1968 PLP 907 (PTD)

The Estate Duty Act as it was enacted originally authorised a Board to make the assessment. Subsequently by certain amendments, the Board was replaced by the Controller of Estate Duty who m case of not being satisfied with the valuation with the return filed by the accountable party may determine it himself subject to an appeal to the Tribunal under section

59. When Muhammad Amir Khan's case came before the Supreme Court, his Lordship Kaikaus, J. delivering judgment of the Court observed as follows: "In view of the substitution of the Board by the Controller it was necessary that section 57 which provided for the collection of estate duty on the basis of the account filed by the accountable party or amended in accordance with the procedure as provided in the original Act should have been suitably amended so as to include a reference to collection of duty on the basis of a determination by the Controller or the Appellate Tribunal. This, however, admittedly on account of a slip by the draftsman, was omitted and section 57 remained in its original form. It became partly inappropriate and partly meaningless. It continued to refer to subsection (5) of section 59 whereas that had ceased to exist and it made no reference to the Controller at all. However, although section 57 was not amended, a new provision authorising a demand notice was introduced by section 58‑D." It was further stated by his Lordship: "By the Finance Act of 1956, section 57 was amended so as to correct the mistake that had crept into it. At the same time, the Controller was given power to re‑open, cases which had previously been closed if the original valuation was discovered to be too low." On a consideration of the points raised before the Lahore High Court and repeated before the Supreme Court, it was observed: "This would show that by the Constitution estate duty in respect of agricultural land was within the exclusive jurisdiction of the Provincial Legislature, while estate duty on property other than agricultural land was in exclusive jurisdiction of the. Federal Legislature." The argument of the Attorney‑General was considered and repelled by the Supreme Court in the following terms: "The argument of the learned Attorney‑General is wholly unacceptable to us. It would be a most unusual provision that whereas one of the two Legislatures should have exclusive jurisdiction to impose duty, the other should have exclusive jurisdiction to regulate the procedure in respect to it." It was then ultimately observed: " . . . . . Section 57 would still remain in 1956 as it was after the amendment of 1953." In other words, the view taken by the Lahore High Court that the Finance Act of 1956 failed to amend section 57, in respect of agricultural land was approved. After having found that section 57 remained un-amended, the Supreme Court held that this was an occasion which called for modification of the Language of an enactment by judicial pronouncement. The appeal was allowed and the order of the High Court forbidding the realisation of the estate duty in respect of agricultural land of the deceased Sir Muhammad Akbar Khan was set aside. It was finally held by the Supreme Court that "the liability of payment of estate duty arose in the year 1952 when Sir Muhammad Akbar Khan died and in accordance with the Estate‑ Duty Act, the value of the estate of Sir Muhammad Akbar Khan was to be assessed by the Controller. The amendment of 1953 had come into force before the year allowed to the Central Board of Revenue for reference to the High Court expired. The Controller admittedly had on account of the amendment the power to determine the value. The appellants had objected to the exercise of jurisdiction on the ground of a drafting error. The objection though conceded in a limited form by the Advocate‑General of Pakistan in 1955 had no force and is now being overruled. The effect of the judgment of the case is that the proceedings before the Controller shall have their ordinary and natural course." It was therefore decided in that case that in the cases in which liability arose before the amendment of 1956, the Controller was entitled to enhance valuation of the agricultural lands as well. Thereafter the accountable person, Nawabzada Amir Khan, invoked the jurisdiction of the Supreme Court to review its own decision. The points raised in the review petitions will appear from the judgment of his Lordship Cornelius C. J. in the case of Md. Amir Khan v. The Controller of Estate Duty, Government of Pakistan, Karachi and another (P L D 1962 S C 335). The learned Chief Justice noticed the points raised in the review petition in the following terms: "It is said that the judgment of the Supreme Court proceeds on an erroneous principle in so far as it reads into the text of section 57 of the Estate Duty Act, 1950, as it stood on 23rd January and 8th March 1956, certain words in replacement of existing words, with the object of giving effect to what was described as the "manifest intention" of the Legislature ; " The Supreme Court, reiterated by, majority judgment that in this case judicial modification of a legislative enactment was called for. His Lordship Hamoodur Rahman, J. in his dissenting judgment observed : "I doubt whether this power can be extended even to meet a case for which the Legislature has clearly and undoubtedly not made a provision or where the words of the Legislative measure as enacted are capable of being given a perfectly good sense and meaning particularly in a taxing Statute." The review applications were, however, dismissed and the order made by the Supreme Court in the case reported in P L D 1961 S C 119, was maintained. That being the position, it is clear that the law of the country as it sands today is that a Controller is not required to accept the valuation put by an accountable person even in respect of agricultural land if the liability occurred' before the Constitution of 1956 came into force on the 23rd March 1956. If a person died after that date leaving agricultural land no estate duty was to be paid thereon. It will therefore be seen that in this case the Income‑tax Appellate Tribunal did not go into any other question, for, the accountable personas well as the Tribunal felt that the point decided gives complete relief to the accountable person. Learned Advocate for the accountable person contends, and it is not denied by learned Advocate for the Controller, that a ground was taken in the memorandum of appeal presented before the Appellate Tribunal to the effect that the valuation put by the Controller on the Agricultural land of the deceased was in complete disregard of the materials produced by the accountable person and was arbitrary in