Kulwant Singh v. Controller Of Estate Duty-Cum-Commissionerof Income Tax, Jalandhar And Another

Civil Writ Petition No.7063 of 1994 IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Civil Writ Petition No.7063 of 1994 Date of Order: 6[th] September, 2013 Kulwant Singh ...Petitioner Versus Controller of Estate Duty-cum-Commissionerof Income Tax, Jalandhar and another ..Respondents CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLAHON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Mr. Alok Mittal, Advocatefor the petitioner. None for the respondents RAJIVE BHALLA, J. The petitioner prays for issuance of a writ of certiorariquashing order dated 20.03.1991(Annexure P-4), notice dated20.03.1991 (Annexure P-5) and order dated 29.01.1993( AnnexureP-7), respectively. The petitioner also prays for issuance of a writ ofmandamus directing the respondents to refund Rs.14018/- withinterest. After assessment of estate duty, the petitioner applied, videletter dated 29.06.1984, for payment in installments. The petitioneralleges that as authorities did not covey any order whether passedunder Section 70 of the Estate Duty Act, 1953 or otherwise(hereinafter referred to as 'the Act'), the petitioner made payment ofestate duty voluntarily according to his convenience and availability of funds. On 21.03.1990, the Assistant Controller of Estate Dutyissued a notice calling upon the petitioner to show cause why interestshould not be levied under Section 70 of the Act. The petitionerreplied vide letter dated 18.04.1990 that interest cannot be chargedas no order was passed or received for payment of installments withinterest. The Assistant Controller of Estate Duty, vide order dated20.03.1991, levied interest upon the petitioner leading to issuance ofa notice of demand under Section 73 of the Act calling upon thepetitioner to pay Rs.14018/-. The petitioner filed an appeal before theController of Estate Duty (Appeals), Jalandhar, which was dismissed,on 29.01.1993. Counsel for the petitioner further submits that as theAssistant Controller of Estate Duty did not pass any order underSection 70 of the Act, allowing installments of estate duty on paymentof interest, the impugned demand of interest is illegal and void. Therespondents have, at no stage of the proceeding, produced copy ofan order passed under Section 70 of the Act, levying interest andmerely because the the petitioner voluntarily made payment ininstallments, the respondents are not entitled to raise an inferencethat an order was passed imposing interest. It is further argued thtthe respondents have at no stage of the proceedings produced thealleged order imposing interest. No one has put in appearance on behalf of the respondents, but we have perused the reply. A perusal of the reply reveals that the respondents admit installments. The respondents have, however, averred that an orderwas passed on 04.07.1984, allowing the petitioner to pay duty in sixhalf yearly installments, subject to payment of interest at the rate ofsix percent. We have heard counsel for the petitioner, perused the paperbook, the reply filed on behalf of the respondents and the impugnedorders. Admittedly, the original assessment order requiring thepetitioner to pay estate duty did not provide for payment of interest.The petitioner filed an application, on 29.06.1984, for deposit ofestate duty in installments. The petitioner has deposited estate dutyin installments, but without interest. The petitioner, was served with anotice dated 21.03.1990, requiring him to show cause why he shouldnot pay interest on estate duty deposited. The petitioner filed a replydated 18.04.1990, raising a specific plea that as no order was everpassed or letter conveyed allowing payment in installments, withinterest, the department cannot levy interest. The Assistant Controllerof Estate Duty, Jalandhar, vide order dated 20.03.1990, rejected thepetitioner's contention by holding as follows:- Admittedly, the original assessment order requiring thepetitioner to pay estate duty did not provide for payment of interest.The petitioner filed an application, on 29.06.1984, for deposit ofestate duty in installments. The petitioner has deposited estate dutyin installments, but without interest. The petitioner, was served with anotice dated 21.03.1990, requiring him to show cause why he shouldnot pay interest on estate duty deposited. The petitioner filed a replydated 18.04.1990, raising a specific plea that as no order was everpassed or letter conveyed allowing payment in installments, withinterest, the department cannot levy interest. The Assistant Controllerof Estate Duty, Jalandhar, vide order dated 20.03.1990, rejected thepetitioner's contention by holding as follows:- "The show cause notice was issued to the A.P.that why interest under Section 70 of the EstateDuty Act, 1953, be not charged according to theorder of the ACED. The counsel of the A.P hasreplied that no order/letter was served upon him orthe A.P. intimating the results of the application,the A.P has made the payments voluntarily. From the above chart, it is very clear that the A.P had made the payments half yearlyregularly as per directions of the ACED and thefacts of citation of Patna High Court quoted are notsimilar to this case as the regular assessment hasbeen completed on 11.9.85 and the A.P