P L D 1967 Karachi 804 (PLP)

WAHIDUDDIN AHMAD, J.‑In this Reference under the Estate Duty Act, 1950 the dispute between the parties is in respect of property No. WO 2/44 and WO 7/30 situated at Wadhumal Udharam Quarter, Karachi. After .the death of her husband Mst. Zainab Bai got these two properties in lieu of her 1/8th share. In the year 1952 Mst. Zainab Bai died and Seth Ghulam Hussain Noorbhai, her son, inherited them. On 4th February 1956, he also died and the above‑mentioned properties were inherited by Saifuddin Ghulam Hussain. In the case of the assessment of estate duty of Seth Ghulam Hussain Noorbhai, Saifuddin claimed concession under section 34 of the Estate Duty Act in respect of these properties on the ground that within a period of five years of the first death the property was subjected to estate duty. This claim was rejected by the Deputy Controller of Estate Duty but in the appeal which came up before the Income‑tax Appellate Tribunal the contention of the accountable person found favour and relief was granted to him under the above‑mentioned provision of law. The learned Tribunal came to the conclusion that both on the definition of the word `land' in Stroud's Judicial Dictionary, Third Edition and in Sind Land Revenue Code, 1879 it includes the building standing thereon and the above‑mentioned properties are covered by the said provision of law. The Department being dissatisfied with the decision of the Income‑tax Appellate Tribunal under section 59‑A of the Estate Duty Act has got the following question of law referred to this Court :‑ "Whether in the facts and circumstances of the case the Appellate Tribunal was justified in interpreting the term "Land" used in section 34 of the Estate Duty Act (X of 1950) includes buildings ?" The learned Tribunal referred this question for the opinion of the High Court under the above‑mentioned provision of law by order dated 12th August 1960. In order to appreciate the dispute between the parties it will be useful to reproduce the provision of section 34 of the Estate Duty Act which is as under :‑ "Where the Board is satisfied that estate duty has become payable on any property consisting of land or on a business (not being a business carried on by a Company) or any interest in land or such a business, passing upon the death of any person and that subsequently within five years estate duty has again become payable on the same property or any part thereof passing on the death, the amount of estate duty payable on the second death in respect of the property so passing shall be reduced." The accountable person's contention before the Income‑tax Tribunal was that since the above‑mentioned two properties had become subject to payment of estate duty twice within 5 years the amount of estate duty payable on the second death in respect of the property so passing should be reduced. The contention of the Controller of Estate Duty, Karachi was that the above provision of law is only applicable to land and has no application in cases where buildings, houses or other properties have been constructed on it.

3. In support of his contention, Mr. Mansurul Arfin, the learned counsel for the Department, has contended that if the intention of the Legislature was to include immovable property constructed on lands it could have easily mentioned it in the provision under consideration. He referred us to definition of "lands" in Land Acquisition Act and other enactments in support of his contention that in cases where the Legislature intended to give a wide definition to the word `land' it has clearly stated that it includes things attached to the earth or superstructure raised on the land. He contended that land should be construed in its etymological sense and not as understood in law. He further referred us to two decisions of the Indo Pakistan High Court reported in Jatindra Nath Roy Choudhury and others v. Narayan Das Khetri (A I R 1926 Cal. 97) and (Bakhshi) Ghazenfar Ali v. (Bakhshi) Muazafar Ali (A I R 1936 Lah. 51). In the first case a sale was held under the Bengal Revenue Sales Law of 1859 and it was urged that on a sale of land under the above provision of law the superstructure existing on it also passed with the land. In that case reliance was placed on the definition of 'land' in section 3 (a) of the Land Acquisition Act and of immovable property under section 3 of the Transfer of Property Act. This contention was repelled on the ground that what was sold was the interest of the Crown which did not include any superstructure existing on the land. It was further observed that the definition of 'land' in the above‑mentioned two enactments were expressly restricted to the enactments in which they appeared and could not be imported into Act XI of 1859 with which the provisions of Act VII of 1868 had to be read by reason of section 30 of the Act XII of 1868. In the second case the question before a Division Bench of the Lahore High Court was whether the rule of English law to the effect, that whatever is fixed to the land becomes a part thereof, bad applicability in India in lieu of the provision of sections 51, 63 and 108 of the Transfer of Property Act. In that case the dispute was between two brothers. One of the two brothers owning certain land in equal shares built a house arid planted a garden on a portion of it entirely at his own expenses. The other brother claimed his share in the house and the garden by seeking declaration to that effect. Their Lordships held that the‑rule of English law to the above‑mentioned effect was not applicable to cases in India and the other brother was not entitled to claim a declaration that he had a share in the house and the garden. In our opinion, these cases are distinguishable and the principle enunciated in them has no application to the facts of the present case.

4. The question whether the word `land' used in section 34 of the Estate Duty Act used in a restricted sense or in a wider sense, has to be construed on the language of the said provision of law. It will be noticed that under section 34 where the Board is satisfied that estate duty has become payable on any property consisting of land or any interest in land and that subsequently within five years estate duty has again become payable on the same property or any part thereof passing on the death the amount of the estate duty payable on the second death in respect of the property so passing shall be reduced. It is quite clear that the property mentioned in it not only refers to 'land' but also any "interest in land". "Interest in land" is a much wider term and would naturally include the superstructure raised on it such as houses and buildings of all kinds. It seems to us that the question what is the import of the words "interest in land" in taxation matters has always been decided on the general principles recognised in law.

5. In S. F. Sultan Ahmed Rowther and others v. The State of Madras (A I R 1954 Mad. 949) a case under Madras General Sales Tax Act these words were considered in its generic sense and it was held that an agreement to collect the usufruct of the trees on the land did not create any interest in land. Similarly in Messrs Mohanlal Hargovind v. Commissioner of Income‑tax (AIR 1949 P C 311) the contract with reference to the purchase of the tender leaves was held to be of goods. In the present case too as there is no definition of "land" and "interest in land" in the above enactment it will not be proper for finding out the import of these words to their definitions in other enactments.

6. As mentioned in Wharton's Law of Lexicon (14th Edition) at page 564 that the word land used in its generic term comprehends every species of ground, soil, or earth or whatsoever as meadows, pastures, woods, moors, waters, marshes, furze and heath. It includes also houses, mills, castles and other buildings for with the conveyance of the land the structure upon it also passes. Looking at this case from this angle it cannot be disputed that on the two deaths not only the land over which the structure is standing passed but the buildings or houses over it also passed to their heirs. We have no hesitation in holding that both the land and building standing on them passed to the heirs. It cannot therefore be doubted that the heirs acquired both land and interest in land of the said properties.

7. We are, therefore, satisfied that both the properties having been subjected to estate duty twice within five years of the first death, the accountable party was rightly granted concession under section 34 of the Estate Duty Act of 1950. On this view of the mater no exception can be taken to the order passed by the Income‑tax Appellate Tribunal. We would therefore answer the question referred to this Court in the affirmative. The parties will bear their own costs of these proceedings. S. Q. Reference answered in the affirmative.