V VENKATARAMAN Vs. CONTROLLER OF ESTATE DUTYMADRAS

JUDGEMENT

(1.) The following question has been referred under S. 64(1) of the Estate Duty Act, 1953: "Whether on the facts and in the circumstances of the case, estate duty was correctly levied on the agricultural lands situate in the Madras State.'' The fact relating to this reference are as follows: One V. Vaidyanatha Aiyar, who owned in his individual capacity agricultural lands in the Madras State, houses and other assets, died on 17-4-1955. The applicant, who is an accountable person within the meaning of S. 2(12-A) of the Estate Duty Act 1953, submitted the account of the estate left by the deceased to the Assistant Controller of Estate Duty, Madras, who determined the principal value of the estate at Rs. 1,43,990. That sum included a sum of Rs. 67,520, the value of the agricultural lands owned by the deceased. The applicant claimed that there could be no levy of estate duty on the value of the agricultural lands, and that he was entitled to a rebate of estate duty on the value thereof from out of the duty fixed for the value of the entire estate. This claim was made on the basis of certain facts which may now be referred to. The Estate Duty Act, 1953, which for the sake of brevity will hereafter be referred to as the Act came into force on 15-10-1953. The Act levied a duty on the value of the property constituting the estate of a deceased person. A distinction was, however, made in the Act between agricultural land and other property. In the computation of the value of the estate for the levy of the duty, the value of the agricultural lands situate within a State could be included only if that State was mentioned in the schedule I to the Act. Under the provisions of the Act as enacted, Madras was not one of the States mentioned in the first Schedule; the result was that under the provisions of the Act in its original form, there could be no levy of estate duty on the value of agricultural lands situate in that State. But the Constitution and the Act provided for the States which had not been included, to come into Schedule I. On 2-4-1955, the Madras State legislature passed a resolution, adopting the Estate Duty Act in respect of agricultural lands in that State. The Central Government issued a notification in accordance with S. 5(2) of the Act which had the effect of adding Madras State to the first schedule thereto. The notification was published in the Gazette of India on 116-1955.

(2.) The case for the applicant is that, as the inheritance to the estate of the deceased had opened before the date of the publication of the notification, when alone the provisions of the Estate Duty Act became operative with respect to the agricultural lands, no duty would be payable in respect of them. The Assistant Controller of Estate Duty, Madras, overruled the claim for exemption of duty in regard to the agricultural lands. That view was upheld by the Central Board of Revenue. That authority, however, has referred the matter for the opinion of this court under S. 64(1) of the Estate Duty Act.

(3.) The only question for consideration is whether the estate duty can be levied on the agricultural lands owned by the deceased in the State f Madras, death having taken place prior to the publication of the notification under S. 5(2).