SUBHAKARAN RAJGHARIA Vs. COMMISSIONER WEALTH TAX

JUDGEMENT

(1.) The present rule was issued on October 3, 1977, at the instance of the writ petitioner, Subhakaran Rajgharia, praying, inter alia, for issue of a writ of mandamus commanding the respondents to cancel, withdraw and/or rescind the notice dated September 20, 1977, and the notices, proceedings and orders relating thereto under Section 25(2) of the Wealth -tax Act, 1957, for the assessment years 1966-67 to 1971-72.

(2.) It is stated that on and from March 1, 1965, the trust under the deed of settlement dated March 22, 1954, came to an end and the petitioner ceased to be a trustee in respect of the properties of the trust. On and from March 1, 1965, Smt. Radha Devi Rajgharia took over charge of the said trust properties as full owner thereof and as her own estate. Since March 1, 1965, the petitioner and/or any other erstwhile trustees under the said settlement were not and are not the owners and hence not assessees or representative assessees within the meaning of the Wealth-tax Act, 1957, in respect of the said properties. It is further alleged that by two separate orders of assessment both dated April 23, 1976, made under Section 16(3) of the said Act, respondent No. 2, Wealth-tax Officer, "C"-Ward, District III(2), Calcutta, assessed the present petitioner as trustee of the estate of Smt. Radha Devi Rajgharia for the assessment years 1964-65 and 1965-66. For the assessment year 1964-65, the net wealth was valued by the said respondent No. 2 at Rs. 2,10,335. In so assessing, respondent No. 2 valued the premises at No. 5, Hungerford Street, Calcutta, at Rs. 1,31,012 as mentioned in the writ petition. Then, on or about September 22, 1979, the petitioner was surprised to receive from respondent No. 1 a notice dated September 20, 1977, purportedly issued by him under Section; 25(2) of the said Act for the concerned impugned assessment years, being 1964-65 to 1971-72 treating the petitioner as the trustee to the estate of Smt. Radha Devi Rajgharia alleging therein that respondent No. 2 completed the wealth tax assessments for the assessment years 1964-65 to 1971-72 on April 23, 1976, and May 14, 1976, erroneously and prejudicially to the interests of the Revenue as stated. Stating all those facts in detail, the petitioner has come up to this court to seek relief on the ground that the assessment orders and the valuations made therein by respondent No. 2 in exercise of his statutory powers and duty under Section 7 of the said Act in accordance with a well-laid method of valuation in law could not be said to be erroneous or prejudicial to the interests of the Revenue within the meaning of Section 25(2) of the said Act. The main thrust of the allegation of the petitioner is that inasmuch as the valuation was made by the said respondent No. 2 in conformity with the well recognised method of valuation and was made bona fide and is not perverse and there are no conditions, facts and materials on the basis whereof it could be said that the said valuation and assessments thereon were erroneous and prejudicial to the interests of the Revenue and, therefore, respondent No. 1 is acting and proceeding illegally and without jurisdiction.

(3.) Dr. Pal, learned advocate for the writ petitioner, has strongly argued that the petitioner is challenging the notice issued under Section 25(2) of the Wealth-tax Act, 1957, by the Commissioner of Wealth-tax. The duty assessed in respect of the assessment years for 1964-65 and 1965-66 in respect of premises No. 5, Hungerford Street, Calcutta, purchased on December 28, 1963, at a price of Rs. 1,31,012 is bad as the whole structure was demolished and a new construction was made. Such new construction was started from the assessment year 1966-67 and this is recorded in the assessment order for 1966-67. Learned advocate has canvassed before this court that in view of the above factual revision, it cannot be disputed that the Commissioner of Wealth-tax had issued the notice under Section 25(2) of the Wealth-tax Act on that basis. The reasoning is that the valuation of the immovable property at No. 5, Hungerford Street, Calcutta, is not in conformity with the provisions of Section 7 of the Wealth-tax Act. He has laid great emphasis upon the report of the Valuation Officer. He has drawn the attention of the court to the definition of Valuation Officer in Section 2(r) of the Wealth-tax Act. According to this section :