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Friday, July 31, 2015

whether the dead person’s property, in the form of his or her estate, can be taxed without the necessary machinery provisions in a tax statute = whether an assessment proceeding under the Central Excises and Salt Act, 1944, can continue against the legal representatives/estate of a sole proprietor/manufacturer after he is dead.

 whether the dead person’s  property,  in
      the form of his or her estate, can  be  taxed  without  the  necessary
      machinery provisions in a tax  statute.   

whether an assessment  proceeding  under
      the Central Excises and Salt Act, 1944, can continue against the legal
      representatives/estate of a sole proprietor/manufacturer after  he  is
      dead.  - Single judge quashed the notice - where as D.B. reversed the order - Apex court held that 
  We do not find any provision in the Act which foists  any  such
           liability in the case of intestate succession. In  other  words,
           there is no provision which empowers the authorities to  recover
           due from a deceased assessee by  proceeding  against  his  legal
           heirs.  The way section 11 and  11A  are  worded,  it  is  amply
           clear, the legislature has consciously kept away the legal heirs
           from answering to liabilities under the Act. 

 To tax the dead is a contradiction in  terms.   Tax  laws  are
      made by the living to tax the living.   What survives the dead  person
      is what is left behind in the form of  such  person’s  property.  This
      appeal raises questions as to
whether the dead person’s  property,  in
      the form of his or her estate, can  be  taxed  without  the  necessary
      machinery provisions in a tax  statute.
The  precise  question  that
      arises in the present case is whether an assessment  proceeding  under
      the Central Excises and Salt Act, 1944, can continue against the legal
      representatives/estate of a sole proprietor/manufacturer after  he  is
      dead.
One Shri George Varghese was the sole proprietor of Kerala  Tyre
      and Rubber Company Limited.  By October 1985, this proprietary concern
      had stopped manufacture and production of  tread  rubber.  By  a  show
      cause notice dated 12.6.1987, for the period January 1983 to  December
      1985, it was alleged that the assessee had  manufactured  and  cleared
      tread rubber from the factory premises by suppressing the fact of such
      production and removal with an intent to evade payment of excise duty.
       The provisions of Section 11A, as they then  stood,  of  the  Central
      Excises and Salt Act were invoked and duty amounting to Rs.74,35,242/-
      was sought to be recovered from the assessee together with  imposition
      of penalty for clandestine removal.

The learned single Judge of the High  Court  quashed  the  proceedings
      against the legal heirs stating that the Central Excises and Salt  Act
      did not contain any provisions for continuing  assessment  proceedings
      against a dead person.  Against this, revenue  went  in  appeal.   The
      Division Bench of the High Court of Kerala reversed the single Judge’s
      judgment.



  “We do not find any provision in the Act which foists  any  such
           liability in the case of intestate succession. In  other  words,
           there is no provision which empowers the authorities to  recover
           due from a deceased assessee by  proceeding  against  his  legal
           heirs.  The way section 11 and  11A  are  worded,  it  is  amply
           clear, the legislature has consciously kept away the legal heirs
           from answering to liabilities under the Act.” (at page 69)

           “In interpreting a taxing statute, equitable considerations  are
           entirely out of place.  Nor can taxing statutes  be  interpreted
           on  any  presumptions  or  assumptions.   The  court  must  look
           squarely at the words of the statute  and  interpret  them.   It
           must interpret a taxing statute in the light of what is  clearly
           expressed; it cannot imply anything which is not  expressed;  it
           cannot import provisions in the statute  so  as  to  supply  any
           assumed deficiency.”

We are, therefore, of the view that this appeal must be  allowed
      and the judgment of the High Court of Kerala is, accordingly set aside
      and that of the learned Single Judge restored.

http://judis.nic.in/supremecourt/imgst.aspx?filename=42811

REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.5802 OF 2005




      SHABINA ABRAHAM & ORS.            … APPELLANTS


                                   VERSUS
      COLLECTOR OF CENTRAL EXCISE
      & CUSTOMS                                    ...RESPONDENT







                              J U D G M E N T

      R.F. Nariman, J.




      1.    “Nothing  is  certain  except  death  and  taxes.”   Thus  spake
      Benjamin Franklin in his letter of November 13, 1789 to Jean  Baptiste
      Leroy.  To tax the dead is a contradiction in  terms.   Tax  laws  are
      made by the living to tax the living.   What survives the dead  person
      is what is left behind in the form of  such  person’s  property.  This
      appeal raises questions as to whether the dead person’s  property,  in
      the form of his or her estate, can  be  taxed  without  the  necessary
      machinery provisions in a tax  statute.   The  precise  question  that
      arises in the present case is whether an assessment  proceeding  under
      the Central Excises and Salt Act, 1944, can continue against the legal
      representatives/estate of a sole proprietor/manufacturer after  he  is
      dead.  The facts of the case are as follows.

      2.    One Shri George Varghese was the sole proprietor of Kerala  Tyre
      and Rubber Company Limited.  By October 1985, this proprietary concern
      had stopped manufacture and production of  tread  rubber.  By  a  show
      cause notice dated 12.6.1987, for the period January 1983 to  December
      1985, it was alleged that the assessee had  manufactured  and  cleared
      tread rubber from the factory premises by suppressing the fact of such
      production and removal with an intent to evade payment of excise duty.
       The provisions of Section 11A, as they then  stood,  of  the  Central
      Excises and Salt Act were invoked and duty amounting to Rs.74,35,242/-
      was sought to be recovered from the assessee together with  imposition
      of penalty for clandestine removal.

      3.    On 14.3.1989, the said Shri George Varghese died.  As  a  result
      of his death, a second show cause notice was issued on  18.10.1989  to
      his wife and four daughters  asking  them  to  make  submissions  with
      regard to the demand of duty made  in  the  show  cause  notice  dated
      12.6.1987.  By their reply dated 25.10.1989, the said legal  heirs  of
      the deceased stated that none of them  had  any  personal  association
      with the deceased in his  proprietary  business  and  were  not  in  a
      position to locate any business  records.   They  submitted  that  the
      proceedings initiated against the deceased abated on his death in  the
      absence of any provision in  the  Central  Excises  and  Salt  Act  to
      continue assessment proceedings against a dead person in the hands  of
      the legal representatives.  The said show cause notice was, therefore,
      challenged as being without jurisdiction.

      4.    As the Central Excise Authorities posted the matter for  hearing
      and refused to pass an order on the maintainability of the show  cause
      notice alone, the legal heirs approached the High Court under  Article
      226 of the Constitution by filing a Writ Petition  in  January,  1990.
      The learned single Judge of the High  Court  quashed  the  proceedings
      against the legal heirs stating that the Central Excises and Salt  Act
      did not contain any provisions for continuing  assessment  proceedings
      against a dead person.  Against this, revenue  went  in  appeal.   The
      Division Bench of the High Court of Kerala reversed the single Judge’s
      judgment.

