G D NARENDRA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THOUGH the point involved in these two cases are the same, the facts are slightly different. In both the writ petitions the petitioner is the accountable person. In W. P. No. 220 of 1966, the petitioner was the beneficiary under the will of late M. Mouna Guruswami Naidu, Zamindar of Neikarapatti. Mouna Guruswami Naidu died on October 23, 1956. The estate of the testator was assessed to estate duty by the Deputy Controller of Estate Duty, Southern Zone, who arrived at the principal value of the estate at Rs. 41, 09, 124 and levied an estate duty of Rs. 10, 89, 443.40. On appeal, the Central Board of Revenue, by its order dated March 3, 1960, reduced the principal value of the estate by Rs. 4, 90, 270. In the meantime, the petitioner bad to take out a probate of the will of late Mouna Guruswami Naidu. When the Deputy Controller finalised the estate duty assessment on August 30, 1958, he took into account a sum of Rs. 87, 049.60 paid as and towards probate duty and after deducting the same from the estate duty levied by him, he arrived at the net estate duty and demanded the same. As already stated, the Central Board of Revenue, on appeal, revised the value of the estate, in consequence of which the estate duty was also reduced. After the Board passed its order, a demand for estate duty was raised after deducting the probate duty already paid. Subsequently, it transpires that the Collector of Madras by his order dated April 6, 1960, and in exercise of the powers conferred on him under the Madras Court-fees Act, revised the quantum of probate duty as, according to him, the Estate was under-valued and a lesser duty was paid and, therefore, an additional demand for probate duty in the sum of Rs. 51, 199.14 was raised towards such duty. After full enquiry the additional probate duty was paid by the petitioner on March 3, 1964. Incidentally, it may be stated that the petitioner was allowed to pay the estate duty in annual instalments of Rs. 57, 400. After the increase of the probate duty by virtue of the proceedings initiated by the Collector of Madras, the petitioner claimed a further deduction in the estate duty in the sum of Rs. 51, 199.14. He in turn applied to the Assistant Controller on March 4, 1964, for a pro tanto reduction of the estate duty demand based on the supervening increased demand for payment of probate duty. In the first instance the petitioner made representations to the Central Board of Direct Taxes through the Controller of Estate Duty who ultimately dealt with this representation and dismissed the same. Contemporaneously, however, the petitioner appears to have taken action by petitioning the Assistant Controller, as already stated, on March 4, 1964, who rejected the claim as time-barred.

(2.) THE Assistant Controller was of the view that this application squarely came within section 61 of the Estate Duty Act and as an order of assessment for estate duty could be rectified under section 61 within five years from the date of final assessment and as such time has lapsed, he did not entertain the application for relief made by the petitioner under section 50 of the Estate Duty Act. THE petitioner's contentions are two-fold. THE application for relief under section 50 is not time-barred even assuming that section 61 would apply to the instant case as the Central Board of Revenue, as the ultimate authority, finally determined the estate duty payable only on March 3, 1960, and the petitioner having applied for relief under section 50, if it is taken to be an application for rectification of the assessment under section 61 on March 4, 1964, which is well within five years from the date of the final assessment, the Assistant Controller failed in his statutory duty to give the necessary relief. In fact, the Deputy Collector, passed the order on March 28, 1964. THE other alternative ground on which the petitioner seeks for the issue of a writ of certiorari to quash the ultimate order of the Controller who conveyed the ultimate order of rejection of the request for relief dated November 8, 1965, is based on the plain meaning of section 50 of the Estate Duty Act. Notwithstanding the fact that no machinery is provided expressly under the Act for grant of such relief and as the application for such relief does not squarely fall under the caption "rectification" contemplated in section 61 of the Act, the petitioner would urge that under the general principles of law the respondent can be compelled to give such relief as without it the statutory relief obtainable by the petitioner would remain in the statute book only as an empty formality and cannot be secured in reality THE facts in W. P. No. 1774 of 1969 are as followsTHE petitioner as the accountable person and as the beneficiary under the will of late R. V. Rajagopala Iyer is seeking for a similar relief as above, but in the following circumstances.

(3.) THE Mysore High Court had occasion to consider a converse case in Mrs. Ethel Rodrigues v. Assistant Controller of Estate Duty . THEre the Assistant Controller assessed the estate for estate duty on March 27, 1957, after valuing the estate at a certain figure for purposes of estate duty. Subsequently, it was discovered that the valuation of the estate made in the probate proceedings was much higher. THE Assistant Controller purported to reopen the assessment under section 61 of the Estate Duty Act on the ground that a mistake has occurred in the order and that he wished to rectify the mistake. THE learned judges held that, for the purpose of determining the estate duty leviable, the record in the probate proceeding is not relevant. It is only after the estate duty due is determined the question of deduction arises. THE question of deduction has nothing to do with the determination of the estate duty due. THE operation of section 50 comes in at a stage after the estate duty is determined. THEse observations in a way support my view that the proceedings under the Estate Duty Act for purposes of assessment and levy are different and independent from proceedings under which a relief could be obtained by an accountable person on the fact that probate duty has been paid over the same estate at some point of timeMr. Balasubrahmanyan relying upon a decision of the Calcutta High Court in Bhubaneswar Sarkar v. Union of India , urges that in the absence of specification of some means for the grant of relief in cases where probate duty is paid in point of time later than the levy of the estate duty, the petitioner cannot be granted any relief. In the above case, Banerjee J. of the Calcutta High Court took the view that"What probate duty is payable or has been paid can never be made part of the estate duty records, unless the probate duty has been assessed and paid and the evidence of payment has been put on the record of the estate duty proceedings. If the estate duty be assessed very quickly and the probate duty be assessed and paid later on, an assessee never can get advantage of section 50 of the Estate Duty Act, because at the time of assessment of estate duty, he may not be able to put in evidence of probate duty paid by him. This seems to me a lacuna, which requires consideration. It is not necessary for me, however, to go into that question because, as I have already found, the application for rectification or refund must fail on the ground of limitation and on the ground of other defects noticed by me." Prima facie, the principal observations contained in the excerpt appear to be obiter dictum. Even otherwise, I am unable, with respect, to agree with the learned judge. In the words of Lord Diplock in Director of Public Prosecutions v. Bhagwan , already referred to, the judge is bound to take into account the purpose of any statutory provision and the means intended to achieve the purpose and in case of a latent or patent ambiguity he is bound to interpret them in the sense in which they are more likely to promote rather than obstruct its achievement. "Relief" means are lease from an obligation. By the mere fact that there is no prescribed procedure in the Act or the rules for achieving its purpose, courts should not be insensitive to their duty to give such reliefs if justice of the case requires and if the purpose of the statutory provision has to be achieved and advanced. In this view of the matter, the petitioners are entitled to succeedTHE further argument of the revenue is that if at all the petitioners could gain any relief, it could only be by invoking section 61 of the Estate Duty Act. Section 61 deals with rectification of mistakes in an order of assessment. It provides that at any time within five years from the date of any order passed by the appropriate authority, such authority may on its own motion rectify any mistake apparent from the record and shall, within a like period rectify any such mistake which has been brought to the notice of such authority by the person accountable. It is urged that if probate duty has not been paid on the date when the estate duty assessment is completed and, therefore, the probate duty was not deducted as provided from the estate duty leviable under the Act, and if an occasion arises where probate duty is paid at a later point of time, then the accountable person can only seek relief under section 61 and thus incidentally seek relief under section 50.