1969 PLP 128 (PTD)

ATAULLAH SAJJAD, J. According to the facts of this case, Khan Muhammad Khan Doha, whose estate is sought to be assessed, died on 12‑12‑1954. He left two sons Khan Abdul Ghafoor Khan and Khan Murtaza Khan, who filed the present writ petition. Khan Abdul Ghafoor Khan has died and his legal representatives have been brought on the record.

2. The heirs of the deceased were asked to submit the return of the estate left by the deceased which they did. The property left by the deceased was estimated at Rs. 2,15,253 by the heirs. The Controller of Estate Duty did not accept this assessment as correct and assessed the estate of the deceased at Rs. 7,63,

153. The heirs of the deceased objected to the proposed value and the respondent by order, dated 1‑2‑57 finally estimated the estate of the deceased at Rs. 6,56,453 out of which net value of the agricultural land was assessed at Rs. 5,56,800.

3. An appeal was filed against this assessment before the Appellate Tribunal which is still pending. Since the writ petition was filed on the ground of lack of jurisdiction, the pendency of an appeal, under the law, as it then existed, was no bar to file a writ petition, if the order was alleged to have been passed without jurisdiction.

4. The basic question, however, is as to when the liability to pay the estate duty was incurred by the heirs of the deceased. The late Khan Muhammad Khan Doha died on 12‑12‑1954 when the Estate Duty on agricultural land was within the province of the Central Government, vide entry No. 56‑A in the Federal Legislative List of the Government of India Act of 1935. In the Constitution of 1956 (hereinafter called the abrogated Constitution) the subject of Estate Duty on agricultural land, however, was placed In the Provincial List at item No. 74 in the Fifth Schedule. The Provincial Legislature passed the West Pakistan Abolition of Estate Duty (Agricultural Lands) Act of 1958 (hereinafter called the Provincial Act) abolishing the estate duty in West Pakistan in respect of the agricultural land with effect from 23‑3‑1956.

5. Section 4 of the Estate Duty Act of 1950 (hereinafter called the Act of 1950) deals with the levy of estate duty. It would be profitable to reproduce it here :‑ "Section 4.‑In the case of every person dying after the commencement of this Act, there shall, save as hereinafter expressly provided, be levied and paid upon the principal value ascertained as hereinafter provided, of all property, settled or not settled, which passes on the death of such a person, a duty called `estate duty' at the rates laid down in the Schedule." Under section 6 of the above Act, the property of the deceased which he was competent to dispose of shall be deemed to pass on his death.

6. Again section.57 of the Act of 1950 says :‑ "Section 57.‑Estate Duty shall be due from the date of the death of the deceased and shall be collected upon the account delivered under section 53 or section 56 or prepared under section 58‑B, or on the valuation amended or determined, as the case may be, under section 58‑A, or section 58‑BB, or on the application, if any, made under section 62 or section 63, subject to the provisions of sections 59, 59‑A and 59‑B." It will be seen that the estate duty is leviable on the principal value ascertained in all property settled or unsettled, which passes on the death of a person. The liability of the persons to whom the property passes will start from the date of the death of the person concerned, because the property passes to them on that date. The ascertainment of value and the determination of the duty is to follow subsequently. For that process, the law has laid down a machinery, which may take a long time, but the charging sections are sections 4 and 57, and clearly say that the liability arises on the date of the death of the person, who has left an assessable estate. The whole scheme of the Act of 1950 leads clearly to the irresistible conclusion that the liability for the levy starts from the date of the death of the person whose estate is sought to be assessed. Section 53 enumerates accountable persons and their duties and liabilities. It makes all persons accountable for the duty to whom the property passes on the death of the deceased and who may have received or disposed of the same or who may have come in possession by alienation or other derivative title. A bona fide purchaser for valuable consideration without notice is, however, exempted. Similarly under section 68 of the Act under reference, the estate duty is the first charge on the property on which it is leviable and under section 69, private transfer, or delivery of any property, from and after the date of the death of the deceased, has been declared to be void as against the claim for the estate duty.

7. In all fiscal Statutes which deal with Taxation, there are certain provisions which are called charging sections and others are termed as machinery sections. The charging sections are those which impose a charge or levy, and the machinery sections are those which provide for the quantification of the charge and its recovery. Once the imposition or levy has been incurred, the machinery sections are to be construed and interpreted in a manner which would not defeat a tax, properly levied, under the charging sections. This was so held by Privy Council in C. I. T. Bengal v. Mahali Ram Ramjidas (AIR 1940 P C 124).