      5.    Shri Rajshekhar Rao, learned counsel  appearing  for  the  legal
      heirs  made   submissions   before   us   with   great   clarity   and
      persuasiveness.  He submitted that a reading of  Sections  2(f),  (3),
      Section 4(3)(a), Section 11 and 11A as they stood at the relevant time
      would show that unlike the provisions of the Income Tax Act, there  is
      no machinery provision  in  the  Central  Excises  and  Salt  Act  for
      continuing assessment  proceedings  against  a  dead  individual.   He
      stressed the fact that an assessee  under  the  said  Act  means  “the
      person” who is liable to pay the duty of excise  under  this  Act  and
      further stressed the fact that in cases of short levy, such  duty  can
      only be recovered from a person who is chargeable with the  duty  that
      has been short levied.   He  further  invited  our  attention  to  the
      Central Excise Rules and Rules 2(3) and 7 in  particular  to  buttress
      his submission that there is no machinery provision  contained  either
      in the Act or in the Rules to proceed against a  dead  person’s  legal
      heirs.  He cited certain judgments before us which we will  advert  to
      later on in this judgment.

      6.    Shri A.K. Panda, learned senior advocate appearing on behalf  of
      the revenue contended that a  close  reading  of  Section  11  of  the
      Central Excises and Salt Act will indicate that sums  are  recoverable
      from an  assessee  by  an  attachment  and  sale  of  excisable  goods
      belonging  to  such  assessee  and  further  that  if  the  amount  so
      recoverable falls short, it can be recovered from the  person  himself
      as an arrear of land revenue.  Inasmuch as a dead man’s  property  can
      be attached and sold and proceeded  against,  it  is  clear  that  the
      necessary machinery is contained in the Central Excises and Salt  Act.
      His further submission is that Section  11A  of  the  said  Act  is  a
      machinery provision and, therefore, the rule to  be  applied  is  that
      that construction should be preferred which makes a machinery  Section
      workable.  He also referred  us  to  the  definition  of  “person”  in
      Section 3(42) of the General Clauses Act to  buttress  his  submission
      that a legal representative would be included within a “person” as  so
      defined.  He referred us to Section 6 of the  said  Act  dealing  with
      registration and argued that registration of  a  person  makes  him  a
      legal entity liable to be assessed as such.   His other submission  is
      that the general principle, namely, that a cause of action abates when
      a person who institutes a proceeding dies is  not  applicable  in  the
      present case and cited various judgments before us in support  of  the
      said principle.  He also submitted that the position under the  Income
      Tax Act would be entirely different as income tax is a tax leviable on
      a person whereas a duty of excise is leviable on manufacture of goods.
      He also cited a number of decisions which will be dealt  with  in  the
      course of this judgment.

      7.    We have heard learned counsel for the parties.  Before  entering
      into a discussion on the merits of the case, it is  necessary  to  set
      out the statutory provisions contained in the Central Excises and Salt
      Act at the relevant time, which are given below:-

           2(f) "manufacture" includes any process incidental or  ancillary
           to the completion of a manufactured product; and
              i)  In  relation  to  tobacco  includes  the  preparation   of
                 cigarettes, cigars, cheroots, biris, cigarette or  pipe  or
                 hookah tobacco, chewing tobacco or snuff,
                 (ia) in relation  to  manufactured  tobacco,  includes  the
                 labeling or re-labelling of containers and  repacking  from
                 bulk packs to retail packs or the  adoption  of  any  other
                 treatment to render the product marketable to the consumer.


             ii)  In  relation  to  salt,  includes   collection,   removal,
                 preparation, steeping, evaporation, boiling, or any one  or
                 more of these processes, the separation or purification  of
                 salt  obtained  in  the  manufacture  of   saltpeter,   the
                 separation of salt from earth or other substance so  as  to
                 produce elementary salt, and the excavation or  removal  of
                 natural saline deposits or efflorescence;
            iii) In relation to patent or proprietary medicines, as  defined
                 in Item No. 14-E of the first Schedule and in  relation  to
                 cosmetics and toilet preparations as defined in Item No.14-
                 F of that Schedule, includes the conversion of powder  into
                 tablets  or  capsules,  the  labeling  or   relabeling   of
                 containers intended for consumers and repacking  from  bulk
                 packs  to  retail  packs  or  the  adoption  of  any  other
                 treatment  to  render  the  product   marketable   to   the
                 consumers;
             iv) In relation to goods comprised to Item No.18-A of the First
                 Schedule,  includes  sizing,  beaming,  warping,  wrapping,
                 winding or reeling, or any one or more of these  processes,
                 or the conversion of  any  form  of  the  said  goods  into
                 another form of such goods;
                 And the word “manufacturer” shall be construed  accordingly
                 and shall include not  only  a  person  who  employs  hired
                 labour in the production or manufacture of excisable goods,
                 but also any person who  engages  in  their  production  or
                 manufacture on his own account.”


           3.    Duties specified in the First Schedule to be  levied.  (1)
           There shall be levied and collected in such  manner  as  may  be
           prescribed duties of excise on all excisable  goods  other  than
           salt which are produced or manufactured in India and a  duty  on
           salt manufactured in, or imported by  land  into,  any  part  of
           India as, and at the rates set forth in the First Schedule.


           4. Valuation of excisable goods for purposes of charging of duty
           of excise. –
           (1) Where under this Act, the duty of excise  is  chargeable  on
           any excisable goods with reference to value, such  value  shall,
           subject to the other provisions of this section be deemed to  be
           –
           (a) the normal price thereof, that is to say, the price at which
           such goods are ordinarily sold by the assessee to a buyer in the
           course of wholesale trade for delivery at the time and place  of
           removal, where the buyer is not a related person and  the  price
           is the sole consideration for the sale:”


           (4) For the purposes of this section, -
           (a) “assessee” means the person who is liable to pay the duty of
           excise under this Act and includes his agent;”


           11. Recovery of sums due to Government. - In respect of duty and
           any other sums of any kind payable  to  the  Central  Government
           under any of the provisions of this Act or  of  the  rules  made
           thereunder, the  officer  empowered  by  the  Central  Board  of
           Excise and Customs  constituted  under  the  Central  Boards  of
           Revenue Act, 1963, to levy such duty or require the  payment  of
           such sums may deduct the amount so payable from any money  owing
           to the person from whom such sums  may  be  recoverable  or  due
           which may be in his hands or under his disposal or  control,  or
           may recover the amount by attachment and sale of excisable goods
           belonging to such person; and if the amount payable  is  not  so
           recovered he may prepare a certificate signed by him  specifying
           the amount due from the person liable to pay the same  and  send
           it to the Collector of the district in which such person resides
           or conducts his business and the said Collector, on  receipt  of
           such certificate, shall proceed to recover from the said  person
           the amount specified therein as if it were  an  arrear  of  land
           revenue.
           11A. Recovery of duties not levied or not paid or  short  levied
           or short paid or erroneously refunded.-
        1) When any duty of excise has not been levied or paid or has  been
           short-levied or short-paid or erroneously  refunded,  a  Central
           Excise Officer may, within six months from  the  relevant  date,
           serve notice on the person chargeable with the  duty  which  has
           not been levied or paid or which has been short-levied or short-
           paid or to whom the refund has erroneously been made,  requiring
           him to show cause why he should not pay the amount specified  in
           the notice:


