Patna High Court
Smt. Nita Taneja vs Asst. Controller Of Estate Duty And Ors. on 15 May, 1984
Equivalent citations: [1984]150ITR668(PATNA)
JUDGMENT Satyeshwar Roy, J.
1. By this application under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for an appropriate writ for quashing annexure 3, the notice issued by respondent No. 1 under Section 61 of the E.D. Act, 1953 (the Act), and annexure 5, the order passed by respondent No. 1 regarding the preliminary objection raised by the petitioner.
2. The admitted facts are that Vijoy Pratap Taneja (V.P. Taneja) and his brother, N.K. Taneja, were owners of a number of joint family properties. There was a partition between the two brothers and half of the property, movable and immovable, was allotted to V.P. Taneja. There was an immovable property at Delhi and one at Dhanbad which were kept joint between the two brothers. V.P. Taneja died leving behind the petitioner, his widow, the only heir.
3. The petitioner filed an account of the properties in respect of which estate duty was payable. Respondent No. 1, for the purpose of assessing estate duty, took, except for Delhi house and Dhanbad non-residential house, half of the principal value of the property. In the case of the Delhi house and Dhanbad non-residential house, whole of the principal value was taken for assessing duty. The order is contained in annexure 1. The petitioner field an appeal under Section 62 of the Act. Respondent No. 2 allowed the appeal in part. The order is contained in annexure 2.
4. Thereafter, respondent No. 1 issued a notice under Section 61 of the Act as contained in annexure 3. Preliminary objection was taken with regard to the power of respondent No, 1 on the ground that the original order of assessment had merged with the appellate order. The objection was rejected by order as contained in annexure 5.
5. Validity of the said notice aforesaid was challenged on two grounds :
"(a) Whether, in view of the fact that the order of the Assistant Controller had merged with the appellate order, the Assistant Controller, i.e., respondent No. 1, has jurisdiction to rectify any mistake in its order ?
(b) Even assuming that he had the power, whether it was a mistake apparent from the record ?"
6. From a perusal of annexure 5, it appears that the only point which was urged before respondent No. 1 was that the original assessment order had merged with the appellate order and, therefore, respondent No. 1 had no jurisdiction to rectify the mistake even if it was apparent from the record. The validity of that order can be the subject-matter of this application. The petitioner cannot be allowed to urge any question which was not raised by her before respondent No. 1 and on which respondent No. 1 had not given any decision. I shall, therefore, express no opinion with regard to point No. (b).
7. Mr. Chatterjee, learned counsel appearing on behalf of the petitioner, submitted that the order of the assessing authority merged with the order of the appellate authority and if Section 61 of the Act was attracted, any mistake that was apparent from the record could have been rectified by the appellate authority and not by respondent No, 1. On this question decisions of different High Courts were cited at the bar. No decision of this High Court was cited. The decisions were based on Supreme Court decisions. The scope and applicability of the doctrine of merger came up for consideration before the Supreme Court in State of Madras v. Madurai Mills Ltd. [1967] 19 STC 144 (SC); AIR 1967 SC 681 and it was observed that (p. 149 of 19 STC) :--
"But the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior tribunal and the other by a superior tribunal, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. In our opinion, the application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction."
8. Keeping in view the law laid down by the Supreme Court, I will analyse the nature of the appellate order as contained in annexure 2 and the scope of Section 62 of the Act, the provision of appeal.
9. From annexure 1, it appears that a number of movable and immovable properties were the subject-matter of assessment under the Act. It included the bank balance in a number of bank accounts in different banks, National Defence Certificates, jewellery, immovable property in Delhi, two items of immovable property in Dhanbad, West Munidih Colliery, etc. After assessing the principal value of all the properties, assessment was made with regard to the duty payable.
10. The petitioner filed an appeal under Section 62 of the Act. It appears from annexure 2 that at the time of hearing, the appeal was confined to the Delhi house, Dhanbad non-residential house and West Munidih Colliery. In the appellate order, with regard to two houses, it was held that as V.K. Taneja had one-half share in each, half of the principal value be included in the estate; valuation of West Munidih Colliery made by respondent No. 1 was upheld. The question, therefore, is when the petitioner challenged the validity of the assessment order with regard to the principal value to be included in the estate in respect of these items of the property, and did not challenge any other part of the order, it can be held that the whole order of respondent No. 1 merged with the order of respondent No. 2. Under Section 62 of the Act, any person objecting to any valuation made or to any order made determining the duty, or to any penalty levied under the Act or the I.T. Act as applied for the purpose of estate duty by the Controller or denying his liability to the amount of the estate duty payable by him, may file an appeal to the Appellate Controller. Under Section 62 of the Act, therefore, the Department has no right to file any appeal. A person who may. file an appeal may object to the order on any of the grounds enumerated hereinabove.
11. The petitioner confined the appeal with regard to the value of three items which could be included in the estate. That being the position, the doctrine of merger in this case will operate only with regard to the value to be included in the estate in respect of the Delhi house, non-residential house at Dhanbad and West Munidih Colliery. I hold that the whole order of respondent No. 1 did not merge with the order of the appellate authority. It merged only to the extent indicated above. By annexure 3, the respondent No. 1 did not seek to touch the order of respondent No. 2 and that clearly appears from annexure 5. The validity of the notice and order, therefore, cannot be challenged on ground No. (a).
12. In the result, the application is dismissed. There shall be no order as to costs.
Abhiram Singh, J.
13. I agree.