8. Under the Income‑tax Act of 1922, which is pari materia with the Act of 1950, the charging provisions are contained in section 3 and the liability is dependent upon the extent determined by the Finance Act. The liability comes into existence only when the Finance Act is passed and the machinery provided by that Act comes into motion only after the levy has been imposed. In Radhashyam Agarwala v. The Commissioner of Income‑tax (P L D 1960 S C 187) the Notification fixing the previous year was made by the Central Board of Revenue after the Finance Act had already come into force and the assessee asserted that he had chosen his own previous year in accordance with clause (c) of subsection (11) of section 2 of the Income‑tax Act and the Department could not fix the previous year under clause (b) of subsection (11) of section 2 to his disadvantage after the passing of the Finance Act. It was held that once the liability of an assessee had came into existence by the passing of the Finance Act, It could not be altered in quantum, extent or character except by direct retros pective legislation.

9. We have, however, to examine the effect of the change made by the enforcement of the abrogated Constitution. We have seen that with effect from 23‑3‑56, the subject of `Estate Duty on agricultural property' was transferred to the Provinces. The Legislature of West Pakistan passed an Act abolishing the levy of estate duty on agricultural land with effect from 23‑3‑

56. Can it be said that the Provincial Legislature was competent to efface the liability that arose long before the change in the Constitution ?

10. The learned counsel relied on proviso (a) to clause (3) of Article 231 of the abrogated Constitution to support the proposition that the right to realise the arrears of estate duty was transferred to the Province from 23‑3‑

56. His argument was that the right to recover the estate duty is included in the rights, which were transferred to the Provinces by virtue of the above proviso, and therefore, the Controller of Estate Duty had no longer any jurisdiction to deal with the matter. The proviso relied upon by the learned counsel may be reproduced here with advantage. It reads as follows :‑ " Provided that all rights, liabilities, and obligations relating to any matter‑ (a) which immediately before the Constitution Day was the responsibility of the Federal Government but which under the Constitution has become the responsibility of the Government of a Province, whether arising out of a contract or otherwise, shall devolve upon the Government of that Province." The marginal note of Article 231 indicates that this Article deals specifically with succession to property and transfer of assets, rights, liabilities and obligations as a result of Constitutional changes. The provisions of the Article, however, are confined C to the assets, rights, liabilities and obligations which arise out of a contract or otherwise. The word `otherwise' is to be read ejusdem generis with the word `contract' and other phraseology used in this Article, and its scope is not as wide as canvassed by the learned counsel for the petitioners. The word `otherwise' inter alia may mean an actionable wrong‑an act which may amount to a Tort, and give rise to a right or liability on account of that.

11. The levy of taxes and fees has been dealt with separately in clause 6 to Article 230 of the abrogated Constitu tion. This is now the above clause reads :- "Notwithstanding anything in the Constitution, all taxes and fees levied under law in force, immediately before the Consti tution Day, shall continue to be levied until they are varied or abolished by Act of the appropriate Legislature." The above provision clearly ensured the continuation of the levy of taxes and fees, until varied or abolished by the Act of appropriate Legislature. In view of this specific provision, it cannot be reasonably held that the General terms of the proviso relied upon by the learned counsel relate to the right to recover taxes.

12. The continuation of the laws which were in force before the abrogated Constitution was ensured by Article 224 and they were to remain in force until altered, repealed, or amended by the appropriate Legislature. Under clause 6(b) of Article 227 of the abrogated Constitution of 1956, all authorities, and all officers, judicial, executive, and ministerial throughout Pakistan exercising functions immediately before the Constitution Day, were to continue to exercise their respective functions from that date.

13. As a general rule the Constitutional provisions are prospective, and not retrospective, unless there is a clear indication in the Constitution itself to that effect. Even if it is possible to hold that proviso (a) to clause (3) of Article 231 of the abrogated Constitution deals with the matter of taxes, it will not legally affect the rights and liabilities, which had accrued before 23‑3‑

56. The legislative authority of the Province in respect of estate duty on agricultural land could not go beyond 23‑3‑56, and if any rights regarding imposition and realisa tion of the estate duty were transferred to the Province by virtue of the proviso relied upon by the learned counsel, they can only be relatable to a period starting from 23‑3‑

56. The relevant law was amended by the Provincial Legislature by abolishing the estate duty from 23‑3‑56 and before that date the Act of 1950 continued to be in full force. Similarly, the Controller of Estate Duty continued to function under clause, 6 (b) of Article 227 in order to realise estate duty, which had become due before the abrogated Constitution came into force.