           Provided that where any duty of excise has not  been  levied  or
           paid or has  been  short-levied  or  short-paid  or  erroneously
           refunded  by  reason  of  fraud,   collusion   or   any   wilful
           misstatement or suppression of facts, or contravention of any of
           the provisions of this Act or of the rules made thereunder  with
           intent to evade payment of duty, by such person  or  his  agent,
           the provisions of this sub-section shall have effect, as if  for
           the  words  "six  months",   the   words   "five   years"   were
           substituted.”
      Rule 2(3) and Rule 7 of the  Central  Excises  Rules,  1944,  read  as
      under:
           “2.  Definitions.—In  these  rules,  unless  there  is  anything
           repugnant in the subject or context—
            (3) "assessee" means any person who is liable  for  payment  of
           duty assessed and also includes any producer or manufacturer  of
           excisable goods or a registered person of a private warehouse in
           which excisable goods are stored;
           7. Recovery of  duty.-  Every  person  who  produces,  cures  or
           manufactures any excisable goods, or who stores such goods in  a
           warehouse, shall pay the duty or duties leviable on such  goods,
           at such time and place and to such persons as may be designated,
           in, or under authority of these rules, whether  the  payment  of
           such duty or duties is secured by bond or otherwise.
           Provided that nothing contained in  this  rule  shall  apply  to
           molasses produced in a khandsari sugar factory.
           Provided further that in respect of goods falling under  Chapter
           62 of the First Schedule to the Central Excise Tariff Act,  1985
           (5 of 1986), manufactured on job-work, the provisions  of  these
           rules shall apply subject to the provisions of rule 7AA.”




      8.    On a reading of the aforesaid provisions, it is clear that  Shri
      Rajshekhar Rao, learned counsel appearing on behalf of the  appellants
      is correct – there is in fact no separate machinery  provided  by  the
      Central Excises and Salt Act to proceed against a dead person when  it
      comes to assessing him to tax under the Act.

      9.    The position under the Income Tax Act, 1922 was  also  the  same
      until Section 24B was introduced by the Income Tax (Second  Amendment)
      Act of 1933.  Prior to the introduction of the aforesaid Section,  the
      Bombay High Court had occasion to deal  with  a  similar  question  in
      Commissioner of Income Tax, Bombay  v.  Ellis  C.  Reid,  A.I.R.  1931
      Bombay 333.  A Division Bench of the Bombay  High  Court  noticed  the
      definition of “assessee” contained in Section 2(2)  of  the  1922  Act
      which definition stated that “‘assessee’ means a person by whom income
      tax is payable”.  The Division Bench went on to say that the words “or
      by whose  estate”  are  conspicuous  by  their  absence  in  the  said
      definition.  The Division Bench then went on to say that there appears
      to be nothing in the charging Section to suggest that a  man  who  has
      once become liable to tax can avoid payment of  tax  by  dying  before
      such tax has been assessed or paid.  However, the Act has  to  contain
      appropriate provisions for continuing an assessment and collecting tax
      from the estate of a deceased person which was found to be  absent  in
      the 1922 Act before it  was  amended  by  insertion  of  Section  24B.
      Having noticed various provisions of the said Act, the Division  Bench
      went on to say:-

           “These are, I think, the only material provisions, of  the  Act.
           It is to  be  noticed  that  there  is  throughout  the  Act  no
           reference to the decease of a person on whom the  tax  has  been
           originally charged, and it is  very  difficult  to  suppose  the
           omission to have been unintentional. It must have  been  present
           to the mind of the  legislature  that  whatever  privileges  the
           payment of Income-tax may confer, the privilege  of  immortality
           is not amongst  them.  Every  person  liable  to  pay  tax  must
           necessarily die and in practically every case, before  the  last
           installment has been collected,  and  the  legislature  has  not
           chosen to make any provisions expressly dealing with  assessment
           of, or recovering payment from, the estate of a deceased person.
           In order that the Government may succeed and the assessment made
           in this case may be held legal I think, one must  do  a  certain
           amount of violence to the language of Section 23(4); I think one
           must either do a certain amount of violence -  I  should  say  a
           considerable amount of violence - to the language of Section 27,
           or else hold that the privilege conferred  on  a  living  person
           assessed under Section 23(4) of getting the assessment set aside
           is not to be enjoyed by the estate of  a  deceased  person  -  a
           distinction for which I can see no logical reason. One must also
           construe Section 29 so as to give to  the  word  "assessee"  one
           meaning in one place and another meaning in another place.

                 In my judgment, in construing a taxing Act the Court is not
           justified in straining the language in order to hold  a  subject
           liable to tax. If the legislature intends to assess  the  estate
           of a deceased person to tax  charged  on  the  deceased  in  his
           lifetime, the legislature must provide proper machinery and  not
           leave it to the Court to endeavor  to  extract  the  appropriate
           machinery out of the very unsuitable language of the statute. We
           are not concerned with the case which may arise of the death  of
           a person after assessment but before payment.” (at page 335)


      10.   Given the aforesaid decision  of  the  Bombay  High  Court,  the
      legislature was quick to amend the Income Tax Act, 1922  by  inserting
      Section 24B which reads as follows:-

           Section 24B : Tax of deceased person payable by representative-

           (1) Where a person dies, his executor,  administrator  or  other
           legal representative shall be liable to pay out of the estate of
           the deceased person to the extent to which the estate is capable
           of meeting the charge  the  tax  assessed  as  payable  by  such
           person, or any tax which would have been payable  by  him  under
           this Act if he had not died.


           (2) Where a person dies before the  publication  of  the  notice
           referred to in sub-section (1) of section 22  or  before  he  is
           served with a notice under sub-section  (2)  of  section  22  or
           section 34, as the case may be, his executor,  administrator  or
           other legal representative shall, on the serving of  the  notice
           under sub-section (2) of section 22 or under section 34, as  the
           case may be, comply therewith, and the  Income-tax  Officer  may
           proceed to assess the total income of the deceased person as  if
           such executor, administrator or other legal representative  were
           the assessee.


           (3)   Where a person dies, without  having  furnished  a  return
           which he has been required to furnish under  the  provisions  of
           section 22, or having furnished a return  which  the  Income-tax
           Officer has reason to believe to be incorrect or incomplete, the
           Income-tax Officer may make an assessment of the total income of
           such person and determine the tax payable by him on the basis of
           such assessment, and for this purpose may, by the issue  of  the
           appropriate notice which would have had to be  served  upon  the
           deceased person had he  survived,  require  from  the  executor,
           administrator or other  legal  representative  of  the  deceased
           person any accounts, documents or other evidence which he  might
           under the provisions of sections 22 and 23  have  required  from
           the deceased person.”