had madethe payments of Rs.60,000/- only as provisionaland the balance amount was paid against regularassessment. I, therefore, have no otheralternative to reject your application." A perusal of the above extract reveals that the AssistantController of Excise Duty has not referred to any order passed, underSection 70 of the Act, much less an order dated 04.07.1984 levyinginterest but has raised an inference from payment of half yearlyinstallments that these payments were deposited pursuant todirections issued by the Assistant Controller of Excise Duty. Theappeal filed by the petitioner was dismissed by holding as follows:- "5. I have carefully considered the rivalsubmissions. Admittedly, the payments weremade as follows:- This was in pursuance of an applicant onfor grant of installments dated 29[th] June, 1984.According to the Ld. Counsel for the appellant theabove payments had been made voluntarily andnot in pursuance of any order grantinginstallments. This contention is based on the pleathat the A.O. had failed to bring any such order,letter to the notice of the appellant. In this regard,it is observed that the very sequence of events i.e.Application for grant of installments dated 29[th]June, 1984 and making of the payments toRs.20,000/- each after interval of six monthsshows that the payments have been made inpursuance to a scheme for grant of installments.Hence, just because the letter/order granting thoseinstallments is not available on record, you wouldnot mean that the said payments had been madevoluntarily and not in accordance with grant ofinstallments. In this view of the matter, I hold thatthe payments of Estate Duty had been made inpursuance of an order/scheme grantinginstallments even if no such order is available.Coming to the next objection that the interest is notchargeable in view of the decision of Hon'ble Patna High Court, mentioned supra, it is observed thatthe said decision pertained to a case where thepayments had been delayed of provisionallyassessed duty. In the case of the appellant thepayments pertained to a regular assessment andhence the facts are entirely different. Similarly thedecision of Hon'ble Calcutta High Court cited supraalso deals with a situation where the matter relatedto the payments of installments of provisionallyassessed amount. Here again, in the case of theappellant the demand arose as a result of regularassessment. Since the said demand was paid ininstallments the charging of interest under Section70 of the E.D.Act, 1953 was justified. Accordingly,the charging of interest is confirmed. To conclude the appeal is held to be notmaintainable and is also dismissed on merits." A perusal of the above extract reveals that the Controller of Estate Duty(Appeals) has held that no letter/order grantinginstallments and imposing interest is available on record but thisalone does not raise an inference that installments were not paidpursuant to an order passed by the authority. A perusal of paragraphs 4 and 5 of the reply, reveals thatthe respondents have, for the first time, made reference to an order The respondents have, however, not appended a copy of the orderwith the reply. An order was, therefore, passed on 13.02.1995 ,directingcounsel for the revenue to produce the record, so as to verifywhether an order dated 04.07.1984 was actually passed. Therespondents have not produced the record or a copy of order dated04.07.1984 and in fact no one is present on their behalf. A perusal of the impugned orders reveals that neither theAssessing Officer nor the Appellate Authority refer to any specificorder passed under Section 70 of the Act much less an order dated04.07.1984, allowing the petitioner to deposit payment in installmentswith interest. In fact the Assessing Officer and the AppellateAuthority have admitted that such an order is not available on record.The respondents have for the first time, in their reply, made referenceto an order dated 04.07.1984, but without appending or producing acopy of the order. The mere fact that the petitioner deposited estateduty in six monthly installments does not raise an inference that suchan order was indeed, passed. Section 70 of the Act empowers theController to allow postponment of payment on such interest, notexceeding four percent or any higher interest yielded by the propertyand on such other terms as the Controller may deem fit. The levy ofinterest must, therefore, be preceded by an order postponingpayment of estate duty by allowing the assessee to pay estate duty ininstallments whether four equal yearly installments or 8 equal halfyearly installments, with interest. The absence of an order passed any such order on record, whether before the Assessing Officer, theAppellate Authority or before this Court, disentitles the revenue toclaim interest. At this stage, it would be necessary to clarify thatliabilities, in taxing statutes cannot be fixed by inference as to ordersthat may or may not have been passed. The absence of an orderapportioning liability to pay interest, disentitles the revenue to claiminterest. In view of what has been stated hereinabove, the writpetition is allowed, the impugned orders are set aside and therespondents are directed to refund Rs.14108/-, to the petitioner. (RAJIVE BHALLA) JUDGE 6[th] September, 2013 (DR. BHARAT BHUSHAN PARSOON)nt JUDGE