Ashok
Singh Vs. Assistant Controller of Estate Duty. Calcutta & Ors [1992] INSC
152 (12 May 1992)
Mohan,
S. (J) Mohan, S. (J) Ray, G.N. (J)
CITATION:
1992 AIR 1756 1992 SCR (3) 190 1992 SCC (3) 169 JT 1992 (4) 147 1992 SCALE
(1)1126
ACT:
Estate
Duty Act, 1953:
Sections
53-A, 56(2), 58, 59 and 73A-Estate Duty-Levy of-Proceedings not commenced
within five years from the death of estate owner-Application for grant of
succession certificate made by the deceased's son after attaining
majority-Whether proceedings debarred-Whether succession certificate could be
denied on ground of non-production of certificate from
Controller-"Proceedings for the levy of any duty"-Whether includes
proceedings for assessment.
Interpretation
of Statues-Plain meaning to be given effect to.
Words
and Phrases-World 'levy'-Meaning of.
Legal
Maxims-Quai Hearet in Litera Haeret in Cortice.
HEAD NOTE:
The
appellant's father died intestate leaving behind the appellant and his brother.
Since they were minors at that time their maternal uncle was appointed as
guardian by the City
Civil Court. The
guardian never filed the account of the property or the return as required
under Sections 53 or 56 of the Estate Duty Act, 1953 in respect of the estate
of the appellant's father within five years from the date of his death.
On
attaining majority, the appellant as Karta, applied to the City Civil Court for the grant of a succession
certificate in respect of the estate of his father.
However,
during the proceeding, it was pointed out that a certificate from Estate Duty
Authority was necessary under Section 56(2) of the Act.
On
behalf of the appellant it was urged that in view of Section 73A of the Act,
the time to commence any proceedings for levy of estate duty 191 had become
barred inasmuch as five years had expired from the date of the death of his
father. Hence, the question of production of certificate under Section 56(2)
did not arise.
The
Chief Judge of the City
Civil Court held that
he could not go into this question since the authorities constituted under the
Act alone could decide this.
Thereafter,
the appellant filed the return with the Assistant Controller of Estate Duty. the
appellant was served with a notice under Section 58(2), along with a
questionnaire with the first respondent-the Assistant Controller of Estate
Duty. Despite the appellant's objection that no proceedings could be initiated
in view of the statutory bar under Section 73A, inasmuch as the period of five
years had expired from the date of his father's death, the appellant was called
upon to furnish certain particulars. Under these circumstances the appellant
challenged before the High Court the notice issued under Section 58(2) of the
Act, along with the questionnaire and the proceedings. A Single Judge cancelled
the notice in question.
On
appeal by the first respondent, the Division Bench held that Section 73A did
not do away with the liability of an accountable person for payment of duty; it
only barred the initiation of proceedings for levy of duty. Therefore, if the
liability remained but proceedings could not be initiated, there was no
question of full payment of duty.
As
such it could not be stated in the certificate by the Controller that there was
no claim of estate duty from accountable person; and, accordingly, the bar of
limitation was not applicable to cases as provided under Section 73A where
application was made for grant of representation or succession certificate and
the account or the copy application was delivered to the Controller as required
under Section 56.
In the
appeal before this Court, on behalf of the appellant it was contended that the
construction placed by the Division Bench was totally incorrect; Section 73A
was comprehensive in its scope in so far it threw a statutory bar preventing the
authority from commencing any proceeding after the expiry of five years; and
would take within it Section 56 also; that the High Court was not correct in
its view that no grant of representation of succession certificate could be
made after the expiry of five years;
that
Section 56 would have to be so read as to bring about a harmonious 192
construction between Section 73A and Section 56; and that strict literal
interpretation would defeat the object and purpose of the statutory bar under
Section 73A.
Allowing
the appeal, this Court,
HELD :
1.1 The language of Section 73A of the Estate Duty Act, 1953 is unambiguous.
This section throws a statutory bar and is comprehensive in nature. In so far
as it says "no proceeding under this Act", that means any proceedings
whatever in relation to levy can ever be commenced after five years. The world
"levy" used in Section 73A embraces within it the process of assesment
and also the imposition of tax. Therefore, it is certain that even a proceeding
for assessment cannot be taken after five years.
Padampat
Singhania and others v. Controller of Estate Duty, Kanpur, 122 ITR 162 at 163, relied on.