      11.   This judgment of the Bombay High Court has been affirmed in  two
      judgments of this Court. In Commissioner of Income Tax, Bombay City  I
      v. Amarchand N. Shroff, [1963] 48 I.T.R. 59, this Court referred  with
      approval to  Ellis C. Reid and held:-

           “The  correct  position  is  that  apart  from  section  24B  no
           assessment can be made in respect of  the  income  of  a  person
           after his death. See Ellis C. Reid v.  Commissioner  of  Income-
           tax. In that case, and that was a case  before  section  24B was
           enacted, a  person  was  served  with  a  notice  under  section
           22(2) of the Income-tax Act but no return was  made  within  the
           period specified and he died. It was  held  that  no  assessment
           could be made under section 23(4) of the Act after his death. At
           p.106 it was observed:-
           "It is to be  noticed  that  there  is  throughout  the  Act  no
           reference to the decease of a person on whom the  tax  has  been
           originally charged, and it is  very  difficult  to  suppose  the
           omission to have been unintentional.  It must have been  present
           in the mind of the  legislature  that  whatever  privileges  the
           payment of income-tax may confer, the privilege  of  immortality
           is not amongst  them.  Every  person  liable  to  pay  tax  must
           necessarily die and, in practically every case, before the  last
           instalment has been  collected,  and  the  legislature  has  not
           chosen to make any provisions expressly dealing with  assessment
           of, or recovering payment from the estate of a deceased person".
           The individual assessee has ordinarily to be a living person and
           there can be no assessment on a dead person and  the  assessment
           is a charge in respect of the income of the  previous  year  and
           not a charge in respect of the income of the year of  assessment
           as measured by the income of the previous year. Wallace Brothers
           & Co. Ltd. v Commissioner of Income-tax.  By   section  24B  the
           legal representatives have, by fiction of law, become  assessees
           as provided in that section but that fiction cannot be  extended
           beyond the object for which it was enacted. As was  observed  by
           this Court in Bengal Immunity Co. Ltd. v. State of  Bihar  legal
           fictions are only for a definite purpose and they are limited to
           the purpose for  which  they  are  created  and  should  not  be
           extended beyond that legitimate field. In the present  case  the
           fiction is limited to  the  cases  provided  in  the  three  sub
           sections of section 24B and cannot be extended further than  the
           liability for the income received in  the  previous  year.”  (at
           page 66)


      12.   Similarly, in  Commissioner  of  Income  Tax,  Bombay  v.  James
      Anderson, [1964] 51 I.T.R. 345, this Court referred with  approval  to
      the judgment in  Ellis C. Reid’s case   and  further  held  that  even
      after Section 24B was enacted tax cannot be assessed  on  receipts  on
      the  footing  that  it  is  the   personal   income   of   the   legal
      representative. This Court held:-

           “It was then urged  that  apart  from  section  24B,  the  legal
           representatives of a deceased person also represent  his  estate
           in the matter of taxation of income and it is competent  to  the
           taxing authorities to assess them on income received  on  behalf
           of the estate. Counsel did not rely upon any specific  provision
           of the Act in support of the  contention,  and  merely  asserted
           that the Act seeks to tax all  assessable  incomes,  and  income
           received by a legal representative of the estate of  a  deceased
           person should not be permitted to escape tax to the detriment of
           public revenue. But if the Legislature has failed to set up  the
           procedure to assess such income, the Courts  cannot  supply  it.
           The expression "assessee" in section 2(2) as substituted by  the
           Indian Income Tax (Amendment) Act, (25  of  1953),  with  effect
           from April 1, 1952, means a person by  whom  income-tax  or  any
           other sum of money is payable under the Act, and includes  every
           person in respect of whom any proceeding and this Act  has  been
           taken for the assessment of his income or of the loss  sustained
           by him or of the amount of refund due to him. By section 3 where
           income-tax is chargeable for any  year  at  any  rate  or  rates
           prescribed by the Act of the Central Legislature,  tax  at  that
           rate shall be charged for  that  year  in  accordance  with  and
           subject to the provisions of the Act in  respect  of  the  total
           income of the previous year of every individual, Hindu undivided
           family, company and local authority, and of every firm and other
           association of persons or  the  partners  of  the  firm  or  the
           members of the association individually. The charge  to  income-
           tax has therefore to be in accordance with and  subject  to  the
           provisions of the Act, and the Legislature has not provided that
           the income received by a legal representative which  would,  but
           for the death of  the  deceased,  have  been  received  by  such
           deceased person, is to be regarded for the purpose of assessment
           as the personal income of the legal  representative.  To  assess
           tax on such receipts on the footing  that  it  is  the  personal
           income of the legal representative  is  to  charge  tax  not  in
           accordance with the provisions of the Act.” (at page 352)




      13.   In Commissioner of Income Tax,  Bombay  v.  Darabsha  Nasarwanji
      Mehta, A.I.R. 1935 Bombay 167, the Bombay High Court held that Section
      24B of the 1922 Act was not retrospective and stated that as Avabai N.
      Mehta died before the said Act came into force and before she had made
      any return, her estate was not liable to be assessed to tax particular
      regard being had to the opening  words  of  Section  24B  which  state
      “where a person dies” which are words in the present tense.

      14.   Pursuant to the 12th Law Commission Report, a new Income Tax Act
      was passed in 1961 which contained elaborate provisions for assessment
      of deceased persons after they die.  The anomalies left by Section 24B
      of the 1922 Act, as pointed out in the  two  Supreme  Court  judgments
      referred to above, were sought to be rectified in the  new  provisions
      contained in the 1961 Act.  Sections  159  and  168  of  the  Act  are
      apposite in this regard and read as follows:-

           “159. (1) Where a person dies, his legal representative shall be
           liable to pay any sum which the deceased would have been  liable
           to pay if he had not died, in the like manner and  to  the  same
           extent as the deceased.
           (2) For the  purpose  of  making  an  assessment  (including  an
           assessment, reassessment or recomputation under section 147)  of
           the income of the deceased and for the purpose  of  levying  any
           sum in the hands of the legal representative in accordance  with
           the provisions of sub-section (1),—
           (a) any proceeding taken against the deceased before  his  death
           shall  be  deemed  to  have  been  taken   against   the   legal
           representative  and  may  be   continued   against   the   legal
           representative from the stage at which it stood on the  date  of
           the death of the deceased;
           (b) any proceeding which  could  have  been  taken  against  the
           deceased if he had survived, may  be  taken  against  the  legal
           representative; and
           (c) all the provisions of this Act shall apply accordingly.
           (3) The legal representative of  the  deceased  shall,  for  the
           purposes of this Act, be deemed to be an assessee.
           (4) Every legal representative shall be  personally  liable  for
           any tax payable by him in his capacity as  legal  representative
           if, while his liability for tax remains undischarged, he creates
           a charge on or disposes of  or  parts  with  any  assets of  the
           estate of the deceased, which are in,  or  may  come  into,  his
           possession, but such liability shall be limited to the value  of
           the asset so charged, disposed of or parted with.
           (5) The provisions of sub-section (2) of  section  161,  section
           162, and section 167, shall, so far as may be and to the  extent
           to which they are not inconsistent with the provisions  of  this
           section, apply in relation to a legal representative.
           (6) The liability of a legal representative under  this  section
           shall, subject to the provisions of  sub-section  (4)  and  sub-
           section (5), be limited to the extent to  which  the  estate  is
           capable of meeting the liability.”