nature. We have discussed at length the various stages of the relevant law to show that while delivering the judgment the Tribunal was guided by the law laid down by the High Court of Lahore and as such it did not proceed to examine the aforesaid ground and the appeal was disposed of, it is rightly contended, by the learned Advocate for the applicant, on a point which is preliminary in nature. He further contends that the Tribunal should be directed to rehear other points. It is clear that we are unable to accede to such a request. The scope of the reference made to us is confined to the consideration of the question referred to us. In returning an answer thereto, we would however observe that learned Advocate for the Respondent is right in contending that 6 it is open to the Tribunal to consider the other points after the answer to the question given by us is received by the Tribunal. The contention of learned Advocate for the respondent is supported by a Division Bench of the Bombay High Court consisting of Chagla, C. J. and Tendolkar J. in the case of Income‑tax Appellate Tribunal, Bombay and others v. S. C. Cambatta & Co. Ltd. (A I R 1956 Bom. 509). In that case it was observed by Chagla, C. J. delivering the judgment of the Court "that except in case which may go up to the High Court on reference, the decision of the Appellate Tribunal under section 33 is final. But where a reference does go up to the High Court, no finality attaches to the decision of the, Appellate Tribunal because by reason of the decision of the High Court, the decision given by the Appellate Tribunal is liable to be reopened and it will be the duty of the Appellate Tribunal to give effect to it, whatever decision the High Court gives." The learned Chief Justice referred to subsection (5) of section 66 in support of the above observation. It, therefore, appears that in the opinion of the learned Judges there was no finality to the order of the Tribunal in a case where reference was made. That being so, the Tribunal was competent to hear the parties on such points as may be considered necessary after receipt of the answer from the High Court. It may be mentioned here that subsection (5) of section 66 of the Income‑tax Act is similar to subsection (7) of section 59‑A of the Estate Duty Act. The aforesaid decision is therefore applicable to this case. Chagla C. J. further observed in that case: "Therefore, reading section 33(6) and section 66(5) together, the scheme is fairly clear that when a reference is made to the High Court either under section 66(1) or section 66(2) the decision of the appellate Tribunal cannot be looked upon as final ; in other words, the appeal is not finally disposed of. It is only when the High Court decides the case exercises its advisory jurisdiction and gives direction to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides it, that the appeal is finally disposed of." It is therefore, clearly observed by Chagla, C. J. that after a question is answered by the High Court something still remains for the Tribunal to consider. The learned Chief Justice explained the position further in the following terms :‑ "Take this very case where pursuant to the directions of the High Court the Tribunal had to value the goodwill and it put a value of Rs. 2,00,000 upon the goodwill. Can it be seriously suggested that in computing the value of the goodwill the Appellate Tribunal was under no obligation to give an oppor tunity to both the parties to be heard? It is clear therefore that the appeal has not been finally disposed of whenever there is a reference to the High Court. The shape that the appeal would ultimately take and the decision that the Appellate Tribunal would ultimately give would entirely depend upon the view taken by the High Court. The High Court may accept the view of the law taken by the Tribunal, in which case the decision of the Appellate, Tribunal would stand. The High Court may reverse the decision of the Appellate Tribunal on a question of law, in which case the appeal would have to be disposed of in accordance with the opinion of the High Court. Therefore, in all cases where, section 66 comes into play the final decision in appeal has only to be given by the Appellate Tribunal after the reference has been made and the decision can only be given under section 33(4)." We have earlier in this judgment stated that the decision of the Lahore High Court was taken to be a settled law until it was overruled by the Supreme Court. It was therefore not necessary for the accountable person to press the Tribunal to consider the other grounds taken in the memorandum of appeal filed before the Tribunal. It would, in the facts and circumstances of this case be open to the Tribunal to give further opportunity to the parties to make their submissions on other points. Similar view was expressed in the case of L. Jeewanlal v. Commissioner of Income‑tax, United Province, Lucknow (A I R 1953 All. 762). In that case a Division Bench of the Allahabad High Court consist ing of Mallick, C. J. and Bhargava, J. observed: "Under section 66, however, we have to decide questions of law which arise out of the Appellate Order and the Tribunal has to act in accordance with our decision. We doubt whether to give our opinion on a question of law arising of the Appellate Order we can ask the Tribunal, before deciding the reference, to take further evidence and then add to or amend the Appellate Order. To further clarify the matter, we may say that as a result of our answers to the questions referred to us it may be necessary for the Appellate Tribunal to rehear the appeal and decide it afresh even after taking such further evidence as may be necessary, but that stage would arise only after we have answered the reference under section 66." In the case before us, the Tribunal did not consider the grounds on merits challenging the assessment made by the Controller. Appellate Tribunal apparently took the view that further consideration of the case was unnecessary inasmuch as it held that the Controller had no right to enhance valuation. It is, now open to the Tribunal to consider if the enhancement of the, valuation of the agricultural land is justifiable. Each case has to be decided in the facts and circumstances of that case. It is true, finality is a cherished object in a litigation but in a case like this rigid application of this principle would entail non‑considera tion of salient features. The view expressed above would be confined to the facts and circumstances of the case. In the result, the reference is answered in the negative but in the facts and circumstances of the case, we leave the parties to bear their own costs. S. Q. Reference answered in the negative.