Controller
of Estate Duty v. Bbola Dutt, 130 ITR 468 approved.
P.C. Saxena
v. The State, 104 ITR 106, distinguished.
Block's
Law Dictionary (fifth edition) page 816, referred to.
1.2.
No doubt, both under sub-section (1), clause (b) and sub-section (2), the
language used in "no order shall be made upon his application". To
require in a case of this character, the production of certificate from the
Controller would amount to the insistence of an impossible compliance.
1.3
The Division Bench of the High Court was not correct in holding that Section
73A was only applicable to proceedings initiated under Section 59. Merely because
Section 59 says "subject to section 73A" that does not mean a
statutory bar under Section 73A is lifted. On the contrary, Section 53A
reinforces the rigour of Section 73A.
The
words "commencement of any proceedings under the Act" are
comprehensive enough to include Section 59 as well.
Equally,
it was not correct in holding that the application of 73A to cases coming under
Section 56 would make the latter Section unsustainable. That will be only
placing in literal interpretation of Section 56 regardless of situation.
1.4
If, therefore, the object of Section 73A is unambiguous to bar the 193
commencement of any proceeding for levy after the period of five years in the
case of first assessment, the rigour of the Section cannot be diluted, by
introducing a construction not warranted in the situation. If it was the
intention of the Parliament to provide exceptional cases making Section 73-A
inapplicable to such cases nothing would have been easier than to have so
expressed. The language under Section 73A is imperative. It admits of no doubt
that there cannot be two limitations (i) in a case where the assessee files a
belated return, and (ii) in a case where the assessee seeks a succession
certificate. In such a case where the assessee, as in the instant case, seeks a
certificate from the Controller, all that the Controller has to say is that no
such certificate could be issued since in view of the statutory bar under
Section 73A. In this context, Section 56 will have to be given meaning and
life.
He who
clings to the letter of the law clings ot the dry bone; that would be against
the spirit of the Act.
Herbert
Broom Legal Maxims, pp. 466-67.
CIVIL
APPELLATE JURISDICTION : Civil Appeal No. 2107 of 1980.
From
the Judgment and Order dated 16.3.1979 of the Calcutta High Court in Appeal No.
348 of 1973.
Shanker
Ghosh and P.K. Mukharjee for the Appellant.
B.B. Ahuja,
Ms. A. Subhashini and Manoj Arora for the Respondents.
The
Judgment of the Court was delivered by MOHAN J. This appeal by certificate is
directed against the judgment and order of the Calcutta High Court dated 16th March 1979 in Appleal No. 348 of 1973.
The
facts are that on 6th
February, 1967 one Ganga
Singh, governed by Mitakshara School of Hindu Law, died intestate. He left two
sons, the appellant and one Binod Singh. The wife of Ganga Singh had pre-deceased
him. As the appellant and Binod Singh were minor at the time of death of Ganga
Singh the maternal uncle of the appellant moved an application in the City
Civil Court at Calcutta in March 1967 for the appointment of guardian of the
appellant and his brother. Accordingly, he was appointed 194 as the guardian.
When the paternal uncle of the appellant and his brother appealed against the
order, the appointment was confirmed. However, the guardian was directed to
continue till the appellant attained majority.
On 7th December, 1970 the appellant attained majority.
As karta
he applied to the City
Civil Court at Calcutta for the grant of a succession
certificate in respect of the estate of Ganga Singh. It appears that the
guardian never filed the account of the property or the return as required
under Section 53 or 56 of the Estate Duty Act, 1953 (hereinafter referred to as
the Act). The appellant being a minor did not know about this. The result is
that no account had been filed by any person in respect of the estate of Ganga
Singh within five years from the date of his death.
In the
proceedings before City
Civil Court the grant
of succession certificate it was pointed out that a certificate from Estate
Duty Authority was necessary under Section 56(2) of the Act. It was urged on
behalf of the appellant that in view of Section 73A of the Act the time to
commence any proceedings for levy of estate duty had become barred inasmuch as
five years had expired from the date of the death of Ganga Singh. Hence, the
question of production of certificate under Section 56(2) would not arise.