14. On the view that I have formed in this case, the liability arose on 12‑12‑54, on the death of Khan Muhammad Khan Doha, and the abolition of the estate duty by the Provincial Legislature with effect from 23‑3‑56 could not deprive the Controller of Estate Duty of his powers to realise the duty which is the subject‑matter of the writ petition before us. There is no indication in the abrogated Constitution that the intention was to divest the Controller of Estate Duty of his authority to realise this duty.

15. The argument of the learned counsel for the respondent that the obligation of the heirs of the deceased to pay the duty on agricultural property continues on the principles of the General Clauses Act is not without force. The General Clauses Act was specifically applied to the Constitution of Pakistan of 1956 by Article

219. It was also stated in clause (2) of the above Article that the Acts repealed by the Constitution shall be deem ed to be the Central Acts. The Constitution of the country before coming into force of the abrogated Constitution was the Government of India Act, 1935 as amended from time to time. The Government of India Act together with all enactments amending and supplementing the same was repealed by Article 221 of the abrogated Constitution. The liability of the heirs of the deceased Khan Muhammad Khan Doha had arisen at a time when under the Government of India Act, the authority to levy taxes on agricultural property rested with the Central Government. It would, therefore, follow that notwithstanding the repeal of the Government of India Act and the coming into force of the abrogated Constitution the liability of the heirs of the deceased would continue under the old law and the right of the Central Government to recover this amount is co‑related with that liability.

16. The question of legality of the levy of duty on agricul tural property came up before the Supreme Court in case, Lt.‑Col. Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty and others (PLD 1961 SC 119). In that case, Sir Muhammad Akbar Khan, Nawab of Hoti, whose estate was sought to be assessed, died on 6‑10‑1952. The accounts were rendered by the heirs on 18‑3‑53 and the Central Board of Revenue directed the heirs on 21‑3‑53 to pay a certain sum on account. Under the law as it stood at that time, the Board, in case of difference between the Board and the heirs of the deceased as to the value of the estate, could refer the matter to the High Court within a year of the submission of the accounts by the heirs for determination of the value of the estate. Before the period of one year was over, the law was changed and the Controller of the Estate Duty took the place of the Board and was authorised to make assessment instead of making a reference to the High Court. An appeal to the Appellate Tribunal was also provided. Subsequent to this amendment, the Controller called upon the heirs on 28‑11‑55 to amend the accounts. The final assessment of the amount payable by the heirs was made on 2‑10‑56 when the Constitution of 1956 had al ready come into force. The two heirs of the late Sir Muhammad Akbar Khan filed two writ petitions in the High Court which were allowed so far as the agricultural land was concerned. There were four appeals to the Supreme Court, two by the heirs of the deceased and two by the Controller of Estate Duty. The appeals filed by the Controller were directed against the decision of the High Court declaring that the levy so far as it related to agricultural land was ultra vires. The Supreme Court held that the amendment in the Finance Act of 1956 made by the Central Legislature in so far as it related to the agricultural property was ultra vires. The findings of the Court have, however, been summed up at page 145 of the report as follows :‑ "(i) That the liability of payment of Estate Duty arose in the year 1952 when Sir Muhammad Akbar Khan had died. (ii) That the Estate Duty in respect of the agricultural land could be realised under section 58 (d) in spite of the defective language of section 57 which was not brought in accord with the other amendments effected in the Estate Duty Act in 1953." The order of the High Court in so far as it declared that the estate duty could not be realised in respect of the agricultural land was set aside.

17. It is true that proviso (a) to clause 3 of Article 231 of the abrogated Constitution does not appear to have been quoted before their Lordships of the Supreme Court in the precedent case. In view of what has been said in the earlier part of this order, a reference to above proviso is inapt and irrelevant for determination of the point before us. The whole scheme of the abrogated Constitution aimed at keeping the administrative machinery going on with the least possible disturbance notwith standing the transfer of certain powers from the Provinces to the Centre and vice versa with effect from 23‑3‑

56. The view that I have taken is in accord with that object.

18. I would, therefore, hold that the liability in this case arose on 12‑12‑54 and that the Controller was perfectly justified in demanding the payment of the Estate Duty on agricultural estate of the late Khan Muhammad Khan Doha. The appeal of the petitioners is pending before the Appellate Tribunal and if they have any objection to the quantum of the duty assessed, they may raise the same before the Tribunal.

19. I would, therefore, dismiss this writ petition, but leave the parties to bear their own costs. MUHAMMAD SIDDIQ, J.‑I concur. K.B.A. Petition dismissed.