           “168. (1) Subject as hereinafter provided,  the  income  of  the
           estate of a deceased person shall be chargeable to  tax  in  the
           hands of the executor,—
           a) if there is only one executor, then, as if the  executor were
              an individual; or
           b) if there are  more  executors  than  one,  then,  as  if  the
              executors were an association of persons;
                 and for the purposes of this Act,  the  executor  shall  be
           deemed to be resident or non-resident according as the  deceased
           person was a resident or non-resident during the  previous  year
           in which his death took place.
        2) The assessment of an executor under this section shall  be  made
           separately from any assessment  that  may  be  made  on  him  in
           respect of his own income.
        3) Separate assessments shall be made under  this  section  on  the
           total income of each completed previous year or part thereof  as
           is included in the period from the date of the death to the date
           of complete distribution to  the  beneficiaries  of  the  estate
           according to their several interests.
      4) In computing the total income  of  any  previous  year  under  this
         section, any income of the estate of that previous year distributed
         to, or applied to the benefit  of,  any  specific  legatee  of  the
         estate during that previous year shall be excluded;  but the income
         so excluded shall be included in the total income of  the  previous
         year of such specific legatee.”


         |                                    |                                    |


      15.   It will be noticed that under Section 159(2), for the purpose of
      making any assessment,  any  proceeding  taken  against  the  deceased
      before his death is by deeming fiction   deemed  to  have  been  taken
      against his legal representative and  may  be  continued  against  the
      legal representative from the stage at which it stood on the  date  of
      the death of the deceased.  Further, the  legal  representative  under
      sub-section (3) of 159 is again by deeming fiction  deemed  to  be  an
      assessee himself. However, the liability  of  such  representative  is
      limited only to the extent to which the estate left by the deceased is
      capable of meeting the tax  liability  subject  to  the  contingencies
      mentioned in sub-sections (4) and (5) of Section 159.

      16.   Similarly, under Section 168, where  the  assessee  has  left  a
      Will, the  income  of  the  estate  of  the  deceased  person  becomes
      chargeable in the hands of the executor of such will.   This  is  made
      clear by Section 168.

      17.   It will be seen that the definition of “assessee”  contained  in
      Section 4(3)(a) of the Central Excises and Salt Act is similar to  the
      definition of assessee contained in the Income Tax Act,  1922.   Under
      that Act, as we have already seen, an assessee means “a person by whom
      income tax is payable.”  Under the Central Excises and  Salt  Act,  an
      assessee means “the person who is liable to pay  the  duty  of  excise
      under this Act”.  The present tense being used, it is clear  that  the
      person referred to can only be a living person as was held in Ellis C.
      Reid (supra).  Further,  the  only  extension  of  the  definition  of
      “assessee”  under the Central Excises and Salt Act is  that  it  would
      also include an assessee’s agent, which has nothing  to  do  with  the
      facts of the present case.  It is  well  settled  that  a  “means  and
      includes” definition is exhaustive in nature  and  that  there  is  no
      scope to read anything further into the said definition.

      18.   As has been correctly pointed out by  learned  counsel  for  the
      appellants, the notice that is served under Section 11A is only on the
      person chargeable with excise duty, which takes us back to  “assessee”
      as defined.

      19.   Learned counsel for the revenue relied upon Section  11  of  the
      Act, which, according to him, indicates that an attachment and sale of
      excisable goods can belong to a dead person and  such  attachment  and
      sale can continue notwithstanding the death  of  such  person.   Apart
      from the fact that there is nothing about dead persons in Section  11,
      Section 11 is limited only to recovery of sums that  are  due  to  the
      Government.  The very opening words in Section 11 show that  duty  and
      other sums must first be payable to the Central Government  under  the
      Act or the rules.  If such sums are not “payable” then the  provisions
      of the Section do not get attracted at all.  We have seen that the Act
      contains  no  machinery  provisions  for  proceeding  against  a  dead
      person’s legal heirs, such as are contained in  the  Income  Tax  Act.
      Obviously, therefore, duty and other  sums  do  not  become  “payable”
      without such machinery provisions.  Further,  Section  11  deals  with
      modes of recovery of tax payable and does not deal  with  the  subject
      matter at hand – namely machinery provisions  for  assessment  in  the
      hands of the estate of a dead person and,  therefore,  does  not  have
      much bearing on the matter in issue in the present case. The argument,
      therefore, as to the insertion of the proviso  to  Section  11  by  an
      Amendment Act of 2004 so as to provide that if a person from whom some
      recoveries are due transfers his business to another person, then  the
      excisable goods in the  possession  of  the  transferee  can  also  be
      attached and sold  again leads us nowhere.  In  fact  learned  counsel
      for the appellants also relied on  this  proviso  to  argue  that  the
      Legislature’s need to add the proviso shows that nothing can  be  read
      into the Central Excises and Salt Act by  implication.   As  has  been
      stated above, Section 11 deals with an  entirely  different  situation
      and the addition of the proviso therein is not of much significance as
      far as the question we have to answer is concerned.

      20.   Learned counsel for the revenue,  however,  contended  that  the
      principles applied in the case of the Income Tax  Act  should  not  be
      applied to the Central Excises and Salt Act as the latter Act is a tax
      on manufacture of goods and  not  on  persons.   We  are  afraid  this
      argument cannot be countenanced in view of this  Court’s  judgment  in
      State of Punjab v. M/s Jullunder Vegetables Syndicate, [1966] 2 S.C.R.
      457. In that judgment, the question before this Court  was  whether  a
      dissolved firm could be assessed to sales tax under  the  East  Punjab
      General Sales Tax Act, 1948, with respect to its pre-dissolution  turn
      over.  After analyzing the East Punjab General  Sales  Tax  Act,  this
      Court held:-

           “The scheme of the Act is a simple one. A firm is a dealer;  the
           said dealer is  assessable  to  tax  on  its  turnover,  if  its
           turnover exceeds the prescribed limit.  It  cannot  do  business
           while being liable to pay tax  under  the  Act  without  getting
           itself registered and possessing a registration certificate.  It
           is assessed to tax under Section 11 of the  Act  in  the  manner
           prescribed thereunder. If it discontinues its business, it shall
           within  the  specified  time  inform  the  prescribed  authority
           accordingly. A dealer and its partners are jointly and severally
           responsible to pay the tax assessed on the dealer. But there  is
           no provision expressly empowering  the  assessing  authority  to
           assess a dissolved firm in respect of its  turnover  before  its
           dissolution. The  question  is  whether  such  a  power  can  be
           gathered by necessary implication from the other  provisions  of
           the Act.”  (at page 461)

      The Court went on to say:

           “Though under the partnership law a firm is not a  legal  entity
           but only consists of individual partners for the time being, for
           tax law, income-tax as well as sales-tax, it is a legal  entity.
           If that be so, on dissolution, the firm ceases  to  be  a  legal
           entity. Thereafter, on principle, unless there  is  a  statutory
           provision permitting the assessment of a dissolved  firm,  there
           is no longer any scope for assessing the firm  which  ceased  to
           have a legal existence. As in the present case, admittedly,  the
           firm was dissolved before the order of assessment was made,  the
           said order was bad.” (at page 462)

