Case: Controller of Estate-Duty, Bihar Vs. Mahant Umesh Narain Puri

On the death of Mahant Surinder Nath Puri of Madra Math on 4th June, 1954, the Asst. Controller of Estate Duty, Patna, finding that no accountable person had filed any return, prepared a draft computation of the estate duty leviable in respect of what he considered to be the estate of the deceased Mahant and he called upon the accountable person to file objections, if any. The reply given by the accountable person was that Mahant Surinder Nath Puri was a mere trustee in respect of the estate which belonged to the Math and in the reply the valuation was also disputed. Since the accountable person who happened to be Mahant, elected by the disciples of the deceased Mahant, did not produce any material in respect of his claim after opportunities given to him, the Asst. Controller finalised the assessment on the 19th June, 1958, holding that the deceased Mahant was not a mere trustee of the properties of the Math and the deceased Mahant was the sole proprietor of the properties. Against the order of the Asst. Controller, the accountable person Mahant Umesh Narain, Puri, preferred an appeal to the CBR. In the appeal it was contended on behalf of the accountable person that the deceased Mahant, Surinder Nath Puri, was merely a trustee of the properties of the Math and no estate duty could, therefore, be levied on the properties of the Math of which the deceased Mahant was only in charge as a trustee. The Board came to the conclusion that the status of the deceased Mahant had already been declared by the District judge of Gaya in Title Suit No. 1 of 1932. The Board further held that in view of the said decision of the district judge in Title Suit No. 1 of 1932 and in view of the further fact that the deceased Mahant had disposed of some of the properties during his lifetime, the estate duty was leviable on the properties and the Board dismissed the appeal. On the question of computation of estate duty, the Board held that there were no justifiable grounds for interfering with the order of the Asst. Controller. Thereupon the accountable person filed a petition before the Board for referring a number of questions of law for the opinion of the High Court. None of the questions suggested by the accountable person were accepted by the Board as legitimate. The Board, however, referred the question, which we have earlier set out, to the High CourtThe High Court, on a consideration of the various arguments advanced and the materials on record, held that the properties comprised in the estate known as Madra Math were trust properties and, no estate duty could be levied on the said properties on the death of Mahant Surinder Nathcorrectness of the said decision of the High Court in the tax reference has been challenged by the Controller. In view of the decision of the High Court in the tax reference, the writ petition was also allowed by the High Court and the order imposing the penalty was also quashed. Hence, the other appeal has been filed and the fate of this appeal from the order in the writ petition will naturally depend on the result of the appeal from the judgment in the tax appeal

Court's reasoning:
We are not impressed by this argument of the learned counsel. It is true that in the absence of a specific question raised with regard to the correctness of any finding of fact, the High Court in a reference is not to interfere with the finding of fact by the Tribunal and the High Court has to proceed to answer the question on the facts found by the Tribunal. The finding of the CBR in the instant case that the properties are the personal properties of the deceased Mahant cannot, in the facts and circumstances of this case, be considered to be a finding of fact. The CBR in coming to its conclusion that the properties were the personal properties of the deceased Mahant had considered the nature of the grant by the Firman and also the judgment of the district judge in the title suit. The conclusion of the Board of Revenue that the properties are the personal properties of the Mahant on an interpretation of the grant and on a consideration of the judgment of the district judge is not a pure finding of fact. Any conclusion as to the true character or nature of the properties on the interpretation of the Firman and on taking into consideration the judgment of the district judge in the title suit is a finding on a mixed question of law and fact. The mere fact that the deceased Mahant had disposed of some of the properties does not in any way materially affect the question of consideration of the true nature and character of the properties and does not, in any way, affect the true nature or character thereof. It may, in this connection, be noted that it is not known under what circumstances any of the properties came to be disposed of by the deceased Mahant. There is no sale deed on record and no sale deed was made available to the High Court or to this court. The true nature and the character of the properties have to be determined on a proper interpretation of the Firman. In our opinion, the High Court in the instant case has correctly come to the conclusion that the properties belonged to the Math and are trust properties, relying on the Firman and the judgment of the district judge in the civil suitThe next contention urged by Mr. Manchanda is that even assuming that the properties were trust properties, the deceased had a beneficial life interest in the properties and the beneficial interest of the deceased Mahant must be deemed to have passed on to the next disciple or issue or Farzand by virtue of the provisions contained in s. 7 of theOn a consideration of the facts and circumstances of this case including the Firman and the judgment of the district judge, the High Court has correctly come to the conclusion that the Mahant had no property which he was competent to dispose of and the only interest the Mahant had was common enjoyment of the trust properties of the Math, with the disciples of the Math. The deceased Mahant had no particular or specific beneficial interest in the property and no benefit would accrue or arise to any one by the cesser of the interest of common enjoyment of the property by the deceased Mahant to any other person, as the deceased Mahant had no property at the time of his death which he was competent to dispose of and no benefit accrued or arose to the Mahant who came to be elected as Mahant according to custom on the demise of the Mahant or to any other disciple of the Math on the death of the Mahant. No interest, therefore, could be deemed to have passed on the death of the Mahant14. Section 2(16) of the Act provides" Property passing on the death includes property passing either immediately on the death or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation, and on the death includes at a period ascertainable only by reference to the death"15. In the instant case, the interest of the Mahant who is elected to be the incharge of the property and who is in enjoyment of the property in common with the disciples of the Math comes to an end on his death and his interest of enjoyment in common with other disciples, whatever may be the nature of such interest, does not pass at any point of time to any other person, After the death of the Mahant duly elected, the right to be theincharge of the propertyvests in the person who is thereafter elected as Mahant and the right of the deceased Mahant to enjoy the property in common with the other disciples of the Math completely ceases and does not pass to anybody else. In the instant case, therefore, no interest of the Mahant passes to anybody else and the provisions of the Act are, therefore, not attractedWe are, therefore, of the opinion that the High Court in the instant case was right in its answer to the question referred to it. The appeal against the judgment in the Tax Reference, therefore, fails. The appeal from the orders in the writ petition, therefore, necessarily fails. The appeals are hereby dismissed.