioner. Subsequently, the revenue's appeal was dismissed. Thereafter, a reference was made to the High Court on the question of the applicable personal law. That question was answered by this Court in favour of the revenue, as a result of which the substratum of the appellate orders disappeared, and the order of the Gift Tax Officer was restored in full vigour.

(3.) Consequent upon the answer given by this Court and the restoration of the original order of the Gift Tax Officer, the assessee was called upon by Ext. P1 order to pay interest under S.32(2) of the Gift Tax Act, 1958 in respect of the unpaid amount. It is that order and Ext. P3 by which that was affirmed that are now challenged in the present proceeding under Art.226 of the constitution.