      The Court went  on  to  consider  various  High  Court  decisions  and
      ultimately concluded as follows:-

           “Strong reliance was placed upon two judgments  of  this  Court.
           This Court in C.A.  Abraham  v.  Income-tax  Officer,  Kottayam,
           speaking through Shah, J., held that S.44 of the Income-tax  Act
           set up a machinery for assessing  the  tax  liability  of  firms
           which have discontinued their business.  This  was  followed  by
           this Court again in Commissioner of Income-tax, Madras  v.  S.V.
           Angidi Chettiar. These two decisions  are  of  no  help  to  the
           Revenue in the present case. Indeed, in a sense they are against
           it.  The  Income-tax  Act contains  an  express  provision   for
           assessing a dissolved firm. Indeed, but for  that  provision  no
           assessment could be made under that Act on dissolved firms.
           For the foregoing reasons we hold that the High Court was  right
           in holding that the assessment order on the dissolved firm could
           not be supported under the provisions of the Act. The High Court
           has given a correct answer to the question  propounded  for  its
           decision.” (at page 464)

      21.   This judgment is a complete answer to the contention of  learned
      counsel for the revenue inasmuch as on a parity  of  reasoning,  sales
      tax  is  not  a  personal  tax  but  a  tax  on  the  sale  of  goods.
      Nevertheless, this Court held that in the  absence  of  any  machinery
      provisions to assess and collect sales tax from a deceased person – in
      that case it was  a  dissolved  partnership  firm  –  all  proceedings
      against such  deceased  person/dissolved  firm  abate.  The  aforesaid
      judgment has been followed by this Court in Khushi Ram  Behari  Lal  &
      Co. v.  Assessing  Authority,  Sangrur,  (1967)  19  STC  381  and  in
      Additional Tahsildar, Raipur v. Gendalal, (1968) 21 STC 263.

      22.   Learned counsel for the revenue, however, strongly  relied  upon
      M/s. Murarilal Mahabir Prasad and others v. Shri B.R. Vad and  others,
      (1975) 2 SCC 736, a case arising under the Bombay Sales Tax Act, 1953.
      Since this judgment has been relied upon as the sheet  anchor  of  the
      revenue’s case, it is important to deal with it in some detail.

      23.   The question that arose in the  aforesaid  case  was  whether  a
      dissolved firm could be re-assessed to sales tax in respect of its pre-
      dissolution turnover.  By a two to one  (2:1),  decision,  this  Court
      held that the Bombay Act contained the  necessary  provisions  to  re-
      assess such  a  dissolved  firm  in  respect  of  its  pre-dissolution
      turnover.   The  majority  judgment  referred  to  the  definition  of
      “dealer” in the Bombay Act  of  1953  and  referred  to  this  Court’s
      judgment in State of Punjab  v.  M/s  Jullunder  Vegetables  Syndicate
      (supra).  We find that the majority  judgment  of  this  Court  relied
      heavily on the fact that dishonest persons  may  dissolve  a  firm  in
      order to escape liability to assessment of taxes legitimately due from
      them but which have escaped assessment.  In paragraph 19, the majority
      held:

           “It is plausible that a distinction ought to be made between the
           death of an individual and the  dissolution  of  a  firm.  Human
           beings, as assessees, are not generally known to court death  to
           evade taxes. Death,  normally,  is  not  volitional  and  it  is
           understandable that on the death of an individual, his liability
           to be assessed to tax should come to an end unless  the  statute
           provides to the contrary. With firms it is different, because  a
           firm which incurs during its existence a liability to pay sales-
           tax may, with a little ingenuity, evade  its  liability  by  the
           voluntary act of dissolution. The dissolution of  a  firm  could
           therefore be viewed differently from the death of an  individual
           and the partners could be denied  the  advantage  of  their  own
           wrong. But we do not want to strike this new  path  because  the
           Jullundur case (supra) and the two cases which  follow  it  have
           likened the dissolution of a firm to the death of an individual.
           Let us therefore proceed to examine the other provisions of  the
           1953 Act.”

      It then went on to quote Section 15(1) of the Bombay  Sales  Tax  Act,
      1953 and then arrived at this conclusion:

           “22. Section 15(1) contains  an  important  clause  that  action
           thereunder can be taken by the Collector after giving  a  notice
           to the  assessee  under Section  14(3) of  the  Act  within  the
           prescribed period. Once such a notice is  given,  the  Collector
           gets the jurisdiction to assess or re-assess the amount  of  tax
           due from the dealer and all the provisions  of  the  Act  "shall
           apply accordingly as if the notice were a notice  served  under"
           Section  14(3).   Section  14(3) speaks  of  the  power  of  the
           Collector to assess the amount of tax due from the dealer  after
           giving notice to him, if the Collector is not satisfied that the
           returns furnished are correct and complete. The jurisdiction  to
           assess or reassess which is conferred by section  15(1) is  thus
           equated with the original  jurisdiction  to  assess  the  dealer
           under section 14. By this method, the continuity  of  the  legal
           personality of the assessee is maintained in order to enable the
           assessment of turnover which has escaped assessment.  It  is  no
           answer to a notice under section  15 that  the  partners  having
           dissolved the firm, the assessment cannot be reopened. It puts a
           premium on one's credulity  to  accept  that  having  created  a
           special jurisdiction to assess or reassess an escaped  turnover,
           the                                                  Legislature
                                            permitted     that     salutary
           jurisdiction to be defeated by the device  of  dissolution.  The
           argument of the appellants really comes to  this:  suppress  the
           turnover, evade the sales-tax, dissolve the firm and  earn  your
           freedom from taxation.”




      The Court then went on to add:

           “24. Section 15A confers on the Collector  analogous  powers  to
           asses or re-assess a dealer for taxes due prior to November  21,
           1956 when the States were reorganised, if either  no  assessment
           was made for the prior period or if  any  turnover  had  escaped
           assessment. This provision, like the one  contained  in  Section
           15, is of general application and makes no exception  in  favour
           of dissolved firm. Therefore, if a firm was not  assessed  prior
           to the re-organisation of States or if any part of its  turnover
           had escaped assessment, it is  competent  to  the  Collector  to
           assess or re-assess  the  firm  notwithstanding  its  subsequent
           dissolution. This is the necessary implication of  Section  15A.
           It must follow as a  corollary  that  the  power  to  rectify  a
           mistake apparent  from  the  record  can  be  exercised  by  the
           Collector under Section 35 of the Act of  1953  even  after  the
           dissolution of an assessed firm, though on conditions  specified
           in the section. The section contains  a  compelling  implication
           that evident errors can be corrected no matter whether the  firm
           is in existence or is dissolved. Dissolution is  not  a  panacea
           for liability to pay sales-tax.”




