SAEED-UN-NISA Versus INCOME-TAX APPELLATE TRIBUNAL
This petition for leave to appeal challenged a Lahore High Court order regarding the valuation of agricultural lands for estate duty purposes. The core legal question was whether the valuation formula adopted by the Supreme Court in Ahmad Khan v. The Collector of Estate Duty—based on produce index units—constituted a rule of universal application, or if the Controller of Estate Duty could lawfully utilize the average sale price of adjoining lands. The Supreme Court held that the formula in Ahmad Khan was dictated by the specific facts and circumstances of that case and was not intended to be a rule of universal application. Consequently, the Court upheld the Tribunal's decision, finding that the Controller’s valuation method, based on market sales in the vicinity, was consistent with the statutory requirement under Section 38(1) of the Estate Duty Act, which mandates that the principal value of property be estimated at the price it would fetch if sold in the open market at the time of the deceased's death. The petition was dismissed.
- Is the valuation formula based on produce index units established in Ahmad Khan v. The Collector of Estate Duty a rule of universal application?
- Does the Controller of Estate Duty have the authority to value agricultural land based on the average sale price of adjoining lands?
- What is the statutory basis for determining the principal value of property for estate duty purposes?
- Section 38(1), Estate Duty Act
ORDER
1. ANWARUL HAQ, J.‑ ‑This petition seeks leave to appeal against an order made by a Division Bench of the Lahore High Court on the 26th of August 1975, by which it has been held that the formula adopted by the Supreme Court in the case of Ahmad Khan v. The Collector of Estate Duty (P L D 1969 S C 123) for the purpose of valuation of agricultural lands for the levy of estate duty, was limited to the peculiar facts and circumstances of that case and. was net intended to be a rule of universal application. .
2. The dispute relates to the valuation of agricultural lands left by Syed Ghulam Mahbub Subbani, who died on the 4th of March 1969. The value declared by the heirs of the deceased was Rs. 3.79.576, but this was not accepted by the Deputy Controller of Estate Duty. It is not necessary to give details of the value assessed by the Deputy Controller. and the Controller at Estate Duty, and it is enough to state that by the final order by the Tribunal the value has been assessed at Rs. 2,27,563. The Tribunal was repelled the contention raised on behalf of the petitioners that the valuation should be fixed on the basis adopted by the Supreme Court in the case of Ahmad Khan, referred to above, namely, Rs. 10 for ever produce index unit, as determined for the various categories of land under the Rehabilitation and Settlement Scheme. Instead the Tribunal has approved the basis adopted by the Controller of Estate Duty namely, the average sale price of adjoining land.
3. These findings of the Tribunal have been upheld by the learned Judge in the High Court, holding that the formula adopted to then case of Ahmed Khan by the Supreme Court was peculiar to the facts and circumstances of that case, and was ‑not intended to operate as a rule of universal application.
4. Leave to appeal is sought on the following grounds :‑
(a) That as the rule approved and adopted by the Supreme Court in the precedent case had since found statutory recognition to the shape of the newly added rule 25‑A of the Estate Duty Rules, it should have been applied by the Tribunal as the said rule was introduced during the pendency of the appeal before the Tribunal;
(b) That even if the rule of valuation on the basis of produce index units of the lands in dispute was not of universal application, it was nevertheless applicable to the present case as its facts and circumstances were identical with those obtaining to the case of Ahmed Khan;
(c) That the assessment as carried out by the Controller of Estate Duty, and approved by the Tribunal, was arbitrary and contradictory in respect of different categories of land abandoned by the deceased.
5. We regret we do not see any merit in these submissions.
6. The first contention was not raised before the Tribunal, and in fact it could not have teen‑ raised as the new rule 25‑A was promulgated on the 29th of October 1971 almost seven, months after the Tribunal had finally disposed of the Petitioner appeal dated the 24th of March 1971.
7. From a perusal of the judgment delivered by this Court to the case of Ahmed Khan. it becomes abundantly cleat that the formula adopted in that case was dictated by the peculiar facts and circumstances obtaining therein. A Local Commissioner had been appointed for fixing the value of the lands and he had suggested alternative methods in this behalf, one of them being on the basis of the produce index value of the lands in accordance with the formula adopted by the Rehabilitation authorities for evacuee lands. The Court felt that on the basis of the material available in that case this was the best formula to be adopted. This case, therefore, does not lay down any formula of universal application.
8. In the presence of the material referred to by the Controller of Estate Duty, and accepted by the Tribunal, it could hardly be said that there was no other satisfactory basis available in the present case for valuation of the lands to dispute.
9. As regards the last contention that the Controller and the Tribunal have acted in an arbitrary manner, we find that such a contention is not justified on the record. The Controller has based his valuation on the basis of sales which had taken place in the vicinity, and such sales wet clearly relevant in terms of subsection (1) of section 38 of the Estate Duty Act, which provided that "the principal value of any property shall estimated to be the price which, in the opinion of Controller it would fetch if sold in the open market at the time of the deceased's death."
10. For the foregoing reasons, we are not persuaded that any justification is made out for our interference in the matter. The petition, therefore, fails and is hereby dismissed.
11. Petition dismissed.