LexCONTROLLER OF ESTATE DUTY, GUJARAT I, AHMEDABAD. versus M.A. MERCHANT ACCOUNTABLE PERSON OF LATE SHRI A.G MERCHANT, MAJIRAJWADI ROAD, BHAVNAGAR, ETC.
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CONTROLLER OF ESTATE DUTY, GUJARAT I,
AHMED ABAD.
v.
M.A. MERCHANT ACCOUNTABLE PERSON OF
LATE SHRI A.G MERCHANT, MAJIRAJWADI ROAD,
BHA VNAGAR, ETC.
MAY 2, 1989
[R.S. PATHAK, CJ AND SABYASACHI MUKHARJI, J.]
Estate Duty Act, 1953: Sections 56-65-Valuations for estate
duty-Rectification of mistake-Reopening of assessment made under
section 59-Permissibility of-Effect of the Estate Duty (Amendment)
Act. 1958.
The respondents who were the accountable persons filed returns
under the Estate Duty Act, 1953, and an assessment was made by the
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B
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Deputy Controller of Estate Duty-Appellant on 26th February, 1960.
D
The Estate Duty (Amendment) Act, 1958 repealed the original
sections 56 to 65. Section 59 which substituted for the original section 62
made provision for re-assessment. It came into force with effect from
!st .July, 1960.
On 21st February, 1962, a notice under the new section 59 of the
Act was issued to the respondents for re-opening the assessment on the
ground that some property had escaped the levy of estate duty. The
respondents raised objections but the same were rejected by the
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Assistant Controller who reopened the assessment.
Against the aforesaid order three different appeals were tiled by
the respondents before the Appellate Controller. who allowed the
appeals, set aside the reassessment order holding that section 59 under
which action had been taken by the Assistant Controller was not
retrospective in operation.
On appeal by the Revenue, the Tribunal upheld the view of the
Appellate Controller relying on the decision of the Bombay High Court
in A.N. Majat!al v. Deputy Controller of Estate Duty, [1968] 67 I.T.R.
~~9.
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F
G
Thereafter. at the instance of the Revenue 3 references were made
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987
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B
c
D
988
SUPREME COURT REPORTS
[1989] 2 S.C.R.
to the High Court raising the indentical question whether section 59 was
retrospective in operation and reopening of the assessment under
section 59 was bad. The High Court analysed the provisions of the new
section 59 and the old section 62, came to the conclusion that the power
of reassessment conferred by the new section 59 is quite different from
the power conferred by the old section 62, and answered the question in
each case in favour of the assessee.
The Revenue appealed to this Court. On the question: whether J
the newly enacted section 59 of the Estate Duty Act is retrospective in
operation so as to affect the assessment already completed on the
accountable persons.
Dismissing the appeals, the Court
HELD: l. Section 59 of the Estate Duty Act is not retrospective in
operation and reopening of the assessment under section 59 of the Act in
the instant case is bad in law. {9930]
2. The Estate Duty (Amendment) Act, 1958 effected a substantial
change in the parent Act. Sections 56 to 65 were substituted in place of
the existing sections 56 to 65. and the originally enacted section 62 was
repealed. The original section 62 provided essentially for the rectifica-
tion of mistakes apparent from the record or in the valuation of any
E
property or by reason of the omission of any property. [9920-E]
3. The newly enacted section 59 deals with properly escaping
assessment. The provision is analogous to section 34 of the Indian
Income Tax Act. 1922 and section 147 of the Income Tax Act, 1961. The
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to the two provisions relates to the "omission of any property", but
the incidents of the power under section 62 relate to a situation mate-
_.-
rially different from the incidents of the power contemplated under
section 59. l992E-F]
G
4. There are no specific words which confer retrospective effect
"..r
to section 59 as it stands. To spell out retrospectivity in section 59
there must be soniething in the intent to section 59 from which
retrospective operation can be necessarily inferred. There is no such
intent. [992G-H]
H
5. The new section 59 is altogether different from the old section
CONTR. OFESTATEDlITY, GUJARAT v.M.A.MERCHANT [PATHAK. CJ.] 989
62 and there is nothing new in the new section 59 from which an intent
to give retrospective effect to it can be concluded. [992H; 993A]
6. There is a well-settled principle against interference with
vested right by subsequent legislation unless the legislation has been
made retrospective expressly or by necessa1·y implication. If an assess-
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