      It also added in paragraph 32:

           “It is indisputable that the first appellant firm was liable  to
           be charged to sales tax on its business turnover.  The  charging
           provisions are contained in Chapter III of the Act of  1953  and
           Chapter II of the Act of  1959.  In  this  appeal,  we  have  to
           construe the machinery provisions of those Acts.  In  accordance
           with the view taken in the  cases  cited  above,  the  machinery
           sections ought to be construed so as to effectuate the  charging
           sections. The construction which we have placed on the machinery
           provisions of the 1953 Act will give meaning and content to  the
           charging sections, in  the  sense  that  our  construction  will
           effectuate the provision contained in the charging sections. The
           resourcefulness  and  ingenuity   which   go   into   well-timed
           dissolution of firms ought not to  be  allowed  to  be  used  as
           convenient instruments of  tax  evasion.  As  observed  by  Lord
           Dunedin in Whitney v. Commissioners of Inland Revenue:

                 "A  statute  is  designed   to   be   workable,   and   the
                 interpretation thereof by a court should be to secure  that
                 object, unless crucial omission of  clear  direction  makes
                 that end unattainable."

           Far from there being any crucial omission or a  clear  direction
           in the present case which would make the end  unattainable,  the
           various provisions to which we have drawn attention leave it  in
           no doubt that a dissolved firm  can  be  assessed  on  its  pre-
           dissolution turnover.”




      24.   It is clear that on a conjoint reading of these paragraphs  this
      Court found that the machinery  provisions  contained  in  the  Bombay
      Sales Tax Act, 1953, were sufficient to reassess a dissolved  firm  in
      respect of income that had escaped assessment before its  dissolution.
      A distinction was drawn between an individual who dies and a firm that
      is dissolved as a device to evade tax.  The Court laid great stress on
      the provision contained in Section 15(1) of the said Act by which  the
      jurisdiction to assess or reassess under Section 15(1) is equated with
      the original jurisdiction to assess the dealer under Section  14.   By
      this method, the Court found the continuity of the  legal  personality
      of the assessee is maintained in order to  enable  the  assessment  of
      turnover  which  has  escaped  assessment.   The  crucial  difference,
      therefore, between Section 15(1) of the Bombay Sales Tax Act, 1953 and
      Section 11A of the Central Excises and Salt Act is  that  Section  11A
      does not contain any such provision as is contained in  Section  15(1)
      which equates the jurisdiction to assess or reassess with the original
      jurisdiction to assess the dealer in the very first  place.   Further,
      this Court also construed Section 19 of the Bombay Sales Tax Act, 1959
      which would throw light on the earlier Bombay Sales Tax Act, 1953,  as
      containing the necessary  machinery  provisions  to  assess  dissolved
      firms in respect of escaped  turnover  pre-dissolution.   Hence,  this
      Court added:

           “35. It is relevant, though we did  not  refer  to  this  aspect
           while dealing with the provisions of the 1953 Act, that  section
           19(3) of the 1959 Act  contains  a  clear  indication  that  the
           legislature intended that a dissolved  firm  could  be  assessed
           under the 1953 Act also. Section 19(3) speaks of  the  liability
           of partners for the tax due from a dissolved firm  and  provides
           that they shall be jointly and severally liable to pay  the  tax
           due from the firm under the Act of 1959 or  "under  any  earlier
           law", whether  such  tax  has  been  assessed  before  or  after
           dissolution. Section 2(12) of the 1959 Act defines "earlier law"
           to mean, inter alia, the Bombay Sales Tax Act, 1953.  Thus,  one
           of the postulates  of  section  19(3) at  any  rate  is  that  a
           dissolved firm could be assessed under  the  1953  Act.  Such  a
           postulate accords with the principle  that  if  the  legislature
           provided for a charge of sales-tax, it could not  have  intended
           to render that charge ineffective by permitting the partners  to
           dissolve the firm, an easy enough thing to do. Nothing, in fact,
           would be easier to evade a tax liability than  to  declare  that
           the firm, admittedly liable to  pay  tax,  has  been  dissolved.
           Section 19(3) of the 1959 Act not  only  makes  clear  what  was
           necessarily implied in the 1953 Act, but  it  throws  additional
           light on the true  construction  of  the  earlier  law.  But  we
           thought it advisable to keep section 19(3) of the 1959 Act apart
           while construing the 1953 Act because it is the courts, not  the
           legislature,  who  have  to  construe the  laws  of   the   land
           authoritatively. As said in Craies on Statute Law:
                 Except as a parliamentary exposition, subsequent  Acts  are
                 not to be relied on as an aid to the construction of  prior
                 unambiguous Acts. (6th Ed., p. 146).
           The limited use which may be made of  the  language  of  section
           19(3) of the 1959 Act, though such a course is  unnecessary,  is
           for saying that it serves to throw some  light  on  the  Act  of
           1953, in case the argument is that the Act of 1953 is ambiguous.
           36.  Section  19(3)  being  quite  clear  and  explicit,  it  is
           unnecessary to dwell on the other provisions of the Act of  1959
           in order to show that a dissolved firm can be assessed under it.
           We may only point out that the Act of 1959  contains  provisions
           similar to those in sections 15, 15A and 35 of the Act  of  1953
           on which we have dwelt at some length. Those provisions  can  be
           found in sections 35, 35A and 62 of the Act.”
      25.   A reading of the ratio of the  majority  decision  contained  in
      Murarilal’s case  (supra)  would  lead  to  the  conclusion  that  the
      necessary machinery provisions were already contained  in  the  Bombay
      Sales Tax Act, 1953 which were good enough to bring into the  tax  net
      persons who wished to evade taxes by the  expedient  of  dissolving  a
      partnership firm.  The fact situation in the present case is  entirely
      different.  In the present case  an  individual  proprietor  has  died
      through natural causes and it is nobody’s case that he has  maneuvered
      his own death in order to evade excise duty.   Interestingly,  in  the
      written submissions filed by revenue, revenue has argued as follows:-
           “It is pertinent to mention  that  in  the  present  case,  Shri
           George Varghese  (predecessor  in  interest  of  the  appellants
           herein) was doing business in the  name  of  manufacturing  unit
           namely M/s. Kerala Tyre & Rubber Company and after the death  of
           Shri George  Varghese,  his  legal  representatives  (appellants
           herein) might have been in possession of the  plant,  machinery,
           stock etc. and continuing the same business,  but  might  be  in
           some other name in order to avoid the excise duty chargeable  to
           the previous manufacturing unit.”
      26.   It is clear on a reading of the aforesaid  paragraph  that  what
      revenue is asking us to do is to stretch the machinery  provisions  of
      the Central Excises and Salt Act, 1944 on the basis  of  surmises  and
      conjectures.  This we are afraid is not possible.  Before leaving  the
      judgment in Murarilal’s case (supra), we wish to add that  so  far  as
      partnership firms  are  concerned,  the  Income  Tax  Act  contains  a
      specific provision in Section 189(1) which introduces  a  fiction  qua
      dissolved firms.  It states  that  where  a  firm  is  dissolved,  the
      Assessing Officer shall make an assessment of the total income of  the
      firm as if no such dissolution had taken place and all the  provisions
      of the Income Tax Act would apply  to  assessment  of  such  dissolved
      firm.  Interestingly enough, this provision is referred to only in the
      minority judgment in M/s. Murarilal’s case (supra).
      27.   The argument that Section 11A of the Central  Excises  and  Salt
      Act is a machinery provision  which  must  be  construed  to  make  it
      workable can be met by stating that there is no charge to excise  duty
      under the main charging provision of a dead  person,  which  has  been
      referred to while discussing Section 11A read with the  definition  of
      “assessee” earlier in this judgment.
      28.   Learned counsel for the revenue also relied upon the  definition
      of a “person” under the General Clauses Act, 1897.  Section  3(42)  of
      the said Act defines “person as under:-
           “(42) “Person” shall include any company or association or  body
           of individuals whether incorporated or not.”
      It will be noticed that this definition does not take us  any  further
      as it does not include legal representatives of persons who are  since
      deceased.  Equally, Section  6  of  the  Central  Excises  Act,  which
      prescribes a procedure for registration of  certain  persons  who  are
      engaged in the process of production or manufacture of  any  specified
      goods mentioned in the schedule to the said Act  does  not  throw  any
      light on the question at hand as it says  nothing  about  how  a  dead
      person’s assessment is to continue  after  his  death  in  respect  of
      excise duty that may have escaped  assessment.   Also,  the  judgments
      cited on behalf of revenue, namely, Yeshwantrao v. The Commissioner of
      Wealth Tax, Bangalore, AIR 1967 SC 135 at  pages  140,  141  para  18:
      (1966) Suppl. SCR 419 at 429  A-B,  C.A.  Abraham  v.  The  Income-Tax
      Officer, Kottayam & Another, AIR 1961 SC 609 at 612 para 6:  (1961)  2
      SCR 765 at page 771, The State of Tamil  Nadu  v.  M.K.  Kandaswami  &
      Others, Air 1975 SC 1871 (para  26):  (1975)  4  SCC  745  (para  26),
      Commissioner of Sales Tax, Delhi & Others v. Shri Krishna  Engineering
      Co. & Others, (2005) 2 SCC 695, page 702, 703  paras  19  to  23,  all
      enunciate principles dealing  with  tax  evasion  in  the  context  of
      construing provisions which are designed to prevent tax evasion.   The
      question at hand is very different – it only deals  with  whether  the
      Central Excises and Salt Act  contains  the  necessary  provisions  to
      continue assessment proceedings against  a  dead  man  in  respect  of
      excise duty payable by him after his death, which is  a question which
      has no relation to the construction of provisions designed to  prevent
      tax evasion.