By an
order dated July 25,
1972 the learned Chief
Judge of the City Civil
Court held that he
could not go into this question since the authorities constituted under the Act
alone could decide this. Since the appellant was advised to file an account to
the Estate Duty Authority, he filed the return on 18th August, 1972 with the Assistant Controller of Estate Duty. As per the return
the estate was valued approximately at Rs.52,000. The appellant was served with
a notice under Section 58(2) along with a questionnaire by the first
respondent, the Assistant Controller of Estate Duty, fixing the date for
hearing. On the said date of hearing the appellant contended that no
proceedings could be initiated in view of the statutory bar under Section 73A,
inasmuch as the period of five years had expired from the date of the death of Ganga
Singh. Hence, no proceedings could be commenced. In spite of these objections,
the first respondent adjourned the case calling upon the appellant to furnish
certain particulars. It is under these circumstances the notice dated 4th of
September, 1972 issued under Section 58(2) of the Act along with a questionnaire
and the proceedings were challenged the High Court of Calcutta by way of a writ
petition in Matter 195 No. 417 of 1972. The learned Single Judge making the
rule absolute held that the impugned notice under Section 58(2) of the Estate
Duty Act, 1953, dated 4th
September, 1972 was
cancelled by a writ of mandamus.
Aggrieved
by the said order, the first respondent took up the matter in appeal. The
Division Bench considered the scope of Section 73A vis-a-vis Section 56 and
concluded that Section 73A does not do away with the liability of an 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 a case, it
cannot be stated in the certificate by the Controller that there is no claim of
estate duty from accountable person. Accordingly, the bar of limitation is not
applicable to cases as provided under Section 73A where application is made for
grant of representation or succession certificate and the account or the copy
application is delivered to the Controller as required under Section 56. Thus,
this appeal by special leave.
Mr. S.
Ghosh, learned counsel for the appellant would urge that the construction
placed by the Division Bench is totally incorrect. Section 73A is comprehensive
in its scope in so far as it throws a statutory bar preventing the authority
from commencing any proceeding after the expiry of five years. Having regard to
the use of words "under this Act" that will take within it Section 56
also. If in any case of this character the appellant is required to produce a
certificate from the Controller it will be requiring him to do the impossible.
In respect of his submission he would place reliance on the ruling of the
Allahabad High Court in Controller of Estate Duty v. Bhola Dutt, (130 ITR 468).
That
was a case when the proceeding was sought to be commenced on the basis of a
return filed by the accountable person voluntarily after five years. The High
Court held that the Assistant Controller had no jurisdiction because of the
expiry of the limitation. It is that ratio which has to be adopted in this
case.
If the
interpretation placed by the High Court is accepted it would amount to putting
a premium on the laches of the authority and enabling it to do something
indirectly which it cannot do even directly.
The
view of the High Court that no grant of representation or succession
certificate can be made after the expiry of five year, cannot be supported.
Section 56 will have to be read as to bring about a har- 196 monious
construction between Section 73A and Section 56. No doubt if there is no
original assessment, reassessment is impossible but on the score the statutory
bar under Section 73A cannot be lifted. If, as held by the High Court, Section
73A is made inapplicable where application is made for the grant of
representation or succession certificate and the account or copy application is
delivered to the Controller as required by Section 56 it will be conferring an
additional power on Controller which is not in contemplation under the Act. The
strict literal interpretation will defeat the object and purpose of the
statutory bar under Section 73a. In support of the submission reliance is
placed on Herbert Broom's Selection of Legal Maxims : QUI HAERET IN LITERA
HAERET IN CORTICE (Page 466).
In
opposition to this, Mr. B.B. Ahuja, learned counsel for the Revenue, comments
the acceptance of the view of the Division Bench of the High Court. When
Section 56 is mandatory in character the requirement of that Section Cannot be
dispensed with even by Court. The party who seeks a succession certificate or
representation in Civil
Court is bound to fulfil
the statutory conditions without any exception, is exactly the view taken by
the Delhi High Court in P.C. Saxena v. The State, (104ITR 106).
Section
73A used the word "levy". As to what exactly is mentioned by levy
under the Act could be gathered by Padampat Singhania and other v. Controller
of estate Duty, Kanpur, (122 ITR 162 at 163). Therefore,
there is no merit in the plea.
We
shall now proceed to consider the relative merits of the respective
submissions. Section 73A reads as follows:
"73A.
