ASSISTANT CONTROLLER OF ESTATE DUTY & ORS. versus PRAYAG DASS AGARWAL

Citation: [1981] 3 S.C.R. 576 · Decided: 23-04-1981 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Disposed off

Judgment (excerpt)

A 
576 
ASSISTANT CONTROLLER OF ESTATE DUTY & ORS. 
v. 
PRAYAG DASS AGARWAL 
April 23, 1981 
[ R.S. PATHAK AND E.S. VENKATARAMIAH, JJ.] 
Estate Duty Act, 1953-Section 52, scope of-Whether under section 52 of 
the Estate Duty Act, 1953, the Central Government is bound to accept in satisfac-
tion of the whole or any part of the duty payable under the Act at such price as 
C 
may be agreed upon between the Central Government and the person accountable 
for estate duty any property passing on the death of the deceased when an applica-
tion is made for that purpose by such person. 
D 
E 
F 
G 
H 
On the death of his father which took place on September 29, 1964 the 
respondent filed a statement of account under the Estate Duty Act of the estate 
passing on the:death of the deceased. The estate duty payable in respect of the 
estate in question was determined at Rs. 3,37,543.40 by the Assistant Controller 
of Estate Duty, Allahabad, by his order dated November 30, 1970. When the 
appeal filed against the said order was still pending, the respondent made an 
application under section 52(1) of the Act on February 16, 1971 to the Central 
Board of Direct Taxes offering one of the items of property passing on the death 
of the deceased, namely, premises No. 1, Phaphamau Road, Allahabad, whose 
principal value had been determined at fRs. 2,53,625 in part payment of the 
balance of estate duty which was still payable by him under the order of assess-
ment. The said offer was not accepted by the Central Board of Direct Taxes 
but the appellant hernin wrote to the respondent stating that the respondent could 
pay the 'arrears of estate duty payable by him in 
monthly instalments of 
Rs. '10,000 each beginning from October 29, 1971 subject to payment of interest 
@ 9% per annum on the arrears outstanding. Thereupon the respondent filed 
a writ petition before the High Court of Allahabad requesting the High Court 
to issue a writ in the nature of mandamus to the Union of India to consider the 
application made by him under section 52(1) on its merits, to negotiate and settle 
the price of the property offered by him in settlement of part of duty payable by 
him and to give credit to the extent of the price so determined under the Act. 
The High Court held that if the accountable person exercised the option to pay 
the estate duty by transferring property, the Central Government could not refuse 
to accept the offer and insist upon payment by another mode when there was 
agreement about the price between it and the accountable person. The High 
Court, however, held that it was not necessary to decide the question whether it 
was open to the Central Government to refuse the offer of property on a ground 
other than the price as the impugned order had not disclosed any reason at all 
for rejecting the offer. Accordingly, the High Court directed the respondents 
before it to dispose of the application afresh in accordance with law. 
Hence the 
appeal after obtaining special leave of the Court. 
Affirming the High Courfs directions, the Court 
ASTT. CONTROLER ESTATE V. PRAYAG DASS 
577 
HELD; 1:1. 
What section 52(1) of the Estate Duty Act does is to set 
forth one more mode in which estate duty may be recovered. It is a provision 
made specially for the recovery of estate duty. It enables the Government to 
recover the duty in accordance with that mode. The other statutory modes 
prescribed under section 51 and specified in the Rules are those where recourse 
by the accountable obliges the Revenue to accept the payment made in any of 
those modes and to treat it, by compulsion of statute, as satisfaction of the dues. 
The peculiarity of the mode provided under section 52(1) is that while recourse 
to it by the accountable person does not automatically imply satisfaction of the 
dues, there is the duty cast on the Revenue to consider the application by the 
accountable person offering an item of property as a mode for satisfying the 
dues. The Government must consider the application on its merits and in the 
exercise of sound administrative judgment. [587 F-H, 588 A] 
1:2. Ordinarily in every contract for the purchase of property there are two 
stages. (il In the first stage, there is complete freedom to l'the parties to decide 
whether one should enter into negotiations with the other at all and in that 
regard the law takes no account of the reason of any party for not choosing to 
entertain the proposal for sale made by the other how

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