      29.   Learned counsel for the revenue also cited Girja Nandini Devi  &
      Ors. v. Bijendra Narain Choudhury, [1967] 1 S.C.R. 93 at paragraph 15,
      and  Shri Rameshwar Manjhi (deceased) Through his  son  Shri  Lakhiram
      Manjhi v. Management of Sangramgarh Colliery & Ors., (1994) 1 SCC  292
      at paragraph 12, in support of the general principle  that  an  action
      begun in a court of law by a person does not  cease  with  his  death.
      The context of both decisions was very different.  The first  decision
      was in the context of proceedings in relation to partition of a  joint
      family whereas the second  was  under  the  Industrial  Disputes  Act.
      Neither judgment has any direct bearing on the controversy before us.

      30.   It remains to consider a judgment cited by learned  counsel  for
      the appellants, namely, Commissioner of Central Excise, Bangalore –III
      v. Dhiren Gandhi, 2012 (281) E.L.T. 64 (Karnataka).  This judgment  is
      correct in its conclusion that while interpreting  the  provisions  of
      the Central Excises and  Salt Act, legal heirs who are not the persons
      chargeable to duty under the Act cannot be brought within the ambit of
      the Act by  stretching  its  provisions.   To  the  extent  that  this
      judgment holds what is set out hereinbelow, it is correct:-

            “We do not find any provision in the Act which foists  any  such
           liability in the case of intestate succession. In  other  words,
           there is no provision which empowers the authorities to  recover
           due from a deceased assessee by  proceeding  against  his  legal
           heirs.  The way section 11 and  11A  are  worded,  it  is  amply
           clear, the legislature has consciously kept away the legal heirs
           from answering to liabilities under the Act.” (at page 69)




      31.   The impugned judgment in the present case has referred to  Ellis
      C. Reid’s case but has not extracted the real ratio contained therein.
      It then goes on to say that this is a case of  short  levy  which  has
      been noticed during the lifetime of the deceased and then goes  on  to
      state that equally therefore legal representatives of  a  manufacturer
      who had paid excess duty would not by the self-same reasoning be  able
      to claim such excess amount paid by the  deceased.  Neither  of  these
      reasons are reasons which refer to any provision of law.   Apart  from
      this, the High Court went  into  morality  and  said  that  the  moral
      principle of unlawful enrichment would also apply and  since  the  law
      will not permit this, the Act needs to be interpreted accordingly.  We
      wholly disapprove of the approach of the High Court.  It flies in  the
      face of first principle when it  comes  to  taxing  statutes.   It  is
      therefore necessary to reiterate the law as it stands.  In  Partington
      v. A.G., (1869) LR 4 HL 100 at 122, Lord Cairns stated:

           “If the person sought to be taxed comes within the letter of the
           law he must be taxed, however great the hardship may  appear  to
           the judicial mind to be. On the other hand, if the Crown seeking
           to recover the tax, cannot bring the subject within  the  letter
           of the law, the subject is free, however apparently  within  the
           spirit of law the case might otherwise appear to  be.  In  other
           words, if there be admissible in any statute, what is called  an
           equitable, construction, certainly, such a construction  is  not
           admissible in a taxing statute where you can  simply  adhere  to
           the words of the statute".




      32.   In Cape Brandy Syndicate v. IRC, (1921) 1 KB 64 at  71,  Rowlatt
      J. laid down:

           “In a taxing Act one has to look merely at what is clearly said.
            There is no room for any intendment.  There is no equity  about
           a tax.  There is no presumption as to tax.   Nothing  is  to  be
           read in, nothing is to be implied.  One can only look fairly  at
           the language used.”




      33.   This Court has, in a plethora  of  judgments,  referred  to  the
      aforesaid principles.  Suffice it to quote from one of such  judgments
      of this Court in Commissioner of Sales Tax Commissioner, Uttar Pradesh
      v. Modi Sugar Mills, 1961 (2) SCR 189 at 198:-

           “In interpreting a taxing statute, equitable considerations  are
           entirely out of place.  Nor can taxing statutes  be  interpreted
           on  any  presumptions  or  assumptions.   The  court  must  look
           squarely at the words of the statute  and  interpret  them.   It
           must interpret a taxing statute in the light of what is  clearly
           expressed; it cannot imply anything which is not  expressed;  it
           cannot import provisions in the statute  so  as  to  supply  any
           assumed deficiency.”




      34.   We are, therefore, of the view that this appeal must be  allowed
      and the judgment of the High Court of Kerala is, accordingly set aside
      and that of the learned Single Judge restored.

                                        ……………………J.

                                        (A.K. Sikri)





                                        ……………………J.

                                        (R.F. Nariman)

New Delhi;

July 29, 2015.

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