No proceedings for the levy of any estate duty 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; and (b) in the case of a re-assessment, after the
expiration of three years from the date of assessment of such property to
estate duty under this Act." A careful reading of the above Section
discloses the following :
197 (i)
For the levy of any estate duty (ii) Under this Act (iii) No proceedings shall
be commenced.
We are
concerned, in this case, only with clause (a).
Therefore,
the fourth qualification will be after the expiration of five years from the
date of death of the deceased. The language, in our considered view, is
unambiguous. This section throws a statutory bar and is comprehensive in
nature. In so far as it says "no proceeding under this Act" that
means any proceeding whatever in relation to levy can ever be commenced after
five years. The word "levy" in Black's Law Dictionary (fifth edition)
at page 816 is stated thus :
"Levy,
v. To assess; raise; execute; exact; tax;
collect;
gather; take up; seize. Thus, to levy (assess, exact, raise, or collect) a tax;
to levy (raise or set up) a nuisance; to levy (acknowledge) a fine; to levy (inaugurate)
war; to levy an execution, i.e., to levy or collect a sum of money on an
execution." As a matter of fact, in Padampat Singhania (supra) the meaning
of this word under this very Act came to be laid down which is extracted as
under:
"The
word "levy" has been interpreted by the Supreme Court in the case of
Assistant Collector of Central Excise v. National Tobacco Co. of India Ltd.,
AIR 1972 SC 2563, as embracing within it the process of assessment and also the
imposition of tax." Therefore, even a proceeding for assessment cannot be
taken after five years. That much is certain. Now, we come to the decisions
cited on behalf of the appellant. In Controller of Estate Duty v. Bhola Dutt,
(130 ITR 468 at 470) the following passage is found:
"This
provision lays down a clear and categorical bar to the commencement of
assessment proceedings.
They
cannot be commenced after the expiry of five years from the date of death of
the deceased.
198
Under the E.D. Act, the assessment proceedings commence with the filing of the
return as prescribed by s. 53(3) of the Act and, under it, the return could
validly be filed within six months of the date of death or within such further
time as may be extended by the Asst. Controller. That provision obviously is
not applicable to the facts of the present case. Under s. 56 of the Act another
method of commencement of assessment proceedings is by the Controller requiring
the accountable person to file the requisite return.
Yet
another method of commencement of assessment proceedings is prescribed by s.58
of the Act. Sub- section (4) of s.58 provides that in any case where no account
has been delivered as required by s.53 or s.56, or the person accountable fails
to comply with the terms of the notice served under sub-s.
(2), the
Controller shall make the assessment to the best of his judgment and determine
the amount payable as estate duty. In this provision assessment proceedings
could be commenced by the Controller in case the requisite return has not been
filed by the accountable person. But to all these modes of commencement of
assessment proceeding s.73A is applicable. Ex hypothesis assessment proceedings
under either of these provisions could not validly be commenced after the
expiry of the period of limitation prescribed by s.73A of the Act. Here, the
proceedings were sought to be commenced on the basis of the return filed by the
accountable person voluntarily but after the expiry of the prescribed period of
five years. In view of s.73A, the Asst. controller had no jurisdiction to
commence the proceedings even on the basis of such a voluntary return.
Our
attention was invited to s.56 of the Act.
It is
true that s.56 does not prescribe any period of limitation, but it applies in
limited circumstances. Sub-section (1) of s.56 applies to a case where the
executor of the deceased wants a representation certificate. Then alone he is
required to file an account of the properties of the deceased to the
Controller. Under sub-s.(2), the accountable person is required to produce a certificate
from the Controller that the requisite estate duty has been paid in respect of
the property for which a succession certificate is applied for. Proceedings
under s.56 commence when some one 199 desires to have a representation
certificate or a succession certificate, not otherwise. In the present case,
none of the two situations have occurred. We are, therefore, clear that the
assessment proceedings were invalid and were rightly quashed by the
Tribunal." We think the High Court is right in its approach. In opposition
to this, what is relied on is the case in P.C.
Saxena
(supra). It is sufficient to extract the head-note.
"In
1966 the appellant applied in the court of the Subordinate Judge for grant of a
succession certificate to realise various debts and securities of the deceased
who had died on October
28, 1959.
