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TMI Blog2002 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and in the circumstances of the case, the Tribunal is justified in law in holding that the interest charged by the Assistant Controller under section 70 of the Estate Duty Act on the demand of estate duty determined provisionally under section 57, is not sustainable in law?" The accountable person (for short, "the AP"), in the instant case is Maharani Mrunalinidevi Puar, the widow of the late Shri Anand Rao Puar, ex-Ruler of the erstwhile State of Dhar. She initially filed a statement of account disclosing the principal value of the estate of the deceased at Rs. 81,50,000. On the basis of that statement a provisional assessment was made by the Controller of Estate Duty on May 11, 1981, raising a demand of Rs. 51,00,510. However, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal. The Tribunal vide order dated November 23, 1994, dismissed the appeal of the Revenue holding that in the circumstances of the case, charging of interest under section 70(1) would not be justified. Unsatisfied with the view taken by the Tribunal, a prayer was made by the Revenue to refer the question, as extracted above, for the decision of this court under section 64(1) of the Act. The prayer was accepted by the Tribunal, thus giving rise to this reference. We have heard Shri R. L. Jain, learned counsel for the Revenue, and Shri Milind Phadke, learned counsel for the respondent-assessee. It was contended by learned counsel for the Revenue that the interest is chargeable even on a demand arising out of the provisional assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional assessment advance of regular assessment. Section 57(1) confers power on the Conti to make provisional assessment in advance of regular assessment after the receipt of the account delivered under section 53 or section 56 by the accountable person. Sub-section (2) of section 57 further provides that upon a provisional assessment being made under sub-section (1), the person assessed shall either pay to the Controller or furnish security to the satisfaction of the Controller for payment of, the estate duty, if any, payable under the provisional assessment. Sub-section (3) speaks of the adjustment of the amount paid under sub-section (2) towards the regular assessment. Sub-section (4) makes such provisional assessment non-appealable. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid with such interest to the date of payment may be paid at any time and in case where the property is sold shall be paid on the completion of the sale and if not so paid shall be recovered in the manner specified in section 73." A reading of sections 57 and 70 in juxtaposition would make it clear that the question of postponement of payment of estate duty under section 70 would arise only after final assessment. The mode of payment of the duty assessed provisionally under section 57(1) is provided in sub-section (2) thereof itself. Under that provision the assessee is either required to make the payment of the duty, if any, payable on the provisional assessment, or to furnish security for the payment of that duty. In fact, the entire Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be rectified under section 61." The Karnataka High Court in Smt. Jayakumari's case [1991] 191 ITR 273 has, however, taken a different view and held: "The two sub-sections of section 70 of the Estate Duty Act, 1953, operate in different fields. This is evident from the use of the non-obstante clause in sub-section (2) of section 70. A careful reading of sub-section (1) clearly discloses that it applies to any case where payment of estate duty is involved and that payment is postponed. It does not limit itself only to the final assessment. Where estate duty is allowed to be paid in instalments in a provisional assessment, the levy of interest under section 70(1) is justified." In this decision in Smt. Jayakumari's case [1991] 191 ITR 273 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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