The
Subordinate Judge allowed the petitions and ordered grant of the succession
certificate subject to the production of a certificate of clearance in respect
of estate duty under section 56(2) of the Estate Duty Act, 1953. The appellant
thereupon applied for exemption from complying with the condition for
production of the clearance certificate in respect of estate duty claiming that
in view of Section 73A of the Act no proceedings could be commenced for levy of
estate duty on the estate of the deceased after the expiry of five years from
the date of his death. The Subordinate Judge rejected the application for
exemption. On appeal to the High Court :
Held,
dismissing the appeal, (i) that the civil court did not possess any
jurisdiction or discretion to waive the condition under section 56(2) of the
Act which was precedent to the grant of representation or succession
certificate;
(ii) that
the bar imposed by Section 73A of the Act could not be claimed by a party who
sought a succession certificate and applied to a civil court for grant of
representation or succession certificate and he was bound to fulfil the
statutory conditions, without any exception, before obtaining the certificate."
We are of the view that this is only an authority for the proposition that the
civil court does not possess any jurisdiction or discretion to waive the
condition to produce the certificate from the Controller which is a precedent
to the grant of representation or succession certificate.
200
Now, we come to Section 56. That is extracted below:
"56.
(1) In all cases in which a grant of representation is applied for- (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 section 19-I of the Court-Fees Act, 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 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 application has been or will be
paid, or that none is due, as the case may be." No doubt, both under
sub-section (1) clause (b) of sub- section (2) the language used is "no
order shall be made upon his application". To require in a case of this
character the production of a certificate from the Controller would amount to
the insistence of an impossible compliance.
The
view of the Division Bench of the High Court is unacceptable to us when it
holds that Section 73A is only applicable to proceedings initiated under
Section 59.
Merely
because Section 59 says "subject to section 73A" that does not mean a
statutory bar under Section 73A is lifted.
201 On
the contrary, Section 53A reinforces the rigour of Section 73A. The words
"commencement of any proceedings under the Act" as we stated above
are comprehensive enough to include Section 59 as well.
Equally,
the finding that the application of Section 73A to cases coming under Section
56 would make the latter Section unsustainable is not correct. That will be
only placing a literal interpretation of Section 56 regardless of situation. In
this connection, we may usefully quote Herbert Broom's Legal Maxims (Pages
466-67) :
"QUI
HAERET IN LITERA HAERET IN CORTICE (Co.
Litt 283b.)- He who considers merely the letter of an instruments goes skindeep
into its meaning.
The
law of England respects the effect and substance
of the matter, and not every nicety of form or circumstance. "The reason
and spirit of cases make law, and not the letter of particular
precedents". Hence it is , as we have already seen, a general rule
connected with the interpretation of deeds and written instruments, that, where
the intention is clear, too minute a stress should not be laid on the strict
and precise signification of words. For instance, by the grant of a remainder,
a reversion may pass, and a converso; and if a lessee covenant to leave all the
timber which was growing on the land when he took it down, but leaves it there;
for this, though a literal performance of the covenant, would defeat its
intent." "In interpreting an Act of Parliament, likewise, it is not
always a true line of construction to decide according to the strict letter of
the Act; but, subject to the remarks already made, the Courts may consider what
is its fair meaning, and expound it differently from the letter, in order to
preserve the intent. The meaning of particular words, indeed, in statutes, as
well as in other instruments, is to be found not so much in a strict
etymological propriety of language, nor even in popular use, as in the subject
or occasion on which they are used, and the object that is intended to be
attained." 202 If, therefore, the object of Section 73A is unmbiguous to
bar the commencement of any proceeding for levy after the period of five years
in the case of first assessment, we do not think we can dilute the rigour of
Section 73A by introducing a construction not warranted in the situation.
If it
was the intention of the Parliament to provide exceptional cases making Section
73A inapplicable to such cases nothing would have been easier than to have so
expressed. The language under Section 73A is imperative.
It
admits of no doubt that there cannot be two limitations (i) in a case where the
assessee files a belated return and (ii) in a case where the applicant seeks a
succession certificate. In such a case where the assessee, as in the instant
case, seeks a certificate from the Controller, all that the Controller has to
say is, that no such certificate could be issued since in view of the statutory
bar under Section 73A. In this context, Section 56 will have to be given
meaning and life. He who clings to the letter of the law clings to the dry
bone; that would be against the spirit of the Act.
In the
result, we set aside the impugned judgment. The appeal will stand allowed.
However, there shall be no orders as to costs.
N.P.V.
Appeal allowed.
Back